Interview with Accounting Expert Professor Baewon Ki of Nonprofit Corporation
Work-related accidents reduce expertise
Supervision and management lacking like Jeonguiyeon
Small organizations lack accounting skills
Need to adjust pace of transparency efforts
[Asia Economy Reporter Jeong Dong-hoon] Amid the accounting irregularities of non-profit organizations such as Jeongui Gieok Yeondae, Bae Won-ki, a professor in the Department of Taxation at Hongik University Graduate School of Business, an expert in this field, suggested that "the government should unify the management of non-profit organizations."
On the 14th, Professor Bae said in an interview with Asia Economy, "The tasks related to non-profit organizations or public interest corporations are scattered across various ministries, resulting in a lack of expertise and insufficient supervision and management," adding, "It is necessary to create a government body tentatively called the 'Public Interest Committee' or 'Citizen Public Interest Committee' to unify these tasks." There have been many criticisms that the accounting irregularities of Jeongui Gieok Yeondae were due to the division of responsibilities among the relevant ministries, donation accounting management departments, and government subsidy payment departments, leading to negligent management and supervision.
Professor Bae has maintained a consistent interest in the accounting issues of non-profit organizations, having served as a part-time auditor for 4 to 5 non-profit organizations for over 15 years. During the 2017 political scandal, he raised his voice for reform whenever accounting irregularities and fraud issues surfaced in non-profit organizations such as the K-Sports Foundation and Mir Foundation.
Currently, movements to improve laws and systems related to non-profit organizations are more active than ever. Since the opening of the 21st National Assembly, about 20 legislative amendments related to non-profit organizations have been proposed, including 10 bills on the Act on the Collection and Use of Donations (Donation Act), 3 bills on the Support for Non-Profit Private Organizations Act, 6 bills on the Act on the Establishment and Operation of Public Interest Corporations (Public Interest Corporation Act), and 1 bill on the Community Chest of Korea Act.
Professor Bae emphasized that among the proposed legislative amendments, the most urgent and important is the revision of the provisions on non-profit organizations in the Civil Act. He pointed out, "Article 32 of the Civil Act stipulates that the establishment of a non-profit organization requires approval from the competent authority to be legally established as a corporation. If the Civil Act is not amended and only the Public Interest Corporation Act is revised, the authority to approve the establishment of non-profit organizations will remain with each competent authority as it is now, making it impossible to achieve integrated management of non-profit or public interest corporations as intended by the revised Public Interest Corporation Act."
He added, "Looking at the proposed amendments, it seems like the law is being revised in a 'patchwork' manner, fixing bugs as they appear," and argued, "It is desirable that laws under the jurisdiction of the Ministry of the Interior and Safety, such as the Donation Act and the Support for Non-Profit Private Organizations Act, and laws under the Ministry of Economy and Finance, such as the Framework Act on Cooperatives, be amended simultaneously," emphasizing, "Reports required by each competent authority and the Donation Act and tax laws should also be integrated."
He also stressed the need for 'speed control' in enhancing accounting transparency of non-profit organizations. Professor Bae said, "There is a discussion in the National Assembly about punishing public interest corporations if they do not appoint an accounting audit committee and conduct audits, but this is done without understanding the realities of non-profit organizations," and stated, "The urgent task is for accountants to assist small organizations in preparing financial statements in accordance with the Public Interest Corporation Accounting Standards."
He pointed out the issue of 'checks and balances' within non-profit organizations. He criticized, "Checks and balances are essential in any organization or group," and said, "It is necessary to reflect on whether the 29 registered directors in Jeongui Yeon and the 5 in Jeongdae-hyeop have fulfilled their duties as directors."
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