Local Subsidy Fraud Reporting Rewards, 'Up to 200 Million KRW' Limit Abolished

'Enforcement Decree of the Local Finance Act' Amendment Passed at Cabinet Meeting
Introduction of Reward for Reporting Budget Waste Under 10 Million Won

[Asia Economy Reporter Jo In-kyung] The cap on rewards for reporting fraudulent claims of local government subsidies, which could be paid up to 200 million KRW, will be abolished. Legal grounds have also been established to pay rewards for reporting budget waste, up to a maximum of 10 million KRW.

The Ministry of the Interior and Safety announced on the 28th that the "Enforcement Decree of the Local Finance Act" containing these provisions has passed the Cabinet meeting.

The revised decree removes the cap on rewards for reporting fraudulent claims of local government subsidies, which had been paid up to 200 million KRW, thereby strengthening reporting incentives. The reward, which local government heads used to pay autonomously within 30% of the canceled budget, has been standardized to a fixed rate of 30%, and a minimum reward payment (within a limit of 5 million KRW) has been introduced to encourage resident reporting.

The decree also newly establishes regulations allowing the payment of rewards for reporting budget waste (up to 10 million KRW) to activate the Budget Monitoring Citizens' Group and city/province monitoring teams.

Furthermore, the requirement for local government heads to obtain approval from the Minister of the Interior and Safety when issuing local bonds exceeding the issuance limit has been relaxed to allow issuance through consultation. The authority to set the issuance limit for local bonds, previously determined by the Minister of the Interior and Safety, has been delegated to local government heads within certain criteria (within 10% of the local government's budget from two years prior), thereby expanding the autonomy of local bond issuance.

However, for local governments whose debt-to-budget ratio exceeds 25%, the approval system will be maintained to prevent deterioration of local fiscal soundness due to excessive local bond issuance.

Ko Gyu-chang, Director of the Local Finance and Economy Office at the Ministry of the Interior and Safety, stated, "We expect sound local fiscal management by strengthening resident oversight of local finances, including the activation of budget waste reporting."

This content was produced with the assistance of AI translation services.