Record 992 Cases of National Subsidy Fraud Detected... 2.8 Trillion Won in Dormant Funds Also Recovered

992 Fraudulent Cases Detected in 2025, Up 1.6 Times From Previous Year
Total of 2.8 Trillion Won in Unused Subsidies Recovered

The government has mobilized statistical model systems and joint on-site inspections to uncover the largest number of fraudulent cases involving national subsidies in history. In particular, it also achieved the result of recovering approximately 2.8 trillion won in subsidies back into the national treasury that had been left unadjusted and idle in project operators' accounts even after projects had ended.

Signboard of the Ministry of Planning and Budget. Yonhap News.

On the 25th, the Ministry of Planning and Budget held the "2nd Subsidy Management Committee" meeting, presided over by Director General for Future Strategy Planning Kang Younggyu, and reviewed and approved a total of four agenda items, including the results of the 2025 inspection of fraudulent receipt of national subsidies and the 2026 implementation plan.

992 cases detected, setting an all-time record

According to the ministry, a total of 992 cases of fraudulent receipt of subsidies were detected last year, the highest number on record in terms of cases. This figure is about 1.6 times higher than the 630 cases recorded in the previous year. The total amount detected was 66.77 billion won, slightly below the previous record high of 69.985 billion won in 2023. The year 2023 was a special period that included 31.89 billion won in fraudulent claims related to quarantine support funds for small business owners introduced to overcome COVID-19.

Among the subsidy projects executed between July and December 2024, the ministry used the fraud-sign detection system of the Integrated National Subsidy Management Network (e-Naradoum) to extract 10,780 suspicious cases. Of these, 317 cases of fraudulent receipt, totaling 49.7 billion won, were uncovered through joint on-site inspections conducted with relevant ministries, the Korea Public Finance Information Service, and accounting firms. Looking only at the joint on-site inspections, both the detected amount and the number of cases were the largest ever. For serious fraud cases, the ministry plans to impose penalty surcharges of up to five times the amount fraudulently received, and to carry out follow-up measures such as filing criminal complaints and recovering the funds.

Although the methods of fraudulent receipt have become increasingly sophisticated, the government's monitoring network has become even tighter. By pattern, the most frequent violation was "breach of specific transaction management," such as splitting projects to qualify for private contracts or channeling work to specific companies, with 647 cases amounting to 21.32 billion won. "Transactions among family members," involving dealings with companies owned by employees' family members, also reached 122 cases totaling 1.33 billion won. In particular, the amount detected using statistical models reached 25.6 billion won across 59 cases, accounting for 38% of the total, demonstrating the effectiveness of digital monitoring.

Another notable point is the large-scale recovery of unused subsidies. Since 2024, the government has been clearing out subsidy funds that remained in the accounts of project operators, local governments, and ministries after project completion, either because the settlement process was delayed or because the funds were left untouched even after settlement was completed. In 2024, it conducted a full review of subsidy projects completed between 2017 and 2023 and recovered 1.7 trillion won to the national treasury. In 2025, it took recovery measures for more than 1.07 trillion won in remaining subsidy balances. The total amount thus recovered into the national treasury comes to approximately 2.8 trillion won.

AI to provide real-time monitoring... pushing innovation in the subsidy management system

Going forward, the government plans to continuously improve the management system to block attempts at fraudulent receipt of subsidies at the source. It intends to establish a next-generation national subsidy management system (BPR/ISP) based on artificial intelligence (AI) and cloud technology by 2030. The aim is to enable AI to detect abnormal signs on a real-time basis and fundamentally prevent fraudulent claims. In addition, the government plans to integrate national subsidy projects that are currently managed through separate systems, such as those executed by local governments, into e-Naradoum for unified management.

Kang Younggyu, Director General for Future Strategy Planning at the ministry, said, "Fraudulent receipt of national subsidies obstructs the achievement of national policy objectives pursued through subsidy projects and results in the waste of precious tax money paid by citizens," adding, "Led by the ministry, each government agency will thoroughly track and uncover any potential fraud so that not a single won of subsidies is wasted, and will rigorously manage the process to ensure that related subsidies are recovered."

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