Nowon-gu Saves 1.67 Billion Won Budget Through Routine Audits and Contract Cost Reviews

Through the review of 440 contract cases worth 59.745 billion KRW in 2019, 1.67 billion KRW was saved... Budget savings in 2019 more than doubled compared to 2018

[Asia Economy Reporter Jongil Park] Nowon-gu (District Mayor Oh Seung-rok) announced on the 9th that it saved 1.67 billion KRW in budget through routine audits and contract cost reviews over the past year.

Routine audits and contract cost reviews are systems conducted by the Audit Department’s Audit Team to examine the appropriateness of procedures such as contract methods and cost calculations before contract signing for major projects related to budget execution, which are difficult to correct or remedy through general post-audits.

The routine audit area covers the appropriateness of contracts, major policy execution, budget management, and other landform changes. Contract cost reviews address the appropriateness of cost increases or decreases for construction costs over 50 million KRW, service contracts over 20 million KRW, and manufacturing purchases and construction design changes over 10 million KRW.

Last year, the district reviewed 440 contract cases with a project cost of 59.745 billion KRW, correcting overestimated costs and saving 1.67 billion KRW.

This amount corresponds to 2.8% of the reviewed amount.

Detailed savings include 1.32 billion KRW from 179 construction cases, 270 million KRW from 124 service cases, and 70 million KRW from 137 goods cases. Compared to 2018, when 315 cases with a project cost of 34.9 billion KRW were reviewed and 790 million KRW saved, the budget savings more than doubled.

In particular, during the review of the Nowon-gu Community Center remodeling project, the largest savings of about 200 million KRW were achieved through unit price adjustments based on construction standard norms and Seoul-type norms. The district reinvests the saved budget into projects essential for residents.

Projects exempt from routine audits and contract cost reviews include purchases of finished products (gift certificates, fuel, volume-based waste bags, artworks, exhibition production items, vehicles, specific program usage, etc.), projects ordered under the Act on Contracts to Which the State is a Party, and projects reviewed by the Seoul Metropolitan Government Contract Review Division.

The routine audit and contract cost review system has been in place since 2011, contributing to securing the financial soundness of projects implemented by the district. Going forward, the district plans to minimize side effects such as overestimation and trial and error during major project implementation to reduce actual waste factors.

Oh Seung-rok, Mayor of Nowon-gu, said, “We will ensure that residents’ taxes are not wasted through more meticulous reviews,” and added, “We will actively pursue administration to improve budget execution efficiency and enhance administrative reliability.” Audit Department (☎2116-3061)