Government-Funded Projects Totaling 53 Trillion Won Annually... Numerous Projects Lack 'Adequate Legal Basis'

Yejeongcheo "Legal basis for appearance fees needed... Strict application and specification of regulations required"

[Asia Economy Sejong=Reporter Kwon Haeyoung] Although government grants exceed 53 trillion won annually, accounting for about 9% of total expenditures, many projects lack legal grounds, raising calls for institutional improvements related to grants.

According to the "Status and Improvement Tasks of Grants" report released by the National Assembly Budget Office on the 21st, the government conducted 2,724 grant projects worth 53.3 trillion won in 2022, accounting for 8.8% of total expenditures. The scale of grant projects has been increasing annually, growing at an average rate of 8.9% per year from 2017 to 2022.

The problem is that the government must have legal grounds to provide grants to specific institutions, but in many cases, such grounds are lacking.

The National Finance Act limits the purpose of grants to institution operation grants and national research and development project grants. On the other hand, according to the Ministry of Economy and Finance's budget formulation guidelines, project grants, financial fund grants, and private fund grants are broadly recognized. In fact, the government is executing project grants without clear legal grounds under the National Finance Act.

The Budget Office pointed out that project grants lacking legal grounds account for 42% of the total grant budget. It cited examples such as parts of the "International Conference Hosting and International Organization Activity Support" project budgeted in 2021 and parts of the "National Maritime Museum Operation" project budgeted in 2022. Ultimately, the Budget Office emphasized that the law should reflect the changed scale and importance of project grants compared to when the grant law was originally enacted.

A Budget Office official stated, "Legal grounds must be established for types of grants not covered by Article 12 of the National Finance Act," and added, "Strict application of legal grounds for grants and specification of legal provisions regarding grant support are necessary."