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ENFORCEMENT DECREE OF THE LOCAL EDUCATION SUBSIDY ACT

Ministry of Education, Science and Technology (Digital Local Education Finance Team) 02-2100-6530

Article 1 (Purpose)

The purpose of this Enforcement Decree is to provide for the matters delegated by the Local Education Subsidy Act (hereinafter referred to as the "Act") and other matters necessary for the enforcement thereof.

Article 2 (Revision of Subsidy Rates)

(1) In the event that the increased amount of personnel expenses for teachers in compulsory educational institutions compared to the previous year under the provisions of Article 4 (2) of the Act exceeds the increased amount of local education subsidies (hereinafter referred to as the "subsidies") granted under subparagraph 2 of Article 3 (2) of the Act compared to the previous year, the excess amount shall be granted by adding on to the next year's subsidies. (2) The personnel expenses for teachers under paragraph (1) shall be determined by the amount of the settled special account for educational expenses of Special Metropolitan City, Metropolitan Cities, Dos and Special Self-Governing Do (hereinafter referred to as the "Cities/Dos"), and the detailed items composing the expense of personnel for teachers shall be determined by Ordinance of the Ministry of Education, Science and Technology, while the local education subsidies under the provisions of subparagraph 2 of Article 3 (2) shall be determined by the amount of the settled expenditure of the government's general account.

Article 3 (Financial Support to Excellent Local Government) (1) According to Article 5-2 (6) of the Act, the Minister of Education, Science and Technology may grant special subsidies to the Cities/Dos falling under any of the following subparagraphs.

1. In the case of achieving excellent results in the evaluation of local educational administrative institutions conducted under Article 9 (2) of the Elementary and Secondary Education Act; and

2. In the case of achieving excellent results in the evaluation of local educational administrative institutions conducted by the Minister of Education, Science and Technology based on the criteria of soundness, efficiency, etc. in financial operation outcome.

(2) Special subsidies under paragraph (1) shall be granted within one month after completion of each evaluation of paragraph (1).

Article 4 (Estimation of Standard Financial Demand, Etc.) (1) The measurement items and measurement unit and estimation criteria for the amount of standard financial demand as prescribed in Article 6 (2) of the Act shall be subject to the Attached Table 1.

(2) In computing the standard financial demand, the self-efforts made by local educational administrative institutions to enhance the autonomy of unit schools and to induce or facilitate sound financial operation shall be reflected. The measurement items, unit and the criteria to compute the financial demand depending on the degree of such efforts made by the institutions shall be subject to the Attached Table 2.

(3) The Minister of Education, Science and Technology may revise the measurement unit of the standard financial demand in the case that there are considerable fluctuations in the prices of commodities or in the measurement units. (4) The formula to compute standard financial demand by each measurement item shall be determined by Ordinance of the Ministry of Education, Science and Technology.

Article 5 (Estimation of Standard Financial Revenue, Etc.) (1) The amount of revenue of which financial resources are derived from the local taxes under Article 7 (2) of the Act shall be computed by applying the average rate of increase/decrease of the revenue in the past three years to the settled revenue of local taxes for the year before last year. (2) The estimation criteria for revenue other than local taxes as prescribed in Article 7 (2) of the Act shall be subject to the Attached Table 3.

(3) When there arise factors that may cause changes in tax revenues on the basis of the result and prospect of collection, etc of local taxes and other revenues, the Minister of Education, Science and Technology may revise the amount of standard financial revenue.

Article 6 (Return or Reduction of Subsidies)

The return or reduction of subsidies under Article 8 (2) of the Act shall be subject to the classifications falling under any of the following subparagraphs.

1. When the budget for investment or loan project has been executed without undergoing the examination of investment or loan as prescribed in Article 37 of the Local Finance Act: Within 10% of the amount disbursed without such investment or loan examination; and

2. In the cases other than subparagraphs 1 and 3; when disbursement of excessive expenses or negligence in revenue collection in violation of laws and regulations are found through audits conducted by the Chairman of Board of Audit and Inspection or the Minister of Education, Science and Technology under Article 22 (1) of the Board of Audit and Inspection Act, Article 3 of the Act on Local Education Autonomy or Article 171 of the Local Autonomy Act: The disbursed amount of excessive expenses in violation of the laws and regulations or the amount of revenue neglected in collection.

3. Deleted. Article 7 (Measures Taken According to Change, Etc. of Administrative Districts) In the cases where Cities/Dos are abolished, divided or merged, or the jurisdictions of the Cities/Dos are changed as provided by Article 10 of the Act, the subsidies for the Cities/Dos concerned shall be adjusted according to the classifications falling under any of the following subparagraphs.

