Mokpo Administrative Attorney | A Client Accused of Violating the Local Subsidy Act, Receiving No Prosecution with the Assistance of Daeryun

The Mokpo administrative attorney examined the detailed circumstances of the case through a thorough consultation with the client.

The client was operating a children's center in Mokpo.

Each month, the client received approximately 13 million won in subsidies designated for meal expenses from the government.

In the course of this, it was revealed that an employee in charge of the center's accounting had failed to properly pay the subsidies to the food supplier and had instead diverted them. As a result, the client, as the head of the center, faced the risk of punishment on the allegation of having failed to fulfill the supervisory duty of care expected of a manager.

Wishing to communicate frequently with an attorney near the client's residence, 🔗Daeryun Mokpo Office was requested to take on the matter, and the Mokpo administrative specialist attorney undertook to provide assistance so that the client could receive the most lenient treatment possible.

The Local Subsidy Act is an abbreviation for the Act on the Management of Local Government Subsidies, a law whose purpose is the transparent and proper management of local subsidy budgets, including the efficient formulation and execution of such budgets, by prescribing the basic matters concerning the formulation of local subsidy budgets, applications for and decisions on grants, and the use thereof.

Here, a local subsidy refers to a subsidy or similar grant that a local government provides, in accordance with statutes or ordinances, in order to promote or support the affairs or projects carried out by another local government, a corporation, an organization, or an individual.

The Act strictly prohibits the use of a local subsidy for any purpose other than its intended use.

▣ Local Subsidy Act, Article 13 (Prohibition of Use of a Local Subsidy for Other Purposes)

A local subsidy project operator shall carry out the local subsidy project with the care of a good manager, in accordance with statutes, the terms of the decision to grant the local subsidy, or a disposition of the head of the local government pursuant to statutes, and shall not use the relevant local subsidy for any other purpose.

A violation of this provision is punishable by imprisonment for up to five years or a fine of up to 50 million won.

As with the client in this case, in addition to the person who actually commits the violation, a person who has a duty to attend to and supervise the relevant work may also be subject to punishment.

Article 40 (Joint Penalty Provisions)

If a representative of a corporation, or an agent, employee, or other worker of a corporation or an individual, commits a violation in connection with the business of that corporation or individual, the corporation or individual shall, in addition to the punishment of the actual offender, be subject to the fine prescribed in the relevant provision. However, this shall not apply where the corporation or individual has not neglected to exercise due care and supervision over the relevant business in order to prevent such violation.

The diversion of the subsidy occurred because the center's accountant, having suddenly been unable to recover a debt owed by an acquaintance, fell into financial difficulty and acted impulsively. Accordingly, we emphasized that the client had not committed the offense in a deliberate and organized manner together with the accountant.

Despite having a severe disability, the client has devoted more than 20 years to the social welfare field. We earnestly requested leniency, taking into account that the client had received a commendation from the Chairperson of the Korea National Council on Social Welfare in recognition of these contributions.

The client deeply reflects on the wrongdoing committed and pledges never to repeat the same mistake. We argued that the client deeply regrets having failed to faithfully fulfill the management and supervisory duties entrusted to a head of center.