'Public Funds Are Not Blind Money'... 45.3 Billion KRW Recovered in the First Year of the Public Finance Recovery Act Implementation

Kwonikwi Announces First Year Performance After Law Enforcement
Most Fraudulent Claims in Social Welfare and Health Sectors

Chairperson Jeon Hyun-hee of the Anti-Corruption and Civil Rights Commission briefing on the results of the Anti-Corruption Policy Council at the government Seoul office briefing room on the 29th of last month. (Image source=Yonhap News)

[Sejong=Asia Economy Reporter Moon Chaeseok] It was announced on the 9th that central and local administrative agencies, educational institutions, and others recovered 45.3 billion KRW from 52,995 cases of fraudulent public finance claims during the first year of the Public Finance Recovery Act enforcement last year. This achievement came from a part that Anti-Corruption Authority, the Anti-Corruption and Civil Rights Commission (ACRC) Chairperson Jeon Hyun-hee, paid close attention to, even declaring that she would change the perception that "government money is blind money."

Since the law was enforced in January last year, if someone is caught falsifying or inflating claims for various subsidies, compensations, or grants, they must return the full amount and pay up to five times the amount of the illicit gain. In April of the same year, the ACRC and the Ministry of the Interior and Safety announced the establishment of the "Public Finance Recovery System Division," which oversees the system related to recovering fraudulent claims on various subsidies, compensations, and grants provided by the government, local governments, and public institutions.

Source: Anti-Corruption and Civil Rights Commission

On the first anniversary of the law's enforcement, the ACRC revealed that it had recovered 45.3 billion KRW and imposed additional fines of about 260 million KRW on cases of fraudulent claims for public finance payments by central and local administrative agencies and educational institutions. This is based on an investigation into the recovery and imposition of fines on public finance payments made over the past year in central, local, and educational finances. The central finance recoveries were mostly in social welfare, health, industry and telecommunications, and defense sectors. Local finance recoveries were highest in social welfare, industry, health, and transportation and logistics, while educational finance recoveries were mainly in early childhood education support, Nuri curriculum, and private school finance sectors.

A representative case of fraudulent claims involved an organization that improperly obtained a youth job project subsidy supported by a central government ministry. They violated the agreement by performing work at a different business site than originally contracted and fraudulently received 25 million KRW in subsidies. The entire subsidy was recovered, and a penalty fine of 106 million KRW was imposed.

Based on the investigation results, the ACRC plans to promote law amendments, compliance inspections, system operations, and education and publicity. The law amendment process will include provisions requiring administrative agencies to be notified when investigations confirm fraudulent claims and prosecutions or deferred prosecutions are decided. The ACRC will organize a 'Joint Inspection Team' to operate continuously, inspecting vulnerable sectors quarterly to recover illegal subsidies. Recovery performance and other data will be managed through the 'Public Finance Fraudulent Claims Integrated Management System' and disclosed to the public. The ACRC Integrity Training Institute will educate officials from various public institutions and continuously promote the law using social networking services (SNS) and public notices.

Oh Jeong-taek, Acting Director of the ACRC Review and Protection Bureau, emphasized, "Last year, the law laid the institutional foundation to support the perception that public finance is not blind money," adding, "We will make every effort to ensure that not a single won of government money is wasted through the thorough enforcement of the law."