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ACRC recommended enhancing transparency in apartment subsidies
- Date2017-10-31
- Hit604
ACRC recommended enhancing transparency in apartment subsidies
Improving transparency in apartment complex subsidy projects
October 31, 2017
Anti-Corruption and Civil Rights Commission
The Republic of Korea
The selection criteria of local governments for the subsidy of apartment projects, such as maintenance of roads or landscaping within complexes - and the management of subsidy execution and adjustment - is to become more transparent.
The ACRC has prepared “measures to improve transparency in apartment management subsidy projects” and has sent recommendations to the relevant local governments.
Major local governments currently provide billions of KRW every year to apartment complexes through apartment house complex subsidy projects.*
| * For roads, street lights, playgrounds, senior community centers, sewage systems, parking lots, and landscaping within complexes * financial support provided by local governments in 2016: KRW 67.6 billion (self-incurred expenses: Gyeonggi-do KRW 20 billion, Seoul KRW 8 billion) |
The ACRC investigated the subsidy projects in order to eradicate potential corruption while promoting such subsidy projects.
The investigation showed that ordinances regarding selection criteria have been established by most local governments; however, concerns were raised as some local governments lacked selection or review criteria, which could lead to redundant support or favoritism.
| <Cases> * ○○-Si(city) conducts reviews and provides support without specific criteria. It has a regulation limiting repetitive subsidy applications within three years, but this measure is not effective as complexes can re-apply for subsidies under KRW 50 million. * ○○-Si(city) has not set a maximum financial limit for apartment facility management subsidy projects. If a complex applies with its plan, the whole amount will be provided. There is no follow-up measure on how the subsidy is managed, which results in budgetary waste. |
It has also found that management and supervision of subsidies was insufficient in preventing excessive appropriation of construction costs, abnormal alliances with specific companies, cursory pre-delivery inspections, and the fabrication of evidential s for calculations.
In response to this, the ACRC has recommended that local governments improve the operation of their review committees - such as addressing committee member avoidance and verifying duplicated applications, adopt an open tender system for subsidy projects, and offer a pre-consulting system to assess construction costs.
The ACRC has also recommended reinforcement measures for management and supervision, such as examinations by supervisory officials, administrative sanctions on insolvent complexes, and the obligatory publicizing of subsidy calculations.
An ACRC official said, “Recent institutional improvements are aimed at providing financial support for urgent needs, such as replacing aging facilities in apartment complexes, and avoiding the provision of support based on favoritism. The ACRC will continue to correct any abnormal work or unreasonable system in the public sector.”
