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ENFORCEMENT DECREE OF THE LOCAL FINANCE ACT

Wholly Amended by Presidential Decree No. 19226, Dec. 30, 2005

Amended by Presidential Decree No. 20445, Dec. 13, 2007

Presidential Decree No. 20504, Dec. 31, 2007

Presidential Decree No. 20741, Feb. 29, 2008

Presidential Decree No. 21087, Oct. 20, 2008

Presidential Decree No. 21214, Dec. 31, 2008

Presidential Decree No. 21260, Jan. 13, 2009

Presidential Decree No. 21495, May 21, 2009

Presidential Decree No. 21656, Jul. 30, 2009

Presidential Decree No. 21801, Nov. 2, 2009

Presidential Decree No. 22493, Nov. 15, 2010

Presidential Decree No. 22532, Dec. 20, 2010

Presidential Decree No. 22564, Dec. 29, 2010

Presidential Decree No. 23121, Sep. 6, 2011

Presidential Decree No. 23573, Jan. 31, 2012

Presidential Decree No. 23645, Feb. 29, 2012

Presidential Decree No. 23674, Mar. 26, 2012

Presidential Decree No. 24425, Mar. 23, 2013

Presidential Decree No. 25103, Jan. 17, 2014

Presidential Decree No. 25226, Mar. 5, 2014

Presidential Decree No. 25532, Aug. 6, 2014

Presidential Decree No. 25751, Nov. 19, 2014

Presidential Decree No. 25781, Nov. 28, 2014

Presidential Decree No. 26572, Oct. 6, 2015

Presidential Decree No. 26691, Dec. 4, 2015

Presidential Decree No. 27268, jun. 28, 2016

Presidential Decree No. 27299, jun. 30, 2016

Presidential Decree No. 27463, Aug. 29, 2016

Presidential Decree No. 27621, Nov. 29, 2016

Presidential Decree No. 27959, Mar. 27, 2017

Presidential Decree No. 28211, Jul. 26, 2017

Presidential Decree No. 28521, Dec. 29, 2017

CHAPTER I GENERAL PROVISIONS
 Article 1 (Purpose)
The purpose of this Decree is to provide for the matters entrusted by the Local Finance Act and other matters necessary for the enforcement thereof.
 Article 1-2 (Evaluation of Main Financial Activities)
(1) Main financial activities subject to evaluation under Article 5 (3) of the Local Finance Act (hereinafter referred to as the “Act”) are as follows: Provided, That excluded herefrom are the local government-subsidized projects provided for in Article 32-2 (1) of the Act and the projects subject to mandatory budget compilation under Acts and subordinate statutes: <Amended by Presidential Decree No. 27268, Jun. 28, 2016>
1. A City/Do:
(a) An investment project, the total project cost of which is at least 500 million won;
(b) An event project, such as a performance or festival;
2. A Si/Gun/autonomous Gu:
(a) An investment project, the total project cost of which is at least 200 million won;
(b) An event project, such as a performance or festival.
(2) The Minister of the Interior and Safety may determine the criteria for the subject matter, methods, procedures, etc. for evaluation of the major financial activities under paragraph (1) and give notice thereof to the heads of local governments. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Articles 2 through 4 Deleted. <by Presidential Decree No. 27621, Nov. 29, 2016>
 Article 5 Deleted. <by Presidential Decree No. 25781, Nov. 28, 2014>
 Article 6 (Application of Matters concerning Education, Science and Physical Education, etc.)
With respect to matters concerning education, science and physical education or the special account for educational expenses prescribed in this Decree, the "head of a local government" or the "Mayor/Do Governor or the head of a Si/Gun/autonomous Gu" shall be construed as the "superintendent of education," the "Minister of the Interior and Safety" shall be construed as the "Minister of Education," and "Ordinance of the Ministry of the Interior and Safety" shall be construed as "Ordinance of the Ministry of Education", respectively. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 7 (Types of Local Government Bonds)
The types of local government bonds prescribed by Article 11 (1) of the Act shall be as follows:
1. Local government bonds issued as securities: These local government bonds refer to bonds issued by means of the issuance of securities in order to obtain borrowings and the same shall apply where such local government bonds are issued overseas;
2. Borrowings: Such borrowings refer to local government bonds by which local governments obtain borrowings by means of the issuance of deeds, and the same shall apply where local governments introduce loans (including loans in kind) from any foreign government and any international organization, etc.
 Article 8 (Special Case concerning Local Government Bonds Issued as Securities)
(1) Local government bonds issued as securities, as prescribed by the provisions of subparagraph 1 of Article 7 may be issued by means of the delivery of local government bonds issued as securities in lieu of fulfilling the obligations of local governments.
(2) Where any local government intends to issue local government bonds issued as securities overseas or to issue local government bonds issued as securities that are denominated in any foreign currency in the Republic of Korea, such local government shall issue such local government bonds according to the procedures that are set by the Foreign Exchange Transactions Act and the Enforcement Decree therefor and develop and implement a foreign exchange risk management plan.
 Article 9 Deleted. <by Presidential Decree No. 25781, Nov. 28, 2014>
 Article 10 (Calculation, etc. of Limit of Amount for Issuance of Local Government Bonds)
(1) No local government bonds may be issued under Article 11 (2) of the Act, if the total project cost is less than the amount provided for in Article 41 (1) 1 (a) and 2 (a): Provided, That the same shall not apply where any borrowing is made to upgrade an office building. <Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014>
(2) The limit of amount for the issuance of local government bonds under Article 11 (2) of the Act shall be the amount determined by the Minister of the Interior and Safety, taking into account the following matters within 10/100 of the budget amount of the relevant local government in the year before the preceding year: <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
1. The amount of local government bonds issued pursuant to Article 11 (1) of the Act;
2. The amount any local government is liable to repay on the grounds of the debtor's bankruptcy, etc. among the amount of the obligations guaranteed pursuant to Article 13 of the Act;
3. The amount of the obligations assumed pursuant to Article 44 of the Act;
4. Other matters determined by the Minister of the Interior and Safety, such as the amount of obligations, the schedule for repaying obligations and the level of financial burden of the relevant local government.
(3) Notwithstanding paragraph (2), the Minister of the Interior and Safety may determine the limit of additional amount for the issuance of local government bonds for a relevant local government, in addition to the limit of amount for the issuance of local government bonds already determined pursuant to paragraph (2), if necessary for the smooth promotion of projects executed by administrative organs (limited to subordinate organs of the local government) in a free economic zone established pursuant to Article 27-2 (1) of the Special Act on Designation and Management of Free Economic Zones. <Newly Inserted by Presidential Decree No. 20123, Jun. 28, 2007; Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 21656, Jul. 30, 2009; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(4) The Minister of the Interior and Safety may request the heads of local governments to furnish materials necessary to calculate the limit of amount for the issuance of local government bonds. In such cases, where any local government obtains an excessively high limit by submitting falsified materials or issues bonds in excess of the limit without obtaining approval therefor, the Minister of the Interior may reduce and adjust such limit or impose restrictions on the issuance of local government bonds. <Amended by Presidential Decree No. 20123, Jun. 28, 2007; Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 11 (Procedures for Issuance of Local Government Bonds)
(1) The Minister of the Interior and Safety shall notify each local government of its limit of amount for the issuance of local government bonds of the following year by no later than July 15 of each year. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(2) Where the head of a local government or the head of the Association of Local Governments intends to issue local government bonds in the following year after obtaining approval therefor from the Minister of the Interior and Safety pursuant to the proviso to Article 11 (2), Article 11 (3) and (4) of the Act, he/she shall submit a draft plan to issue its local government bonds for the following year to the Minister of the Interior and Safety in compliance with the standards prescribed by the Minister of the Interior by no later than August 31. In such cases, the draft plan to issue local government bonds of a Si/Gun/autonomous Gu shall be submitted to the Minister of the Interior and Safety via the competent Special Metropolitan City Mayor, Metropolitan City Mayor or Do Governor (hereinafter referred to as "Mayor/Do Governor"). <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(3) The Minister of the Interior and Safety shall determine whether to approve the draft plan to issue local government bonds submitted under paragraph (2) after consulting thereon with the heads of the relevant central government agencies (referring to central government agencies prescribed in Article 6 (2) of the National Finance Act; hereinafter the same shall apply) and notify local governments of the result of such determination by no later than October 31. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(4) Where the head of a local government or the head of the Association of Local Governments intends to issue local government bonds in excess of the limit of amount for the issuance of local government bonds during the fiscal year, he/she shall obtain additional approval therefor from the Minister of the Interior and Safety, notwithstanding paragraphs (2) and (3). <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 12 (Procedures for Acquisition of Local Government Bonds)
(1) Each local government that intends to obtain borrowings in the following year from the special account, funds and office building upgrade funds, or similar from the central government shall submit a draft plan for issuing local government bonds for the following year, which is formulated in compliance with the standards set by the Minister of the Interior and Safety, to the Minister of the Interior by no later than August 31. In such cases, the draft plan for issuing local government bonds by a Si/Gun/autonomous Gu shall be submitted to the Minister of the Interior and Safety via the competent Mayor/Do Governor. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(2) The Minister of the Interior and Safety shall consult with the heads of relevant central government agencies or the head of the Association of Local Governments, etc. on the draft plan for issuing local government bonds submitted under paragraph (1) and then notify the relevant local governments of the result of such consultations by no later than October 31. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(3) Each Si/Gun/autonomous Gu that intends to obtain borrowings in the following year from the fund, etc. for the community development under Article 19 (2) of the Local Public Enterprises Act shall submit a draft plan for issuing local government bonds for the following year in compliance with the standards set by the Minister of the Interior and Safety, to a Mayor/Do Governor by no later than July 31. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 13 (Local Government Bonds Issued as Securities by Means of Public Offering)
(1) When any local government issues local government bonds issued as securities in a manner of offering provided for in Article 12 of the Act, such local government shall prepare a subscription form for the local government bonds issued as securities, in which the matters falling under each of the following subparagraphs are entered:
1. The name of the local government;
2. The total amount of local government bonds issued as securities;
3. Purposes of the local government bonds issued as securities;
4. The face value of each of the local government bonds as securities;
5. The value issued or the minimum value of each of local government bonds as securities;
6. The interest rate of local government bonds issued as securities;
7. The repayment of local government bonds issued as securities, means to pay interest and the time limit for paying such interest;
8. When the payment by frequent installations of the local government bonds issued as securities is prescribed, the amount of payment by frequent installments and the timing therefor;
9. When local government bonds issued as securities are limited to registered local government bonds or non-registered local government bonds, the rationale therefor;
10. When any company is commissioned to make a public offering of local government bonds issued as securities, its trading name and address;
11. Where the subscription amount of the local government bonds issued as securities falls short of the total amount thereof issued, when anyone is contracted to acquire the balance thereof, the rationale therefor;
12. When any transfer agent is hired, his/her name, address or place of business;
13. The deadline for subscribing to local government bonds issued as securities.
(2) Anyone who intends to subscribe to local government bonds issued as securities shall record the number of local government bonds issued as securities he/she intends to acquire and his/her address in a subscription form for local government bonds issued as securities referred to in the provisions of paragraph (1) and then write his/her name and affix his/her seal thereon.
(3) Where the minimum value of each local government bond issued as a security is set, subscribers shall each enter the subscription value in the subscription form for local government bonds issued as securities.
(4) Any company that is commissioned to offer local government bonds issued as securities may perform acts referred to in paragraph (1) in the name of the local government that commissions him/her to do so.
 Article 14 (Special Case of Subscribing to Total Amount of Local Government Bonds Issued as Securities)
The provisions of Article 13 shall not apply to cases where anyone subscribes to the total amount of local government bonds issued as securities under a contract. Where any company that is commissioned to offer local government bonds issued as securities subscribes to part of such local government bonds issued as securities, the provisions of Article 13 shall not apply to the part of the local government bonds subscribed, either.
 Article 15 (Special Case concerning Instance Where Subscribed Amount of Local Government Bonds Issued as Securities Falls Short of Total Amount of Local Government Bonds Issued as Securities)
Even where the subscribed amount of local government bonds issued as securities falls short of the total amount of local government bonds issued as securities, as entered in the subscription form for the local government bonds issued as securities, when the establishment of the local government bonds issued as securities is mentioned in the subscription form for the local government bonds issued as securities, the subscribed amount may be deemed the total amount of the relevant local government bonds issued as securities.
 Article 16 (Payments)
(1) When the offering of local government bonds issued as securities is completed, local governments shall cause subscribers to pay without delay for the total amount of local government bonds issued as securities or pay the first installment amount.
(2) Any company that is commissioned to offer local government bonds issued as securities may perform the act referred to in the provisions of paragraph (1) for the local government that commissions it to do so in the latter's name.
 Article 17 (Issuance of Securities)
(1) When the total amount of local government bonds issued as securities is paid, local governments shall issue such securities without delay.
(2) The matters falling under each of the following subparagraphs shall be noted on the local government bonds issued as securities and the heads of local governments shall subscribe their names and affix their seals thereon:
1. The number of local government bonds issued as securities;
2. Matters provided for in the provisions of Article 13 (1) 1 through 4, 6, 7, 9, 10 and 12;
3. The date of issuance of the local government bonds issued as securities.
 Article 18 (Issuance of Local Government Bonds Issued as Securities by Way of Sale)
When local governments issue local government bonds issued as securities by way of sale, they shall publish the matters falling under each of the following subparagraphs:
1. Matters provided for in the provisions of Article 13 (1) 1 through 4, 6, 7, 9 and 12;
2. The period during which the local government bonds issued as securities are offered for sale;
3. The sale value of the local government bonds issued as securities;
4. When any company is commissioned to sell the local government bonds issued as securities, its trading name and address.
 Article 19 (Special Case concerning Instance Where Total Sale Amount of Local Government Bonds Issued as Securities Falls Short of Total Amount)
Even where the total amount of local government bonds issued as securities during the sales period falls short of the total amount of local government bonds issued as securities, which are published pursuant to the provisions of Article 18, when the completion of the sales of local government bonds issued as securities is explicitly published, the total amount of sales shall be deemed the total amount of relevant local government bonds issued as securities.
 Article 20 (Conversion between Registered Securities and Non-Registered Securities)
Creditors of local government bonds may request the relevant local government to convert registered securities into non-registered securities or non-registered securities into registered securities, except in cases where securities are limited to registered securities or non-registered securities.
 Article 21 (Ledger of Local Government Bonds Issued as Securities)
(1) When any local government issues its local government bonds as securities, such local government shall prepare and keep a ledger of local government bonds issued as securities.
(2) Where any registered securities are issued, the matters falling under each of the following subparagraphs shall be entered in the ledger of local government bonds issued as securities:
1. The number of local government bonds issued as securities;
2. The matters provided for in the provisions of Article 13 (1) 2 through 10 and 12;
3. The amount and date of payment of each local government bond issued as a security;
4. The date on which local government bonds issued as securities are issued;
5. The acquisition date of each local government bond issued as a security;
6. Matters concerning the payment of principal and interest;
