2018Guhap372 Revocation of Disposition of Improvement

Faithful Social Welfare Foundation

Head of the Busan Metropolitan Government Maritime Affairs Office

April 19, 2018

June 21, 2018

1. On January 17, 2018, the part related to the surplus funds of both agencies in the improvement order for the violation of the Social Welfare Services Act that the Defendant issued to the Plaintiff is revoked.

2. The plaintiff's remaining claims are dismissed.

3. The costs of lawsuit shall be borne by each person;

On January 17, 2018, the Defendant revoked an improvement order for the violation of the Social Welfare Services Act against the Plaintiff.

1. Details of the disposition;

A. The Plaintiff received a subsidy for the operation of the Social Welfare Center from the Defendant as a social welfare foundation operating the Pakistan General Social Welfare Center (hereinafter referred to as the “Social Welfare Center of this case”), a facility for the visit of pagabonds (hereinafter referred to as the “Medical Care Center of this case”), a facility for the children of pagabonds (hereinafter referred to as the “child center of this case”), a facility for the children of pagabonds, and a kindergarten for pagabonds in Busan Metropolitan City, and the Defendant received a full amount of the budget for the operation of the Social Welfare Center from Busan Metropolitan City, and delivered it to the social welfare foundation

B. On January 17, 2014, Busan Metropolitan City notified the Defendant of the details and terms and conditions of the grant of the operating subsidy of the social welfare center in January 2014, stating that personnel expenses, operating expenses, bathing projects, permanent rental programs, home care programs, and specialized projects are determined according to the details of the grant (in the case of the instant social welfare center, the amount of the subsidy was determined in personnel expenses, operating expenses, and the item of the said grant), and the “Notice of Decision to Grant the subsidy” should prohibit the use of the subsidy for any purpose other than the designated purpose and manage the subsidy separately from the separate account.

C. On January 22, 2014, the Defendant: (a) notified the Plaintiff of the payment of operating expenses of a social welfare center in January 2014; (b) attached “the details of the grant of operating expenses by the social welfare center in January 2014, which the Busan Metropolitan City notified the Defendant; and (c) provided that subsidies may not be used for any other purpose due to the terms and conditions of the grant, and may be recovered at the time of conversion into other project expenses, and the subsidies shall be managed to a separate account. Since then, the Defendant sent subsidies once a month to the Plaintiff by sending the official

D. Meanwhile, the Defendant was notified from Busan Metropolitan City on November 4, 2016 that ① the Plaintiff neglected relevant duties by failing to guide and supervise the Plaintiff’s transfer center funds of this case, property tax payment, etc., despite the fact that the Plaintiff spent KRW 13,396,080 from March 3 to April 2016, 2016 for the purpose of using the health care center funds of this case, which are not welfare projects for older persons, on 12 occasions in total from August 2014 to April 2016.

E. Accordingly, on December 26, 2016, the Defendant recovered the legal costs of a corporation paid by the instant social welfare center from the facility accounting of the instant social welfare center, and demanded the Plaintiff to recover the surplus funds of the instant medical care center spent by the instant child center as corporate accounting and use them for welfare projects, etc. for the elderly.

F. However, the Plaintiff did not comply with the request for measures on January 17, 2018, on the ground that the litigation costs of this case are litigation costs related to the instant social welfare center, not corporation costs, and thus, they should be disbursed from the account of the instant social welfare center facilities, and that the use of surplus funds of the instant medical care center falls under the exclusive use of budget, which is the inherent matters of the Plaintiff corporation, and that they were properly disbursed as prescribed by the former Rules on Finance and Accounting of Social Welfare Foundation and Social Welfare Facilities (amended by Ordinance of the Ministry of Health and Welfare No. 283, Jan. 5, 2015; hereinafter “Financial Accounting Rules”). The Defendant issued an improvement order to the Plaintiff pursuant to Article 40 of the Social Welfare Services Act and Article 26-2 of the Enforcement Rule of the same Act (hereinafter

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 4 through 15, Eul evidence Nos. 1 through 5, 10 through 13 (including each number; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

1) The part concerning the costs of lawsuit in the disposition of this case

A) The Plaintiff received subsidies from the Defendant, not by specifying the purpose of the subsidies, but by a comprehensive method of subsidization, and thus, may spend the litigation costs relating to the instant social welfare center as subsidies from the instant social welfare center. Moreover, the Defendant cannot add the terms and conditions of granting subsidies, and thus, cannot specify the purpose of use while granting subsidies. Therefore, the part relating to the litigation costs relating to the instant disposition on the premise that the purpose of subsidies is specified is illegal.

