The South Korean government is poised to restructure its subsidy system as a recent inspection uncovered cases of illegal spending by civil groups, in an effort to thoroughly manage state aids to prevent the abuse of taxpayers’ money.

“We discovered as many as 1,865 cases involving illegal spending and corruption in state subsidy projects worth 1.1 trillion won after inspecting 12,000 private organizations that have received 6.8 trillion won in state subsidies over the past three years,” Lee Kwan-sup, senior presidential secretary for policy planning, said during a press briefing at the presidential office in Seoul on Sunday.

Given that the amount of illegal spending identified so far is 31.4 billion won, according to the presidential office, it is highly likely that the amount will increase with further inspections.

During the briefing, the government unveiled plans to review the subsidy budget for private organizations from scratch and reduce more than 500 billion won ($382.86 million) in subsidies compared with this year when it draws up the budget for next year. Patronage and conventionally organized projects are expected to be subject to reduction.

The presidential office said that restructuring the state subsidy system will not be a one-off event and will continue to be carried out over the next four years during the Yoon Suk Yeol administration. The government will also verify the use of subsidies by private organizations to prevent corruption and enhance transparency. It plans to make it obligatory for civil groups to present electronic data on their spending and enhance the reporting system on subsidy fraud and corruption.

The inspection of how state subsidies have been spent by civic groups was carried out by 29 ministries under the supervision of the Office for Government Policy Coordination until April this year. The Yoon government has pushed to enhance the transparency of subsidies provided to private organizations as a key policy task. Yoon has always emphasized that “taxpayers’ money should not be wasted.”

Previously, the presidential office revealed that a total of 31.4 trillion won in state subsidies was paid to civil groups for seven years from 2016 and the previous Moon Jae-in government, in particular, increased the size of subsidies by about 2 trillion won. However, during this period, only 153 fraudulent cases were discovered and as little as 3.4 billion won was recovered, leading the current government to conduct a full investigation.

By Park Yun-gyun and Yoon Yeon-hae

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