7. The names (in the case of a corporation, its trading name) and addresses of creditors of local government bonds.
(3) Where non-registered securities are issued, the kinds and number of the securities, other than the matters provided for in the provisions of paragraph (2) 1 through 6 shall be entered in the ledger of local government bonds issued as securities.
(4) When any local government is notified by a pledger of the fact that registered local government bonds issued as securities have become subject to a right of pledge, the name (in the case of any corporation, its trading name) and address of the pledgee shall be entered in the ledger of local government bonds issued as securities.
 Article 22 (Lottery Repayments of Local Government Bonds Issued as Securities)
(1) Where any local government intends to repay part of any local government bonds issued as securities by way of lottery, such local government shall publish in advance the amount of the repayment, the repayment date, the date and place where the lottery is made and means of conducting the lottery.
(2) The local government shall publish the winning number by grouping of face value of local government bonds issued as securities by way of lottery as provided for in paragraph (1).
 Article 23 (Case of Deficiency in Right and Interest)
(1) Where non-registered local government bonds issued as securities with the rights and interests are repaid, when the right and interest are partially defective on the grounds of contamination or damage, the amount equivalent to the defective part shall be deducted from the amount repaid.
(2) The holder of the rights and interests referred to in the provisions of paragraph (1) may claim payment of the deducted amount in exchange for such right and interest at any time and the relevant local government shall comply with such claim.
 Article 24 (Special Case concerning Local Government Bonds Issued as Securities in Foreign Currency)
The issuance of local government bonds issued as securities overseas, which are denominated in any foreign currency (hereinafter referred to as "local government bonds issued as securities in foreign currency"), the conversion between registered local government bonds issued as securities in foreign currency and non-registered local government bonds issued as securities in foreign currency, the register of local government bonds issued as securities in foreign currency, lottery repayment of local government bonds issued as securities in foreign currency, repayment of local government bonds issued as securities in foreign currency with defective rights and interests therein and payments to the holders of rights and interests, etc. may be governed by Acts and subordinate statutes or customs of the country where the local government bonds issued as securities are issued, notwithstanding the provisions of this Decree.
 Article 25 (Methods of Publication)
Local government bonds issued as securities shall be published in the public gazette of the relevant local government or in daily newspapers.
 Article 26 (Approval for and Management of Guaranteed Obligations)
(1) Anyone who intends to obtain a guarantee from any local government for fulfilling his/her obligations pursuant to Article 13 (1) of the Act shall file an application in advance for an obligation guarantee, in which the names of the creditor and debtor, the amount for repayment, etc. are entered, with the head of the relevant local government.
(2) In the written statement indicating that the relevant local government guarantees the fulfillment of the principal obligations pursuant to Article 13 (2) of the Act, the scope of the principal obligations that are borne by the relevant local government and matters that both the creditors and debtor are required to observe shall be noted.
 Articles 27 and 28 Deleted; <by Presidential Decree No. 27621, Nov. 29, 2016>
 Article 29 (Restrictions on Donations or Subsidies)
(1) Deleted. <by Presidential Decree No. 23121, Sep. 6, 2011>
(2) The expenditure of public money under the main sentence of Article 17 (1) of the Act means all financial expenditures, including subsidization, by a relevant local government, except the investment and funding under Article 18 of the Act. <Amended by Presidential Decree No. 25781, Nov. 28, 2014>
(3) "Which is deemed necessary for a project recommended by a local government" in Article 17 (1) 4 of the Act means where it is impractical to conduct the project recommended by the relevant local government, relating to administrative affairs within the jurisdictions of such local government, unless a subsidy is provided for such project.
(4) Deleted. <by Presidential Decree No. 23121, Sep. 6, 2011>
(5) Filing applications for subsidization or expenditure of public money by local governments under Article 17 (1) of the Act, and determinations to grant such subsidization or expenditure, use of such subsidies or public money, and other necessary matters shall be prescribed by ordinance of relevant local government in compliance with the standards prescribed by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 30 (Scope of Public Corporations)
"Public corporation, the members of which are local governments" referred to in the main sentence of Article 17 (2) 2 of the Act means a corporation established after obtaining authorization therefor from the Minister of the Interior and Safety with the investment made by various levels of local governments as financial resources for their funds in order to restore public buildings to their original condition after being effected by disasters, to upgrade public office buildings, to create and manage public property and to facilitate the international exchange programs of local governments, etc. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 23121, Sep. 6, 2011; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Articles 30-2 through 30-4 Deleted. <by Presidential Decree No. 25781, Nov. 28, 2014>
 Article 31 (Establishment, etc. of Advisory Councils for Each Field)
(1) The Minister of the Interior and Safety shall establish advisory councils for each field pursuant to Article 19 of the Act. The advisory councils for each field shall be comprised of not more than 10 members, including one chairperson, who are appointed or commissioned by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(2) The Advisory Council for Local Financial Policy shall be established within the Ministry of the Interior and Safety to advise the Minister of the Interior and Safety on the management of the finances of local governments and the Advisory Council for Local Financial Policy shall be comprised of not more than 20 members, including one chairperson, who are appointed or commissioned by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(3) The advisory councils for each field established under paragraph (1) may table the agenda on local finances to the Advisory Council for Local Financial Policy under paragraph (2) for its deliberation.
(4) Detailed matters necessary the composition and operation of the advisory councils for each field and the Advisory Council for Local Financial Policy under paragraphs (1) and (2) shall be prescribed by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
CHAPTER II BURDEN OF EXPENSES
 Article 32 (Restrictions on Disbursement of Expenses)
In disbursing expenses, every local government shall disburse such expenses only for performing the clerical work under its jurisdiction and shall be prohibited from disbursing any expense for performing the clerical work of the State, the clerical work of other local governments or educational clerical work without grounds provided therefor in Acts and subordinate statutes.
 Article 33 (Items, etc. of Expenses Borne by Local Governments)
(1) The items and the rate of apportionment of the expenses to be borne by a Special Metropolitan City, a Metropolitan City and a Do (hereinafter referred to as a "City/Do") and a Si/Gun/autonomous Gu (excluding the amount that is appropriated from fiscal and financial funds of the State and other amounts that are borne by beneficiaries) pursuant to Article 22 (1) of the Act shall be determined by Ordinance of the Ministry of the Interior and Safety, taking into account the nature of the projects, scope of the effects of projects and the interests among the local governments on the relevant projects: Provided, That the same shall not apply where other Acts and subordinate statutes prescribe otherwise. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(2) Where it is deemed necessary on the grounds of the financial situation of a Si/Gun/autonomous Gu, a Mayor/Do Governor may bear additional expenses in excess of the standard burden ratio, notwithstanding the burden ratio set by Ordinance of the Ministry of the Interior and Safety pursuant to paragraph (1) (hereinafter referred to as "standard burden ratio"). <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 34 (Filing Applications for Government Subsidies)
Where the head of a local government reports the details of an application for earmarking subsidies from the National Treasury in the budget to the Minister of the Interior and Safety pursuant to Article 24 of the Act, he/she shall include materials and opinions that are submitted to the Minister of Strategy and Finance or the heads of central government agencies pursuant to Articles 8 and 11 of the Subsidy Management Act in their respective reports. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 21214, Dec. 31, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 35 (Organization of Committee for Deliberation on Local Financial Obligations)
(1) “Related central government agencies prescribed by Presidential Decree” referred to in Article 27-2 (4) 1 of the Act means central government agencies, such as the Office for Government Policy Coordination, that are related to an agenda laid before the Committee for Deliberation on Local Financial Obligations (hereinafter referred to as the “Committee for Deliberation on Local Financial Obligations”) under paragraph (1) of the same Article, as designated by the chairperson of such Committee in advance every meeting. <Amended by Presidential Decree No. 25103, Jan. 17, 2014; Presidential Decree No. 25781, Nov. 28, 2014>
(2) Deleted. <by Presidential Decree No. 25103, Jan. 17, 2014>
(3) The terms of office of members referred to in Article 27-2 (4) 2 and 3 of the Act shall be two years: Provided, That a member appointed to fill a vacancy occurring before the expiration of the term for which his/her predecessor was appointed shall serve for the remainder of such term. <Amended by Presidential Decree No. 25103, Jan. 17, 2014>
(4) The National Conference of Mayors/Do Governors, the National Conference of Heads of Sis/Guns/Gus, the National Conference of Chairpersons of Local Councils of Cities and Dos, or the National Conference of Chairpersons of Local Councils of Si/Guns/Gus may withdraw the recommendation of a member under Article 27-2 (4) 2 of the Act if he/she falls under any of the following: <Newly Inserted by Presidential Decree No. 26572, Oct. 6, 2015>
1. Where he/she becomes unable to perform any of his/her duties due to any mental or physical impairment on his/her part;
2. Where he/she commits misconduct in relation to his/her duties as a member;
3. Where he/she is deemed unfit to be in office as member on the grounds of neglect of duty, loss of dignity and such like;
4. Where he/she voluntarily manifests his/her unfitness to perform the duties of his/her office.
(5) The Prime Minister may withdraw the commission of a member under Article 27-2 (4) 3 of the Act if he/she falls under any subparagraph of paragraph (4). <Newly Inserted by Presidential Decree No. 26572, Oct. 6, 2015>
[This Article Wholly Amended by Presidential Decree No. 23753, Jan. 31, 2012]
 Article 35-2 (Operation of Committee for Deliberation on Local Financial Obligations)
(1) The chairperson of the Committee for Deliberation on Local Financial Obligations (referred to as the "Chairperson" hereafter in this Article) shall convene its meetings and preside over the meetings.
(2) Where the Chairperson is unable to perform any of his/her duties due to extenuating circumstances, the vice chairperson pre-designated by the Chairperson shall act on behalf of the Chairperson.
(3) The Committee for Deliberation on Local Financial Obligations shall hold a meeting with a majority of all incumbent members present and pass resolutions with the consent of a majority of the members present.
(4) Where the head of a local government advances his/her opinion in relation to matters referred to in the subparagraphs of Article 27-2 (1) of the Act, the Minister of the Interior and Safety may request the Chairperson to refer such opinion to deliberation at meetings of the Committee for Deliberation on Local Financial Obligations, if he/she deems it necessary. <Amended by Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(5) Where necessary for deliberation, the Chairperson may request related institutions to submit necessary data or opinions, or require related public officials or nongovernmental experts to attend meetings to hear their opinions.
(6) The Minister of the Interior and Safety shall immediately notify each central government agency and each local government of matters on which the Committee for Deliberation on Local Financial Obligations has passed resolutions so that they may take necessary measures. In such cases, the heads of the relevant central government agency and local government shall notify the Minister of the Interior and Safety of the measures taken following resolutions by the Committee, and the Minister of the Interior and Safety shall report the details thereof to the Committee. <Amended by Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 26572, Oct. 6, 2015; Presidential Decree No. 28211, Jul. 26, 2017>
(7) One administrative secretary shall be assigned to the Committee for Deliberation on Local Financial Obligations, and the Minister of the Interior and Safety shall appoint the administrative secretary from among public officials belonging to the Senior Executive Service belonging to the Ministry of the Interior and Safety. <Amended by Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(8) Except as otherwise expressly provided for in paragraphs (1) through (7), matters necessary for the composition and operation of the Committee for Deliberation on Local Financial Obligations shall be prescribed by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Wholly Amended by Presidential Decree No. 25103, Jan. 17, 2014]
 Article 35-3 (Organization and Operation of Working Committees)
(1) Working committees referred to in Article 27-2 (6) of the Act (hereafter in this Article referred to as "Working Committee") shall be comprised of not more than 15 members, including one chairperson in consideration of gender composition, and the following persons shall serve as the members thereof: <Amended by Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 27268, Jun. 28, 2016; Presidential Decree No. 28211, Jul. 26, 2017>
1. Public officials belonging to Senior Executive Service under the jurisdiction of the Ministry of Strategy and Finance, the Ministry of the Interior and Safety and the Office for Government Policy Coordination;
2. One person each recommended by the National Conference of Mayors/Do Governors, the National Conference of Heads of Sis/Guns/Gus, the National Conference of Chairpersons of Local Councils of Cities and Dos, and the National Conference of Chairpersons of Local Councils of Si/Guns/Gus;
3. Other persons commissioned by the Minister of the Interior and Safety who have knowledge about, and expertise in, local finance.
(2) Where the chairperson is unable to perform his/her duties due to any unavoidable cause, a member pre-designated by the chairperson shall act on behalf of the chairperson.
(3) One administrative secretary shall be assigned to each Working Committee, and the Minister of the Interior and Safety shall appoint the administrative secretary from among public officials of at least Grade IV under the jurisdiction of the Ministry of the Interior and Safety. <Amended by Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(4) The terms of office of members referred to in paragraph (1) 2 and 3 shall be two years: Provided, That a member appointed to fill a vacancy occurring before the expiration of the term for which his/her predecessor was appointed shall serve for the remainder of such term.
(5) The Working Committees shall review the following matters:
1. Matters concerning items to be discussed at meetings of the Committee for Deliberation on Local Financial Obligations;
2. Matters which the Working Committees have been directed to review by the Committee for Deliberation on Local Financial Obligations;
3. Other matters necessary for the operation of the Working Committees.
(6) Article 35-2 (1), (3), and (5) shall apply mutatis mutandis to the operation of the Working Committees. In such cases, "the Committee for Deliberation on Local Financial Obligations" shall be construed as "the Working Committees."
(7) Article 35 (4) and (5) shall apply mutatis mutandis to the withdrawal of recommendation of a member under paragraph (1) 2 and the revocation of the commission of a member under paragraph (1) 3 among the members of the Working Committees. In such cases, “the Prime Minister” shall be construed as “the Minister of the Interior and Safety.” <Newly Inserted by Presidential Decree No. 26572, Oct. 6, 2015; Presidential Decree No. 28211, Jul. 26, 2017>
(8) Except as otherwise expressly provided for in paragraphs (1) through (7), matters necessary for the composition and operation of the Working Committees shall be prescribed by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 26572, Oct. 6, 2015; Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 25103, Jan. 17, 2014]
 Article 35-4 (Management of Government Subsidies)
(1) The head of a central government agency shall notify the Minister of the Interior and Safety of the outcomes of Government subsidies granted to local governments pursuant to Article 27-4 (1) of the Act and the outcomes of subsidies used by the relevant local governments by no later than May 31 of the following year. <Amended by Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(2) The head of a central government agency that prepares the outcomes of Government subsidies granted to local governments pursuant to paragraph (1) and the outcomes of subsidies used by the relevant local governments, shall do so separately or each local government. <Amended by Presidential Decree No. 25781, Nov. 28, 2014>
(3) The Minister of the Interior and Safety shall comprehensively analyze the outcomes of Government subsidies granted to local governments pursuant to paragraph (1) and the outcomes of subsidies used by the local governments notified by a central government agency pursuant to Article 27-4 (2) of the Act and publish such outcomes via the Internet website, etc. <Amended by Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 25103, Jan. 17, 2014]
 Article 35-5 (Local Projects Subject to Assessment of Impacts on Local Government Finance)
