Report Finds Widespread Indiscriminate Use of Local Funds

A national report has found that since the implementation of the local government system, local governments have indiscriminately created funds to use as a pork barrel to become popular among residents.

According to the Inspection Report of Local Government Fund Operations issued on Sunday by the Board of Audit and Inspection (BAI), there were 700 local government funds in total at the end of 1994 that amounted to 2,186.7 billion won. The local funds have been increased since the local elections of 1995, and by the end of last year, they were more than five times the size of 1994, recording 11,247.4 billion won in 2,253 funds.

It was determined that 63.9 percent of the 246.7 billion won executed during the years 2001-2003 was used as pork barrel spending: 52.1 billion won for scholarships and social welfare and 105.5 billion won for subsidies for social groups and civil grants-in-aid.

It was found that 1,850 million won was spent for overseas trips by a total of 25 organizations during the same three-year time period. In particular, Kyonggi Province and its 10 cities and counties spent 670 million won and Cheju Island spent 280 million won for overseas trips of civic group members.

The BAI pointed out, “Local governments remain far from financial independence, and their budgets rely on the central government’s grants. Still, they have created various funds as ‘another pocket’ to spend as pork, and they have managed their funds indiscriminately, with rudimentary systems in general.”

Yong-Gwan Jung yongari@donga.com