[Editorial] Dispute over Kentech

State audit lays bare irregularities with university funded by Kepco

It is rare for a single university to generate a slew of critical talking points. But the Korea Institute of Energy Technology, known as Kentech, is not a normal university that can bypass relentless media spotlight.

Kentech, established in March last year in the southwestern city of Naju, South Jeolla Province, as part of the energy policy pushed by the former Moon Jae-in administration, is now in hot water over alleged irregularities regarding administrative expenses and other regulations, according to a government audit.

The Ministry of Trade, Industry and Energy on Thursday called for the dismissal of Kentech President Yoon Eui-joon and disciplinary action against university officials, citing lax management and other irregularities it found through an audit.

It is the first time for the Industry Ministry to request the dismissal of the president of a university affiliated with a state-run company. The ministry is in charge of monitoring the state-run Korea Electric Power Corp., known as Kepco, and its affiliated Kentech.

The Industry Ministry’s audit revealed that Kentech professors and officials misused around 126 million won ($99,000) in administrative expenses. The irregularities involved research funds, overtime pay and violations of construction and contract rules.

Since the university is funded by the money-losing Kepco alongside the central and local governments, the revelations came as a shock that triggered public criticism. Despite a record operating loss of 32.7 trillion won last year, Kepco sent more than 70 billion won to the school last year.

Signs of troubles surfaced in September last year when Kepco and an external support group conducted management consulting and discovered a host of administrative issues with the university.

At the time, speculation mounted that Kepco had tried to cover up the irregularities of the university. The suspicion prompted the National Assembly to call for a government-led investigation in April this year. In response, the Industry Ministry carried out a strict audit into the school over the past three months.

Following the audit’s conclusion, the Industry Ministry requested the board of directors dismiss its president, take disciplinary actions against six officials and issue 83 warnings. It said it found rampant problems with the university from budget and accounting to research and external contracts.

Without consulting with the board of directors and Industry Ministry in advance, Kentech raised salaries for employees by an average 13.8 percent and paid a total 17.3 million won in overtime payment to 47 officials who forged working hour records -- two instances among multiple irregularities.

“As Kentech’s budget is supported by Kepco, which is suffering a huge amount of losses, its affiliates, and the central and local administrations, the university must spend its budget in a transparent and reasonable manner,” the ministry said, detailing representative irregularities.

Even though the Yoon Suk Yeol government is keen to reduce the losses of Kepco, the utility firm posted an operating loss of 6.2 trillion won in the first quarter of this year. Analysts projected the company to post an operating loss in the second quarter, as well, amounting to 2.2 trillion won.

Kentech said in a statement that it apologizes for problems related to its management and administrative operations, but protested the Industry Ministry’s measure, saying it is hard to accept that Yoon Eui-joon should take full responsibility and be dismissed. The university said it plans to ask the Industry Ministry to review its disciplinary decisions again according to the ministry’s auditing rules.

Amid the deepening dispute over the university, the government plans to reduce its financial support to Kentech by 30 percent to around 20 billion won next year. But given that the university is fraught with various irregularities and mismanagement issues, policymakers must reconsider the university’s specific role and long-term status. Kentech, for its part, has to take extensive cost-cutting steps to make up for the taxpayer money it has wasted away.

By Korea Herald(khnews@heraldcorp.com)