(1) Projects subject to assessment by the head of a local government under the latter part of Article 27-6 (1) of the Act are as follows: <Amended by Presidential Decree No. 27268, Jun. 28, 2016>
1. A domestic or international sports competition, public performance, festival or other event project subject to the investment examination under Article 41, the total project cost of which is at least three billion won;
2. A public contest, etc. subject to a bid or an application, the total project cost of which is at least ten billion won and the amount of local financial burden is at least five billion won.
(2) Notwithstanding paragraph (1), any of the following projects shall be exempt from local projects subject to assessment: <Newly Inserted by Presidential Decree No. 27268, Jun. 28, 2016; Presidential Decree No. 28211, Jul. 26, 2017>
1. A project whose impact on local government finance was assessed in the preceding year or the year before the preceding year pursuant to Article 27-6 (1) of the Act, which is an event project, such as a performance or festival repeatedly held every year or every other year: Provided, That the foregoing shall not apply to a project whose total project cost has increased 20 percent or more from the preceding year (in cases of an event project held every other year, referring to the year before the preceding year);
2. A project prescribed and announced by the Minister of the Interior and Safety among projects mandatorily implemented pursuant to Acts and subordinate statutes, which are subject to bids or applications for public contests, etc. pursuant to the former part of Article 27-6 (1) of the Act.
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 35-6 (National Projects, etc. Subject to Assessment of Impacts on Local Government Finance)
(1) A written assessment of the impact on local government finance that the head of a central government agency must submit to the Minister of the Interior and Safety under the former part of Article 27-6 (2) of the Act shall include the results of assessing the duration of local financial burden, the details of the required amount and the possibility of funding. In such cases, matters necessary for detailed items, criteria, procedures, methods, etc. for assessment shall be determined by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
(2) A project that the head of a central government agency is required to assess under the latter part of Article 27-6 (2) of the Act means a new project, the total project cost of which is at least 50 billion won and for which the amount of local financial burden is at least 20 billion won.
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 35-7 (Restrictions of Local Tax Reductions and Exemptions)
(1) Pursuant to Article 28-2 (1) of the Act, the Minister of the Interior and Safety shall ensure that the ratio (referred to as “rate of the aggregate amount of local taxes that are non-taxable, reduced or exempt” hereafter in this Article) of the aggregate amount of local taxes that are non-taxable, reduced or exempt to the sum of local taxes collected at settlement, and local taxes that are non-taxable, reduced or exempt for the relevant year shall not exceed any ratio set forth in the following classifications for each year. In such cases, when any ratio is calculated, a fraction of less than 1/1,000 shall be deemed nil: <Amended by Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 26572, Oct. 6, 2015; Presidential Decree No. 28211, Jul. 26, 2017>
1. By the year 2017: 15/100;
2. The year 2018: A ratio calculated by adding 5/1,000 to a rate of the aggregate amount of local taxes that are non-taxable, reduced or exempt for the year 2017;
3. The year 2019: A ratio calculated by adding 5/1,000 to an average rate of the aggregate amount of local taxes that are non-taxable, reduced or exempt for the years from 2017 to 2018;
4. From the year 2020 on: A ratio calculated by adding 5/1,000 to an average rate of the aggregate amount of local taxes that are non-taxable, reduced or exempt for three immediately preceding years of the relevant year.
(2) When calculating the rate of the aggregate amount of local taxes that are non-taxable, reduced or exempt referred to in the subparagraphs of paragraph (1), the following amounts shall not be included in local taxes that are non-taxable, reduced or exempt:
1. An amount of acquisition tax reduced and exempt under Article 40-2 of the Restriction of Special Local Taxation Act (applicable only where the amount of acquisition tax reduced and exempt exceeds an amount of 3,477.5 billion won reduced from acquisition tax at settlement for the year 2010);
2. Local taxes that are non-taxable, reduced or exempt, which temporarily arise due to extenuating circumstances for rendering support under a national policy, including tax reduction and exemption to support an Agricultural cooperative’s business restructuring referred to in Article 57 (3) of the Restriction of Special Local Taxation Act.
[This Article Newly Inserted by Presidential Decree No. 23753, Jan. 31, 2012]
 Article 36 (Types and Distribution of Grants-In-Aid for Adjustment among Sis/Guns)
(1) The types and uses of grants-in-aid for adjustment under Articles 29 and 29-2 of the Act are as follows: <Amended by Presidential Decree No. 25781, Nov. 28, 2014>
1. General grants-in-aid: Grants-in-aid to meet general fiscal demands, such as supplementing funds necessary for the administration of Sis/Guns;
2. Special grants-in-aid: Grants-in-aid to meet specific fiscal demands, such as promoting community development projects or other policies of Sis/Guns.
(2) Funds for general grants-in-aid shall be an amount equivalent to 90/100 of the total amount of grants-in-aid, and funds for special grants-in-aid shall be an amount equivalent to 10/100 of the total amount of grants-in-aid. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014>
(3) In the distribution of general grants-in-aid, an amount equivalent to 50/100 of the total amount of general grants-in-aid shall be distributed in proportion to the population size of a relevant Si/Gun, an amount equivalent to 20/100 thereof shall be distributed based on the collection records of the Metropolitan City tax and Do tax of the relevant Si/Gun, an amount equivalent to 30/100 thereof shall be distributed on the basis of the value obtained by subtracting, from one, the financial independence index (referring to the value calculated by dividing the standard amount of financial revenue by the standard amount of financial demand for each year pursuant to the Local Subsidy Act) of the relevant Si/Gun among Sis/Guns in each of which the financial independence index is less than one. <Amended by Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 27463, Aug. 29, 2016>
(4) Deleted <by Presidential Decree No. 27463, Aug. 29, 2016>
(5) Matters concerning disbursement of general grants-in-aid including timing for distributing, and specific standards for distributing, methods for calculating, and timing for distributing special grants-in-aid shall be prescribed by municipal ordinance of a City/Do. <Amended by Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 27463, Aug. 29, 2016>
 Article 36-2 (Grants-in-Aid for Adjustment among Autonomous Gus)
(1) Funds for grants-in-aid for adjustment among autonomous Gus under Article 29-2 of the Act shall consist of money arising from the ordinary taxes (for Metropolitan Cities, excluding the pro rata property portion of resident tax under Section 3 of Chapter VII of the Local Tax Act and the pro rata employee portion of resident tax under Section 4 of the same Chapter) under the items of Article 8 (1) 1 of the Framework Act on Local Taxes among the Special Metropolitan City tax and Metropolitan City tax.
(2) Article 36 (2) shall apply mutatis mutandis to the structure of grants-in-aid for adjustment among autonomous Gus. In such cases, “general grants-in-aid” shall be construed as “general grants-in-aid for adjustment among autonomous Gus”, “grants-in-aid” as “grants-in-aid for adjustment among autonomous Gus”, and “special grants-in-aid” as “special grants-in-aid for adjustment among autonomous Gus,” respectively.
(3) Matters necessary for the grant ratio, calculation methods, grant period, etc. of grants-in-aid shall be determined by ordinance of the Special Metropolitan City or a Metropolitan City.
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 37 (Management of Records of Local Subsidies)
(1) The head of each local government shall manage the records of local subsidies for each project pursuant to Article 32-2 (5) of the Act.
(2) The management of the records of local subsidies for each project under paragraph (1) shall include the following:
1. Project name;
2. Address and name or title of a local government-subsidized project operator under Article 32-2 (1) of the Act (hereinafter referred to as “local government-subsidized project operator”);
3. Status of local subsidies granted to each local government-subsidized project operator for the last three years;
4. Performance evaluations conducted under Article 32-7 of the Act.
(3) The Minister of the Interior and Safety may notify the heads of local governments of criteria for the management of the records of local subsidies under paragraph (1). <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 37-2 (Keeping of Data Related to Local Government-Subsidized Projects)
(1) "Period prescribed by Presidential Decree" in Article 32-5 (5) of the Act means five years.
(2) The scope of data to be kept by local government-subsidized project operators pursuant to Article 32-5 (5) of the Act shall be as follows:
1. Account: A document of totaled calculations of the results of the accounting handled by a local government-subsidized project operator;
2. Evidentiary document: A document that proves the details of an account under subparagraph 1;
3. Attached document: A document necessary to explain the details of an account referred to in subparagraph 1 or evidentiary document referred to in subparagraph 2.
[This Article Newly Inserted by Presidential Decree No. 27268, Jun. 28, 2016]
 Article 37-3 (Deadline for Submitting Performance Reports of Local Government-Subsidized Projects)
Each local government-subsidized project operator shall submit a performance report of the local government-subsidized project to the head of the local government within two months after any of the causes provided for in the subparagraphs of Article 32-6 (1) of the Act arises.
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 37-4 (Evaluation and Management of Local Government-Subsidized Projects)
(1) When conducting the performance evaluation pursuant to Article 32-7 of the Act and the post evaluation pursuant to Article 32-8 (8) of the Act, the head of a local government shall include the evaluation of the outcomes, the necessity for continuance, etc. of the subsidized project.
(2) The head of a local government shall register and manage the information referred to in each subparagraph of Article 37 (2) in the information system established under Article 96-2 (1) of the Act in order to facilitate the performance evaluation under Article 32-7 of the Act and the post evaluation under Article 32-8 (8) of the Act. <Amended by Presidential Decree No. 27268, Jun. 28, 2016>
(3) The Minister of the Interior and Safety may notify the heads of local governments of the criteria for the evaluation of, the compilation of budgets for, the management, etc. of local government-subsidized projects under Articles 32-7 and 32-8 (8) of the Act. <Amended by Presidential Decree No. 28211. Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 37-5 (Property, etc. Restricted from Disposition)
(1) “Important property prescribed by Presidential Decree” referred to in Article 32-9 (1) of the Act means each of the following (referred to as “important property” hereafter in this Article):
1. Real property and accessories thereof;
2. Vessels, buoys, floating piers and floating docks, and accessories thereof;
3. Aircraft;
4. Other property deemed by the head of a local government to be specifically necessary for achieving the purposes of granting local subsidies.
(2) Every local government-subsidized project operator shall keep a record of important property under Article 32-9 (1) of the Act including the current value and an increase or decrease in quantity thereof determined by the head of the local government and report it to the head of the local government semiannually along with the documents related to the local government-subsidized project.
(3) The head of a local government shall publish the status of important property under Article 32-9 (1) of the Act through the Internet web-site, etc. of the local government.
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 37-6 (Exceptions to Restrictions on Disposition of Property)
Where a local government that is a local government-subsidized project operator acquires property with subsidies provided by another local government under Article 32-9 (3) 3 of the Act, it may engage in an act provided for in each subparagraph of Article 32-9 (2) of the Act without approval from the other local government: Provided, That, when seeking to dispose of any property for which the period under Article 32-9 (3) 2 of the Act has not elapsed, it shall consult with the head of the other local government thereabout.
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 37-7 (Payment of Rewards for Making Reports)
(1) Where a report or an accusation under Article 32-11 (1) is made, the head of a local government shall verify the details of such report or accusation and decide whether to pay a reward, and notify a reporter or accuser of his/her decision. In such cases, he/she shall notify a reporter or an accuser after revoking a decision to grant a local subsidy under Article 32-8 (1) of the Act or issuing an order to return a subsidy under Article 32-8 (2) of the Act.
(2) The head of a local government shall pay a reward to a reporter or an accuser within 60 days of the date of notification pursuant to paragraph (1), and standards for the payment of the reward shall be up to 30 percent of the amount of a subsidy revoked from provision or of the amount of a subsidy ordered to be returned, and shall not exceed 100 million won.
(3) No head of any local government shall pay a reward to a person who makes a report or accusation of the same content as the previous report or accusation under Article 32-11 (1) of the Act; where two or more persons make a joint report or accusation, the head of a local government shall pay a reward to the representative designated.
(4) Except as otherwise expressly provided for in paragraphs (1) through (3), necessary matters concerning standards, methods, procedures, etc. for payment of rewards shall be prescribed by the head of a local government.
[This Article Newly Inserted by Presidential Decree No. 27268, Jun. 28, 2016]
 Article 38 (Presentation of Opinions about Standard Burden Ratio)
(1) The head of a local government that is dissatisfied with the standard burden ratio applied to his/her local government pursuant to Article 33 may present his/her opinion to the Minister of the Interior and Safety, along with necessary materials. In such cases, a Si/Gun/autonomous Gu shall present its opinion, along with the opinions of the competent Mayor/Do Governor. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(2) Where the Minister of the Interior and Safety recognizes that the opinion presented pursuant to paragraph (1) is deemed reasonable after comprehensively examining the financial circumstances, etc. of the relevant local government and other local governments, he/she shall adjust the standard burden ratio. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
CHAPTER III BUDGET
 Article 38-2 (Formulation etc. of Medium-Term Local Finance Plan)
(1) When the head of a local government formulates a medium-term local finance plan under Article 33 (1) of the Act (hereinafter referred to as “medium-term local financial plan”) may listen to the public by means referred in Article 46 (1) of the Act.
(2) Where the Minister of the Interior and Safety finds that a medium-term local finance plan submitted by the head of a local government pursuant Article 33 (1) of the Act falls under any of the following, he or she may request to supplement such plan from the head of the relevant local government: <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
1. Where it is not correlated with State or regional plans under Article 33 (2) of the Act;
2. Where it omits matters required to be included or states outlooks etc. without grounds under Article 33 (3) of the Act.
(3) When the Minister of the Interior and Safety requests to supplement a medium-term local finance plan under paragraph (2), he or she shall listen to opinions of the head of the relevant local government in advance. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
(4) The Minister of the Interior and Safety shall notify a local government of guidelines of a medium-term local finance plan under Article 33 (4) of the Act by August 31 every year. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 27463, Aug. 29, 2016]
 Article 39 (Scope of Mandatory Spending)
The scope of mandatory spending referred to in Article 33 (3) 6 of the Act is as follows: <Amended by Presidential Decree No. 26572, Oct. 6, 2015; Presidential Decree No. 27935, Mar. 27, 2017>
1. Money transferred to the special account for educational expenses under Article 11 (2) of the Local Education Subsidy Act, the collection subsidies under Article 17 of the Local Tax Collection Act, and the grants-in-aid under Articles 29 and 29-2 of the Act;
2. Expenses incurred in relation to Government-subsidized projects or projects subsidized by Cities/Dos for Sis/Guns/autonomous Gus under Article 23 (2) of the Act (including Government subsidies and subsidies that Cities/Dos provide to Sis/Guns/autonomous Gus under Article 23 (2) of the Act);
3. Interest expenses on local government bonds, loans, etc.;
4. Expenses incurred to support the common education and nursery curriculum under Article 24 of the Early Childhood Education Act and Articles 29 and 34 (3) and (5) of the Enforcement Decree of the same Act;
5. Other expenses, the disbursement and amount of which are determined pursuant to Acts and subordinate statutes.
[This Article Wholly Amended by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 40 (Scope of Expenses Operated as Off-Budget Annual Revenues and Expenditure)
(1) "Grounds prescribed by Presidential Decree" in Article 34 (3) of the Act means the grounds falling under any of the following subparagraphs:
1. The burden of losses incurred for public facilities;
2. Contract guarantees, bidding guarantees, short-fall guarantees and defects liability guarantees;
3. Deposits made pursuant to other Acts;
4. Expenses that are temporarily reserved by any local government to meet the need to perform clerical work.
(2) The expenses referred to in each subparagraph of paragraph (1) shall be managed as cash outside of the annual revenues and expenditures and direct expenditure thereof shall be prohibited except where this Decree or other Acts and subordinate statutes prescribe otherwise.
 Article 40-2 (Details of Gender-Sensitive Budgets and Standards for Preparation thereof)
