Jungil Kang of Jeonnam Provincial Assembly Delivers Strong Criticism of Jeonnam Province's Poor Financial Management

"Omission of Revenue, Neglect of Arrears, and Surge in Overpayments"
Calls for Comprehensive Overhaul of Computer Systems and Collection Framework

The poor financial management of Jeonnam Province faced strong criticism during the provincial assembly's settlement review.

Jungil Kang, a member of the Jeonnam Provincial Assembly (Democratic Party of Korea, Gwangyang 2), pointed out structural problems in the province’s financial operations during the recently held 391st regular session of the Special Committee on Budget and Accounts. He specifically cited inaccuracies in revenue budget estimates, insufficient management of arrears, and an increase in refunds for overpaid local taxes, urging the establishment of a more precise and accountable budget execution system.

According to the Jeonnam Provincial Assembly on June 16, Jeonnam Province recorded a total of 79.6 billion KRW in excess revenue in the 2024 fiscal year settlement, including 49.1 billion KRW in excess local tax revenue and 39.2 billion KRW in unbudgeted non-tax revenue. However, the province failed to appropriately reflect this in the budget, resulting in the inability to utilize it for expenditures within the same year.

Jungil Kang, Jeonnam Provincial Assembly Member

Kang first raised the issue of inaccurate revenue budget projections. He stated, "The omission of even predictable revenues from the budget formulation process is seriously undermining the efficiency and timeliness of fiscal management," and added, "In particular, highly certain items such as the return of city and provincial subsidies should be actively reflected in the budget."

He also called for proactive collection measures regarding 6.2 billion KRW in deferred revenue and 34.4 billion KRW in uncollected revenue. He said, "Swift action is needed when additional taxes arise after acquisition tax reductions," and emphasized, "A dedicated organization should be established to create a systematic and effective collection system." He further suggested that, to improve the delivery efficiency of delinquency notices, "the 'Kakao Alimtalk' electronic notification system, currently used by only some departments, should be expanded to all departments in the province to substantially increase the collection rate of arrears."

The issue of increasing refunds for overpaid local taxes was also raised. Kang strongly criticized, "Of last year's 18.7 billion KRW in local tax refunds, 9.8 billion KRW, or 52%, resulted from taxpayer relief measures," adding, "This is an administrative mistake stemming from tax assessment errors and inadequate legal review by the province." He particularly emphasized, "Although the total amount of overpaid local taxes has decreased, both the number of relief cases and the amount have actually increased by 3 billion KRW," stressing the need to enhance the expertise of tax administration and the precision of the tax assessment system.

Kang also pointed out the inadequacy of the subsidy management computer system. He said, "The current 'Botam-e System' cannot integrate the management of subsidy execution balances by department, making it difficult to grasp the overall subsidy status at a glance," and stressed, "The budget department must urgently overhaul the computer system so that it can manage the subsidy execution status of all departments in real time."

He also criticized the poor management of carryover projects. Kang noted, "Of the 62.6 billion KRW in projects carried over and specified in 2023, about 24.9 billion KRW, or 40%, was re-carried over," and pointed out, "The reasons for carryover are vague and ambiguous, making it difficult to even identify the causes of project delays." He added, "When stating the reasons for carryover, the guidelines of the Ministry of the Interior and Safety must be strictly followed, and project-by-project execution management must be more thoroughly monitored."

In response, Myung Changhwan, Vice Governor for Administrative Affairs of Jeonnam Province, stated, "We recognize that the issues you raised, such as unused funds, omitted revenue, arrears management, and overpayment refunds, are very important matters affecting the overall financial management of the province." He continued, "Through precise revenue forecasting, proactive collection responses, and systematic improvements to the computer system, we will ensure that the budget is used efficiently and contributes meaningfully to the well-being of residents."