Gyeongnam Province Receives Highest Grade in 'Local Government Financial Analysis' Evaluation

Gyeongsangnam-do Provincial Government Building. [Image source: Gyeongsangnam-do]

[Asia Economy Yeongnam Reporting Headquarters Reporter Lee Sang-hyun] Gyeongsangnam-do announced on the 8th that it received the highest comprehensive grade of "A" in the "Local Government Financial Analysis" conducted annually by the Ministry of the Interior and Safety.

Gyeongnam Province was evaluated as having planned and efficiently managed finances to overcome the difficulties caused by the novel coronavirus infection (COVID-19), receiving the comprehensive excellent grade again this year.

The local government financial analysis is a financial monitoring system by the Ministry of the Interior and Safety aimed at enhancing the soundness and efficiency of local finances and ensuring accountability. It analyzes 13 indicators across three areas?soundness, efficiency, and planning?classified into 14 types of local governments with similar population and financial conditions.

In this analysis, the province was rated excellent in 10 out of the 13 indicators compared to other provinces.

In the financial soundness area, the integrated financial balance ratio (net income - net expenditure) was -2.46%, which was evaluated lower than the provincial average (-2.09%) due to expansionary fiscal operations such as disaster relief funds. However, the management debt balance (local debt balance / revenue settlement amount) was 4.77%, lower than the provincial average (7.85%), indicating good debt soundness.

In the efficiency area, the local tax revenue ratio (26.11%), local subsidy ratio (0.91%), and self-expense ratio (3.08%) were excellent compared to the provincial average, while the rates of increase/decrease in non-tax revenue arrears, investment/donation/transfer funds, and self-expense showed lower values than the provincial average, indicating areas needing improvement.

In the financial planning area, the unused budget ratio (0.61%) and tax revenue error ratio (95.87%) were analyzed as superior compared to the provincial average.

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