A group of 30-or-so academics and accountants, at the request of the Ministry of Planning and Budget, has discovered that most of the 62 public funds operated by 22 government agencies are being poorly managed.
The combined amount of the funds under management as of end-1999 is 196.8 trillion won (approx. $178.9 billion), or 1.6 times more than the national budget in 1999.
Looking at some statistical figures, it is easy to see how these funds contribute seriously to the country's snowballing budget deficit. For fiscal year 2000, the total balance is estimated at around 18.1 trillion won in the red, of which 10.7 trillion (or 59 percent) is accounted for by mismanagement of the funds. The corresponding number in FY 1999 was 13.1 and 3.6 trillion won, respectively.
Why has the government created so many different funds in the first place? It seems that all the ministries and administrative agencies have had every incentive to create a fund of their own. (See attached table.)
It was always easier to spend 'petty cash' out of the fund account rather than from the general account that usually comes under stricter scrutiny. Plus, the agencies had to answer to no one except the National Assembly (for special-purpose funds, there is no such requirement), as to how the funds are managed -- even when an investment went sour and the fund lost money. That's why the agencies insist on keeping funds even after it is no longer necessary.
Now that it has become clear that such funds have been managed haphazardly, the government should waste no time in implementing swift and thorough reform of these funds. It has to close immediately those accounts that have lost their reason for existence, without waiting for scheduled phase-outs in years to come.
It's our money after all because, although they are not financed directly by taxes, such poorly managed funds will bloat the national debt which must be covered someday in the future by our money.
Factional interests of governmental agencies should never supercede the interests of the nation's taxpayers. It is time for taxpayers to express uneasiness about the government's incompetence and to demand a substantial cut in the funds along with professional management and strict accountability for those funds that are not cut.
The combined amount of the funds under management as of end-1999 is 196.8 trillion won (approx. $178.9 billion), or 1.6 times more than the national budget in 1999.
Looking at some statistical figures, it is easy to see how these funds contribute seriously to the country's snowballing budget deficit. For fiscal year 2000, the total balance is estimated at around 18.1 trillion won in the red, of which 10.7 trillion (or 59 percent) is accounted for by mismanagement of the funds. The corresponding number in FY 1999 was 13.1 and 3.6 trillion won, respectively.
Why has the government created so many different funds in the first place? It seems that all the ministries and administrative agencies have had every incentive to create a fund of their own. (See attached table.)
It was always easier to spend 'petty cash' out of the fund account rather than from the general account that usually comes under stricter scrutiny. Plus, the agencies had to answer to no one except the National Assembly (for special-purpose funds, there is no such requirement), as to how the funds are managed -- even when an investment went sour and the fund lost money. That's why the agencies insist on keeping funds even after it is no longer necessary.
Now that it has become clear that such funds have been managed haphazardly, the government should waste no time in implementing swift and thorough reform of these funds. It has to close immediately those accounts that have lost their reason for existence, without waiting for scheduled phase-outs in years to come.
It's our money after all because, although they are not financed directly by taxes, such poorly managed funds will bloat the national debt which must be covered someday in the future by our money.
Factional interests of governmental agencies should never supercede the interests of the nation's taxpayers. It is time for taxpayers to express uneasiness about the government's incompetence and to demand a substantial cut in the funds along with professional management and strict accountability for those funds that are not cut.
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