🚨 Special Activity Funds

Today Korean Social News for Beginners | 2025.11.11

0️⃣ Board of Audit Guideline Violations and Transparency Challenges

📌 Board of Audit Used Special Activity Funds Like Bonuses…"Guideline Violation Controversy Spreads"

💬 The Board of Audit has been caught distributing Special Activity Funds to employees like regular bonuses, even though these funds should only be used for confidential work. It was confirmed that 87% of the annual budget of about 1.5 billion won was distributed to 700-800 employees as quarterly and grade-based incentives. This clearly violates the Ministry of Economy and Finance's budget guidelines and the Board of Audit's own "Special Activity Funds Calculation and Verification Guidelines." Special Activity Funds are supposed to be used only for confidential work like investigations, audits, and information gathering that cannot be disclosed publicly. However, they were actually operated like regular bonuses distributed to general staff. Evidence was also found that the funds were spent all at once at year-end to use up the remaining budget, raising questions about proper budget execution. As the nation's highest audit institution that audits other government agencies violated guidelines in its own budget execution, public criticism and trust collapse are inevitable.

💡 Summary

• Special Activity Funds should only be used for confidential work, but the Board of Audit distributed them like bonuses.
• 87% of the annual 1.5 billion won budget was distributed quarterly by grade to 700-800 employees.
• Budget guideline violations and lack of transparency are the key issues, requiring urgent reform.

1️⃣ Definition

Special Activity Funds are expenses needed by government agencies to conduct confidential work such as investigations, audits, and information gathering that are difficult to disclose publicly. Because of the confidential nature of the work, receipts may be exempted unlike regular expenses, but strict execution principles apply.

The principle is to provide Special Activity Funds 'only when necessary,' and according to the Ministry of Economy and Finance's 'Budget and Fund Management Plan Execution Guidelines,' they should only be used for specific tasks requiring confidentiality. Using them as regular salary supplements like allowances or incentives is clearly prohibited.

💡 Why is this important?

• Special Activity Funds are budgets created from taxpayer money and must be used transparently for their intended purpose.
• Because of the confidential nature, they can be executed without receipts, making misuse highly possible.
• Guideline violations by the Board of Audit, the highest audit institution, greatly damage trust throughout the civil service.
• Without transparency and accountability, the original purpose of the budget can be distorted.

2️⃣ Current Status and Problems with Special Activity Funds

📕 Board of Audit's Guideline Violation Cases

• Special Activity Funds were distributed regularly like bonuses. Key facts include:

  • 87% of the annual Special Activity Funds budget of about 1.5 billion won was distributed to 700-800 employees.
  • It was operated as an incentive system with quarterly distributions varying by grade.
  • It was regularly distributed to general employees regardless of confidential work performance.
  • This clearly violates both Ministry of Economy and Finance guidelines and the Board of Audit's own regulations.

• Bulk spending to use up year-end budgets also occurred. Key problems include:

  • Evidence was found that Special Activity Funds were spent all at once at year-end to meet budget targets.
  • They were used to meet budget execution rates regardless of actual confidential work needs.
  • The budget's original purpose was completely distorted during execution.
  • This raises questions about the appropriateness of the budget planning itself.

📕 Systemic Problems and Lack of Transparency

• Special Activity Funds have been managed as non-public budgets. Key situations include:

  • Most Special Activity Funds execution details were kept confidential because of the confidential nature of the work.
  • It is practically difficult for the National Assembly or external agencies to monitor and check.
  • Receipt attachment is exempted, making it difficult to verify actual usage.
  • This lack of transparency has become a breeding ground for budget misuse.

• Similar problems have been raised at other agencies. Key cases include:

  • Recent information disclosure lawsuits by civic groups and media have revealed inappropriate execution cases at various agencies.
  • Some agencies were confirmed to have used Special Activity Funds for company dinners, incentive payments, and gift card purchases.
  • Transparency controversies continue regarding Special Activity Funds at intelligence agencies like the National Intelligence Service and police.
  • The Board of Audit case is even more shocking because 'the auditing agency became the audited.'

📕 Board of Audit's Role and Trust Collapse

• The Board of Audit is the nation's highest audit institution. Key roles include:

  • It is an independent agency established under the Constitution that audits government departments and public agencies.
  • It verifies whether budgets are properly executed according to laws and guidelines.
  • It detects corruption in the civil service and demands corrections.
  • It serves as a 'guardian of public interest' by monitoring to prevent waste of taxpayer money.

• The Board of Audit's guideline violations raise double standard controversies. Key criticisms include:

  • While strictly auditing other agencies' budget execution, they violated guidelines themselves.
  • Criticism is pouring in that they are "strict with others but lenient with themselves."
  • Public trust in the Board of Audit is greatly declining.
  • The legitimacy and authority of future Board of Audit audit results may also weaken.

