In the National Assembly, there is a term called ‘message budget’. This refers to the practice of lawmakers inserting budgets for local projects that are not reflected in the government budget at the last minute of the budget deliberation process. A representative example is the construction of local facilities promoted by members of the National Assembly through banners such as ‘securing 0 billion won for 000 projects’ after the budget is concluded.
The results of the audit of ‘National Treasury Subsidy Arrangement and Management Status’ released by the Board of Audit and Inspection on the 26th revealed the harmful effects of such a memo budget. As a result of the audit, government funds that were unfairly provided by bypassing the current vague government funding regulations amounted to 252 billion won (2021-2024) in 20 projects. In some cases, lawmakers who received complaints from badminton and soccer clubs received hundreds of millions of dollars in government funds. Since the money was added at the last minute without verification, the actual budget execution rate for the project was only 4.73% on average, making it difficult to proceed with the project normally.
Since 2004, in an effort to promote local decentralization, the government has been distinguishing between national treasury subsidy projects supported by government funds and local transfer projects conducted with local resources themselves. In 2020 and 2023, projects to build cultural arts centers and sports promotion facilities were also excluded from national subsidies. But the regulations and reality were different. In most cases, the Ministry of Strategy and Finance could not refuse the National Assembly’s request for an increase, saying, “It is inevitable for budget agreement.”
According to the Board of Audit and Inspection, 13 of the 20 projects in which government subsidies were paid unfairly were cases in which local governments requested an increase in the budget for long-awaited projects through the National Assembly member’s office. A representative example is the construction of the Gangwon-do Opera House, for which 100 billion won of national funds was allocated this year. The Ministry of Strategy and Finance, which was opposed to budget allocation, requested Gangwon-do in December of last year, “In order to organize the budget, provide space for cultural content creation and production companies,” and when Gangwon Provincial Office verbally said, “I understand,” the budget was increased. I did it. However, there were no plans to build related facilities as of last June, when the audit was conducted. The Cheonan Bonjour badminton court construction project, which is being built in Cheonan, South Chungcheong Province, was allocated 9 billion won in national funds this year due to complaints from local clubs. Last October, an acquaintance of the Badminton Association’s president delivered project data to the National Assembly’s office, and the budget was later increased. The project to build a residential soccer field in Nakseong District, Gwanak-gu, for which 750 million won in national funds was allocated this year, is also an example of a project where the budget was allocated following a complaint filed by the local soccer federation.
There were many cases where local governments belatedly learned about the budget allocation in a memo from a member of the National Assembly and hastily prepared business plans. This year, the Pyeongtaek Yongjuk District Sports Center Construction Project, for which 9 billion won in national funds was allocated, and the Handeulmulbit City Youth Sports Facility Installation Project in Asan-si, Chungcheongnam-do, for which 900 million won in national funds were allocated, local government officials confirmed the fact of budget allocation through media reports and political party banners and announced the project. A plan was prepared. As a result of the audit, it is unclear whether the two projects will secure a business site or pass the local financial investment review, so it is unclear whether they will proceed.
The Board of Audit and Inspection cited the ambiguous provisions of the current Subsidy Act Enforcement Decree as the reason why such note budgets were not eradicated. According to the current enforcement ordinance of the subsidy-related law, the ‘Cultural Tourism Resources Development and Creation’ project is not eligible for government support. However, ‘tourism resource development’, which has a similar meaning, is eligible for government support, and sports promotion facility support projects are also excluded from government support. However, projects to support the expansion of basic sports are not excluded, and the National Assembly member uses it as a basis for budget increase. It means that it is being used. The Board of Audit and Inspection notified the Ministry of Strategy and Finance to ensure that the details of local transfer projects are clearly distinguished in the Enforcement Decree of the Subsidy Act.
Taein Park ([email protected])
