[Exclusive] Yoon Entrusts Subsidy Management Reform to National Audit Office: "We Must Establish a Transparent Rule of Law Society"

President Yoon emphasizes "Transparent Budget Execution is a Given" to the Office for Government Policy Coordination... Stresses Fair Rule of Law Society
Ministry of Economy and Finance, Ministry of the Interior and Safety, etc. advancing detailed plans... Discussing measures to have private accounting firms review accounts

[Asia Economy Reporter Baek Kyunghwan] The Office for Government Policy Coordination will take charge as the control tower for a full-scale investigation of subsidies to private organizations. This follows President Yoon Seok-yeol directly designating the Office for Government Policy Coordination as the overall command center for the reform of national subsidy management, stating that "our society must be transparent and fair overall for the rule of law to be established." It has been confirmed that the government is preparing measures to conduct accounting audits together with private accounting firms.

According to the Presidential Office and government ministries on the 29th, President Yoon ordered a "complete overhaul of the national subsidy management system" and conveyed a message to the Office for Government Policy Coordination, saying, "Since it is operated with taxpayers' money, it is only natural to ensure transparency in budget execution." A Presidential Office official elaborated, "Since the country is run with the people's hard-earned taxes, it is the government's obvious duty to oversee the entire process of budget execution and correct any issues."

[Image source=Yonhap News]

The day before, the Presidential Office announced a reform plan focusing on a comprehensive self-audit of subsidy execution status, adjustment of inadequate management systems, and supplementation of lax management regulations under the Subsidy Act. The plan also includes a policy to inform the public of investigation results as soon as facts are confirmed, and leaves open the possibility of requesting investigations into inappropriate conduct by related public officials.

Among the reform plans presented by the Presidential Office, the Ministry of Economy and Finance, which will review the overall management system, and the Ministry of the Interior and Safety, which will verify local government subsidy projects, have already begun follow-up actions. In particular, the Ministry of Economy and Finance has even planned on-site inspections with related institutions supporting financial tasks, such as the Korea Fiscal Information Service. If signs of fraud in national subsidies are detected through self-monitoring, they intend to conduct direct verification. They are also preparing a plan to investigate together with private professional accounting firms to ensure transparent and thorough accounting audits. A Presidential Office official said, "To identify legally inappropriate accounting operations, professional expertise is required to verify and correct them. Based on this, an inspection system and institutional improvement measures will be established."

The Ministry of the Interior and Safety has decided to focus on local government subsidy projects. Local government subsidy projects account for 60% of all subsidy projects. Internally, there have been suggestions to increase the utilization of the soon-to-be-launched 'Integrated Local Subsidy Management Network' to secure transparency in local subsidy management.

A comprehensive self-audit of subsidy execution status by each ministry is planned to be completed by the first half of next year. However, the Presidential Office explained that due to the large number of audit targets and the varying scales of subsidy payments, it may take more time. Accordingly, the Office for Government Policy Coordination plans to receive interim reports and continuously coordinate improvement directions until all ministries complete their full investigations.

The Presidential Office expects that all ministries will devote their efforts to thorough audits and establishing a transparent management system, as the reform plan was announced just one day after President Yoon instructed a complete overhaul of the subsidy management system, stating, "If taxpayers' money was used for their own vested interest cartels, the public will not tolerate it," and the related ministries immediately began follow-up actions the very next day.

This is also influenced by the Yoon Seok-yeol administration selecting transparency enhancement of subsidies to non-profit private organizations as a key national agenda. During the presidential election, President Yoon pledged to prevent misuse of civic group funds and accounting fraud, citing cases such as the Justice and Memory Foundation incident. Previously, President Yoon also ordered a system to guarantee accounting transparency for labor unions similar to corporate disclosures, in the same context. President Yoon stated, "Preventing union corruption and strengthening transparency are essential for enhancing our industry's competitiveness and improving workers' welfare."

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