[Exclusive] Board of Audit and Inspection Uncovers ODA Misconduct at Korea Industrial Technology Association... Demands Disciplinary Action for Involved Personnel

Illegal Activities Detected at Korea Institute for Advancement of Technology... Disciplinary Action Demanded
Board of Audit and Inspection to Review ODA Audit Results for Announcement Next Week

The Board of Audit and Inspection (BAI) has detected misconduct in the Official Development Assistance (ODA) process of the Korea Institute for Advancement of Technology (KIAT) and is considering announcing the audit results as early as next week.

According to a comprehensive report by Asia Economy on the 6th, the BAI began auditing the government's ODA project implementation this summer, conducting intensive inspections on the overall ODA coordination system as well as individual implementing agencies for cases of poor execution occurring at project sites in recipient countries.

The audit confirmed improper cases related to KIAT’s ODA projects, one of the ODA implementing agencies, and it has been confirmed that disciplinary actions against the relevant personnel have also been requested. It is known that five people are subject to discipline. KIAT is an affiliated institution under the Ministry of Trade, Industry and Energy, responsible for tasks such as analyzing industrial technology research and development (R&D) performance. It also carries out ODA projects. A government official stated, “The BAI conducted a comprehensive audit of ODA, and it was confirmed that KIAT had significant problems during the local project process.”

KIAT’s ODA audit is reportedly related to serious violations such as improper use of project funds, accounting errors, and acquisition of undue profits. It is unusual for the BAI to issue disciplinary demands beyond warnings, notifications, or corrective actions to audited agencies in ODA audit results. The BAI’s ODA audits typically cover project promotion and planning, execution, post-management, budget, and organizational management, often resulting only in minor corrective or cautionary measures.

The BAI is expected to finalize the audit results reflecting the discussions of the Audit Committee.

This is not the first time the BAI has audited ODA. Since inspecting eight countries in 2010 and pointing out 58 problematic cases, special audits on ODA implementation (in 2014, 2016, and 2018) have been conducted every 2 to 4 years. Since 47 institutions (including 12 local governments as of 2023) and central ministries have been conducting ODA projects in a fragmented manner, audits have mainly focused on checking misconduct and poor project execution cases within individual ministries.

The 2010 and 2014 audits examined poor project management and issues such as the establishment of grant and loan aid project plans, respectively. The 2016 audit looked into whether ODA projects were fragmented due to too many ministries conducting small-scale projects and the appropriateness of selecting priority partner countries. In 2018, the audit focused on problems with project feasibility studies and the implementation status of overseas projects.

The BAI is expected to finalize soon whether to announce the ODA audit report results next week. Given that the Yoon Suk-yeol administration has increased the ODA-related budget for next year to a record high of 6.5 trillion won to enhance national prestige, the fallout from improper and illegal cases by individual implementing agencies is anticipated. The Yoon administration has a plan to leverage Korea’s unique experience as the only country that transitioned from an aid recipient to a donor to promote national interests through ODA projects.