Yeongdeungpo-gu Saves 11.1 Billion Won in Budget Over 10 Years Through Contract Review

Last Year, Record 81.4 Billion KRW Reviewed Due to COVID-19, Saving Over 1.2 Billion KRW... Focus on Enhancing Contract Management Skills in Departments... Strengthening Old Financial Soundness

[Asia Economy Reporter Jong-il Park] Yeongdeungpo-gu (Mayor Chae Hyun-il) saved a total budget of 1.231 billion KRW through contract reviews in the year 2020.

The contract review system is a system where the appropriateness of the project cost details calculated by the project agency (department) before bidding and contracting is reviewed by a separate department to operate local finances efficiently and transparently.

It applies to projects with ▲construction costs of 10 million KRW or more ▲service contracts of 5 million KRW or more ▲goods purchases of 5 million KRW or more.

Since the district implemented the contract review system in November 2010, the total amount saved over the past 10 years until last year reached 11.1 billion KRW.

This highlights its role as a meticulous guardian of the district’s finances.

In particular, last year was an important year showing results in major district priority projects such as increased quarantine facilities and supplies due to COVID-19, construction and equipment works related to childcare facilities like reading rooms and I-Land, and market environment improvement projects.

With an increase in remodeling projects for aging facilities and various service projects to promote non-face-to-face business, last year’s contract reviews covered a record-high project budget of 81.4 billion KRW, of which 1.2 billion KRW was saved through reviews.

The district reviewed a total of 1,109 cases worth 81.4 billion KRW, including ▲420 construction cases ▲431 service cases ▲258 goods purchase cases, and reinvested the saved 1.231 billion KRW budget into major projects, greatly contributing to improving residents’ convenience.

Also, to enhance the efficiency of contract reviews and support early ordering, the district designated a special review period from January last year and worked to shorten processing times.

As a result, last year the average review period per case was shortened to 2.34 days (standard 10 days), playing a leading role in the prompt execution of budgets and revitalization of the local economy.

The district is making comprehensive efforts to continuously improve the practical cost analysis capabilities of each relevant department in charge of projects through ▲prior consultation on contract reviews ▲publication and sharing of best practice cases ▲external expert advice ▲1:1 consulting between ordering and contracting departments ▲contract review satisfaction surveys and feedback, resulting in a steady decrease in the savings rate.

This year, the district will newly open and operate a consultation window for visiting contract reviews. By strengthening appropriateness reviews before the completion of design services to reduce unnecessary design changes and exempting contract reviews for construction projects involved in the design, the district plans to strengthen efforts to ensure prompt and efficient budget execution and secure the soundness of district finances.

Chae Hyun-il, Mayor of Yeongdeungpo-gu, stated, “We will establish a flawless contract review system to prevent excessive budgeting and spending from the early stages of projects to completion,” adding, “This year, we will catch two rabbits: transparent budget execution trusted by residents and a substantial, highly satisfactory district administration.”