Institutional Blind Spots in the Management of Public Financial Leakage to Be Removed by Preventing False Claims for Public Funds

ACRC held workshops for local government officers in charge of audit and subsidy project affairs

Three years on from the Implementation of the Public Fund Recovery Act … ACRC shared achievements and discussed ways to prevent public fund leakage

(April 13^th 2023, ACRC)

Local governments across the nation were provided with a venue for communication to share the achievements made in the course of the implementation of the Act on the Prohibition of False Claims for Public Funds and Recovery of Illicit Profits (herein after referred to as the “Public Fund Recovery Act”) for the last three years and to address the institutional blind spots of the public fund management.

The Anti-Corruption and Civil Rights Commission (ACRC) held last month the workshop for improvement in transparency in public fund management and reinforcement of management capacity for officers from 203 local governments*, who are in charge of affairs related to audit and subsidy administration, at the Korea Press Center.

*local governments that received ACRC recommendations for implementation of illicit profit recovery rules in accordance with the fact-finding inspection result of Feb. 2023

During the workshop, the ACRC explained major provisions of the Public Fund Recovery Act, sharing the experience of the implementation of the Act over the last three years and discussing in depth measures to prevent subsidy frauds, including oil subsidies and public direct payments for agriculture and rural communities.

As the eradication of false claims for public funds is a matter that requires the government-wide cooperation, the ACRC invited officials of the Korea Fiscal Information Service, an affiliated organization under the Ministry of Finance and Economy, and the Ministry of Interior and Safety that are in charge of the administration of central and local government subsidies to the workshop for training regarding cases of subsidy frauds and responses.

With its 1^st workshop held in Seoul, the Commission plans to organize workshops by region, making necessary adjustments to the scope of participants and the contents of training in accordance with needs of each institution.

The Public Fund Recovery Act was legislated in April 2019 to improve soundness and transparency in public finance and became effective in January 2020.

The Commission has distributed authoritative interpretation casebooks to public institutions for stable establishment of the public fund recovery system and improvement in the awareness of the general public and public servants and provided tailored education for officials in charge of the matter.

In addition, the Commission has been putting various efforts into eradicating subsidy frauds through stable implementation of the public fund recovery system, including distribution of promotional video and brochure to inform the general public of the system, fact-finding inspection of the status of recovery of payments from public finance by public institutions of various levels, and offering recommendations to public institutions found to have failed in administrating appropriate disposition of recovery and additional monetary sanctions.

*the data for the status of imposition in 2022 is tentative and the finalized one is slated to be made public in the first half of 2023.

An ACRC Official said, “Since the implementation of the Public Fund Recovery Act, we made some fruitful outcomes, such as increases in the amount of recovered payments from public finance and additional monetary sanctions and spread of the awareness of importance of eradication of subsidy frauds, thanks to the efforts put in by officials in charge at public institutions of various levels. The Commission will continue to faithfully manage the public fund recovery system, contributing to achieving the pan-governmental goal of sound fiscal management in cooperation with relevant agencies.”