[Editorial] Taxpayers Feel Mortified by Misuse of the Public Funds

It has been confirmed that 823.1 billion won was squandered due to the lack of governance of the public funds. The inspection by the Board of Audit and Inspection comes as a surprise that problems like moral hazard, embezzlement, and unskilled management have been prevalent. Aside from interest of the public funds, it is really excruciating for the public to pay back a principal of 49 trillion won with the taxpayers’ precious money.

The Korea Asset Management Corporation, which misunderstood a mortgage bond as a non-mortgage bond, went so far as to sell a mortgage bond worth 8.9 billion won for 100 won. The money, incapable of retrieving due to no written or a wrongly written contract of post-settlement of accounts by this agency and the Korea Deposit Insurance Corporation, amounts to 100.8 billion won. How loose an internal control system within those agencies and government’s oversight has it been to lead to these absurd consequences?

Not only those government agencies in control of the public funds but also financial firms aided by them have been culprits in dealing with the public fund inadequately. The Korea Asset Management Corporation unjustly set 355.8 billion won from the revenues out of insolvent bonds as their revenues. Financial companies left their management normalization behind and stuck to enhancing the welfare of their employees while raising the wages of the executives by 80 percent over two years.

Nevertheless, citing that the party concerned was retired and the deadline for discipline had passed, the punishment has been not fully implemented. Without the authority to investigate, the agency has not been able to begin an investigation even after having discovered unjust acts by some foreign companies involved in the sale of insolvent bonds. Now the prosecution has to come forward.

The Board of Audit and Inspection should set related provisions in good condition in order to prevent similar events from happening again. In addition, it has to tighten the inspection on the inefficient public sector across the board to bar the public’s money from being wasted. If the management of the public funds poses a problem like this, there is a growing possibility that public enterprises or other pension schemes will pose similar problems as well.