Government-Funded Projects Without Results for 3 Years to Be 'Abolished'... Public Disclosure of Evaluations

[Asia Economy Sejong=Reporter Son Seonhee] The government will completely overhaul the performance management system for fiscal projects and abolish projects that have been rated unsatisfactory for three consecutive years.

The Ministry of Economy and Finance announced on the 22nd that it reported the "2022-2026 Basic Plan for Performance Management of Fiscal Projects" with such content at the 38th Cabinet Meeting. This is to efficiently implement performance management of fiscal projects in accordance with the revised "National Finance Act" in December last year, and detailed operation plans will be prepared within the year.

The government introduced the performance management system for fiscal projects in 2003 and has operated it for 20 years. Six ministries, including the Ministry of Economy and Finance, operate 11 project performance evaluation systems. However, as the number and scale of fiscal projects have increased, there have been criticisms that evaluations have been conducted formally or redundantly. The number of performance indicators managed by each ministry exceeds 1,000, and performance plans and reports have been disclosed only formally.

In particular, the budget feedback system, which can be considered the core purpose of evaluating fiscal projects, has been virtually nonexistent, and there were limitations in utilizing related results in subsequent budget formulation.

Accordingly, the government decided to completely reform the related system based on three pillars: ▲reducing administrative burdens of performance management ▲institutionalizing budget feedback (expenditure restructuring) ▲strengthening public disclosure of fiscal operation performance.

First, under the policy of "selection and concentration," the total number of performance indicators will be drastically reduced to less than 500, about half of the current number. Also, to reduce administrative burdens from evaluations, the items and timing of each project performance evaluation will be standardized. In the mid to long term, evaluations with low retention benefits will be consolidated or abolished.

For projects with poor evaluation results, expenditure restructuring will be promoted by mandatorily cutting a certain percentage of the budget. Projects rated unsatisfactory for two consecutive years will undergo project redesign, and projects rated unsatisfactory for three consecutive years will, in principle, be abolished.

Along with this, the government plans to select and disclose "10 core fiscal projects" in December. These projects will be the focus of performance management for five years, from budget formulation to execution stages, centered on the Ministry of Economy and Finance, the fiscal authority.

Jung Heegap, Director of the Fiscal Management Bureau at the Ministry of Economy and Finance, stated, "The list of core fiscal projects and detailed management plans will be finalized by the end of this year, and performance management of core fiscal projects will be promoted from next year."

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