1. When more than two Cities/Dos are merged to establish a new City/Do, the subsidies to be granted to the previous Cities/Dos shall be granted to the new City/Do;

2. When the jurisdictions of the Cities/Dos are changed or one City/Do is divided into two or more Cities/Dos, the general subsidy to be granted to the new Cities/Dos shall be recalculated according to Article 5 of the Act based on the general subsidies to be granted to the previous Cities/Dos, and the special subsidy shall be recalculated for each project according to each subparagraph of Article 5- 2 (1) of the Act; and

3. Notwithstanding subparagraph 2, when the jurisdiction of Cities/Dos are changed to a limited extent such as partial or slight change, the subsidies may not be adjusted during the corresponding year but the concerned amount can be added or deleted in estimating subsidies for the next year. Article 8 (Consultation on Transfer Money)

(1) The superintendent of educational affairs under Article 11 (4) of the Act shall request to head of the concerned local government in writing for consultation on the draft budget of annual expenditure to be appropriated as the transferred amount before submitting the same draft budget to the Education Committee of the relevant City/Do. The head of the concerned local government shall send his/her written opinion as a reply within 20 days from the date of receiving such request.

(2) For consultation on drawing up expenditure budget under paragraph (1), the Education Policy Council may be established in Cities/Dos. (3) Matters necessary for the organization and operation of the Education Policy Council under paragraph (2) shall be prescribed by ordinances of Cities/Dos. (4) When submitting the budget bill to the Education Committee of Cities/Dos and the municipal/provincial assembly, the superintendent of educational affairs shall attach the written opinion of the head of the concerned local government as provided under paragraph (1).

Article 9 (Raising Objection to Subsidies, Etc.)

When an objection raised is recognized and is deemed reasonable through the examination conducted under the provisions in Article 13 (2) of the Act, the Minister of Education, Science and Technology shall increase or decrease the amount of standard financial demand or standard financial revenue for the concerned City/Do in estimating the next year's subsidies.

ADDENDA (Office Organization of the Ministry of Public Administration and Security, and the Agencies under the Ministry) Article 1 (Enforcement Date)

This Enforcement Decree shall enter into force on the date of its promulgation. Articles 2 through 4 Omitted

Article 5 (Amendment of Other Laws and Regulations) From (1) to <23> Omitted

<24> A part of the Enforcement Decree of the Local Education Subsidy Act shall be amended as follows.

In Article 2 (2) and Article 4 (4), "Ordinance of the Ministry of Education and Human Resources" shall be amended to "Ordinance of the Ministry of Education, Science and Technology."

In the part other than each subparagraph of Article 3(1), Articles 3(2), 4 (3), 5 (3), 6 (2) and 9, the "Minister of Education and Human Resources" shall be amended to the "Minister of Education, Science and Technology." Attached Table 1 and 2 shall be provided as follows. [Attached Table 1]

Measurement items and measurement unit and computation criteria for Standard Financial Demand (related to Article 4 (1))

Measurement Items Measurement Unit Computation Criteria

1. Expense of personnel for teacher and staff

Number of teacher

and staff

Number of teacher and

staff in public

kindergartens, public and

private elementary

schools, middle schools,

high schools, special

schools and educational

administrative

institutions

Increased number

of teacher and

staff

Increase of teacher and

staff in public schools

and educational

administrative

institutions in the year

when subsidy is

approved by the Minister

of Education, Science

and Technology

2. Operating expenses for

schools and

curricula

a. School

expenses

Number of

schools

Number of schools

including public

kindergartens, public and

private elementary

schools, middle schools,

high schools and special

schools

b. Class expenses Number of

Classes

Number of classes in

public kindergartens,

public and private

elementary schools,

middle schools, high

schools and special

schools

c. Students'

expenses

Number of

students

Number of students in

public kindergartens,

public and private

elementary schools,

middle schools, high

schools and special

schools

d. Curricula

administration

expenses

Number of

students, and

administrative

district

Number of students in

public kindergartens,

public and private

elementary schools,

middle schools, high

schools and special

schools, and

administrative district

where schools are

located

3. Educational administrative

expenses

a. Operating

expenses for

institution

Number of

schools and

students, and

number of

standard faculty

1) Number of schools

and students in public

kindergartens, public

and private elementary

schools, middle

schools, high schools

and special schools

2) Number of standard

faculty

b. Expenses for

balanced

education

Number of schools

and area of

administrative

district where

schools are

located, number of

recipients, etc.

