"Commuter Bus Service for Civil Servants in Seoul Metropolitan Area Should Be Discontinued"... 36% of Publicly Funded Projects Rated for Restructuring (Comprehensive)

Ministry of Economy and Finance Announces First Results of Integrated Fiscal Project Performance Evaluation
901 Out of 2,487 Projects Rated as Underperforming
"7.7 Trillion Won to Be Restructured Through 15% Budget Cuts and More"

The Ministry of the Interior and Safety's civil servant commuter bus program received a 'funding reduction' rating in the government's first-ever integrated fiscal project performance evaluation conducted this year. The evaluation recommended discontinuing bus service in the Seoul metropolitan area, where public transportation accessibility is high, and restructuring the program to focus on areas with poor public transport, such as the Sejong Government Complex.

For the first time this year, the government and private sector jointly assessed the performance of publicly funded projects, with more than one out of every three projects receiving a failing grade. Notable examples include the Ministry of the Interior and Safety’s civil servant commuter bus service, the Ministry of Health and Welfare’s national smoking cessation support, the Financial Services Commission’s Youth Leap Account, and the Ministry of Environment’s carbon neutrality commercialization projects. The government plans to reduce the budget for projects rated as underperforming—such as those marked for reduction or elimination—next year, restructuring expenditures by nearly 8 trillion won.

With 'self-evaluation' abolished, 36.2% rated for reduction, elimination, or integration... Ministry of Land, Infrastructure and Transport leads the list

The Fiscal Performance Committee of the Ministry of Economy and Finance finalized and announced the results of the integrated fiscal project performance evaluation. Until last year, each ministry conducted a 'self' evaluation of its projects. However, concerns were raised about the objectivity and effectiveness of such lenient self-evaluations. Therefore, starting this year, all ministries’ projects underwent a joint evaluation by relevant ministries and private sector experts.

Woo Sukjin, professor at Myongji University and head of the fiscal project performance evaluation team, explained, "Amid fiscal expansion, it is difficult to gain public consent without restructuring existing fiscal expenditures, so we aimed for an objective and independent evaluation. We maintained a strict evaluation framework to uphold taxpayer value from the public’s perspective, without any preconceptions."

As a result, out of 2,487 government fiscal projects evaluated, 901 (36.2%) were classified as targets for expenditure restructuring, including reduction, elimination, or integration. A further 1,497 projects (60.2%) were flagged for needing improvement, though not reduction. Only 89 projects (3.6%) were rated as proceeding normally and recognized as effective and policy-relevant enough to warrant continued support. An official from the Ministry of Economy and Finance explained, "The 36.2% ratio for expenditure restructuring is the highest ever, more than double the 15.8% average for underperforming projects in self-evaluations over the past five years."

By budget size, the area most frequently flagged for restructuring—including reduction, elimination, or integration—was land, infrastructure, and transport, with 18.3262 trillion won out of a total 44.2961 trillion won (39.1%) up for review. This was followed by disaster and safety (6.6024 trillion won), national defense, diplomacy, and unification (3.7149 trillion won), SME finance (3.6398 trillion won), and science, technology, information, and communications (3.3713 trillion won).

By ministry, the Ministry of Land, Infrastructure and Transport led with 21.9737 trillion won, followed by the Ministry of Employment and Labor (3.6510 trillion won), the Ministry of SMEs and Startups (3.5350 trillion won), the Ministry of Science and ICT (3.4458 trillion won), and the Ministry of Environment (3.2567 trillion won).

Youth Leap Account, National Smoking Cessation Support Service among projects rated for reduction... Case studies by type

The evaluation process involved 17 subcommittees, each composed based on the expertise of evaluators, who reached conclusions through discussion and coordination. The process operated as a “three-step review system,” ensuring participation and input from relevant ministries at all stages—written evaluation, in-person evaluation, and evaluation of contentious projects. Evaluation criteria included not just procedural compliance, but also four main items: necessity of the fiscal project, appropriateness of the project plan, appropriateness of execution, and fiscal support outcomes.

By type, the civil servant commuter bus operation failed in the category of project necessity. The national smoking cessation support service, which includes public health center smoking cessation clinics and hotlines, fell short in project plan appropriateness, due to insufficient legal basis, functional and target overlaps between sub-projects, and unclear boundaries between some program elements. For the Youth Leap Account, flagged for poor execution efficiency, the evaluation noted that although new enrollments have stopped, retained funds, carryover resources, and recoveries continue to accumulate, indicating the need to realign the overall project size based on the actual payment requirements for existing members. The Ministry of Foreign Affairs’ New Growth Partnership Program (ODA) was criticized for insufficient achievement of outcomes, with rapidly increasing budgets despite variability in implementation and issues with partner contribution compliance.

The Ministry of Environment’s carbon neutrality commercialization support was rated for integration with similar projects, especially with other small and medium environment enterprise support programs within the ministry, requiring consolidation and restructuring. The ministry was also advised to integrate inspections of aging apartment complexes and electrical facility safety checks to improve operational efficiency. The Ministry of Science and ICT’s 3D printing industry development infrastructure program was rated for elimination, reflecting changes in the environment such as increased private sector capabilities.

Yonhap News Agency

Each ministry must submit budget requests, including a 15% reduction, by the end of May

The government plans to reflect the integrated evaluation results in the 2027 fiscal year budget. The Ministry of Economy and Finance has already communicated project-specific expenditure restructuring targets to each ministry. Ministries must submit next year’s budget requests, incorporating their restructuring plans, by the end of May.

Projects rated for elimination must have their entire budget cut, while projects rated for reduction must reduce their budgets by at least 15%. An official from the Ministry of Economy and Finance stated, "Assuming both reduction and elimination are fully implemented, we estimate a total expenditure restructuring of 7.7 trillion won."

For projects flagged for improvement, ministries must prepare a performance management improvement plan in June, reflecting the necessary improvements indicated in the evaluation report, and submit this with next year’s performance plan. For projects that inevitably fail to meet their expenditure restructuring targets, ministries must later submit a “statement of reasons for non-reflection” and provide justification through the “Open Finance” portal.

Meanwhile, projects with outstanding performance will be rewarded. Up to 50 projects selected by the evaluation team as excellent will be exempt from evaluation next year, and those with especially high public satisfaction—chosen through a public vote in July—will have their project managers recognized with special awards.

An official from the Ministry of Economy and Finance stated, "To enhance the effectiveness of the integrated evaluation system, we plan to review and revise evaluation guidelines and make other institutional improvements during the second half of the year, taking into account suggestions and issues raised by ministries and the evaluation team during the process."

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