In accordance with Articles 8 and 34 of the National Financial Act of Korea, the Korean government appended a performance plan when it submitted the budget bill to the National Assembly of Korea. For an efficient and effective evaluation of the bill from a performance perspective, the National Assembly Budget Office (“NABO”) reviewed the FY 2015 performance plan and carried out a deep-dive analysis to assess the budget bill in relation to the performance plan.
The topics for this evaluation have been selected based on the main themes of the 2015 budget bill. Despite difficulties in collecting tax revenues, the government explains that it has developed an expansionary budget plan in order to revitalize the economy. Another point to be noted is that the budget for health, welfare and employment has exceeded 30% of the gross expenditure for the first time in history. This is why this report focused on “economic revitalization” and “national happiness” when choosing its evaluation topics.
The report also tried to conduct a comprehensive analysis by looking into not just the budget plan itself but also other structural factors like related systems, performance management, and tax expenditure and assess whether the intended purpose of a budgeted program has been met. By compiling and categorizing our findings in the appendix, which would include suggestions for budgetary adjustments, creation & amendment of laws, system reforms and performance management, the report intends to support an effective review of the 2015 budget bill by the National Assembly.
The report evaluated 27 topics under three categories: 1) comprehensive and inter-ministerial; 2) economy and industry; and 3) society and administration.
Under the “society and administration” category, it looked into 11 topics such as: the vocational college development program; the cultural heritage protection program; contributions to the public institutions managed by the Education, Culture, Sports & Tourism Committee; the dementia management program; the sewer revamp project; the workers’ compensation program; the social enterprise support program; the family support service delivery system; the correctional service initiative; the military equipment repair & overhaul project; and the assignment & management of responsible administrative agencies in the military. Our key findings and suggestions for each topic are as follows.
Vocational College Development Program: It needs to reflect the unique nature of the vocational college when setting out the direction of the program and selecting performance indicators for assessment. At the same time, it is important to consolidate similar or overlapping initiatives so that the program can be run efficiently. In particular, it needs to develop and monitor performance indicators which reflect the advantages of the vocational college, such as “vocational training” and “collaboration with the industry,” and strengthen its function as a high-level vocational training institute.
Cultural Heritage Protection Program: It should find ways to increase the execution rate of the small cultural object repair & maintenance initiative; improve the criteria to grant government subsidy; and develop a comprehensive measure for the safekeeping of our cultural heritage. For example, before a subsidy is granted to a local government, a through and robust review on the project plan should be conducted . In addition, if a project deals with an item that is quite clear and predictable, it should be separated from the gross-based budget account and instead included in the general budget account.
Contributions to Public Institutions Managed by the Education, Culture, Sports & Tourism Committee: It is recommended to post the proceeds from bond issuance by the Korea Student Aid Foundation (or KRW 42 billion) to its own revenue account and consider a downward adjustment of the budgeted contribution to the Foundation. Meanwhile, the Ministry of Education’s budget to support university hospitals should be discussed with the Ministry of Health & Welfare if it is related to some activities like the construction of a hospital or the purchase of medical equipment, which is closely related to medical treatment.
Dementia Management Program: It is recommended to include the dementia screening test as part of the complimentary medical exams provided by the National Health Insurance Service and subsidize the medical expense related to the diagnosis and screening test, regardless of the patient’s income level. It is also proposed to open a new dementia center to look after Gwangju-Jeonnam and Ulsan-Gyeongnam areas currently not covered by other dementia centers and it needs to beef up the staff dedicated to the city- and district-level dementia management programs.
Sewer Revamp Project: It is recommended to change and improve the performance indicators that do not properly reflect the project performance; improve efficiency for the conversion to a new separate sewer system; and consider introduction of an incentive scheme to encourage an integrated implementation and operation of sewer pipes.
Workers’ Compensation Program: It is proposed to develop measures to increase penetration of workers’ compensation insurance; improve the system in order to minimize incurred-but-not-reported industrial accidents; strengthen on-site inspection into occupational diseases; and look for ways to reduce the portion of the medical expense born by the patient.
