Ministry of Health and Welfare Issues Institutional Warning to National Health Insurance Service for Embezzlement of 4.6 Billion Won... Requests Severe Disciplinary Action for 3 Officials

[Asia Economy Reporter Kim Young-won] The Ministry of Health and Welfare confirmed deficiencies in the management regulations for information system access rights and inadequate internal controls related to the embezzlement incident involving a National Health Insurance Service employee that occurred last September. The ministry has demanded severe disciplinary action against the head of the Finance Management Office and issued a formal warning to the Service.

According to the Ministry of Health and Welfare on the 14th, a special audit jointly conducted over two weeks from September 25 to October 7 by departments responsible for audit, health insurance, and information security revealed a total of 18 issues related to the Service’s information system operations, accounting-related organizations, and personnel management.

Previously, Choi, a team leader in the Service’s Finance Management Office, embezzled 4.62 billion KRW by transferring withheld seizure medical fees from 17 medical institutions to his personal account seven times starting April 27, then fled overseas. Despite the embezzlement continuing for about five months, it was confirmed that the internal monitoring system of the Service did not function properly, highlighting the absence of an effective management system within the Service.

Following the audit results, the Ministry of Health and Welfare demanded that the Service implement severe disciplinary measures against the Finance Management Office director and former and current department heads for negligence in managing accounting operations. Regarding six issues including inadequate management regulations, insufficient internal controls, lack of self-inspections, and missing approvals, the ministry issued a formal 'institutional warning' to the Service.

Regarding the institutional warning, the ministry stated, "It clarifies that responsibility lies with the entire institution, including the Service’s president and executives," and added, "The Service must establish and thoroughly implement recurrence prevention measures and carry out strengthened innovation actions reflecting the results of external expert consulting."

The audit revealed that the Service’s 'Integrated Benefit Information System' allowed employees to arbitrarily change payment account information, and administrators could process account registration and verification collectively. Notably, there was an error in the procedure for verifying whether the account holder’s name matched the account number, allowing account approval even when the names and accounts did not match. Despite this, the embezzlement incident occurred without detection.

Furthermore, the Service’s accounting regulations require separation of 'expenditure cause actions' and 'expenditure operations,' but both tasks were performed by the same department. It was also confirmed that the expenditure operations staff had no way to verify documents related to expenditure cause actions, making substantive review impossible.

The special audit team also pointed out that the 'self-inspection to prevent expenditure-related incidents' conducted by the Service’s Finance Management Office was carried out only formally, and that a false report prepared by the embezzlement perpetrator was approved as is, despite the lack of expertise among the heads of accounting-related departments.

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