💡 Key Issues in the Special Activity Funds Controversy

1. Guideline Violations: Budget execution that clearly violated Ministry of Economy and Finance and internal regulations
2. Purpose Distortion: Used for allowances and incentives rather than confidential work
3. Lack of Transparency: Impossible to monitor and check because it's a non-public budget
4. Double Standards: The contradiction of an audit agency violating guidelines itself
5. Trust Collapse: Damage to the credibility of budget execution throughout the civil service

3️⃣ Special Activity Funds Reform Measures

✅ Transparency Enhancement Measures

• Post-execution disclosure of Special Activity Funds is needed. Key measures include:

  • After confidentiality is lifted, some execution details should be institutionally disclosed.
  • Execution details should be regularly reported to the National Assembly's Special Committee on Budget and Accounts.
  • Inappropriate execution cases should be detected through independent verification by the Board of Audit.
  • Even for non-public budgets, minimum transparency mechanisms should be established.

• Clear usage standards and guidelines should be prepared. Key tasks include:

  • Specific criteria should be provided for when Special Activity Funds can be used.
  • Provisions explicitly prohibiting use as allowances or incentives should be strengthened.
  • Recording and storing execution reasons, targets, and timing should be mandated.
  • Disciplinary actions and recovery measures for violations should be clearly specified.

✅ Strengthening Institutional Oversight Mechanisms

• Independent oversight bodies are needed. Key measures include:

  • A committee dedicated to monitoring Special Activity Funds execution can be established within the National Assembly.
  • A civilian oversight system with participation from civic groups and experts can be built.
  • Whistleblower protection systems should be strengthened to detect inappropriate execution cases early.
  • Regular external audits should be conducted to ensure system effectiveness.

• Appropriate budget size should be reviewed. Key tasks include:

  • Excessive budgets should be reduced by carefully analyzing actual confidential work needs.
  • Principles for handling unused amounts should be clarified to prevent year-end bulk spending.
  • Necessity and appropriateness should be strictly verified from the budget planning stage.
  • The size of Special Activity Funds by agency should be disclosed to guarantee citizens' right to know.

✅ Improving Civil Service Awareness

• Public officials' budget execution ethics should be strengthened. Key directions include:

  • The awareness that Special Activity Funds are taxpayer money should be clarified.
  • The practice of loose execution under the excuse of confidential work should be eliminated.
  • Transparency and accountability in budget execution should be reflected in public official evaluations.
  • Disciplinary actions for inappropriate execution should be strengthened to raise awareness.

• The Board of Audit's self-correction efforts are needed. Key tasks include:

  • Thorough internal investigation and accountability for those responsible for this incident should be carried out.
  • The Special Activity Funds execution system should be comprehensively reviewed and improved.
  • Progress and improvement measures should be transparently disclosed to citizens to restore trust.
  • They should set an example for other agencies by leading the way.

4️⃣ Related Terms Explained

🔎 Budget and Fund Management Plan Execution Guidelines

• The Budget and Fund Management Plan Execution Guidelines are the basic rules for government budget execution.
  • The Budget and Fund Management Plan Execution Guidelines are administrative guidelines established annually by the Ministry of Economy and Finance and communicated to each ministry, containing specific standards for how government budgets should be executed. They are created based on the National Finance Act, and all government agencies must comply with these guidelines.
  • Regarding Special Activity Funds, these guidelines first specify that they should be 'provided only when performing specific tasks requiring confidentiality.' Second, they stipulate that execution reasons, targets, and timing must be specifically recorded. Third, they explicitly prohibit use as allowances or incentives. Fourth, they mandate keeping supporting documents for a certain period.
  • The Board of Audit case directly violated these basic budget execution principles. They regularly distributed funds to general employees regardless of confidentiality, operated them like allowances, and did not specifically record execution reasons. Executing the budget arbitrarily while ignoring budget authority guidelines is a serious problem that undermines basic budget execution principles.

🔎 Board of Audit Special Activity Funds Calculation and Verification Guidelines

• The Board of Audit Special Activity Funds Calculation and Verification Guidelines are the Board of Audit's own execution regulations.
  • The Board of Audit Special Activity Funds Calculation and Verification Guidelines are regulations prepared internally by the Board of Audit, specifying how Special Activity Funds should be executed and verified. They are based on Ministry of Economy and Finance guidelines and tailored to the Board of Audit's work characteristics.
  • The main contents of these guidelines include: first, Special Activity Funds should only be used when confidentiality is required during audit work. Second, payment reasons and usage purposes should be clearly stated. Third, execution content confirmation documents must be created and stored. Fourth, appropriateness should be verified through regular internal checks.
  • However, in this case, the Board of Audit did not even follow its own guidelines. They distributed funds like allowances regardless of confidential work, provided them quarterly without clear reasons, and appropriateness checks were not properly conducted. The Board of Audit violating its own regulations shows organizational self-discipline failure and raises concerns about ethical awareness throughout the civil service.

