▲ Yeongcheon City Hall
The recent revelation that an accounting employee at an administrative welfare center in Yeongcheon, Gyeongsangbuk-do, embezzled 2.5 billion won by manipulating the computer system over 200 times has once again brought the issue of lax internal controls over budget execution in grassroots administrative organizations to the forefront.
Despite conducting regular accounting audits every year, Yeongcheon City failed to timely detect that the employee in question had been habitually manipulating the computer system for months, siphoning off precious budget funds intended for village-level projects into their own pockets.
As similar incidents continue to occur at administrative welfare centers and township offices across the country, not just in Yeongcheon, experts have unanimously stated that establishing institutional mechanisms to prevent recurrence is urgent.
According to Yeongcheon City and other sources on July 21, it was discovered during the second-quarter accounting audit conducted earlier this month that an employee identified as A, a Grade 7 accounting official at a local administrative welfare center, had embezzled 2.5 billion won by falsely manipulating the local finance management system (e-Hozo) approximately 230 times.
Investigations revealed that A, who was in charge of accounting at the administrative welfare center, exploited the fact that budgets for administrative welfare centers and township offices are executed separately from the main city office and are subject to lax management and supervision.
Generally, departments under the main office must go through the accounting division to spend budgets exceeding a certain amount.
In contrast, at administrative welfare centers or township offices, a single accounting employee is effectively responsible for the entire budget execution process.
It was found that A was also responsible for the entire process, from inputting expenditure items into the computer to making transfers.
Furthermore, the period of A's criminal activity discovered so far spans about seven months, from November of last year to June of this year. During this period, it was revealed that A received approval from superiors for budget execution under the guise of paying public utility bills, but actually siphoned the money into their own account.
However, Yeongcheon City had conducted an accounting audit of local administrative welfare centers in the first quarter of this year, but failed to detect A's criminal activities.
Yeongcheon City explained, "Under the current structure, it is difficult to identify accounting corruption by employees if the computer system shows no issues with the administrative welfare center's balance," adding, "In the second-quarter audit, we were able to uncover A's actions because the administrative welfare center's budget balance was calculated to be insufficient due to reasons such as excessive expenditure."
Because budget execution within administrative welfare centers takes place in a vulnerable structure that only requires internal approval without management or supervision from other departments, incidents similar to that in Yeongcheon are occurring incessantly across the country.
In February, it was discovered that an accounting employee at a township office in Geochang-gun, Gyeongsangnam-do, had embezzled approximately 1.4 billion won in public funds over about one year and six months using methods such as false expenditures.
In November 2024, it was also revealed that an accounting official at a township office in Yangpyeong-gun, Gyeonggi-do, had misappropriated 790 million won in budget funds over several months by methods such as entering their own bank account number into the computer system.
Eun Jae-sik, Secretary-General of the civic group Our Welfare Citizens Union, pointed out, "In the case of Yeongcheon City official A, it means they embezzled an average of 300 to 400 million won per month, which is a scale that is difficult to accept by common sense," adding, "The fact that such similar cases are repeated nationwide means there is a problem with the internal administrative system."
Voices have also been raised calling for strengthened management and supervision of employees in charge of accounting at administrative welfare centers and township offices.
Ha Hye-soo, a professor of public administration at Kyungpook National University, stated, "The biggest problem is that it was not detected in time by the internal monitoring system, whether through inspections or audits," and added, "We must strengthen the system so that inspections are carried out thoroughly by checking item by item, rather than approaching it with the concept of how much balance is left."
Meanwhile, the police, who received a request for an investigation into A from Yeongcheon City on July 14, have recently been conducting an initial investigation, including securing statements from city officials and reviewing relevant materials.
(Photo: Provided by Yeongcheon City Hall, Yonhap News)
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