Jeonnam Fine Arts Association Sponsorship Funds Spark Transparency Controversy, Calls for Provincial Audit

Company Donates Tens of Millions of Won;
Portion of Prize Money Also Returned as Sponsorship
Criticism Mounts Over Alleged "Kickbacks"

Concerns have been raised regarding the management of certain sponsorship funds by the Jeollanam-do branch of the Korean Fine Arts Association (hereafter referred to as Jeonnam Fine Arts Association), specifically calling for a review of whether accounting procedures and subsidy management standards have been properly followed.

Jeollanam-do Art Exhibition. Courtesy of the reader

The main issue centers on how sponsorship funds, raised in parallel with events supported by local government and provincial subsidies, have been managed. Key points of contention include whether the sponsorship funds were incorporated into the organization’s overall accounting and reported at general meetings and audits, as well as whether the use of dedicated accounts and the flow of funds were managed in accordance with relevant standards.

In particular, controversy is growing over the Jeollanam-do Art Exhibition, as Company A transferred tens of millions of won to a “sponsorship” account, and it has been confirmed that some award recipients donated part of their prize money as sponsorship.

Some have criticized the situation, saying, “Calling it sponsorship sounds nice, but it looks more like a kickback for awarded work, and it doesn’t seem appropriate for prize money to be donated back as sponsorship.”

There are also calls for clarification on whether the sponsorship funds were officially reported and whether their use was properly distinguished from the subsidies, as regulations require that any additional revenue generated during subsidized events must be reported to the subsidy-granting institution along with details of its use.

In response, Mr. J, president of the Jeollanam-do branch, stated, “Sponsorship funds are managed transparently through a separate sponsorship account.”

According to nonprofit accounting principles, sponsorship funds are generally classified as organizational assets and should be included in the organization’s overall accounting. Furthermore, as there have been mentions of “some sponsorship funds passing through personal accounts,” there is a growing need to review whether the disbursement of funds followed internal resolutions and procedures.

Experts point out that the focus should not be on the intentions of specific individuals, but rather on reviewing the overall financial management structure of cultural and arts organizations that receive public funding. As a result, there are increasing calls for administrative review and audit by the Jeollanam-do Department of Culture and Arts.