B) Even if the purpose of the subsidy is specified, since Article 16 of the Financial Accounting Rules was deleted from the Defendant’s authority and discretion upon the amendment on August 17, 2012, Article 16 of the Financial Accounting Rules, the Plaintiff could divert the budget pursuant to Article 16 of the Financial Accounting Rules, and the Plaintiff lawfully diverted the budget through the procedures prescribed in Article 16 of the Financial Accounting Rules. Therefore, the part relating to the litigation cost of the instant disposition, which is premised on the use of

C) The Plaintiff submitted the budget and settlement of accounts stating the costs of lawsuit to the Defendant, but did not raise the Defendant’s objection, and was approved by the Defendant as to the payment of the above costs of lawsuit as the subsidies of the Social Welfare Center. Therefore, the part relating to the costs of lawsuit in the instant disposition should be revoked

2) The part related to the surplus of the long-term care institution in the instant disposition

Article 10(3) [Attachment 4] of the Financial Accounting Rules, 2015 guidelines for the management of social welfare facilities in 2015, and 2015 guidelines for the guidance for the health and welfare of older persons. The instant medical care institution is not a social welfare facility prescribed by the Social Welfare Services Act, but a social welfare facility established under the Act on Long-Term Care Insurance for Older Persons, and 2015 guidelines for the management of social welfare facilities in 2015 and 2015 guidelines for the health and welfare of older persons. Therefore, the part related to the surplus of the instant medical care institution during the instant disposition is not subject to the disposition or has no effect of the basis for the disposition. Therefore, the relevant

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) The part concerning the costs of lawsuit in the disposition of this case

A) Whether the purpose of the subsidy is specified

The Defendant received full subsidies from Busan Metropolitan City from the Busan Metropolitan City and granted subsidies to the Plaintiff and other social welfare foundations. From January 2014 to December 2016, Busan Metropolitan City notified the Defendant of subsidies for operating social welfare centers to prohibit the use of subsidies for purposes other than designated purposes and to manage subsidies in a separate account. In the case of the instant social welfare centers, the Defendant granted subsidies for personnel expenses, operating expenses, and services items. The Defendant provided subsidies from January 2014 to December 2016 under the condition that the Plaintiff would prohibit the use of subsidies for purposes other than the purpose of the subsidies and manage the subsidies in a separate account. As seen earlier, according to the above recognition, it is reasonable to view that the Defendant provided subsidies to the Plaintiff, while managing the subsidies from a separate account, and used them for personnel expenses, operating expenses, and re-service projects.

On the other hand, the plaintiff asserts that the purpose of the subsidy is not specified because the purpose of the subsidy was not specified according to the classification of the expenditure budget items, such as sections, paragraphs, items, etc. as stipulated in the Financial Accounting Rules.

According to Article 10 (3) of the Financial Accounting Rules, the budget of a social welfare center shall be compiled according to the classification of revenue and expenditure budgets prescribed by the above rules, and the budget of expenditure shall be divided into "office expenses- personnel expenses-paid expenses-paid expenses, etc.", "office expenses-operation expenses-operating expenses, etc.", "project expenses-project expenses-○○ project expenses, etc.". However, Article 2-2 of the Financial Accounting Rules provides that "Except as otherwise expressly provided for in other Acts and subordinate statutes, this Rule shall apply to the financial and accounting management of corporations and facilities," and Article 2-2 of the Financial Accounting Rules of the Busan Metropolitan City provides that the conditions necessary for the decision of granting subsidies may be imposed (Article 18), the details of subsidized projects may be subdivided (Article 20), and the purpose may be designated (Article 22), and the above Act does not stipulate that the purpose of granting local subsidies may be delegated to the Mayor of Busan Metropolitan City according to Article 20-2 (1) of the Local Finance Act.

Therefore, it cannot be deemed that the Defendant specified the purpose of the subsidy only in accordance with the classification of the expenditure budget item, and as long as the Defendant had the Plaintiff use the subsidy for the purpose of personnel expenses, operating expenses, and home care service projects while granting the subsidy, the above conditions of the subsidy are legitimate vice officers attached to the granting of the subsidy, which is a beneficial administrative act, in accordance with the relevant Acts and subordinate statutes, such as the Subsidy Act, the Local Finance Act, and the Busan Metropolitan City Ordinance on the Management of Subsidies. Therefore, this part of the Plaintiff’s assertion based on the premise that the Defendant did not specify the purpose of the subsidy,

