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South Korea's response to COVID-19

Financial management operations under the COVID-19 pandemic: The Korean Experience

September 23, 2020 by Hanwool Oh - Carlos Pimenta - Rodrigo Suescun - Jae-young Choi Leave a Comment


Due to the global spread of COVID-19, the world is now facing an unprecedented health and economic crisis. This novel virus is fundamentally changing our daily lives and working habits. Countries are facing several health, social and economic challenges to battle the pandemic and its effects while working to ensure the business continuity of the most important parts of their operations.

In this blog we provide an overview of how the Korean government implemented an effective business continuity strategy to ensure its financial management system can deliver the services the government and citizens need during this crisis.

Since the first confirmed case occurred in January of this year, Korea has responded to the impact of COVID-19 earlier than most other countries. Several mass outbreaks have led to a surge in the number of confirmed cases, and the national economy as well as daily social life have shrunk drastically.

Fortunately, Korea has actively utilized various IT technologies to track and manage a lot of confirmed cases and provided related information transparently at home and abroad. Above all, thanks to the voluntary participation of its citizens under quarantine orders, Korea was able to mitigate the spread of the infection relatively quickly.

Meanwhile, COVID-19 was a huge challenge for the Korea Public Finance Information Service (KPFIS), which runs the core infrastructure that forms the basis of governmental finance activities.  The dBrain system – a platform used by the Korean government for public financial management – had to ensure operational continuity without any disruption or delay regardless of this unprecedented emergency.

Reducing the Risk of Spreading the Disease Among Employees

KPFIS quickly formed its own disaster countermeasure headquarters and ran the Emergency Operation System to secure business continuity.

First, to prevent COVID-19 spread in the workplace, employee body temperature is taken when entering the KPFIS building. A thermal imaging camera placed at the building entrance on the first-floor records anyone that enters the building. The technology takes a broad measurement of body temperature for early detection of the symptoms. Thermometers are placed at the office entrance in each floor.

To minimize face-to-face contact with employees or outsiders, it is now mandatory to install a barrier between desks and replace face-to-face meetings with video conference. In the case of inevitable face-to-face meetings, it is mandatory to wear masks and maintain social distance.

Response of dBrain Operator: Distributed Work Environment

KPFIS quickly established a distributed work environment in the early stages of COVID-19 outbreak and deployed some of key operating personnel to the distributed work area. So even if the office had to be closed due to a confirmed case, there would not be any delay or interruption of the national financial operations because it had divided the workers into smaller clusters.

The Korean government has prepared various non-face-to-face work systems in the public sector as part of its digital government operations framework. When COVID-19 became a pandemic, the government asked central and local governments to minimize face-to-face meetings and actively utilize video conferences to prevent the spread of the disease.

Telecommuting has been applied to the KPFIS system in accordance with the government’s three-shift telecommuting guidelines to prevent the spread of COVID-19. Workers can connect to the non-face-to-face system called GVPN (Government Remote Work Support System) to handle their work, find the necessary data on the “G Drive” (Office Data Store) and do the work as they do in the office.

Response of dBrain Functional Support Center

To ensure business continuity of its client support services, KPFIS has established a distributed operation system for its call centers to reduce the risk of mass infection. Of the total 32 support employees, 16 were assigned to work on a different floor, and the existing inbound-oriented functional support methods were distributed by chat, and bulletin boards with the aim of maintaining service quality.

Support via chat services was broadened to six different areas instead of only one before the pandemic by providing training to support staff.

Capacity building among users

One important aspect of the dBrain system is capacity building for new users, especially newly appointed government officials, to ensure they understand both theory and practice in diverse fields related to public financial management, so they can really leverage the system and all information it provides. Usually such trainings are delivered through a combination of online and in-person group classes, which are very effective in onboarding news users in the system in a short period of time.

However, the pandemic has halted all in-person activities and to mitigate that challenge KPFIS has increased its efforts to improve and update manuals for users, case books and FAQs for important and frequent inquiries based on Big Data and Data Mining.

KPFIS Financial Policy Support: Capacity to Quickly Adapt and Meet User Needs

Besides ensuring business continuity, the KPFIS system had also to make important changes in order to be able to offer operational support to execute the policies being implemented by the Korean government to address the economic slowdown and protect vulnerable citizens affected by the pandemic.

For example, to ease the financial stress of key government suppliers, Korea revised the Enforcement Decree of the National Treasury Fund Management Act and expanded the maximum amount of prepayments that state agencies can pay for construction, manufacturing, and service contracts to 80 percent from 70 percent of the contract amount by December 31st of this year. dBrain was adjusted to allow such payments to be executed through the system. 

Also, the government has deferred the income tax payment deadline for all taxpayers ‒regardless of industry or region – as part of its economic measures to fight the impacts of COVID-19. The deadline was extended to August 31st from June 1st. The dBrain system changed the payment deadline accordingly in a timely manner, preventing confusion among taxpayers. The system also managed to deliver accurate information on tax receipts, contributing to the government’s revenue operations.

Conclusion

In these times of pandemic, good public financial management is more important than ever to ensure efficiency and transparency in resource management, which are being impacted by the reduction in public revenues and changes in spending implemented to quickly meet the needs of the most affected population such as providing fast and effective financial transfers.

Financial management systems like dbrain in Korea are essential at this time of crisis, and sharing the Korean experience about strengthening remote support with chats, reinforced control with online education, and various other operational adjustments, are very useful for Latin American and Caribbean countries, facing similar urgent challenges.


Filed Under: Fiscal Policy

Hanwool Oh

Hanwool Oh is an Associate of Korea Public Finance Information Service (KPFIS). She is in charge of international cooperation of KPFIS and specializing in FMIS informatization.

Carlos Pimenta

Carlos Pimenta is a Principal Specialist in the IDB's Fiscal Management Division. He has more than 25 years of experience in matters of modernization of public management, including 8 years in the Government in Brazil, 5 in private consultancies and 13 in the IDB, where he led public management reform projects in more than 10 countries of Latin America and the Caribbean. During the 90s in Brazil he held the positions of Executive Secretary of the Council for State Reform, National Secretary in the Ministry of Administration and State Reform, President of the National School of Public Administration, and Vice-minister of Labor and of the Public administration. He has degrees in public administration and a master's in public management from the Getulio Vargas Foundation in Brazil. Currently he concentrates his work mainly in the areas of public financial management.

Rodrigo Suescun

Rodrigo Suescun is a Principal Specialist in the IDB's Fiscal Management Division in Washington, DC. Previously, he represented the Colombian government before the Board of the World Bank and has held various positions as Technical Vice Minister of the Ministry of Finance and Public Credit, Professor and Director of the Doctorate Program in Economics at the University of Los Andes and Researcher at the Office of the Chief Economist for Latin America from the World Bank. He also worked for several years at the Banco de la República, Banco Central de Colombia, as a researcher and later as Director of the Department of Monetary and Financial Affairs. He is a graduate of the Faculty of Economics of the Universidad de los Andes and later obtained the degrees of M.A. and Ph.D. in Economics from the University of Pennsylvania, Philadelphia.

Jae-young Choi

Jae-young Choi is consultant in the IDB seconded by the Korean Ministry of Economy and Finance since 2018. He advises on the topics of fiscal matters in the FMM with his expertise on public investment, tax policy, and government procurement. His prior positions in the Korean government include Director for Infrastructure and Transportation Budget Affairs and Director for Official Development Assistance.

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