Review and Analysis of FY 2016 Implementation of Major Programs by Public Institutions
Public institutions carry out programs, as stipulated by laws and regulations, with diverse income sources such as government funding, contributions, and subsidies, as well as shares, consignment and monopoly income, and other revenues. However, as the National Assembly’s review on the final accounts is focused on the projects earmarked in the government budgets by ministry, this poses a limit to deliberating on the operation of public institutions that implement these programs.
In this regard, this report offers a comprehensive assessment of the FY 2016 final accounts and major programs of 332 public institutions (35 public corporations, 89 quasi-government agencies, and 208 other public institutions) as of June 2017 to support the National Assembly’s review on account settlement, pursuant to Article 4 of the Act on the Management of Public Institutions.
The analysis shows that the total debt of the 332 public institutions declined by KRW 5.4 trillion year-on-year to KRW 499.4 trillion as of the end of 2016. As a result, the financial soundness of public institutions as a whole was evaluated as partially improved. However, the debt of public institutions that implement policy projects increased, which implies that more detailed management by related ministries is required.
Meanwhile, the net profits of public institutions as a whole increased by KRW 3.6 trillion year-on-year to KRW 16.1 trillion. However, public institutions for banking that were excluded from the final accounts collected by the Ministry of Strategy and Finance incurred a net loss of KRW 2.4 trillion.
In particular, Korea Resources Corporation, Korea National Oil Corporation, Korea Gas Corporation, and other resource development public corporations affiliated with the Ministry of Industry, Trade and Energy, as well as Korea Coal Corporation and other institutions in a state of full-scale capital erosion, continued to incur a net loss over the last five years. This reveals that the management of fiscal soundness of public institutions is essential.
This report also addresses the management and main projects of public institutions in various fields such as finance, land transportation, energy, agriculture and livestock, education, culture and broadcasting, and public health, environment, and labor. The assessment includes the necessity to narrow the gap between the industrial electricity rates of Korea Electric Power Corporation; the effectiveness of Korea Water Resources Corporation’s measures to pay debt incurred by the Four River Project; the necessity to designate SR Corporation, shares of which are held by Korea Railroad Corporation, as a public institution; improvement measures for equity funding and the operation of the Export-Import Bank of Korea; and the analysis of Korea Investment Corporation’s profit rates and profit disclosure system.