South Korea won't audit USFK use of funds

Members of the 1st Battalion, 12th Cavalry Regiment arrive at Osan Air Base, Republic of Korea, Jan. 29, 2014. The approximately 800 troops are from Fort Hood, Texas.

Siuta B. Ika/U.S. Air Force


SEOUL, South Korea — A South Korean government audit board has decided not to investigate whether U.S. Forces Korea improperly used funds contributed by Seoul toward the upkeep of U.S. troops, saying it would be “inappropriate” in light of national security and diplomatic concerns.

The Board of Audit and Inspection had been reviewing documents from several government agencies, including the Ministry of Foreign Affairs, the Ministry of National Defense and the Seoul Regional Tax Office, to determine whether to launch a formal investigation.

The review apparently focused on whether the U.S. has tried to evade taxes on interest earned on unspent defense contributions from Seoul — an allegation U.S. Forces Korea has denied.

The board dismissed the case late Thursday afternoon, and had found no evidence of USFK wrongdoing, according to an auditor and board spokeswoman, who spoke on customary condition of anonymity.

“We decided it was unsuitable to audit the case since the matter is related to the defense cost-sharing agreement with USFK,” she said. It was unclear whether the case was dropped solely because of political concerns.

The auditor said neither the South Korean government nor USFK had asked that the case be dropped.

She would not release documentation about the board’s decision to Stars and Stripes, saying it could not be made public.

A left-wing civic group, Solidarity for Peace and Reunification of Korea, requested the audit in October. According to South Korea’s Yonhap News, the group alleged that unspecified “data” showed the U.S. has left unspent more than $944 million in Korea-provided defense funds.

USFK said in a previous email to Stars and Stripes that it “does not earn any interest on (Special Measures Agreement) funds deposited in the burden-sharing account, nor does USFK make any additional money off the SMA burden-sharing account.”

Under the SMA, Seoul will increase its contributions 5.8 percent in 2014. In addition to paying 920 billion won — about $866.6 million — South Korea will make unspecified contributions toward labor, logistics and construction.




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