Social Enterprise Support Program: It is important to lay the groundwork where various types of social enterprise (such as job creators, social service providers and community-oriented enterprises) can develop and prosper. It is also necessary to find and support a promising social enterprise which can contribute to the local community. At the same time, the survey on social enterprises should be conducted more frequently while their business reports should be reviewed and evaluated more thoroughly.
Family Support Service Delivery System: It is recommended to review and find out whether the services provided by the Healthy Family Support Center and the Multicultural Family Support Center are overlapped or similar, and then consider how to consolidate them. It is also recommended to expand and strengthen the services for single-parent families and grandparent-grandchild families.
Correctional Service Initiative: It is recommended to support the inmate’s rehabilitation by promoting an independent prison labor system and expanding vocational training. At the same time, it is necessary to transfer expenditure not related to the production itself, such as vocational training expense, from the special account for prison labor to the general account in order to increase subsidies for prison labor. It is also recommended to upgrade medical treatment within correctional facilities and expand support for correctional officers who work in poorer conditions in terms of mental health than other government workers such as police officers.
Military Equipment Repair & Overhaul Project: It is necessary to clearly define the criteria to decide which party - the National Armed Forces, or an outside vendor - should conduct a given task for repair and overhaul and specify the same criteria in the respective plans made by the Army, the Navy and the Air Force. Currently they don’t have a uniform principle and the criteria for outsourcing is ambiguous. In some cases like UH1H and UH60, they relied upon outsourcing even when it was not necessary in terms of internal capability and cost-effectiveness. Again, the project needs some fine-tuning and should make sure to apply the outsourcing criteria to the future repair and maintenance plan.
Project Concerning Responsible Administrative Agencies in the Military: It is recommended to set up a mid-term plan for an organized and efficient management of the responsible administrative agencies in the military; streamline the operational process by, for example, addressing the reason for the cancellation of an assignment as the responsible administrative agency; guarantee autonomy by empowering the heads of the agencies; and ensure transparent disclosure of their performance by implementing better performance indicators.
The topics for this evaluation have been selected based on the main themes of the 2015 budget bill. Despite difficulties in collecting tax revenues, the government explains that it has developed an expansionary budget plan in order to revitalize the economy. Another point to be noted is that the budget for health, welfare and employment has exceeded 30% of the gross expenditure for the first time in history. This is why this report focused on “economic revitalization” and “national happiness” when choosing its evaluation topics.
The report also tried to conduct a comprehensive analysis by looking into not just the budget plan itself but also other structural factors like related systems, performance management, and tax expenditure and assess whether the intended purpose of a budgeted program has been met. By compiling and categorizing our findings in the appendix, which would include suggestions for budgetary adjustments, creation & amendment of laws, system reforms and performance management, the report intends to support an effective review of the 2015 budget bill by the National Assembly.
The report evaluated 27 topics under three categories: 1) comprehensive and inter-ministerial; 2) economy and industry; and 3) society and administration.
Under the “society and administration” category, it looked into 11 topics such as: the vocational college development program; the cultural heritage protection program; contributions to the public institutions managed by the Education, Culture, Sports & Tourism Committee; the dementia management program; the sewer revamp project; the workers’ compensation program; the social enterprise support program; the family support service delivery system; the correctional service initiative; the military equipment repair & overhaul project; and the assignment & management of responsible administrative agencies in the military. Our key findings and suggestions for each topic are as follows.
Vocational College Development Program: It needs to reflect the unique nature of the vocational college when setting out the direction of the program and selecting performance indicators for assessment. At the same time, it is important to consolidate similar or overlapping initiatives so that the program can be run efficiently. In particular, it needs to develop and monitor performance indicators which reflect the advantages of the vocational college, such as “vocational training” and “collaboration with the industry,” and strengthen its function as a high-level vocational training institute.
