The Korean Institute of Certified Public Accountants (KICPA) noted on 1st that there would be no double administrative burden or additional expense for faculty members due to the amendment to the Local Government Act that mandates the auditing of privately contracted projects.
This is a rebuttal to the recent claim by the Korean Federation of Childcare Centers, stating, "Lawmakers Shin Jeong-hoon and Park Soo-min have each proposed amendments to the Local Government Act," adding that "if external auditors are mandated for accounting audits, it will impose a dual workload on faculty members and additional audit expenses." The National Assembly's Public Administration and Security Committee recently discussed the amendment to the Local Government Act, which mandates auditing for municipal government privately contracted projects.
A KICPA official emphasized, "Most childcare centers operate with national and local subsidies (including privately contracted funds), and are already receiving accounting verification for subsidized projects from external auditors (certified public accountants) each year," noting that "in this case, since projects that have already undergone accounting verification do not need to receive re-verification (accounting audit), there will be no double administrative burden or additional expenses for faculty members."
Furthermore, it was added, "The expense for verification is also not directly borne by the childcare centers," explaining that "the verification fee can be reflected in the local government's budget or included in project costs, so there is no additional cost burden on the childcare centers."
Additionally, regarding the claim that "the average annual accounting audit cost per private contracting institution amounts to 6 million won," it was stated that "this refers to cases where some subsidy recipients are required by law to undergo financial statement audits like for-profit enterprises, which is an incorrect comparison. In fact, the nature of privatized accounting audits is the same as that of subsidy project accounting verifications, and for large-scale privatized projects in the Seoul area (averaging 2.7 billion won), the budget is set at approximately 2 million won per case."
It was also analyzed that small-scale and low-income childcare centers are likely to be excluded from the scope of audits. The KICPA stressed, "This amendment is not intended to impose new burdens on childcare centers, but rather aims to unify the management standards of privately contracted projects that have been operated differently by each local government and enhance transparency in financial execution."