(1) The gender-sensitive budget referred to in Article 36-2 of the Act (hereinafter referred to as “gender-sensitive budget”) shall include the following details: <Amended by Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
1. Outline and scale of the gender-sensitive budget;
2. Expected effects of gender equality by the gender-sensitive budget, performance objectives thereof and benefit analysis on the gender-sensitive budget by gender;
3. Other matters prescribed by the Minister of the Interior and Safety.
(2) The gender-sensitive budget shall be prepared in compliance with the standards for preparation and methods, etc. prescribed by the Minister of the Interior and Safety after consultation with the Minister of Gender Equality and Family. <Amended by Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 23121, Sep. 6, 2011]
 Article 41 (Examination of Financial Investment Projects)
(1) The head of a local government shall examine any of the following investment projects pursuant to Article 37 of the Act (hereinafter referred to as "investment examination"): Provided, That the same shall not apply to any project for restoration, such as full recovery from any disaster and any other projects prescribed by Ordinance of the Ministry of the Interior and Safety: <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 21801, Nov. 2, 2009; Presidential Decree No. 22532, Dec. 20, 2010; Presidential Decree No. 23121, Sep. 6, 2011; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 27268, Jun. 28, 2016; Presidential Decree No. 28211, Jul. 26, 2017>
1. A City/Do: Any of the following projects:
(a) A new investment project, which amounts to at least four billion won for a total project cost;
(b) A new investment project, which amounts to at least one billion won for a total project cost and includes any foreign loan project or foreign investment project;
(c) A new investment project, which amounts to at least 500 million won for a total project cost, and is a publicity-building project;
(d) A new investment project, which amounts to at least 300 million won for a total project cost, and is an event project, such as a performance or festival;
2. A Si/Gun/autonomous Gu: Any of the following projects:
(a) A new investment project, which amounts to at least two billion won for a total project cost;
(b) A new investment project, which amounts to at least 500 million won for a total project cost, and includes any foreign loan project or foreign investment project;
(c) A new investment project, which amounts to at least 300 million won for a total project cost, and is a publicity-building project;
(d) A new investment project, which amounts to at least 100 million won for a total project cost, and is an event project, such as a performance or festival.
(2) and (3) Deleted. <by Presidential Decree No. 25781, Nov. 28, 2014>
(4) The Minister of the Interior and Safety and a Mayor/Do Governor shall take measures, including training, necessary to improve the investment examination capabilities of local governments, and the Minister of the Interior and Safety or a Mayor/Do Governor may, upon the request of the head of a local government, perform the investment examination on investment projects exceeding the scale prescribed by Ordinance of the Ministry of the Interior and Safety, and present their opinions thereon. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(5) Where the head of a local government intends to request an investment examination of an investment project, as provided in paragraph (4), on which the feasibility study under Article 37 (2) of the Act or the preliminary feasibility study under Article 38 of the National Finance Act has been conducted, he/she shall submit the results of the feasibility study or preliminary feasibility study and whether such results are reflected. In such cases, if the results of the feasibility study or preliminary feasibility study are not reflected, he/she shall specify reasons therefor. <Amended by Presidential Decree No. 25781, Nov. 28, 2014>
(6) Standards for conducting investment examinations and other matters necessary for conducting investment examinations shall be prescribed by Ordinance of the Ministry of the Interior and Safety. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 41-2 (Methods of Disclosing Major Projects)
(1) Pursuant to Article 37-3 of the Act, the head of a local government shall post the following information on the web-site of the local government:
1. The outline of a project (including the total project cost, funds, project period, the department of project management, and the person in charge);
2. The results of investment examinations;
3. The results of examining the issuance of local government bonds;
4. The issue of local government bonds (including the total amount of issue scheduled and the amount issued until the date of disclosure);
5. The progress rate and other implementation status of the project.
(2) The disclosure under paragraph (1) shall be made as at December 31 each year.
(3) The disclosure under paragraph (1) shall be continued for at least five years after the completion of each project.
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 42 (Compilation of Budgets)
The budgets of local governments shall be compiled according to the standards for compiling the budgets of local governments and the classification of their budget items provided for in Articles 38 (2) and 41 of the Act, except where the provisions of other Acts and subordinate statutes prescribe otherwise.
 Article 43 Deleted. <by Presidential Decree No. 21087, Oct. 20, 2008>
 Articles 44 and 45 Deleted. <by Presidential Decree No. 25781, Nov. 28, 2014>
 Article 46 (Procedures for Residents to Participate in Process of Compiling Budgets of Local Governments)
(1) Residents may participate in the process of compiling budgets of local governments under Article 39 of the Act in a manner falling under any of the following subparagraphs:
1. Public hearings or informal gatherings for discussion of major projects;
2. Written or Internet question surveys on major projects;
3. The public offering of projects;
4. Other means to appropriately solicit the opinions of residents, as prescribed by Municipal Ordinance.
(2) The heads of local governments may examine the opinions of residents that are collected pursuant to paragraph (1) and compile their respective budgets by taking into account their opinions.
(3) Specific matters concerning the scope of the compilation of budgets in which residents participate, procedures and means, etc. for collecting the opinions of residents and the management of the collected opinions of residents shall be prescribed by Municipal Ordinance of each local government.
 Article 47 (Classification and Establishment of Budget Items)
(1) The budget items of annual revenues shall be classified into local tax revenues, non-tax revenues, local subsidy taxes, grants-in-aid, subsidies, local government bonds and the retrieval of deposit money, etc., taking into account the sources of annual revenues. <Amended by Presidential Decree No. 25781, Nov. 28, 2014>
(2) The budget items of annual expenditures shall be classified into costs for general administration, public order and safety, education, culture and tourism, environmental protection, social welfare, health care, agriculture, forestry, maritime affairs and fisheries, etc., taking into account functions of the budget of annual expenditures. <Amended by Presidential Decree No. 20504, Dec. 31, 2007>
(3) Detailed matters necessary for the classification and establishment of the budget items of annual revenues and the budget items of annual expenditures shall be prescribed by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 48 (Restrictions on Spending of Reserve Funds)
Indirect official business expenses and subsidies (excluding subsidies for emergency disaster countermeasures) shall not be earmarked in the reserve fund provided for in Article 43 of the Act.
 Article 49 (Grounds for Incurring Obligations and Amount Thereof)
The incurring of obligations provided for in Article 44 of the Act shall require clarification of the necessary reasons therefor by matter and indicate the year during which the incurring of obligation is to be performed, the amount of obligations that are borne, the year during which the obligations are repaid and the amount repaid.
 Article 49-2 (Documents to Accompany Budget Bills)
“Documents prescribed by Presidential Decree” referred to in Article 44-2 (1) 14 of the Act means:
1. The standards for compiling local government budgets under Article 38 (2) of the Act;
2. A total amount table and a net amount table of account settlement of the year before the preceding year, and a total amount table and a net amount table of the estimated amount of account settlement of the preceding year’s revenues and expenditures;
3. The issuance and repayment record of local government bonds issued as securities and borrowings as at the end of the year before the preceding year, and an estimate of the current amount of the local government bonds issued as securities and borrowings as at the end of the preceding year and the relevant year;
4. A written statement pertaining to an annual repayment plan for local government bonds issued as securities and borrowings;
5. A local tax disbursement report under Article 5 (1) of the Restriction of Special Local Taxation Act;
6. Other documents necessary for clarifying the details of budget.
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 49-3 (Matters to be Included in Outline of Conditions of Financial Management)
“Matters prescribed by Presidential Decree” referred to in Article 44-2 (2) 9 of the Act means: <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
1. The current status of activities to issue local government bonds;
2. The current status of public-private partnership projects and the amount of financial burden;
3. The current status of local public enterprises;
4. The arrears of local tax and non-tax revenue;
5. Other matters determined by the Minister of the Interior and Safety.
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 50 (Requirements for Reducing Expenditures and Increasing Revenues)
(1) "Where the budget is conserved" in Article 48 (1) of the Act (hereinafter referred to as the "reduced expenditure") means where the budget has a surplus of receipts over disbursements by incurring less expenses while maintaining the previous level or a higher level than that of the performance of the official business by means of a reduction in the fixed number of regular personnel, improvements in the methods of disbursing the budget and in the system by which the budget is disbursed through voluntary efforts.
(2) "Where revenues are increased" in Article 48 (1) of the Act (hereinafter referred to as "increased revenues") means a case where annual revenues are increased by means of the discovery of new sources of annual revenues or improvements in the system by which annual revenues are collected, etc. through considerable efforts.
 Article 51 (Standards for Paying Performance Bonuses for Saved Budgets)
(1) The budgetary performance bonuses on the saved expenditure under Article 48 (1) of the Act shall be paid to persons who have contributed to saving expenditure within the following limits and their payment per capita shall not exceed 20 million won:
1. Where personnel expenses are saved by means of the reduction in the number of regular personnel, reduced one-year personnel expenses;
2. Where ordinary expenses are reduced, 50 percent of the reduced ordinary expenses;
3. Where major project costs are reduced, 10 percent of the reduced costs: Provided, That the performance bonus per case shall not exceed 100 million won.
(2) Where the Budgetary Performance Bonus Examination Committee established under Article 54 recognizes a substantial effect on the reduction of expenditures by extensively applying the reduction of expenditures to similar projects, other subsidiary institutions, assistant institutions and affiliated institutions, the budgetary performance bonus may be paid in addition within 30 percent of the budgetary performance bonus that is calculated pursuant to paragraph (1). In such cases, the amount paid per capita shall not exceed 26 million won, and in cases falling under paragraph (1) 3, the performance bonus per case shall not exceed 130 million won.
(3) The budgetary performance bonus for increased revenues shall be paid to anyone who has contributed to increased revenues within ten percent of the increased revenues, but the performance bonus per capita shall not exceed 20 million won.
(4) Where personnel expenses are saved by reducing the number of regular personnel, the head of the relevant local government may earmark the amount equivalent to reduced one-year personnel expenses, in addition to the budgetary performance bonus provided for in paragraph (1) 1, in the budget of a project that is designated by the head of the relevant subsidiary institution, the relevant assistant institution or the relevant affiliated institution (hereinafter referred to as "subsidiary institution, etc.") that is prescribed by Ordinance of the Ministry of the Interior and Safety. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 52 (Ex Post Facto Budgetary Measures, etc.)
(1) Where budgetary performance bonuses are paid for reducing expenditures, the head of the relevant local government shall take measures to reduce the relevant expenditures when he/she allocates the budget in the fiscal year following the fiscal year during which the reduction of the expenditures accrues and he/she compiles the budget for the fiscal year following the year following the fiscal year during which the reduction of the expenditures accrues.
(2) Where budgetary performance bonuses are paid from the proceeds of reduced personnel expenses following the reduction in the number of regular personnel, the relevant subsidiary institution, etc. shall be prohibited from requesting a creation of any new organization or increasing its number of regular personnel, which performs work similar to the work of the organization with the number of regular personnel that are reduced in scale and number.
(3) Where the amount of reduced ordinary expenses and the reduced major project costs are paid as budgetary performance bonuses, the rel evant subsidiary institution, etc. shall be prohibited from requesting a budget allocation for the cost to undertake any project similar to the project on which costs are reduced.
 Article 53 (Provisions Governing Payment and Operation of Budgetary Performance Bonuses)
Matters necessary for the payment and operation of the budgetary performance bonuses shall be prescribed by Ordinance of the Ministry of the Interior and Safety, except as otherwise expressly prescribed in this Decree. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 54 (Establishment of Budgetary Performance Bonus Examination Committee)
(1) Each local government shall establish the Budgetary Performance Bonus Examination Committee under the jurisdiction of its head in order to examine the payment, etc. of the budgetary performance bonuses pursuant to Article 48 (2) of the Act.
(2) The Budgetary Performance Bonus Examination Committee referred to in paragraph (1) shall be comprised of not more than ten members, including one chairperson and one vice chairperson. The chairperson shall be the vice head of each local government. The vice chairperson shall be the section chief, the bureau chief or the public official in charge of budget. Its members shall be appointed or commissioned by the head of the relevant local government from among public officials who belong to the relevant local government and persons who have profound expert knowledge in the fields of budget accounting and local taxation.
(3) Matters necessary for the operation, etc. of the Budgetary Performance Bonus Examination Committee shall be prescribed by Ordinance of the Ministry of the Interior and Safety. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(4) Notwithstanding paragraphs (1) through (3), where a committee of which the features and functions are similar to the Budgetary Performance Bonus Examination Committee is established under the jurisdiction of the head of a local government, the committee may function on behalf of the Budgetary Performance Bonus Examination Committee as prescribed by the municipal ordinance of the relevant local government. <Newly Inserted by Presidential Decree No. 28521, Dec. 29, 2017>
 Article 54-2 (Resident Supervision relating to Illegal Expenditure and Waste of Budget and Funds)
(1) The head of each local government shall establish and operate a center for reporting a waste of budget to accept claims for corrective action against illegal expenditure of budget and funds, and proposals related to a budget saving or a revenue growth, referred to in Article 48-2 (1) and (2) of the Act, and to deal with such claims and proposals.
(2) Where the head of the relevant local government deems that claims for corrective action and proposals referred to in Article 48-2 (1) and (2) of the Act fail to meet requirements, he/she shall may ask for additional information within a specified period.
(3) Notice referred to in Article 48-2 (3) of the Act shall be given within 30 days (excluding a specified period referred to in paragraph (2)) from the date on which claims for corrective action and proposals are accepted: Provided, That if it is deemed impractical to deal with the claims or proposals within the period, a relevant person who has asked for claims for corrective action or made proposals shall be informed of reasons for such impracticality and a period required for dealing with such claims or proposals.
(4) No head of the relevant local government shall reveal or imply the identity of any person asking for claims for corrective action or making proposals referred to in Article 48-2 (1) and (2) of the Act, to another person, without such person’s consent.
(5) The head of the relevant local government may pay the budgetary performance bonuses referred to in Article 48 of the Act, to any persons who have made proposals related to a budget saving or a revenue growth, referred to in paragraph (1).
[This Article Newly Inserted by Presidential Decree No. 23121, Sep. 6, 2011]
 Article 55 (Conversion of Budget)
(1) In cases of the budget less the following expenses, the amount for each unit project or each item within each policy project’s budgetary limits may be converted into any other item of expenditure, pursuant to the provisions of Article 49 (1) of the Act: <Amended by Presidential Decree No. 20445, Dec. 13, 2007; Presidential Decree No. 23121, Sep. 6, 2011; Presidential Decree No. 23645, Feb. 29, 2012; Presidential Decree No. 25226, Mar. 5, 2014>
1. Personnel expenses [including basic personnel expenses under the Regulations on Administrative Organizations and Standards for the Fixed Number of Personnel, etc. of Local Governments (including personnel expenses of the scope of self-regulation under the latter part of Article 4 (2) of the aforesaid Regulations) or the total amount of personnel expenses under the Regulations on Administrative Organizations and Standards for the Fixed Number of Personnel, etc. of Local Educational Administrative Institutions;