Cultural Heritage Protection Program: It should find ways to increase the execution rate of the small cultural object repair & maintenance initiative; improve the criteria to grant government subsidy; and develop a comprehensive measure for the safekeeping of our cultural heritage. For example, before a subsidy is granted to a local government, a through and robust review on the project plan should be conducted . In addition, if a project deals with an item that is quite clear and predictable, it should be separated from the gross-based budget account and instead included in the general budget account.
Contributions to Public Institutions Managed by the Education, Culture, Sports & Tourism Committee: It is recommended to post the proceeds from bond issuance by the Korea Student Aid Foundation (or KRW 42 billion) to its own revenue account and consider a downward adjustment of the budgeted contribution to the Foundation. Meanwhile, the Ministry of Education’s budget to support university hospitals should be discussed with the Ministry of Health & Welfare if it is related to some activities like the construction of a hospital or the purchase of medical equipment, which is closely related to medical treatment.
Dementia Management Program: It is recommended to include the dementia screening test as part of the complimentary medical exams provided by the National Health Insurance Service and subsidize the medical expense related to the diagnosis and screening test, regardless of the patient’s income level. It is also proposed to open a new dementia center to look after Gwangju-Jeonnam and Ulsan-Gyeongnam areas currently not covered by other dementia centers and it needs to beef up the staff dedicated to the city- and district-level dementia management programs.
Sewer Revamp Project: It is recommended to change and improve the performance indicators that do not properly reflect the project performance; improve efficiency for the conversion to a new separate sewer system; and consider introduction of an incentive scheme to encourage an integrated implementation and operation of sewer pipes.
Workers’ Compensation Program: It is proposed to develop measures to increase penetration of workers’ compensation insurance; improve the system in order to minimize incurred-but-not-reported industrial accidents; strengthen on-site inspection into occupational diseases; and look for ways to reduce the portion of the medical expense born by the patient.
Social Enterprise Support Program: It is important to lay the groundwork where various types of social enterprise (such as job creators, social service providers and community-oriented enterprises) can develop and prosper. It is also necessary to find and support a promising social enterprise which can contribute to the local community. At the same time, the survey on social enterprises should be conducted more frequently while their business reports should be reviewed and evaluated more thoroughly.
Family Support Service Delivery System: It is recommended to review and find out whether the services provided by the Healthy Family Support Center and the Multicultural Family Support Center are overlapped or similar, and then consider how to consolidate them. It is also recommended to expand and strengthen the services for single-parent families and grandparent-grandchild families.
Correctional Service Initiative: It is recommended to support the inmate’s rehabilitation by promoting an independent prison labor system and expanding vocational training. At the same time, it is necessary to transfer expenditure not related to the production itself, such as vocational training expense, from the special account for prison labor to the general account in order to increase subsidies for prison labor. It is also recommended to upgrade medical treatment within correctional facilities and expand support for correctional officers who work in poorer conditions in terms of mental health than other government workers such as police officers.
Military Equipment Repair & Overhaul Project: It is necessary to clearly define the criteria to decide which party - the National Armed Forces, or an outside vendor - should conduct a given task for repair and overhaul and specify the same criteria in the respective plans made by the Army, the Navy and the Air Force. Currently they don’t have a uniform principle and the criteria for outsourcing is ambiguous. In some cases like UH1H and UH60, they relied upon outsourcing even when it was not necessary in terms of internal capability and cost-effectiveness. Again, the project needs some fine-tuning and should make sure to apply the outsourcing criteria to the future repair and maintenance plan.
Project Concerning Responsible Administrative Agencies in the Military: It is recommended to set up a mid-term plan for an organized and efficient management of the responsible administrative agencies in the military; streamline the operational process by, for example, addressing the reason for the cancellation of an assignment as the responsible administrative agency; guarantee autonomy by empowering the heads of the agencies; and ensure transparent disclosure of their performance by implementing better performance indicators.