Board of Audit and Inspection: "Improper Handling of Management Performance at Content Promotion Agency"

Announcement of Regular Audit Results: Performance Bonuses Paid Based on Incorrect Management Performance Reports

[Asia Economy Reporter Ryu Jeong-min] The Korea Creative Content Agency was found to have improperly processed its performance report and paid performance bonuses, according to an audit by the Board of Audit and Inspection.

The Board of Audit and Inspection announced the results of a regular audit of the agency on the 28th. This audit, which examined the management practices of the Content Agency, was conducted over 15 days from May 25 to June 12 last year.

According to the Board of Audit and Inspection, the Korea Creative Content Agency prepared a report detailing its 2018 management performance to receive the 2018 performance evaluation and submitted it to the Ministry of Economy and Finance in March 2019.

[Image source=Yonhap News]

Among the detailed evaluation items for the 2018 management performance assessment, the agency received full marks in both the 'Production Support Content Sales Performance (9 points)' and the 'Investment and Financing Support Performance through Content Value Evaluation (6 points).' As a result, it was awarded an overall grade of C (total score 72.124 points) and paid 297 million KRW in performance bonuses to its executives and employees.

However, the Board of Audit and Inspection pointed out that "the sales performance for production support content was reported inaccurately." Investigations revealed that the management evaluation department officials at the Content Agency, knowing that only 2018 sales figures should be included in the sales performance calculation, requested modifications to include either the expected 2019 sales or the 2017 sales figures as if they were 2018 sales.

The Board of Audit and Inspection stated, "The performance investigation department requested production support companies to revise the sales occurrence year, resulting in the submission of 2018 sales figures as approximately 125.3 billion KRW instead of the actual 93.3 billion KRW, based on which the management performance report was prepared and submitted."

Furthermore, the Board of Audit and Inspection pointed out issues with the preparation of the investment and financing support performance through content value evaluation.

They revealed that the reported performance included 13.2 billion KRW, which was the actual guarantee performance of 12.4 billion KRW plus an overlapping amount of 0.8 billion KRW. The Board stated that if the report had been properly prepared, the overall grade would have been D or lower, and the 297 million KRW in performance bonuses were paid improperly.

The Board of Audit and Inspection explained, "Public institutions must prepare management performance reports based on facts, and if false reports are submitted, the Minister of Economy and Finance can take measures such as lowering scores for related evaluation items and reducing performance bonuses."

The Board requested the head of the Korea Creative Content Agency to discipline (at least a mild disciplinary action) three individuals involved in the improper handling of the 2018 management performance evaluation. Additionally, they requested that one individual be cautioned to prevent negligence in reviewing management performance evaluation materials.

The Board of Audit and Inspection notified the Minister of Economy and Finance to take appropriate measures, including revising the management performance evaluation results and performance bonus payment rates for the Korea Creative Content Agency, which submitted the 2018 management performance report inaccurately.