Jeonju City faces an institutional warning from the Jeonbuk Special Self-Governing Province audit committee after exceeding a 25.5% real debt ratio and inflating its available financial resources by 67.5 billion won for large-scale infrastructure investments.
The Bottom Line
- Jeonju City’s official budget-to-debt ratio climbed from 14.78% in 2024 to 22.5% by March of this year, while managed debt surged from 4862억원 to 6819억원.
- The audit committee found that including unreturned subsidies and fund repayment obligations pushes the real debt ratio to 25.5%, breaching the Ministry of the Interior and Safety threshold for fiscal caution entities.
- Local authorities artificially inflated available funds in investment review materials by 67.5 billion won to advance 25 projects totaling 2634억원 despite a real funding shortfall of 509억 won.
Jeonju City Debt Load and Audit Findings
When the provincial audit committee released its findings on the 1st via the Jeonju City website, records showed that municipal managed debt expanded sharply. The local administration issued 6171억원 in local government bonds between 2019 and 2025. This borrowing funded 2965억원 for long-unexecuted urban planning facility land purchases alongside 3206억원 for general and infrastructure construction. Auditors issued an institutional warning over deficient fiscal management that undermined municipal financial soundness.
The formal budget debt ratio moved from 14.78% in 2024 to 22.5% by March of this year. Managed debt went from 4862억원 to 6819억원 during the same period. Accounting for 428억원 in unreturned national and provincial subsidies alongside 381억원 in required fund repayments brings the real debt ratio to 25.5%. That figure surpasses the 25% ceiling set by the Ministry of the Interior and Safety for designation as a fiscal caution entity.
Financial Resource Calculation Discrepancies
Auditors uncovered that the municipality lacked concrete financing plans when establishing its urban planning facility execution schedules. During financial investment reviews, the local government altered baseline numbers. While the previous year’s main budget listed local bond issuance at 1520억원, investment screening documents presented the figure as 2500억원.
This discrepancy created a phantom surplus. Although actual available financial resources fell short by 509억 won, municipal calculations claimed a 67.5 billion won surplus. This miscalculation permitted the advancement of investment screening for 25 separate projects representing a total cost of 2634억원.
| Financial Metric | Reported / Official Figure | Audited / Real Figure |
|---|---|---|
| Managed Debt | 6819억원 | 6819억원 (Plus Unreturned Subsidies & Funds) |
| Real Debt Ratio | 22.5% (Official) | 25.5% (Including Unreturned Subsidies & Fund Obligations) |
| Available Financial Resources | 67.5 Billion Won Surplus | 509억 won Shortage |
| Bond Issuance (Investment Review) | 2500억원 | 1520억원 (Main Budget Baseline) |
Subsidy Mismanagement and Corrective Mandates
Subsidy accounting practices also drew scrutiny from the Jeonbuk audit committee. Out of 589억원 in national and provincial subsidies designated for return, the municipality reflected only 161억원 in its budget. The remaining 428억원 was omitted from financial ledgers.
The audit committee directed Jeonju City to tighten management of bond issuance and repayments alongside rigorous verification of financing feasibility for each project. Officials must now establish multi-year medium- and long-term debt management plans. Jeonju City officials raised no objections to the audit findings. The municipal administration stated its intention to recalculate available resources based on actual fiscal conditions and selectively pursue investment projects according to strict priority rankings.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
