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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Seoul, October 13 — South Korea’s National Assembly revealed that KRW 129 billion (USD 94 million) in state subsidies have been misappropriated over the past three years through fraudulent contracts and illegal no-bid agreements, sparking concerns over widespread leakage of public funds.
According to data submitted by the Ministry of Economy and Finance to Rep. Park Sung-hoon of the ruling People Power Party, a total of 1,383 cases of subsidy fraud were uncovered between 2022 and 2024, involving KRW 129.09 billion in illicitly obtained government funds.
Sharp Rise in Fraud Cases
The number of detected cases rose sharply from 260 in 2022 to 493 in 2023, and further to 630 in 2024 — a 2.4-fold increase in just two years. The total amount involved also surged from KRW 9.8 billion in 2022 to KRW 70 billion in 2023, before recording KRW 49.3 billion last year.
While small-scale fraud cases under KRW 50 million accounted for the majority (1,182 cases, or 85.5%), large-scale frauds exceeding KRW 5 billion also numbered 27 cases (2%), representing KRW 92.56 billion — nearly three-quarters of the total misappropriated amount.
Rep. Park criticized the findings, stating,
“Regardless of scale, taxpayer money is being wasted across the board. This points to serious gaps in oversight and accountability.”
Oversight Measures and Limitations
State subsidies — financial grants provided by the central government to local authorities, individuals, or organizations — amounted to KRW 109.1 trillion in 2023, representing 16.6% of total government spending.
In response to mounting concerns, the Ministry of Economy and Finance has strengthened monitoring through on-site inspections, revised guidelines, and enhanced external audits. Suspicious cases flagged for review rose from 4,603 in 2022 to 10,016 in 2024, while joint field inspections with other ministries increased from 330 to 600 over the same period.
However, despite these measures, the surge in violations suggests limited effectiveness in enforcement.
“The growing number of detected cases shows that corrective efforts have yet to yield tangible results,” Park added, urging the ministry to “implement stronger, more proactive monitoring and real-time tracking systems to prevent further leakage of public funds.”
알파경제 Kim Jisun (stockmk2020@alphabiz.co.kr)
