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Government accounting system 3

Government Accounting under the Budget Accounting Act (1962~2006)

The Fiscal Act, aside from being a copy of the Japanese Fiscal and Accounting Acts, also revealed numerous shortcomings that required legislative overhauls. In December 1961, the government therefore enacted and promulgated the Budget Accounting Act (BAA, Law 849). Prior to the enactment of the BAA, in July 1961, the Government Organization Act (GOA) was amended to give birth to the Economic Planning Board (EPB), and the Budget Bureau of the Ministry of Finance was transferred to the EPB. The EPB thus came to oversee budget preparations, while the Ministry of Finance controlled budget spending. Another amendment of the GOA in February 1966 led to the creation of the National Tax Service in March of the same year.

The GAO came into being under Law 12, passed in December 1948 according to Article 95.3 of the Constitution of 1948. The amended General Accounting Office Act (GAOA) of September 1961 required that the GAO report to the Supreme Council for National Reconstruction (SCNR) instead of to the President. The enactment of the Board of Audit and Inspection Act (BAIA) in March 1963 led to the abolition of the GAO, as the newly created Board took over reviews of accounting measures and practices.

The BAA introduced a performance-oriented budgeting system, set aside appropriations to be transferred to reserve funds, required planned distribution of budgets and funds, and defined other tasks toward realizing more efficient budget management. Yet the general awareness and standards of accounting remained unaltered for the most part.

Source: Korea Institute of Public Administration. 2008. Korean Public Administration, 1948-2008, Edited by Korea Institute of Public Administration. Pajubookcity: Bobmunsa.