Verkmenntaskóli Austurlands. Finances and Operations 2002–2005

This report deals with the operational problems of a small, rural Icelandic secondary school, Verkmenntaskóli Austurlands, in 2002–2003 and the means by which it was possible to improve its financial position over the past two years.
Around two-thirds of all Icelandic secondary schools were operated with a deficit during the years 2002–2003. In the former year, Verkmenntaskóli Austurlands had comparatively the highest deficit, whereas in the latter year, it was third. The Icelandic National Audit Office points out that the main reason for this deficit was two-fold. On the one hand, the school’s administrators shrunk from making changes that would affect the quantity of teaching, due to their obligations to the students. On the other hand, the Ministry of Culture and Education’s supervision of the school’s finances was lacking.

Changes to the Ministry of Culture and Education’s model used to calculate contributions to the schools and the increase in the number of full-time students caused Verkmenntaskóli Austurlands to receive a considerably higher contribution in 2004 than for the previous year. This, in addition to the school administrators’ increased restraint, caused the school’s operations to be in the black for that year, and everything indicates the operations will also be stable in 2005.

In the Icelandic National Audit Office’s report, various general information on the operations of the country’s secondary schools is presented. By looking at Verkmenntaskóli Austurlands in this light, it can be seen that it is one of the school’s where utilisation is the poorest and the cost is therefore proportionally the highest. During 2002–2004, there were fewer full-time students per school employee than at any other secondary school in the country. Its premises are also among the largest considering the number of full-time students and its utilisation is therefore very poor.

To ensure that the operations of Verkmenntaskóli Austurlands continue to remain within the budget, the school’s administrators must have active control over the cost and employ systematic measures to keep it in check. It is imperative to support the school’s budget preparations so that they are always based on thorough calculations. It is important for administrators to realise the correlation between the quantity of teaching, utilisation and operational performance and to comply completely with instructions on the implementation of the budget.