Hwaseong City's Fourth Elected Term Marked by Budget Misuse; Turns to Cooking Books When Money Runs Out

During 2009 and 2010, Hwaseong City recklessly pursued mayoral campaign pledge projects of the fourth elected term, including the construction of a comprehensive sports town. When the city's finances became strained, the city manipulated accounting to conceal the problem, according to findings from an audit by the Board of Audit and Inspection.

According to the Board of Audit and Inspection on the 10th, Hwaseong City excessively recorded 83.5 billion won in revenue budget during 2009, including 59.2 billion won in fiscal transfer funds and 24.3 billion won in general contributions, and executed the budget for mayoral campaign pledge projects such as establishing a certain high school, which cannot be supported under current law.

When the city's revenue fell short of initial projections, it concealed this by processing 11.3 billion won in fiscal transfer funds that should have been handled as 2010 revenue, 39.8 billion won in development charges to be returned to Gyeonggi Province, and 7.1 billion won borrowed from five funds including the elderly welfare fund—totaling 58.2 billion won—as 2009 revenue.

As a result, while the city actually faced a deficit of 32.1 billion won in net government surplus, it fabricated the settlement to show 26.1 billion won in net government surplus, according to the Board of Audit and Inspection investigation.

During 2010, the city excessively recorded 173.1 billion won in revenue budget, including 23.1 billion won in fiscal transfer funds and 150 billion won in regional development cooperation funds, and used the funds for mayoral campaign pledge projects such as the construction of the comprehensive sports town.

After executing the budget, anticipating revenue loss due to decreased tax collection, the city improperly transferred 63 billion won in development charges to be returned to Gyeonggi Province and 31.7 billion won from the waste disposal facility special account to the general account, processing a total of 38 billion won as 2010 fiscal year revenue.

Additionally, the city failed to include 56.4 billion won—comprising 39.8 billion won in development charges attributed to Gyeonggi Province in the 2009 expenditure budget and 16.6 billion won in construction costs to be paid in 2010—in the 2010 fiscal year expenditure budget.

Consequently, while the city actually incurred a net government surplus deficit of 92.3 billion won, it fabricated the settlement to show 2.1 billion won in net government surplus.

The Board of Audit and Inspection noted that the accounting manipulation interfered with and undermined the local assembly's legitimate exercise of budget review and settlement audit authority, and provided citizens with false financial information.

Accordingly, the Board of Audit and Inspection notified the city to return 46.1 billion won in development charges attributed to Gyeonggi Province to the province, while requesting the provincial governor to take disciplinary action against the responsible civil servants.