B) Whether the Plaintiff has the exclusive right to use the subsidy

Articles 22(1), 30(1)1, and 31(1) of the Subsidy Act provide that a subsidized project operator shall faithfully perform the subsidized project with the care of a good manager according to statutes, the details of the decision to grant subsidies, etc., and shall not use the subsidy for other purposes, and shall revoke the decision to grant the subsidy and order the return of the subsidy if the subsidy is used for other purposes. Article 32-4(1) and (2) of the Local Finance Act also provides that a local government-subsidized project operator shall faithfully perform the local subsidized project with the care of a good manager in accordance with statutes, the details of the decision to grant the subsidy, etc., and shall not use the relevant subsidy for other purposes, and shall not obtain approval from the head of the relevant local government. Article 23(1) and (2) of the Busan Metropolitan City Ordinance on the Management of Local Subsidies also stipulates

Meanwhile, according to Articles 15 and 16(1) of the Financial Accounting Rules, the budget for corporate accounts, etc. is not used for purposes other than those stipulated in the expenditure budget, but the representative director, etc. of a corporation may divert the budget between the government, claims, and items. However, the Financial Accounting Rules are nothing more than the Ordinance of the Ministry of Health and Welfare enacted with the delegation of the Social Welfare Services Act, i.e., the Ordinance of the Ministry of Health and Welfare, which was enacted with the delegation of the Social Welfare Services, and are contrary to the provisions of the superior laws or regulations, or do not take precedence over the law. Therefore, the Financial Accounting Rules prohibit the use of subsidies for purposes other than the purpose of the subsidies in the Subsidy Act or the Local Finance Act, etc. Therefore, even according to the Financial Accounting Rules, the said provisions prohibit the use of subsidies for the operation of the Social Welfare Center in the case of the Plaintiff, based on the Financial Accounting Rules, and thus, cannot divert the budget by changing the conditions of the Defendant’s use of the subsidies as personnel, operating

C) Whether approval was obtained from the Defendant

As seen earlier, Article 32-4(1) and (2) of the Local Finance Act provides that a local government-subsidized project operator shall not use subsidies for any other purpose, and shall obtain approval from the head of the local government in order to modify the content of the project or to revise the distribution of expenses. As to the disbursement of litigation expenses with subsidies from a social welfare center of this case, it is insufficient to accept such approval solely on the ground that the Plaintiff submitted a budget bill and a partnership oath stating the litigation expenses to the Defendant, and no other evidence exists to

D) Sub-committee

Therefore, the Defendant’s improvement order to recover the above litigation costs from the facility accounts of the Social Welfare Center on the ground that the Plaintiff used the subsidy of the Social Welfare Center for a specific purpose in the litigation costs.

2) The part related to the surplus of the long-term care institution in the instant disposition

The aforementioned evidence and evidence are as follows: ① The portion of surplus funds related to the long-term care institution in the instant disposition, which was acknowledged by the overall purport of the statement and pleading as follows: ① the portion of the expenditure budget of the instant medical care institution, which was compiled as an item of pre-payment for corporate accounting (hereinafter referred to as “the part of the association”) and the portion of the funds transferred into the Plaintiff’s corporate accounting as an item of pre-delivery for corporate accounting (hereinafter referred to as “the part of the association”) which was formed as an expenditure budget, and transferred to the accounts of the child center in this case (hereinafter referred to as “the association”). ② According to the Financial Accounting Rules and the guidance for the management of social welfare facilities in 2015, where the elderly is a long-term care institution, it is possible to transfer the surplus funds to the accounts of the corporation if the elderly is a pre-term care institution (Article 10(3)4 of the Financial Accounting Rules). In light of the above provisions, the part of the association can only be seen as unlawful in the guidelines for disposal of surplus funds of the Plaintiff 1 and the association.

3. Conclusion

Therefore, the part related to the surplus funds of the long-term care institution in the Plaintiff’s claim of this case is reasonable, and the remainder of the claim is dismissed as it is without merit. It is so decided as per Disposition.

Judges Kim Jong-hee

Judge Lee Inven

Judges Mahova-Gyeong

1) From the 11th response, the Defendant stated that the transfer of the surplus of the instant medical care institution to the corporate accounting does not constitute infrastructure expansion and operation of the institution’s infrastructure and welfare projects for the elderly. Of the instant disposition, the part related to the surplus of the institution’s long-term care in the instant disposition is not to be recovered from the instant medical care institution to the corporate accounting because it was erroneous that the transfer from the corporate accounting to the corporate accounting for the purpose other than the welfare projects for the elderly, etc., not to recover from the corporate accounting for the instant medical care institution, but to the corporate accounting for the purpose that the transfer from the corporate accounting for the children’s center to the corporate accounting

A person shall be appointed.

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A person shall be appointed.

A person shall be appointed.

A person shall be appointed.

A person shall be appointed.