2. Facility expenses and incidental expenses;
3. Repayment expenses: Provided, That the principal and interest shall be interchangeable with each other.
(2) The budget conversions cannot be made after the lapse of the fiscal year and other expense items cannot be converted in order to appropriate indirect official business expenses.
 Article 56 (Plan for Allotting Budget)
(1) When the budget is enacted, the head of each local government shall develop a plan for allocating the budget, including annual revenues and expenditures, continuing expenses, the incurring of obligations and s pecified carryover expenses, and then allocate the monthly and quarterly budget for the secretariat of the local council, subsidiary institutions, administrative agencies and subordinate administrative agencies.
(2) The plan for allotting the budget referred to in the provisions of paragraph (1) shall be developed on the basis of the plan for the monthly collection of budget for annual revenues and the plan for the monthly disbursement of budget for annual expenditures.
(3) When the disbursement of reserve funds is determined, the allocation thereof shall be made from the budget of annual expenditures.
 Article 57 (Budget Allotment Prior to Commencement of Fiscal Year)
Where the budget of each local government is enacted, the budget for the expenses and costs falling under each of the following subparagraphs may be allocated even prior to the commencement of the fiscal year: <Amended by Presidential Decree No. 20504, Dec. 31, 2007>
1. Expenses incurred in areas in which traffic and communication are inconvenient;
2. Travel expenses;
3. Expenses that are incurred abroad;
4. Expenses involved in the sailing of ships;
5. Expenses incurred to purchase refreshments in administrative agencies and subordinate administrative agencies of the local government;
6. Indirect official business expenses;
7. Public works project costs requiring early disbursement due to local economic policy;
8. Expenses for disaster recovery projects.
 Article 58 (Carryover of Budget of Annual Expenditures)
(1) "Expenses prescribed by Presidential Decree" in Article 50 (2) 2 of the Act means the following expenses: <Amended by Presidential Decree No. 20504, Dec. 31, 2007; Presidential Decree No. 26691, Dec. 4, 2015>
1. Expenses incurred in relation to construction work performed by means of the prior examination of bidding qualifications under Article 14 of the Enforcement Decree of the Act on Contracts to Which a Local Government Is a Party;
2. Expenses disbursed under contracts concluded through negotiations pursuant to Articles 43 and 44 of the Enforcement Decree of the Act on Contracts to Which a Local Government Is a Party;
3. Expenses incurred in relation to construction work announced pursuant to Article 96 (1) of the Enforcement Decree of the Act on Contracts to which a Local Government is a Party;
4. Expenses incurred in making full recovery from disasters.
(2) "Expenses prescribed by Presidential Decree" in Article 50 (2) 3 of the Act means the following expenses: <Amended by Presidential Decree No. 26691, Dec. 4, 2015>
1. Expenses incurred in taking reimbursement procedures or reimbursement procedures that are in progress after the completion of the survey, appraisal and assessment of land, goods, etc. that are all subject to reimbursement;
2. Expenses incurred in concluding a service contract to perform appraisal and assessment or appraisal and assessment in progress in order to pay indirect compensation for damage caused to fishing rights still in existence after the construction work is completed;
3. Expenses incurred in paying reimbursements for undertaking disaster recovery projects.
(3) "Expenses prescribed by Presidential Decree" in Article 50 (2) 4 of the Act means the following expenses prescribed by the head of a local government: Provided, That expenses referred to in subparagraph 2 may be carried over only by January 10, 2016: <Amended by Presidential Decree No. 26691, Dec. 4, 2015>
1. Expenses incurred in maintaining and operating institutions or facilities;
2. General compensation, rewards, or expenses transferred to the private sector.
CHAPTER IV ACCOUNT SETTLEMENT
 Articles 59 through 62 Deleted <by Presidential Decree No. 27621, Nov. 29, 2016>
 Article 62-2 (Outsourcing of Affairs concerning Local Accounting)
Pursuant to Article 55 (5) of the Act, the Minister of the Interior and Safety shall outsource affairs including financial analysis and financial diagnosis under paragraphs (1) and (2) of the same Article to an institution or organization designated and publicly notified by the Minister of the Interior and Safety as having expertise in the field of financial analysis. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Wholly Amended by Presidential Decree No. 27621, Nov. 29, 2016]
 Articles 62-3 through 63-2 Deleted <by Presidential Decree No. 27621, Nov. 29, 2016>
CHAPTER V FINANCIAL ANALYSIS AND PUBLICATION
 Article 64 (Reports on Financial Operation)
(1) The financial reports the head of each local government must submit pursuant to Article 54 of the Act are as follows: <Amended by Presidential Decree No. 23121, Sep. 6, 2011; Presidential Decree No. 25781, Nov. 28, 2014>
1. The budget report referred to in Article 133 (2) of the Local Autonomy Act;
2. The report on the approval for the account settlement referred to in Article 134 (2) of the Local Autonomy Act;
3. The report on the issuance of local government bonds provided for in Article 11 of the Act;
4. The report on the act of incurring guaranteed obligations provided for in Article 13 of the Act;
5. The report on the investment provided for in Article 18 of the Act;
6. The report on the incurring of expenses for local governments provided for in Articles 21 and 23 of the Act;
7. The report on the medium-term local finance plan provided for in Article 33 of the Act;
8. The report on the results of the examination of the financial investment project plan under Article 37 of the Act;
9. The report on the act of incurring obligations provided for in Article 44 of the Act;
10. The financial statements under Article 53 (4) of the Act;
11. The report on the current management of claims provided for in Article 85 of the Act;
12. The plan on funds management and the report on the account settlement of the funds provided for in Article 8 of the Framework Act on the Management of Local Government Funds;
13. Other reports on important matters that are deemed necessary to formulate and appropriately administer policies for the finances of local governments.
(2) The forms of financial reports, a submission deadline and other necessary matters concerning such reports shall be determined by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 65 (Financial Analysis, Financial Examination, etc.)
(1) The Minister of the Interior and Safety shall conduct financial analysis and examination under Article 55 of the Act (hereinafter referred to as “financial analysis and examination”) each year and matters necessary for procedures and methods for conducting financial analysis and examination shall be determined by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(2) Where any of the following applies to a local government as a result of analysis on details of financial reports, the Minister of the Interior and Safety shall conduct a financial examination of that local government: <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 23121, Sep. 6, 2011; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
1. Where the debt ratio of the budget of annual revenues is in excess of the ratio of the budget of annual revenues set by the Minister of the Interior and Safety, or the balance of obligations is excessively high;
2. Where the record of annual revenues is found to be substantially lower than the budget amount as a result of the account settlement, or the revenues of the following year are brought forward for appropriation and expenditure;
3. Where the budget ratio of ordinary expenses, including personnel expenses, is high, substantially deteriorating the soundness of financial operations;
4. Where the Minister of the Interior and Safety deems it necessary for conducting a financial examination due to a substantial lack of financial soundness, efficiency, etc. as a result of analysis on financial reports.
(3) The Minister of the Interior and Safety may commission any relevant specialized institutions to conduct a financial analysis and examination in order to ensure the objectivity and expertise of such financial analysis and examination. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(4) Where it is deemed necessary as a result of financial examination conducted under paragraph (2), the Minister of the Interior and Safety may require the relevant local government to establish and implement a plan for improving the financial soundness of the relevant local government, aimed at restructuring the organization, repaying obligations, boosting annual revenues and restricting new projects, etc. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(5) Where a plan for the financial soundness of the relevant local government is found inadequate as a result of an assessment of its implementation, the Minister of the Interior and Safety may publish the result of the assessment of such implementation or recommend matters necessary to improve the financial soundness. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 65-2 (Criteria, Procedures, etc. for Designation of Organization in Financial Crisis and for Revocation of Designation)
(1) Pursuant to Article 55-2 of the Act, the Minister of the Interior and Safety may designate a local government as an organization in financial crisis after deliberation by the Local Financial Crisis Management Committee under Article 56 of the Act, where its financial crisis is found serious and where any of the following arises: <Amended by Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 26572, Oct. 6, 2015; Presidential Decree No. 27268, Jun. 28, 2016; Presidential Decree No. 28211, Jul. 26, 2017>
1. The percentage of its consolidated financial deficit is at least 30 percent;
2. The aggregate of an amount borne by the local government to assume responsibility for fulfilling its liabilities, among the amount consisting of an amount of municipal bonds issued pursuant to Article 11 of the Act and an amount caused by an act of burdening the local government with surety liabilities referred to in Article 13 of the Act, and an amount caused by an act of burdening the local government with liabilities referred to in Article 44 of the Act, exceeds 40 percent of the local government’s final budget amount for the relevant year;
3. The average amount of net expenditures borne by the local government in an amount of redemption of liabilities for the period from the past four years to the next four years, including the relevant year, exceeds 17 percent of the average amount of estimated ordinary revenue (referring to the aggregate of local tax, ordinary non-tax revenue prescribed by the Minister of the Interior and Safety, local subsidy, and grants-in-aid, excluding local education tax). In such cases, the amount of ordinary revenue for the next four years shall be calculated by multiplying the amount of ordinary revenue for the immediately preceding year by the average growth rate of ordinary revenue for the past four years;
4. The accumulated amount of local taxes collected quarterly in the relevant year (referring to the actual accumulated amount of local taxes collected after deducting refunds of overpayments or erroneous payments of local taxes) becomes a negative value;
5. The total balance of a depository belonging to the local government for each quarter of the relevant year is less than ten percent of the average of total balance of the depository for the relevant quarter for the recent three years;
6. The debt amount of a local public corporation established under Article 49 of the Local Public Enterprises Act exceeds six times the net asset thereof.
(2) The Minister of the Interior and Safety may occasionally monitor the level of financial risk of a local government under each subparagraph of paragraph (1). <Newly Inserted by Presidential Decree No. 26572, Oct. 6, 2015; Presidential Decree No. 28211, Jul. 26, 2017>
(3) Where the reasons for designating a local government as an organization in financial crisis pursuant to paragraph (1) have ceased, the Minister of the Interior and Safety may revoke such designation after deliberation by the Local Financial Crisis Management Committee established under Article 56 of the Act. <Amended by Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(4) Where the Minister of the Interior and Safety designates a local government as an organization in financial crisis or revokes such designation, he/she may, where necessary, conduct a paper review or an on-site inspection, etc. <Amended by Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(5) Where, as a result of occasional monitoring under paragraph (2), a local government is not in a serious financial crisis under paragraph (1), but substantially lacks financial soundness, efficiency, etc., the Minister of the Interior and Safety may recommend the local government to take necessary measures, including establishing and implementing a plan for financial soundness, subject to deliberation by the Local Financial Crisis Management Committee under Article 56 of the Act. <Newly Inserted by Presidential Decree No. 26572, Oct. 6, 2015; Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 23121, Sep. 6, 2011]
 Article 65-3 (Submission Deadline for Plans for Financial Soundness, etc.)
(1) The head of a local government designated as an organization in financial crisis pursuant to Article 55-2 (1) of the Act (hereinafter referred to as “head of an organization in financial crisis) shall establish a plan for improving financial soundness pursuant to Article 55-3 (1) of the Act within 60 days from the date on which the local government is designated as an organization in financial crisis, and then shall submit the plan to the Minister of the Interior and Safety. <Amended by Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(2) After obtaining approval by the Minister of the Interior and Safety pursuant to Article 55-3 (1) of the Act, the head of an organization in financial crisis shall, without delay, forward a plan for financial soundness to the relevant local council and request the local council to pass a resolution on the plan. <Amended by Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
(3) Where the head of an organization in financial crisis intends to revise a plan for financial soundness, he/she shall submit the plan to the relevant local council for resolution after obtaining approval from the Minister of the Interior and Safety. <Amended by Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 23121, Sep. 6, 2011]
 Article 65-4 (Restrictions on Compiling Budgets for Financial Investment Projects)
“Projects requiring public investment in excess of the scale prescribed by Presidential Decree” referred to in Article 55-4 (2) of the Act means financial investment projects classified below: <Amended by Presidential Decree No. 25781, Nov. 28, 2014>
1. A City/Do: A new investment project, the total project cost of which is at least four billion won;
2. A Si/Gun/autonomous Gu: A new investment project, the total project cost of which is at least two billion won.
[This Article Newly Inserted by Presidential Decree No. 23121, Sep. 6, 2011]
 Article 66 (Organization, Operation, etc. of Committee for Management of Local Government Financial Crisis)
(1) The chairperson (hereafter in this Article referred to as the "Chairperson") of the Committee for Management of Local Government Financial Crisis established under Article 56 of the Act (hereinafter referred to as the “Local Financial Crisis Management Committee”), shall convene meetings of the Local Financial Crisis Management Committee and preside over its meetings.
(2) Where the Chairperson is unable to perform his/her duties due to any unavoidable cause, a member pre-designated by him/her shall act on behalf of the Chairperson.
(3) "Related administrative agencies prescribed by Presidential Decree, such as the Ministry of Strategy and Finance, the Ministry of the Interior and Safety, and the Office for Government Policy Coordination" in Article 56 (3) 1 of the Act means the Ministry of Strategy and Finance, the Ministry of the Interior and Safety, the Office for Government Policy Coordination, and central administrative agencies designated by the Chairperson, which are related to items on the agenda. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
(4) The Local Financial Crisis Management Committee shall hold meetings when a majority of its incumbent members attends and passes resolutions by an affirmative vote of a majority of those present.
(5) Where necessary for deliberation, the Chairperson may request related agencies to submit necessary data or opinions, or require related public officials or non-governmental experts to attend meetings of the Local Financial Crisis Management Committee to hear their opinions.
(6) One administrative secretary shall be assigned to the Local Financial Crisis Management Committee, and the Minister of the Interior and Safety shall appoint the administrative secretary from among public officials under the jurisdiction of the Ministry of the Interior and Safety. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
(7) Where a member recommended pursuant to Article 56 (3) 2 of the Act falls under any of the following, the Governors Association of Korea, the National Association of Mayors, the Association of Chairpersons of Metropolitan and Provincial Councils, or the National Association of Chairpersons of Municipal Councils may withdraw its recommendation:
1. Where the member becomes unable to perform his/her duties due to a mental disorder;
2. Where the member engages in misconduct in relation to his/her duties;
3. Where the member is deemed unfit for a member due to neglect of his/her duty or impairment of his/her dignity, or for other reasons;
4. Where the member personally makes it clear that it is impracticable for him/her to perform his/her duties.
(8) Where a member appointed pursuant to Article 56 (3) 3 of the Act falls under any subparagraph of paragraph (7), the Minister of the Interior and Safety may dismiss the relevant member. <Amended by Presidential Decree No. 28211, Jul.26, 2017>
(9) Except as otherwise expressly provided for in paragraphs (1) through (8), matters necessary for the composition and operation of the Local Financial Crisis Management Committee shall be prescribed by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 28211, Jul.26, 2017>
[This Article Wholly Amended by Presidential Decree No. 27268, Jun. 28, 2016]
 Article 66-2 (Composition, Operation, etc. of Working Committee for Local Financial Crisis Management)
(1) The working committee (hereafter in this Article referred to as the "Working Committee for Local Financial Crisis Management”) established under Article 56 (6) of the Act shall be comprised of up to 15 members, including one chairperson, in consideration of gender composition.