🔎 Special Activity Funds Disclosure Controversy

• The Special Activity Funds disclosure controversy is a conflict between transparency and confidentiality.
  • Special Activity Funds have mostly been kept confidential as a 'classified budget.' Under the Information Disclosure Act, information related to national security may not be disclosed, so intelligence agencies rarely disclosed Special Activity Funds execution details.
  • However, controversy is expanding as demands for enhanced transparency grow. First, civic groups filed information disclosure lawsuits and some details were disclosed. Second, inappropriate execution cases at various agencies were revealed in disclosed materials. Third, bills to strengthen Special Activity Funds transparency are being proposed in the National Assembly. Fourth, citizens argue that indefinite non-disclosure cannot be justified by 'classified' reasons.
  • The core of this controversy is finding a balance between national security and citizens' right to know. Complete disclosure could hinder confidential work performance, but complete non-disclosure can lead to budget misuse. Experts suggest compromise solutions such as partial disclosure after confidentiality is lifted or confidential reporting to the National Assembly's Special Committee on Budget and Accounts. The Board of Audit case is a representative example showing how easily non-public budgets can be misused.

🔎 Transparency Enhancement Discussion

• Transparency enhancement discussion is the core of Special Activity Funds reform.
  • Various institutional improvement measures are being discussed to increase transparency of Special Activity Funds. This is because awareness is spreading that the current opaque execution structure is the root cause of budget misuse.
  • Major improvement measures include: first, establishing a regular verification system by the National Assembly and Board of Audit. A system should be created to regularly receive reports and check Special Activity Funds execution details. Second, introducing a phased disclosure system. Execution details should be disclosed after a certain period following the lifting of confidentiality. Third, strengthening whistleblower protection. A safe system should be established for reporting inappropriate execution internally. Fourth, citizen society oversight participation. An oversight committee with experts and civic groups can be formed.
  • Looking at overseas cases, most democratic countries are also strengthening parliamentary oversight of intelligence agency budgets. In the US, House and Senate Intelligence Committees thoroughly verify intelligence agency budgets, and in the UK, an independent Intelligence Committee oversees intelligence agencies. Korea should also establish institutional mechanisms that can secure transparency while maintaining confidentiality. This Board of Audit incident clearly shows that transparency enhancement is a task that can no longer be delayed.

5️⃣ Frequently Asked Questions (FAQ)

Q: Why can Special Activity Funds be used without receipts?

A: Because receipts could expose the work due to the nature of confidential work.

• Special Activity Funds are used for confidential work such as investigations, audits, and information gathering that should not be disclosed publicly. Due to the nature of such work, if receipts are obtained or card payments are made, transaction records could be created and confidentiality might not be maintained. For example, when paying informants or secretly purchasing materials, requesting receipts could risk exposing the work itself. Therefore, receipt attachment is exceptionally exempted by law.
• However, such exceptions should only be recognized under strict conditions. First, it should be determined whether the work actually requires confidentiality. Second, execution reasons and purposes should be clearly recorded and stored. Third, at least minimal documentation that can verify appropriateness after the fact should be kept. Fourth, inappropriate use should be detected through internal and external audits. The Board of Audit case completely ignored these principles and misused the budget by exploiting the fact that receipts are not required. Balancing transparency and confidentiality is important.

Q: Why did Board of Audit employees receive Special Activity Funds?

A: They appear to have received them regularly like allowances without clear reasons.

• While the Board of Audit's justification for distributing Special Activity Funds to employees was 'audit work performance,' they actually provided them quarterly to general employees regardless of confidential work. It was an incentive system with differential payments by grade, and it was confirmed that they were provided in bulk regardless of actual confidential work performance. This essentially operated Special Activity Funds as 'additional allowances.'
• This execution method is a clear guideline violation. The principle is that Special Activity Funds should only be provided when necessary, not as regular allowances. When the Board of Audit discovers such cases when auditing other agencies, they point them out as 'inappropriate execution' and demand corrections. Yet they executed the budget in the same manner themselves. From employees' perspective, they may have received them because the organization provided them regularly, but this completely distorted the system's purpose. The Board of Audit should thoroughly investigate this incident, hold those responsible accountable, and take strong self-correction measures including recovering inappropriately paid amounts.

Q: What changes are expected after this incident?

A: Reform discussions regarding the entire Special Activity Funds system are expected to begin in earnest.

• This Board of Audit incident revealed structural problems with the Special Activity Funds system. Discussion of bills to strengthen Special Activity Funds transparency will become active in the National Assembly, and the government is also expected to clarify budget execution guidelines and strengthen oversight systems. First, mandatory reporting of Special Activity Funds execution details to the National Assembly may be promoted. Second, a system of partial disclosure after confidentiality is lifted may be introduced. Third, the Board of Audit's authority to audit Special Activity Funds may be strengthened. Fourth, recovery and disciplinary actions for inappropriate execution will become stricter.
• Also, budget execution culture throughout the civil service is expected to change. Awareness will spread that non-public budgets cannot be used carelessly, and transparency and accountability will be emphasized. However, excessive regulations that do not consider the special nature of confidential work could hinder actual necessary work performance, so balanced institutional improvement is important. Above all, fundamental change is possible only when public officials' ethical awareness and autonomous accountability are strengthened. Citizens should also maintain continuous interest in and oversight of Special Activity Funds issues.

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