2024-07-25 03:31:22
It was revealed that at least 3.2323 trillion won (5.3%) of the 61.4 trillion won in disaster relief funds and compensation for losses paid by the government to small business owners over the past two years since 2020 have leaked out. The number of companies that unfairly received the funds reached 623,042.
According to the ‘Audit Report on the Status of Small Business Support Projects, etc.’ released by the Board of Audit and Inspection on the 25th, at least 3.2323 trillion won was paid out in excess of the amount of damage caused by COVID-19 or was delivered to businesses that were not eligible to receive support funds at all.
● Due to poor government system design… Subsidies provided to companies without damage
The Board of Audit and Inspection pointed out that the Ministry of SMEs and Startups (MSS), which was in charge of disaster relief funds and loss compensation projects, “had a poor system design from the beginning, which resulted in more than 3 trillion won leaking out.”
In particular, there was no close review of the classification of industries in management crisis, and support funds were paid without objectively confirming the decrease in sales due to COVID-19. Industries where sales of small businesses plummeted while overall average sales increased due to increased sales of large companies were excluded from support.
On the other hand, industries where small business sales actually increased were classified as industries in management crisis. This is because it seemed as if the overall average sales decreased due to the decrease in sales of large companies. It was also problematic that a fixed amount of disaster relief funds was given to companies that had even a 1 won decrease in sales or companies that had low sales only in the second half of the year.
In addition, the fact that the Ministry of SMEs and Startups assigned the task of selecting recipients of disaster relief funds and compensation for losses to one employee was also a cause of the large-scale default payment. The audit results revealed that the Ministry of SMEs and Startups assigned the task of selecting recipients of the 16.1 trillion won disaster relief funds for the 1st to 4th round to one new administrative officer (Grade 5) who had been employed for just over a year.
In addition, it was pointed out as a problem that the advance payment loan system was unreasonably designed and operated so that those who were not eligible for compensation could enjoy more favorable interest rates than those who were eligible, and that it was designed to provide disaster relief funds even if legal requirements were not met as long as the business was registered on paper.
● 620,000 companies unfairly received subsidies… even unrelated industries were closed or suspended
Of the 623,042 companies that unfairly received subsidies, 366,764 received more subsidies than the damage they suffered due to COVID-19, amounting to KRW 2.6847 trillion. In addition, 86,217 companies received KRW 300.7 billion even though they were not confirmed to have suffered damage due to COVID-19.
15,574 businesses received 120.5 billion won despite being in industries that had no damage at all due to COVID-19. For example, solar power companies had already signed 20-year power sales contracts with Korea Electric Power Corporation and others before the COVID-19 pandemic, so they were in an industry that had no damage due to COVID-19. The decline in their sales during the COVID-19 period was due to reasons unrelated to COVID-19. Nevertheless, solar power generation businesses were classified as eligible for payment and received subsidies.
41,166 businesses received 54.6 billion won in compensation for business losses despite being closed or out of business, and 3,855 businesses that were only in business on paper but had not received permits or licenses received 11 billion won. 15,490 businesses received two or more types of support funds, and the additional amount received in this way amounted to 30 billion won.
321 organizations were caught in this audit for deceiving the government, local governments, and public institutions to receive subsidies. Among them were shell corporations established for crimes such as voice phishing and opening fake bank accounts.
● 3 trillion won leaked out… Are taxpayers responsible for potential losses?
It has been confirmed that more than 3 trillion won of the COVID-19 relief funds have leaked out, but most of them are difficult to recover. This is because it appears that the Ministry of SMEs and Startups designed the funds incorrectly and paid them out. However, only a small number of companies that are caught deceiving the government and receiving the subsidies can be subject to subsidy recovery, surcharges, and criminal punishment.
The potential losses due to the government’s poor payment of disaster relief funds and compensation for damages are the responsibility of taxpayers. As of the end of 2019, the year before the first disaster relief payment, the national debt was 723.2 trillion won, and as of the end of 2022, when the seventh disaster relief payment was made, the national debt increased by 344.2 trillion won in three years to 1,067.4 trillion won. This is because the government previously prepared five supplementary budgets to pay out the seven relief payments, and four of these relief payments were paid out by using the government’s emergency reserve fund or excess tax revenue.
Lee Ye-ji, Donga.com reporter [email protected]
2024-07-25 03:31:22