Gimpo city government is overhauling its financial management system for local public institutions to prevent accounting fraud and improve transparency.
The city announced Thursday that it has drawn up a reform plan for the financial management systems of its local public institutions, prompted by a recent embezzlement case at Gimpo FC, and will begin implementing the changes in earnest.
The plan centers on four areas: digital financial management, stronger internal controls, an external oversight framework, and direct accountability by institution heads.
At its core, the plan calls for broader digitization of accounting processes, separation of duties to prevent any single employee from concentrating authority, and an early-warning system to detect irregular transactions.
The city will introduce a fund management system linking its accounting platform directly to financial institutions, replacing manual processes previously handled through internet banking or in-person bank visits. The change is intended to reduce the risk of errors and fraud that can arise from manual handling.
Accounting duties will also be divided so that no single person can handle expenditure approval, fund disbursement and post-execution verification. Department heads overseeing accounting will be required to regularly cross-check account transaction records against the books to monitor cash flows.
Internal control procedures will be established to flag and immediately investigate suspicious activity — including transfers to personal accounts, repeated transactions with specific vendors, and any transaction executed without approval through the accounting system.
The city will also introduce a job-rotation system to reduce the risks that come with long-tenured accounting staff. Accounting-related regulations at each institution will be comprehensively reviewed and revised, and regular ethics education will be provided to strengthen internal oversight and ethical awareness among accounting personnel.
External oversight will become a permanent, ongoing function. The city will verify the fund management status of each local public institution every month, and the responsible department will directly inspect the operation of general deposit accounts every quarter.
A response framework will also be established so that any accounting irregularities detected during inspections trigger an immediate request to the audit department for a targeted audit.
Measures to strengthen direct accountability by institution heads are also planned. The city will increase the weight given to internal controls and accountability in performance evaluations, and institutions that receive audit sanctions — such as a Caution or a formal warning — will face deductions in their performance scores, pushing institution heads to take personal responsibility for financial management and internal controls.
Starting in the second half of this year, the city will begin revising the accounting regulations of each local public institution and will build the linkage between the accounting system and financial institutions in stages.
"The core of this plan is not simply to detect accounting fraud after the fact, but to build a system that manages and prevents it in advance," Gimpo Mayor Lee Gi-hyeong said. "We will continuously strengthen internal controls and external oversight to create transparent local public institutions that citizens can trust."
gilbert@heraldcorp.com
