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W17.8 Trillion Mistake

Posted September. 08, 2007 06:55,   


The government miscalculated its expenses by 17.8 trillion won for the first half of this year, leading to other statistical mistakes. Now the government’s handling of the budget is being criticized as well due to mistakes of enormous proportions that would not even be made in a small-sized company.

The Ministry of Finance and Economy first announced a total expenditure figure of 131.2 trillion won as a consolidated government balance on August 23, but revised that yesterday to 113.4 trillion won, and revised the total government income figure from 125.1 trillion to 124.7 trillion won.

The modification put the consolidated government balance at a surplus of 11.3 trillion won from a deficit of 6.1 trillion won and the adjusted fiscal balance, which is consolidated fiscal balance minus the surplus in social security funds plus repaid public funds, from a deficit of 22.5 trillion won to a deficit of 5.1 trillion won. In turn, the ministry modified its fiscal progress rate from 62.0% to 53.6%.

Kim Hyeong-soo at the financial planning department of the Finance Ministry said, “Errors occurred in the new digital budget accounting system created miscalculations. Our overhead cost, which was 11.5 trillion won, injected 28.7 trillion won into the system, which created a 100 billion won gap in our tax statistics.”

The ministry said these errors were detected while checking the system for a week after the ministry’s announcement of the figures on August 23.

When asked by reporters why the ministry failed to detect these errors earlier, Kim said, “There are as many as 1,100 items that need to be checked when calculating overall balance. It’s an exorbitant task.”

However many criticize the ministry and say making such a mistake was unthinkable as checking the figures even once would have shown them what was wrong. In addition, the ministry did not detect the problem for almost two weeks after the initial announcement of the statistics last month.

After the first set of figures came out last month, some reporters questioned, “Current account expenses, including overhead cost for the first half of this year, increased by as much as 44%; is this the right figure?” The finance ministry answered, “Yes.”

higgledy@donga.com cha@donga.com