Yongsan-gu Saves 500 Million KRW in 2020 Budget Through Routine Audits and Contract Reviews

421 Contracts for Construction, Services, and Goods (43.6 Billion KRW) Reviewed, Saving 500 Million KRW from Previous Budget... Savings Rate 1.17%

[Asia Economy Reporter Jong-il Park] Yongsan-gu (District Mayor Seongjang Hyun) saved 500 million KRW from last year’s district budget through routine audits in the contract sector and contract cost reviews.

In 2020, the number of routine audits and contract cost reviews in the contract sector was 421 cases (172 construction, 84 service, 165 goods), with an amount of 43.6 billion KRW, achieving a savings rate of 1.17%.

Routine audits target comprehensive/general construction contracts over 300 million KRW (estimated price basis), specialized/other construction contracts over 200 million KRW, service contracts over 70 million KRW, goods manufacturing/purchasing contracts over 20 million KRW, and major (new) policy projects with project costs over 300 million KRW.

Routine audits also cover matters such as housing redevelopment and reconstruction project implementation approvals, large building construction permits and usage approvals, and budget reallocations over 200 million KRW.

The district inspects the appropriateness of design documents and cost calculation amounts, the suitability of contract methods and procedures, and whether the budget is used for purposes other than intended. When each department requests a routine audit from the district audit officer, the audit officer conducts the audit and then responds to the department.

Each department must submit the results of routine audit measures to the audit officer within two weeks.

Contract cost reviews have a broader scope. They examine construction contracts over 30 million KRW, service contracts over 20 million KRW, goods manufacturing/purchasing contracts over 5 million KRW, and construction projects with contract amounts increased by more than 10% (design changes), focusing on the method of cost calculation and the appropriateness of applying standard market unit prices.

When the ordering department requests a review from the district audit officer, the audit officer recalculates the amount and assists so that subsequent procedures (contracts) can proceed.

Seongjang Hyun, Mayor of Yongsan-gu, said, “Since the district budget scale has been partially reduced this year, more efficient execution is required. We will prevent budget waste and promote the improvement of contract object quality through routine audits and contract cost reviews.”

The district’s main budget for 2021 is 502.5 billion KRW (general account 470.8 billion KRW, special account 31.7 billion KRW), which is 1.53% (7.8 billion KRW) less than the previous year. This reduction reflects a cut in unnecessary operating expenses due to a forecasted decrease in self-generated revenue. Instead, the budget was increased by 13.9 billion KRW for the growing social welfare sector, 2.1 billion KRW for health, and 3.9 billion KRW for contingency funds, respectively.

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