(2) The following persons shall serve as members of the Working Committee for Local Financial Crisis Management: <Amended by Presidential Decree No. 28211, Jul.26, 2017>
1. Persons appointed by the Minister of the Interior and Safety from among public officials belonging to the Senior Executive Service under the jurisdiction of the Ministry of the Interior and Safety;
2. One person each recommended by the Governors Association of Korea, the National Association of Mayors, the National Association of Chairpersons of Metropolitan and Provincial Councils, and the National Association of Chairpersons of Municipal Councils;
3. Other persons appointed by the Minister of the Interior and Safety with extensive knowledge about, and experience in, local public finance.
(3) The Minister of the Interior and Safety shall appoint the chairperson of the Working Committee for Local Financial Crisis Management from among members appointed or recommended under paragraph (2). <Amended by Presidential Decree No. 28211, Jul.26, 2017>
(4) One administrative secretary shall be assigned to the Working Committee for Local Financial Crisis Management, and the Minister of the Interior and Safety shall appoint the administrative secretary from among public officials of at least Grade IV under the jurisdiction of the Ministry of the Interior. <Amended by Presidential Decree No. 28211, Jul.26, 2017>
(5) The term of office of members under paragraph (2) 2 and 3 shall be two years, and they may serve a second consecutive term only.
(6) The Working Committee for Local Financial Crisis Management shall review the following matters:
1. Matters concerning items on the agenda to be discussed by the Local Financial Crisis Management Committee;
2. Matters to be examined, as required by the Local Financial Crisis Management Committee;
3. Other matters necessary for the operation of the Working Committee for Local Financial Crisis Management.
(7) Article 66 (1), (2), (4), and (5) shall apply mutatis mutandis to the operation of the Working Committee for Local Financial Crisis Management. In such cases, the "Local Financial Crisis Management Committee" shall be deemed the "Working Committee for Local Financial Crisis Management."
(8) Article 66 (7) shall apply mutatis mutandis to the withdrawal of the recommendation of a member under paragraph (2) 2 among members of the Working Committee for Local Financial Crisis Management, and Article 66 (8) to the dismissal of a member appointed pursuant to paragraph (2) 3 among members of the Working Committee for Local Financial Crisis Management, respectively.
(9) In addition to matters provided for in paragraphs (1) through (8), matters necessary to organize and operate the Working Committee for Local Financial Crisis Management shall be prescribed by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 28211, Jul.26, 2017>
[This Article Newly Inserted by Presidential Decree No. 27268, Jun. 28, 2016]
 Article 67 (Publication of Consolidated Financial Information)
The Minister of the Interior and Safety may comprehensively analyze the consolidated financial information that is prepared and submitted by the head of each local government pursuant to Article 59 of the Act and publish the result of such comprehensive analysis at least once annually. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
 Article 68 (Means of Publicly Announcing Management Conditions of Local Government Finance)
(1) Where the heads of local governments publish the current operational status of their finances pursuant to Article 60 of the Act, they shall classify the publication into the publication of the general operational status of the finances (hereinafter referred to as "common publication") and the publication of the special operational status of the finances (hereinafter referred to as "special publication") of the relevant local government.
(2) The matters subject to common publication are as follows: <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 23121, Sep. 6, 2011; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
1. The matters provided for in Article 60 (1) 1 through 15 of the Act;
2. The results of the analysis and examination of local government finances;
3. The results of audits conducted by the Board of Audit and Inspection and other audit institutions;
4. Other matters concerning the general operation of the finances prescribed by the Minister of the Interior and Safety, as deemed necessary to be disclosed to residents.
(3) The matters subject to special publication shall be prescribed by the local government finance public announcement deliberative committee under Article 60 (3) of the Act. <Amended by Presidential Decree No. 25781, Nov. 28, 2014>
(4) Deleted. <by Presidential Decree No. 25781, Nov. 28, 2014>
(5) Except as otherwise expressly provided for in paragraphs (1) through (3), matters necessary for the forms and means of preparing publication shall be determined by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 20741, Feb. 29, 2008; Presidential Decree No. 24425, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. 28211, Jul. 26, 2017>
CHAPTER V-2 EMERGENCY FINANCIAL MANAGEMENT
 Article 69 (Designation, and Removal of Designation of, Organization Subject to Emergency Financial Management)
(1) "Where the level of financial crisis (~omitted~) worsens below the level prescribed by Presidential Decree" in Article 60-3 (1) 1 of the Act means any of the following cases:
1. Where a percentage of the consolidated financial deficit is at least 45 percent;
2. Where the total of the amount a local government owes and the amount of assuming debt obligations under Article 44 of the Act, among the amount of municipal bonds issued under Article 11 of the Act and the amount of assuming guaranteed debt obligations under Article 13 of the Act, is at least 60 percent of the final budget for the relevant year;
3. Where the average of the amounts of repaid debts incurred on the net local expenses for the last four years and for four years in the future based on the relevant year is at least 255/1,000 of the average amount of general revenues (referring to the total amount of local taxes, non-tax revenue, and grants-in-aid for adjustment excluding local education taxes). In such cases, the amount of general revenues for four years in the future shall be calculated by applying the rate of average increase in general revenues for the last four years to the size of general revenues in the immediately preceding year;
4. Where the accumulated amount of local taxes collected quarterly in the relevant year (referring to the actual accumulated amount of local taxes collected after deducting refunds of overpayments or erroneous payments of local taxes) is the negative value, and the absolute value thereof is at least 50 percent of the absolute value of the accumulated amount of average local tax collected in the relevant quarter for the last three years;
5. Where the total remainder in the depository in each quarter of the relevant year does not exceed 5 percent of the average total remainder in the depository in each quarter of the relevant year for the last three years;
6. Where the amount of debts of a local public corporation established pursuant to Article 49 of the Local Public Enterprises Act is at least nine times the amount of net assets.
(2) Where the Minister of the Interior and Safety intends to designate an organization subject to emergency financial management (hereinafter referred to as "organization subject to emergency financial management") under Article 60-3 of the Act or remove the designation thereof, he/she may conduct analysis of documents, on-site inspections, etc. to judge the level of the financial crisis. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 27268, Jun. 28, 2016]
 Article 70 (Dispatch, etc. of Emergency Financial Manager)
(1) Where the Minister of the Interior and Safety appoints a public official belonging to a government agency as emergency financial manager (hereinafter referred to as "emergency financial manager") under Article 60-4 (1) of the Act, he/she shall appoint the emergency financial manager from among public officials belonging to the Senior Executive Service. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
(2) Where the Minister of the Interior and Safety appoints and dispatches a person, who is not a public official belonging to a government agency, as emergency financial manager, he/she shall decide remuneration of the emergency financial manager following deliberation by the Local Financial Crisis Management Committee. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
(3) The Minister of the Interior and Safety shall pay remuneration of an emergency financial manager decided pursuant to paragraph (2): Provided, That, where the head of a local government applies for the designation of an organization subject to emergency financial management pursuant to Article 60-3 (2) of the Act, the local government shall pay remuneration decided pursuant to paragraph (2). <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
(4) The period of dispatch of an emergency financial manager shall be one year from the date of dispatch, and may be extended in consideration of the period of implementation and the conditions of the implementation of an emergency financial management plan under Article 60-5 of the Act. In such cases, the Minister of the Interior and Safety shall decide whether to extend the period of dispatch of an emergency financial manager and the extended period following deliberation by the Local Financial Crisis Management Committee. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
(5) In any of the following cases, the Minister of the Interior and Safety may dismiss an emergency financial manager following deliberation by the Local Financial Crisis Management Committee: <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
1. Where the designation of an organization subject to emergency financial management is removed pursuant to Article 60-3 (5) of the Act;
2. Where the emergency financial manager becomes unable to perform his/her duties due to a mental disorder;
3. Where the emergency financial manager engages in misconduct in relation to his/her duties;
4. Where the emergency financial manager is deemed unfit to maintain the position of emergency financial manager due to neglect of his/her duties or impairment of his/her dignity, or for other reasons;
5. Where the emergency financial manager personally makes it clear that it is impracticable for him/her to perform his/her duties.
(6) Where the Minister of the Interior and Safety deems it necessary for the affairs of an emergency financial manager, he/she may request a local government, which is not an organization subject to emergency financial management, to provide personnel support. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 27268, Jun. 28, 2016]
 Article 71 (Standards, Procedures, etc. for Establishment of Emergency Financial Management Plan)
(1) A local government shall submit an emergency financial management plan established under Article 60-5 (1) of the Act to the Minister of the Interior and Safety within 60 days (where an emergency financial manager directly establishes an emergency financial management plan, referring to 60 days from the date he/she is dispatched to an organization subject to emergency financial management) from the date of designation as an organization subject to emergency financial management. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
(2) "Cases prescribed by Presidential Decree" in the proviso to Article 60-5 (1) of the Act means any of the following:
1. Where the head of a local government at the time the local government is designated as an organization under financial crisis is the same person as the head of a local government at the time the local government is designated as an organization subject to emergency financial management;
2. Where the head of a local government applies for the designation of an organization subject to emergency financial management pursuant to Article 60-3 (2) of the Act;
3. Where the head of an organization subject to emergency financial management requires an emergency financial manager to establish an emergency financial management plan.
(3) Where an emergency financial manager establishes an emergency financial management plan pursuant to the proviso to Article 60-5 (1) of the Act, the head of an organization subject to emergency financial management and employees of the organization subject to emergency financial management shall provide cooperation in the establishment of the emergency financial management plan.
(4) "Matters prescribed by Presidential Decree" in Article 60-5 (1) 4 of the Act means the following matters:
1. Goals and the period of implementation of an emergency financial management plan;
2. Matters referred to in the subparagraphs of Article 87-3 (1) of the Act (referring to matters based on the date a local government is designated as an organization subject to emergency financial management);
3. A plan for reduction in the prescribed number of public officials (including executives and employees of local public enterprises) and reorganization;
4. Matters concerning the issuance of municipal bonds, guarantee of debts, temporary borrowing, and assuming debt obligations under Article 60-8 (1) of the Act;
5. A plan for financial investment projects under Article 60-8 (2) of the Act.
[This Article Newly Inserted by Presidential Decree No. 27268, Jun. 28, 2016]
 Article 72 (Evaluation of Implementation of Emergency Financial Management Plan)
In order to ensure the objectivity and professionalism of the evaluation of the conditions of the implementation of an emergency financial management plan under Article 60-6 (4) of the Act, the Minister of the Interior and Safety may entrust a related specialized institution with the evaluation thereof. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 27268, Jun. 28, 2016]
 Article 72-2 (Restrictions on Compilation of Budget for Financial Investment Projects)
"Financial investment project larger than the size prescribed by Presidential Decree" in Article 60-8 (2) of the Act means a financial investment project under the following classification:
1. In cases of a City/Do: A new investment project, the total project cost of which is at least two billion won;
2. In cases of a Si/Gun/autonomous Gu: A new investment project, the total project cost of which is at least one billion won.
[This Article Newly Inserted by Presidential Decree No. 27268, Jun. 28, 2016]
CHAPTER VI REVENUES (Articles 73 through 84-2) Deleted.
CHAPTER VII EXPENDITURES
 Article 85 (Redistribution of Budget)
(1) Where any public official commissioned to perform the clerical work involving the incurring of expenditures under Article 67 of the Act, recommissions such clerical work, the head of the relevant local government shall develop a plan for redistributing the budget of annual expenditures by the financier who is recommissioned within the scope of the allocated budget of annual expenditures and redistribute the budget of annual expenditures according to such plan. <Amended by Presidential Decree No. 25781, Nov. 28, 2014>
(2) When it is deemed necessary for budget spending, the head of each local government may change the plan for redistributing the budget of annual expenditures, which is developed pursuant to paragraph (1).
(3) When any financier who is recommissioned to incur expenditures under paragraph (1) incurs expenditures, such expenditures shall not exceed the scope of the redistributed budget of annual expenditures. <Amended by Presidential Decree No. 25781, Nov. 28, 2014>
 Articles 86 through 89 Deleted. <by Presidential No. 27621, Nov. 29, 2016>
 Article 89-2 Deleted. <by Presidential No. 25781, Nov. 28, 2014>
 Articles 90 through 97 Deleted. <by Presidential No. 27621, Nov. 29, 2016>
 Articles 98 and 99 Deleted. <by Presidential No. 25781, Nov. 28, 2014>
 Articles 100 and 101 Deleted. <by Presidential No. 27621, Nov. 29, 2016>
CHAPTER VIII CASH AND SECURITIES (Articles 102 through 106) Deleted.
CHAPTER IX CLAIMS AND OBLIGATIONS
 Article 107 (Definition of Clerical Work Involving Management of Claims)
The term "clerical work involving management of claims" in Article 87 (1) of the Act means clerical work that does not fall under any of the following subparagraphs from among the clerical work involving preservation, collection, changes in details and extinguishment, which must be performed as the creditor of claims of the local government:
1. Clerical work that is performed by any collection officer pursuant to the provisions of Article 62 of the Act;
2. Clerical work that is performed by anyone who is in charge of taking dispositions on defaults pursuant to the provisions of Acts and subordinate statutes;
3. Clerical work involving accepting the fulfillment of obligations;
4. Clerical work involving the custody of cash or goods.
 Article 108 (Scope of Clerical Work Involving Debt Management)
The scope of obligations and other debts of local governments, which must be managed under Article 87-2 (1) of the Act, shall be as follows: <Amended by Presidential Decree No. 25781, Nov. 28, 2014; Presidential Decree No. Jul. 26, 2017>
1. Local government bonds issued as securities;
2. Borrowings;
3. Incurring of obligations;
4. Incurring of guaranteed obligations;
5. Retirement benefit liabilities;
6. Long-term deposits received;
7. Long-term unearned revenues;
8. Other obligations and debts determined by the Minister of the Interior and Safety.
 Article 109 (Exclusion from Applicability)
The provisions of Articles 110 through 133 shall not apply to the claims falling under any of the following subparagraphs:
1. Fines for negligence and claims similar thereto;
2. Claims on local taxes, additional charges and dispositions on default;
3. Claims in the form of securities;
4. Claims on deposits in the depository of any local government;
5. Claims on deposits made by any treasurer in charge of ordinary expenses and any treasurer in charge of receiving and disbursing cash, other than annual revenues and expenditure;
6. Claims aimed at paying money that is to become cash-on-hand;
7. Claims on subsidies or contributions;
8. Claims for which any foreign country or any international organization is a debtor;
9. Claims on ambassadors, diplomatic ministers, diplomats or persons corresponding thereto of any foreign country.
 Article 110 (Report on Accrual or Reversion of Claims)
In cases falling under each of the following subparagraphs, anyone who falls under any of the following subparagraphs shall report without delay the accrual of claims or the reversion of claims to any local government to the head of such local government:
1. Where anyone who intends to conclude any contract or to perform any act, either of which incurs the claims of any local government or the reversion of claims to any local government, concludes such contract or performs such act pursuant to Acts and subordinate statutes, Municipal Ordinances or rules: Provided, That in the accrual or the reversion of the claims, when the condition for suspension or timing therefor is set, the fulfillment of such condition and the arrival of such time mean the accrual or reversion of the claims;
