Leaking Finances... 74.3 Billion KRW Recovered for Fraudulent Claims in the Second Half of Last Year

Large-Scale Detection of Fraudulent Claims in the 'Employment and Labor' Sector Including Job Stability Fund

[Asia Economy Sejong=Reporter Son Seon-hee] It has been revealed that the amount recovered from fraudulent claims of various government subsidies and other public financial payments in the second half of last year reached 74.3 billion KRW. In particular, a large number of fraudulent claims were detected mainly in the employment and labor sectors, such as job stabilization funds, within the 'social welfare' field.

The Anti-Corruption and Civil Rights Commission (ACRC) announced the results of the 'Public Finance Recovery Act' implementation inspection on the 25th. From March 10 to April 15, the ACRC conducted inspections targeting a total of 308 institutions, including central administrative agencies, local governments, and local education offices, to prevent leakage of public funds.

As a result of the inspection, the amount recovered by public institutions in the second half of last year was 74.3 billion KRW, and the imposed penalty surcharges amounted to 6.8 billion KRW. This is 3.5 times the recovery amount of 21.4 billion KRW in the first half of last year and even exceeds the annual recovery amount of 45.4 billion KRW in 2020.

By sector, 65.2 billion KRW of fraudulent claims were recovered in the social welfare sector, accounting for about 90% of the total. The ACRC explained that major fraudulent cases included falsely registering insured persons for employment insurance to wrongfully receive additional youth employment incentives.

Following that, 5.2 billion KRW and 2.0 billion KRW were recovered in the industry, small and medium enterprises, and energy sectors, and the agriculture, forestry, and marine fisheries sectors, respectively.

By law, the recovery amounts were large for public financial payments made under social welfare-related laws, including 45.6 billion KRW related to the Framework Act on Employment Policy, 7.6 billion KRW related to the National Basic Livelihood Security Act, and 4.2 billion KRW related to the Housing Benefit Act.

Meanwhile, there were also 187 suspected cases where penalty surcharges should have been imposed due to false or excessive claims but were not, with the corresponding fraudulent claim amount confirmed at 3.8 billion KRW.

The ACRC plans to conduct additional inspections on the 187 suspected cases for penalty surcharges and impose them if wrongdoing is confirmed. It will also analyze individual recovery cases to identify vulnerable areas such as common or similar projects with frequent recoveries and promote on-site inspections.

Furthermore, to enable each administrative agency to actively implement the public finance recovery system, the ACRC will expand related education such as consulting and upgrade the integrated management system for fraudulent public finance claims used for data collection during this inspection to establish a precise public finance leakage management system.

Kim Gi-seon, Director of the Review and Protection Bureau at the ACRC, said, "As the Public Finance Recovery Act enters its third year since enforcement, a foundation has been laid for stable operation of the system. We will do our best to ensure that precious tax money is not misused amid increasing national financial burdens due to the spread of COVID-19."