Securing Liquidity through Disposal of Non-Essential Assets and Office Maintenance... Used for Regional Revitalization
The government achieved a budget reduction effect of approximately 141.4 billion KRW through financial soundness innovation by selling non-core assets of local public institutions and renovating office buildings.
The Ministry of the Interior and Safety announced on the 1st the 2023 performance results of the 'Financial Soundness Innovation' in local public institutions, which includes these details. The innovation of financial soundness in public institutions is currently being promoted as part of the national agenda.
Over the past year, the Ministry of the Interior and Safety secured liquidity of 117.8 billion KRW and achieved a budget reduction of 141.4 billion KRW over 10 years by reorganizing 799 unnecessary assets from 408 institutions, 68,741㎡ of office buildings, 11 investee companies, and 527 welfare benefit systems.
First, the Ministry announced that it completed the reorganization of 833 cases (52.7%) out of 1,676 cases scheduled for reorganization from 2023 to 2027. In the field of unnecessary asset reorganization, about 64.7 billion KRW was secured by selling idle land of Gangwon Development Corporation, and a total of 799 cases from 44 institutions were sold, securing about 108.9 billion KRW in liquidity.
Next, in the public institution office building reorganization sector, Daegu Happiness Promotion Social Service Agency reduced its leased area by 1,513㎡, saving 540 million KRW annually in rent. Accordingly, a total of 62 institutions reorganized 68,741㎡ of public institution office buildings, saving about 12.1 billion KRW annually through increased rental income and rent reduction. In the investee company reorganization sector, 11 investee companies from 11 institutions including Gwangju Metropolitan City Urban Corporation were reorganized, securing about 8.94 billion KRW in liquidity.
In the welfare benefits sector, welfare support systems that were pointed out by other institutions such as the Board of Audit and Inspection or were excessive compared to local government officials were reorganized. Out of 987 cases targeted for reorganization, 527 cases (53.4%) were reorganized last year, saving an estimated 2.04 billion KRW annually according to local government estimates. The Ministry plans to reorganize an additional 287 cases this year, totaling 814 cases (82.5%).
The Ministry of the Interior and Safety will support local governments and local public institutions to promptly complete asset soundness and welfare benefit reorganization tasks, provide management evaluation bonus points to excellent institutions, and discover and share best practices.
The resources secured through management efficiency such as asset sales are expected to be used by local public institutions to activate investments aimed at revitalizing the regional economy, including job creation.
Ko Gi-dong, Vice Minister of the Ministry of the Interior and Safety, said, "Strengthening financial soundness is expected to increase the investment capacity of local public enterprises and contribute to regional economic revitalization," and added, "We will strive to improve financial soundness to enhance management efficiency of local public institutions."
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