2. Where anyone who is in charge of performing acts of incurring expenditures for any local government pursuant to the provisions of Acts and subordinate statutes, Municipal Ordinances or rules is aware of the accrual of claims to any amount refunded as a result of the act of incurring expenditures;
3. Except for cases falling under subparagraphs 1 and 2, where anyone who concludes a contract for any local government pursuant to the provisions of Acts and subordinate statutes, Municipal Ordinances or rules is aware of the accrual of claims under the relevant contract or the reversion of such claims to the relevant local government;
4. Except for cases falling under subparagraphs 1 through 3, where the treasurer in charge of cash or goods, or anyone who performs clerical work involving public property is aware of the accrual of claims on the property for which he/she is responsible.
 Article 111 (Payment Notices)
(1) The head of each local government shall serve a payment notice, claiming the fulfillment of obligations on 15 days before the deadline for meeting the relevant claims.
(2) When the head of each local government intends to serve the payment notice referred to in the provisions of paragraph (1), he/she shall ascertain whether the amount of the relevant claims, the period during which the claims are met and the details of the claims are in conformity with statutes or the contract.
(3) The provisions of paragraphs (1) and (2) shall not apply to any claim that is paid after a report is made thereon.
 Article 112 (Serving of Demand Notice)
(1) Where all or a part of the claims are not met after the lapse of the deadline set by the payment notice provided for in the provisions Article 111 (with respect to any claim that does not require the payment notice, referring to the period during which such claim is met), the head of the relevant local government shall serve a notice demanding the person concerned to meet the claims in question: Provided, That where the deadline for meeting the claims provided for in the provisions of Article 124 is extended or the deadline for meeting the claims is extended on the grounds of compromise provided for in the provisions of Article 129, a demand notice shall be served after the expiration of the extended period.
(2) The demand notice referred to in the provisions of paragraph (1) shall be served within 15 days after the lapse of the payment deadline and the payment deadline in the demand notice (hereinafter referred to as the "demand deadline") shall be set to a time of not more than 15 days from the date on which the demand notice is served.
 Article 113 (Claim Filed for Compulsory Fulfillment of Claims)
With respect to any claims whose deadline lapses, where all or a part of such claims are not met after the demand deadline lapses after the demand notice is served pursuant to the provisions of Article 112, the heads of the relevant local governments shall take the relevant measures according to the following classifications:
1. With respect to secured claims (including claims guaranteed by a guarantor; hereinafter the same shall apply), the disposal and the auction of the security, implementation of the procedures for exercising security rights or any claim filed against the guarantor for him/her to fulfill his/her guarantee obligations;
2. With respect to the claims with title, the implementation of procedures for execution;
3. With respect to claims that do not fall under subparagraphs 1 and 2, claims filed to meet the claims in question by means of litigation procedures.
 Article 114 (Shortening of Deadline for Meeting Claims)
When grounds arise that make it possible to shorten the deadline for meeting claims, the head of the relevant local government shall promptly take the measures provided for in the provisions of Article 111: Provided, That the same shall not apply to cases where the deadline may be extended pursuant to the provisions of any subparagraph of Article 124 (1).
 Article 115 (Report on Claims)
When any local government becomes aware of the accrual of the grounds falling under any of the following subparagraphs and where such local government can demand dividends and report the claims in the capacity of a creditor pursuant to statutes, Municipal Ordinances, or rules, the head of the relevant local government shall immediately take measures therefor:
1. When the debtor is subject to enforcement procedures;
2. When the debtor is subject to a disposition on default on taxes and public levies;
3. When the debtor's property is put up for auction;
4. When the debtor is declared bankrupt;
5. When procedures commence for exercising the security right against the debtor's property;
6. When a corporate debtor is dissolved;
7. When the inheritance commences on the debtor and the inheritor makes a qualified acceptance;
8. When the liquidation of all of the debtor's property has commenced except in the cases provided for in the provisions of subparagraphs 4 through 7.
 Article 116 (Other Measures for Preservation)
(1) When it is deemed necessary to preserve their claims, the heads of local governments shall require the debtor for security, a guarantee offered by a guarantor, the furnishing of additional security, a change in the guarantor and other necessary matters under the conditions prescribed by Acts and subordinate statutes, Municipal Ordinances, rules or contract.
(2) When it is deemed necessary to preserve their claims, the heads of local governments shall each file an application for the provisional seizure thereof or the provisional disposition thereon.
(3) Where it is deemed necessary to preserve the claims, and any local government may exercise a right that is held by the debtor as a creditor pursuant to the provisions of Acts and subordinate statutes, Municipal Ordinances or rules, the head of the local government shall take measures necessary to exercise the relevant right in lieu of the debtor.
(4) Where the head of any local government becomes aware that an act is performed by the debtor with the aim of undermining the interests of his/her local government with respect to its claims and when the local government is entitled to request to have the act set aside pursuant to the provisions of Acts and subordinate statutes, Municipal Ordinances and rules as a creditor, the head of the relevant local government shall promptly file a claim with the court to have such act set aside.
(5) When the head of any local government deems that his/her claim is likely to be extinguished on the grounds of its prescription, he/she shall take necessary measures, including filing a claim for a trial, etc. with the aim of suspending such prescription.
 Article 117 (Preservation of Security)
When a security is furnished for its claims, the head of each local government shall promptly register and perform the registration of the establishment of a security right and meet the requirements that make it possible for his/her local government to counter any third person.
 Article 118 (Preservation of Security and Material Evidence, etc.)
The heads of local governments shall upgrade and preserve secured properties that they must occupy as creditors (including goods that are received by exercising rights of subrogation, which belong to the debtor), claims, documents necessary to verify the matters concerning the security of their claims and other goods with duties of due care as good managers.
 Article 119 (Discontinuation of Collection)
(1) When the claims are not fully met after the demand notices therefor are served (excluding any claims collected according to the precedent of a disposition taken to collect local taxes or local taxes in arrears) and fall under any of the following subparagraphs and it is deemed inappropriate to have such claims met, the heads of local governments may reorganize such claims after concluding that the clerical work involving the collection of the relevant claims (excluding the clerical work provided for in the provisions of Article 118) is no longer required with the exception of secured claims:
1. Where a corporate debtor discontinues its business, it is impossible for the debtor to resume its business in the future and it is recognized that the value of the seizable property does not exceed the expenses to be incurred in execution (excluding cases where any third person who is liable to meet the claims of the relevant corporation is not in the situation referred to in the provisions of subparagraph 2);
2. Where the debtor's whereabouts are unknown and the value of the seizable property is deemed not to exceed the expenses of execution and any other case similar thereto;
3. Where the amount of claims is so small that the amount of such claims falls short of the expenses to be incurred in their collection.
(2) When the heads of local governments intend to discontinue the collection referred to in the provisions of paragraph (1), they shall ask the tax office, etc. to inspect and confirm whether the property of the relevant debtor exists: Provided, That the same shall not apply to cases where the amount of the claims falls short of 100,000 won.
(3) Where it is deemed inappropriate to continue taking the measures referred to in the provisions of paragraph (1) after taking the measures on the grounds of a change in circumstances, etc., the head of the relevant local governments shall discontinue such measures.
 Article 120 (Set-Off, etc.)
Any offset of claims under Acts, municipal ordinance, or rules shall be offset or appropriated under Article 65 of the Presidential Decree of Local Accounting Act. <by Presidential Decree No. 27621, Nov. 29, 2016>
 Article 121 (Report on Extinguishment)
When collection officers, persons in charge of repaying the obligations of their local governments pursuant to the provisions of statutes, municipal ordinances or rules, or persons who fall under any subparagraph of Article 110 become aware of the extinguishment of the claims while performing their respective clerical work, they shall promptly report the fact to the heads of relevant local governments.
 Article 122 (Reorganization of Claims Deemed Extinguished)
Where claims entered in the book fall under any of the following subparagraphs, the heads of local governments shall deem that the whole or part of such claims are extinguished, reorganize them, and then enter the fact in the book: <Amended by Presidential Decree No. 28521, Dec. 29, 2017>
1. Where the extinctive prescription of the relevant claims expires;
2. Where the liquidation procedures for the corporate debtor are completed;
3. Where the debtor dies and a qualified acceptance is made for his/her obligations and it is recognized that the value of the inherited property does not exceed the expenses necessary for the execution and the total amount of preferential repayment claims;
4. Where the amount of the claims on the same debtor does not exceed the expenses necessary to serve the payment notice or the payment slip;
5. Where the head of a local government exempts a debtor from his/her claims under Article 130.
 Article 123 (Setting Deadline for Meeting Claims)
(1) The deadline for meeting claims shall be clearly set.
(2) In the case of paragraph (1), when it is deemed advantageous for meeting the claims, the deadline may be set for paying the amount of the claims in installments unless prescribed otherwise in other Acts and subordinate statutes.
 Article 124 (Special Agreement, etc. on Extending Period during Which Claims Are Met)
(1) The heads of local governments may each conclude special agreements on extending the period during which claims (excluding claims collected according to the example of a disposition taken to collect local taxes and local taxes in arrears) are met or take a disposition to extend the period during which claims are met (hereinafter referred to as a "special agreement on extending the period during which the claims are met") only in the case falling under any of the following subparagraphs, except in cases prescribed by other Acts. In such cases, the period during which the amount of the relevant claims is paid in installments may be set:
1. When the debtor is insolvent or is in circumstances similar to insolvency;
2. When the debtor faces difficulty to repay the whole of the relevant obligations at one time and it is deemed advantageous to extend the period during which the obligations are repaid in light of the assets that are presently owned by him/her;
3. When it is deemed inevitable to extend the period during which the obligations are repaid after it is deemed difficult for the debtor to repay the whole of the obligations at one time on the grounds of any disaster or any accident that the debtor suffers;
4. When it is difficult for the debtor to repay the whole of the obligations at one time according to contract and it is deemed that the repayment of the obligations within the fixed time limit is feared to greatly undermine the public interest;
5. When, in connection with the claim for compensatory damages or a refund of the amount obtained by unjust enrichment, the debtor is unable to repay the whole of the obligations at one time, but he/she is deemed conscientious in the repayment of such obligations.
(2) The head of the relevant local government may conclude special agreements on extending the period during which claims are met pursuant to the provisions of paragraph (1) even after the lapse of the period during which the claims are met: Provided, That in such cases, the claims for late payment penalties (referring to the compensatory damages on the delay in meeting the claims and other amounts for collection; hereinafter the same shall apply) that have already accrued, shall be collected.
(3) Where the claims are set to be met in installments and a special agreement on extending the period during which such claims are met is concluded, when it is deemed especially necessary, the head of the relevant local government may take measures to extend the period during which the amount of the claims is paid after the relevant period during which the claims are met.
(4) If the debtor intends to conclude a special agreement on extending the period during which a claim is met pursuant to the provisions of paragraphs (1) through (3), he/she shall file an application with the head of the relevant local government for a special agreement on ex tending the period during which the claim is met.
(5) Upon receiving an application for a special agreement on extending the period during which a claim is met pursuant to the provisions of paragraph (4), the head of the relevant local government shall request the tax office, etc. to inspect and confirm whether the debtor owns his/her property: Provided, That the same shall not apply to cases where the amount of the claim does not exceed 100,000 won.
 Article 125 (Deadline for Extending Period during Which Claims Are Met)
(1) Where a special agreement is concluded on expending the period during which claims are met, the heads of local governments shall limit the extension of the period to five years or less (not more than ten years where the case falls under the provisions of Article 124 (1) 1) from the period during which the claims are met (where a special agreement is concluded on extending the period during which the claims are met after the period during which the claims are met, it refers to the date on which the relevant special agreement is concluded): Provided, That when it is deemed necessary, further special agreements on extending the period during which claims are met may be concluded.
(2) Where a further special agreement is concluded on extending the period during which the claims are met pursuant to the provisions of paragraph (1), the extended period during which the claims are met shall not exceed ten years (20 years in cases falling under Article 124 (1) 1).
 Article 126 (Measures for Special Agreement on Extending Period during Which Claims Are Met)
(1) Where a special agreement is concluded on extending the period during which claims are met, the heads of local governments shall each cause security to be furnished and interest to be borne: Provided, That in cases falling under Article 124 (1) 1, the furnishing of any security or the bearing of interest may be exempted.
(2) The interest rate of claims for which a special agreement is concluded on the extension of the period during which the claims are met pursuant to the provisions of paragraph (1) shall be the interest rate applicable at the time when banks prescribed by the Banking Act lend out general funds as of the date on which the special agreement is concluded on extending the period during which the claims are met. <Amended by Presidential Decree No. 22493, Nov. 15, 2010>
 Article 127 (Acquisition of Title)
(1) When a special agreement is concluded on extending the period during the claims are met pursuant to the provisions of Article 124 for claims without title, the heads of local governments shall each take measures necessary to acquire the title, except in cases falling under any of the following subparagraphs:
1. Where the relevant claims are fully secured;
2. Where the debtor is deemed unable to bear expenses necessary to acquire the title;
3. Where the acquisition of the title is in fact deemed ineffective on the grounds of the debtor's insolvency.
(2) When the head of the relevant local government finds it necessary to acquire the title pursuant to the provisions of paragraph (1), he/she shall determine the action to be taken by the debtor and the time limit therefor and then notify the relevant debtor thereof.
 Article 128 (Conditions Set in Special Agreement on Extending Period during Which Claims Are Met)
Where a special agreement is concluded on extending the period during which claims are met, the head of the relevant local government shall set the conditions falling under the following subparagraphs:
1. When it is necessary to preserve the relevant claims, the head of the relevant local government is required to question the debtor or the guarantor about his/her business or his/her assets, inspect books, documents and other goods, and request the debtor or the guarantor to report and submit materials;
2. In the event falling under any of the following items, the head of the relevant local government is required to shorten the extended period during which the whole or part of the relevant claims are met:
(a) When the debtor conceals, destroys or disposes of the property or he/she is feared to conceal, destroy or dispose of the property in a manner that is disadvantageous to the local government;
(b) When the debtor falsely incurs other obligations;
(c) Where the period during which the claims are met is extended by dividing the amount of the relevant claims into installments, when the debtor neglects to meet the amount of an installment payment of the claims;
(d) When the grounds falling under any of the subparagraphs of Article 115 accrue;
(e) When the debtor fails to meet the conditions referred to in subparagraph 1 and the conditions of the special agreement on extending the period during which the claims are met;
(f) When it is deemed inappropriate to meet the claims according to the extended period during which the claims are met on the grounds of a change in the debtor's financial capacity and other circumstances.
 Article 129 (Compromise)
When any legal dispute arises over the claims, the head of the relevant local government may make a compromise on the dispute in order to settle such legal dispute when it is deemed inevitable and advantageous for the local government to settle the dispute and collect the relevant claims.
 Article 130 (Exemption)
(1) With respect to the claims for which a special agreement is concluded on extending the period during which such claims are met on the grounds that the debtor is insolvent or nearly insolvent, where the debtor is still insolvent or nearly insolvent after the elapse of ten years from the first period during which the claims are met (where a special agreement is concluded on extending the period during which the claims are met after the first period during which the claims are met, the date on which the special agreement is concluded on extending the first period during which the claims are met) and not expected to meet the claims, the head of the relevant local government may exempt the debtor from the relevant claims, late payment penalties and the interest that accrues from the claims.
(2) Where the interest on delayed payment (referring to the interest provided for in the provisions of Article 126; hereinafter the same shall apply) is added to the claims for which a special agreement is concluded on extending the period during which such claims are met, when the debtor pays the amount equivalent to the total amount (excluding the interest on delayed payment) of the claims within the extended period during which the claims are met, the head of the relevant local government may exempt the debtor from an amount equivalent to the whole or part of the interest on delayed payment only where it is deemed inevitable in light of the state of the debtor's solvency.
(3) When the debtor seeks exemption from his/her obligations pursuant to the provisions of paragraphs (1) and (2), he/she shall file an application with the head of the relevant local government for exemption of his/her obligations.
(4) Upon receiving the application for the exemption of the obligations pursuant to the provisions of paragraph (3), the head of the relevant local government shall request the tax office, etc. to inspect and confirm whether the debtor owns his/her property: Provided, That the same shall not apply to cases where the amount of the claim does not exceed 100,000 won.
 Article 131 (Special Case concerning Late Payment Penalties)
(1) When the amount of the claim (excluding any claim that bears interest or is governed by the provisions of other Acts and subordinate statutes concerning late payment penalties) that is not repaid within the period during which such claim is to be met, does not exceed 10,000 won, the head of the relevant local government may not add late payment penalties thereto.
(2) With respect to the claims falling under any of the following subparagraphs, when an amount equivalent to the whole of the principal is repaid, the whole or part of the late payment penalties that are added thereto may be exempted:
1. Tuition fees and dormitory charges collected by educational facilities that are established by local governments;
2. All expenses collected from patients by medical facilities that are established by local governments;
3. A refund of the amount unjustly obtained by the debtor inadvertently or without gross negligence.
 Article 132 (Terms of Contracts concerning Claims)
Any public official in charge of concluding contracts or other acts that give rise to claims for any local government (hereinafter referred to as the "public official in charge of contracts") pursuant to the provisions of Acts and subordinate statutes, Municipal Ordinances or rules shall not enter into any agreement on matters concerning the reduction and exemption of the claims and the extension of the period during which the claims are met when he/she intends to decide on the terms of the relevant claims with the exception of the matters prescribed by Acts and subordinate statutes, Municipal Ordinances or rules.
 Article 133 (Agreement on Contract of Claims)
(1) When the public official in charge of contracts intends to decide on the terms of any contract that establishes claims, he/she shall conclude an agreement on the requirements falling under the following subparagraphs except when the preparation of such written contract may be exempted:
1. When the debtor fails to meet his/her claims by the period during which such claims are to be met, he/she is required to pay an amount calculated according to certain standards as a late payment penalty to the relevant local government;
2. When the debtor neglects to meet the amount of claims that must be met in installments, the period during which the whole or part of the relevant claims are to be met is required to be shortened;
3. When the security of the secured claims reduces in value or circumstances that disqualify the guarantor occur, the debtor is required to furnish additional security, change the guarantor or the security at the request of the relevant local government;
4. When it is deemed necessary to preserve the relevant claims, the debtor or the guarantor is required to answer questions about his/her business, the current state of his/her property, or to cooperate with the inspection of his/her books, documents and other goods or to make reports and submit materials;
5. When the debtor fails to comply with the matters referred to in subparagraphs 1 through 4, the period during which the whole or part of the relevant claims is to be met shall be shortened.
(2) With respect to the claims on loans where the purpose of use is specified, aside from the requirements referred to each subparagraph of paragraph (1), an agreement shall also be concluded on the requirements falling under the following subparagraphs:
1. Where the debtor fails to apply the loan proceeds to the purpose for which such loans are granted within the deadline, all or part of the claims are required to be recovered before the period during which the claims are to be met;
2. Where the debtor fails to earnestly implement the terms prescribed in the loan contract, all or part of the claims are required to be recovered before the period during which the claims are to be met.
CHAPTER X ACCOUNTING OFFICERS(Articles 134 through 139) Deleted.
CHAPTER XI SUPPLEMENTARY PROVISIONS (Articles 140 through 145) Deleted.
 Article 146 (Provision of Education for Finance-Related Public Officials, etc.)
(1) The Minister of the Interior and Safety and the heads of local governments may conduct education, at least once a year, for public officials related to local government finance, pursuant to Article 96-3 of the Act. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
(2) The head of a local government shall survey the demand for education and training among the finance-related public officials of the local government and encourage them to participate in such education and training.
(3) Except as otherwise expressly provided for in paragraphs (1) and (2), matters necessary for the provision of education for public officials related to local government finance shall be determined by the Minister of the Interior and Safety. <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
[This Article Newly Inserted by Presidential Decree No. 25781, Nov. 28, 2014]
 Article 147 (Handling of Personally Identifiable Information)
(1) The heads of local governments (including those to whom relevant authority is delegated or entrusted) or accounting-related officials may handle data containing information on the resident registration numbers or alien registration numbers prescribed in subparagraph 1 or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act, if essential to perform each of the following affairs:
1. through 5. Deleted; <by Presidential Decree No. 27621, Nov. 29, 2016>
6. Management of claims under Article 87 of the Act.
(2) Deleted. <by Presidential Decree No. 27621, Nov. 29, 2016>
[This Article Newly Inserted by Presidential Decree No. 25532, Aug. 6, 2014]
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2006: Provided, That the amended provisions of Articles 62 and 63 shall enter into force on January 1, 2007.
Article 2 (Application Precedent concerning Financial Reports)
The matters concerning financial reports among the amended provisions of Article 59 (2) shall apply, starting with the portion of the 2007 fiscal year.
Article 3 (Application Precedent concerning Payment Notices)
The amended provisions of Article 111 shall apply, starting with the claims that first accrue after this Decree enters into force.
Article 4 (Application Precedent concerning Demand Notices)
The amended provisions of Article 112 (2) shall apply, starting with the first demand notice that is issued after this Decree enters into force.
Article 5 (Application Precedent concerning Special Agreements by Which Period for Meeting Claims Is Extended)
The amended provisions of Article 126 (2) shall apply, starting with the claims for which the special agreement is first concluded on the extension of the period during which such claims are to be met after this Decree enters into force.
Article 6 (Transitional Measures concerning Ceiling on Issuance of Local Government Bonds)
The amount of local government bonds that are issued by the local gov ernments prior to the enforcement of this Decree shall be deemed to be in conformity with the ceiling on the amount of local government bonds that can be issued pursuant to the amended provisions of Article 10 (1).
Article 7 (Relation with Other Acts and Subordinate Statutes)
Where the previous Enforcement Decree of the Local Finance Act or the provisions thereof is or are cited by other Acts and subordinate statutes at the time of enforcement of this Decree, when the corresponding cited provisions exist in this Decree, this Decree or the relevant provisions of this Decree shall be deemed cited in lieu of the previous provisions.
ADDENDA <Presidential Decree No. 19586, Jun. 30, 2006>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDUM <Presidential Decree No. 19735, Nov. 23, 2006>
This Decree shall enter into force on January 1, 2007.
ADDENDUM <Presidential Decree No. 19995, Apr. 5, 2007>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 20123, Jun. 28, 2007>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 20445, Dec. 13, 2007>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDUM <Presidential Decree No. 20504, Dec. 31, 2007>
This Decree shall enter into force on January 1, 2008: Provided, That the amended provisions of Articles 45 and 47 shall apply when the budgets of annual revenues and expenditures for 2008 are compiled.
ADDENDA <Presidential Decree No. 20741, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 6 Omitted.
ADDENDA <Presidential Decree No. 21087, Oct. 20, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 21214, Dec. 31, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 21260, Jan. 13, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Effective Period)
The amended provisions of Article 91 (1) 15 shall be effective by October 31, 2009.
ADDENDA <Presidential Decree No. 21495, May 21, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force one month after the date of its promulgation.
Article 2 (Applicability)
The amended provisions of Article 41 shall apply from the cases where the request for feasibility study is made after this Decree enters into force.
ADDENDA <Presidential Decree No. 21656, Jul. 30, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 31, 2009.
Article 2 Omitted.
ADDENDUM <Presidential Decree No. 21801, Nov. 2, 2009>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 22493, Nov. 15, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on November 18, 2010
Articles 2 through 5 Omitted.
ADDENDUM <Presidential Decree No. 22532, Dec. 20, 2010>
This Decree shall enter into force on January 1, 2011: Provided, That the amended provisions of Article 103-2 shall enter into force on March 1, 2011.
ADDENDA <Presidential Decree No. 22564, Dec. 29, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on December 30, 2010. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDA <Presidential Decree No. 23121, Sep. 6, 2011>
Article 1 (Enforcement Date)
This Decree shall enter into force on September 9, 2011: Provided, That the amended provisions of Articles 65-3 and 65-4 shall enter into force on January 1, 2012.
Article 2 (Applicability to Subsidies)
The amended provisions of Articles 30-2 through 30-4 shall apply beginning from the first subsidy to be granted after this Decree enters into force.
Article 3 (Applicability to Details of and Standards for Preparation of Gender-Sensitive Budget, and of Gender-Sensitive Settlement of Accounts)
The amended provisions of Articles 40-2 and 63-2 shall apply beginning from a gender-sensitive budget bill and gender-sensitive settlement of accounts for the 2013 fiscal year, respectively.
Article 4 (Applicability to Interest on Refunds of Overpayments or Erroneous Payments)
The amended provisions of Article 84-2 shall apply beginning from the first refund of an overpayment or erroneous payment to be made after this Decree enters into force.
Article 5 Omitted.
ADDENDUM <Presidential Decree No. 23573, Jan. 31, 2012>
This Decree shall enter into force on February 5, 2012.
ADDENDA <Presidential Decree No. 23645, Feb. 29, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2013. (Proviso Omitted.)
Articles 2 and 3 Omitted.
ADDENDUM <Presidential Decree No. 23674, Mar. 26, 2012>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 24425, Mar. 23, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That concerning Presidential Decree amended pursuant to Article 6 of Addenda, amended parts of Presidential Decree which have been promulgated before this Decree enters into force but the enforcement date of which has not come shall enter into force on the date the relevant Presidential Decree enters into force, respectively.
Articles 2 through 6 Omitted.
ADDENDUM <Presidential Decree No. 25103, Jan. 17, 2014>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 25226, Mar. 5, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDUM <Presidential Decree No. 25532, Aug. 6, 2014>
This Decree shall enter into force on August 7, 2014.
ADDENDA <Presidential Decree No. 25751, Nov. 19, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That any amendment of the Presidential Decrees made pursuant to Article 5 of this Addenda, which were promulgated before this Presidential Decree comes into force, but the enforcement date of which has yet to arrive, shall enter into force on the date of the corresponding Presidential Decree takes effect.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 25781, Nov. 28, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on November 29, 2014: Provided, That the amended provisions of Articles 30-2 through 30-4, 37-2 through 37-6, 98 and 99 shall enter into force on January 1, 2015.
Article 2 (Applicability to Types and Distribution of Grants-In-Aid for Adjustment among Sis/Guns)
The amended provisions of Article 36 (2) through (4) shall begin to apply from January 1, 2015.
Article 3 (Transitional Measures concerning Receipts and Disbursements Following Adjustment of Deadline for Closing Receipts and Disbursements)
Receipts and disbursements for fiscal years preceding fiscal year 2015 shall be governed by the former provisions, notwithstanding the amended provisions of subparagraph 4 of Article 2, the proviso to subparagraph 6 of Article 3, the proviso to Article 4, and Article 5.
Article 4 Omitted.
ADDENDUM <Presidential Decree No. 26572, Oct. 6, 2015>
This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 65-2 (1) 2 and 3 shall enter into force on January 1, 2019.
ADDENDUM <Presidential Decree No. 26691, Dec. 4, 2015>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 27268, Jun. 28, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on June 30, 2016.
Article 2 (Applicability to Projects Exempt from Assessment of Impact on Local Public Finance)
The amended provision of Article 35-5 (2) shall apply beginning with a project whose impact on local public finance is assessed by the head of a local government after this Decree enters into force.
Article 3 (Applicability to Payment of Rewards for Making Reports)
The amended provisions of Article 37-7 shall apply beginning with cases where a report or accusation is made after this Decree enters into force.
Article 4 (Applicability to Examination of Financial Investment Projects)
The amended provisions of Article 41 (1) 1 (c) and (d) and subparagraph 2 (c) and (d) of the aforesaid paragraph shall apply beginning with cases where an examination of a financial investment project is made or entrusted after this Decree enters into force.
ADDENDA <Presidential Decree No. 27299, Jun. 30, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 1, 2016. (Proviso Omitted.)
Articles 2 through 15 Omitted.
ADDENDA <Presidential Decree No. 27463, Aug. 29, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2017.
Article 2 (Transitional Measure concerning Repeal of Special Cases of Preferential Distribution of General Grants-In-Aids)
(1) Notwithstanding the amendments of Article 36 (4), Mayor/Do Governor may preferentially distribute an amount referred in the following as general grants-in-aids by 2018 to Si/Gun entitled to general grants-in-aids under the previous Article 36 (4):
1. 2017: 80 percent of an amount the relevant Si/Gun contributes to raising fund for grants-in-aid during the relevant period;
2. 2018: 70 percent of an amount the relevant Si/Gun contributes to raising fund for grants-in-aid during the relevant period.
(2) Si/Gun to which general grants-in-aid is distributed shall be governed by the previous provisions until 2018 notwithstanding the amendments of Article 36 (3).
ADDENDA <Presidential Decree No. 27621, Nov. 29, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on November 30, 2016.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 27959, Mar. 27, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on March 28, 2017.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 28211, Jul. 26, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That among Presidential Decrees amended by Article 8 of the Addenda, the amendments to Presidential Decrees which have been promulgated before this Decree enters into force but of which the enforcement dates have yet to arrive shall enter into force on the date the relevant Presidential Decree takes effect.
Articles 2 through 8 Omitted.
ADDENDA <Presidential Decree No. 28521, Dec. 29, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 (Applicability to Amendment to the Enforcement Decree of the Local Finance Act)
Obligation of claims exempted under Article 130 of the Enforcement Decree of the Local Finance Act is also governed by the amended provisions of subparagraph 5 of Article 122 of the Enforcement Decree of the Local Finance Act from among Article 12.