1) Number of schools

that include public

kindergarten, public

and private elementary

school, middle school,

high school and

special school, and

pertaining

administrative district

2) Number of students

aged 6 to 17 who are

either recipient of

allowance or ward

under National Basic

Living Security Act

c. Other

expenses

Number of

students and

pertaining

administrative

district

Number of students in

public kindergartens,

public and private

elementary schools,

middle schools, high

schools, special schools,

and pertaining

administrative district

4. Cost of school facilities

a. Cost to

improve

educational

environment

Total building area Total building area of

school buildings for

which maintenance and

repair are deemed

necessary by criteria

provided by Ordinance

of Ministry of Education,

Science and Technology

b. School

remodeling

costs

Total building area Total building area of

schools for which

remodeling are deemed

necessary by criteria

provided by Ordinance

of Ministry of Education,

Science and Technology

c. Cost of new

construction

and expansion

for schools

Land area Land area of schools to

be newly constructed

which passed

examination by Article

41 of the Enforcement

Decree of the Local

Finance Act

Total building area Standard total building

area of schools to be

constructed newly

through examination by

Article 41 of the

Enforcement Decree of

the Local Finance Act,

and schools for which

classrooms need to be

expanded according to

the criteria set by the

Minister of Education,

Science and Technology

5. Educational expenses for

infants

a. Support for

infants' school

expenses

Number of

kindergarten pupils

1) Among the infants

enrolled in

kindergartens aged 3

to 5, the number of

pupils who are

qualified for school

expenses assistance,

while meeting the

criteria set by the

Minister of Education,

Science and

Technology

2) Among children of the

households that meet

the criteria set by the

Minister of Education,

Science and

Technology, the

number of infants for

whom the whole

school expenses are

not assisted as eldest

infant is enrolled at

kindergarten or

nursery school and

other infants

(including 2nd

eldest

infant 3 or 4 year old)

enrolled at

kindergarten

b. Assistance for

kindergarten

teachers'

personnel

expenses

Number of

teachers

Number of teachers in

private kindergartens

located in rural-urban

complex type city with

population less than 300

thousands and located in

areas mentioned in

Article 3 (1) a of Special

Act on Life Quality

Improvement for

Farmers, Forestry and

Fishermen, and

Development Promotion

of Agricultural, Hilly

and Fishing Villages

c. Support for

educational

capacity of

kindergartens

Number of

kindergartens

Number of kindergartens

which fall under the

criteria set by the

Minister of Education,

Science and Technology

d. Environmental

improvement

cost for

kindergarten

Number of

kindergartens

Number of kindergartens

for which environmental

improvement is deemed

necessary according to

the criteria set by the

Minister of Education,

Science and Technology

6. Project cost for school after

class dismissal

a. Assistance for

agricultural,

hilly and

fishing villages

Number of classes Number of classes in

public and private

elementary, middle and

high schools having not

more than two classes in

each year and being

located in areas referred

to in Article 3 (1) a of the

Special Act on Life

Quality Improvement for

Farmers, Forestry and

Fishermen and

Development Promotion

of agricultural, hilly and

fishing villages

b. Assistance of

free tickets to

Number of

recipients, etc.

Number of pupils aged 6

to 17 who are either

recipient of allowance or

attend lecture ward under National

Basic Living Security

Act

c. Nurturing

assistance in

elementary or

middle schools

Number of classes Number of classes which

ran nurturing program in

elementary or middle

school in the previous

year

7. Compensation for financial

deficiency

a. Repayment of

local

educational

bonds

Amount of issued

bonds

Redeemed principal and

interest of projects for

which the Minister of

Education, Science and

Technology decided to

assist principal and

interest

b. Payment for

privately

invested

project

Rent of privately

invested project of

rental-type

Rent of projects for

which the Minister of

Education, Science and

Technology decided to

pay rent

Remarks

1. Among the private elementary, middle and high schools, the schools whose tuition and entrance fees are self-regulated shall be excluded from the object of estimation criteria for local education financial subsidies.

2. The number of schools, classes and students shall be computed as of April 1 of the previous year of the subsidy granting year. Provided, however, that in the case that the number of schools, classes and students are planned or expected to increase/decrease in the subsidy granting year, the estimated number of such increase/decrease may be added/deducted. The number for 2008 shall be computed as of Sept. 1, 2007.

3. In Item 3 - Educational administrative expenses - of the measurement items, the "number of standard faculty" included in the criteria to compute operating expenses means the total number of teachers and staff which is calculated by dividing the number of students per school, class and area of Cities/Dos by the average number of students per faculty per school class and area nationwide. Areas are classified as follows.

a. Metropolitan area: Autonomous precinct as prescribed in Article 3 (2) of the Local Autonomy Act, and Dong of cities with over 500 thousand population according to Article 3 of the same Act;

b. City area: Dong of cities as prescribed in Article 3 (3) of the Local Autonomy Act (referring to city with population less than 500 thousand); c. Eup and Myeon area: Eup and Myeon as prescribed in Article 3 (3) of the Local Autonomy Act; and

d. Islands and remote places: Islands and remote places as prescribed in Article 2 of the Education Promotion Act for Islands and Remote Places where school with less than 300 students is located.

[Attached Table 2]

Measurement items and measurement unit and criteria to compute the amount of financial demand according to voluntary efforts (related to Article 4 (2)) Measurement Items Measurement Unit Computation Criteria

1. Expansion of Basic operating Money transferred from special account basic operating

cost of school

cost of school of education expenses to school account, which is computed by the criteria set by

Ordinance of Ministry of Education,

Science and Technology

2. Assistance for merger and

abolition of school

and class

Number of schools Number of merged or abolished schools recognized by the Minister of Education,

Science and Technology

Number of classes Number of decreased classes recognized by the Minister of Education, Science and

Technology

3. Strengthening of civil-public

cooperation to

construct school

Saved amount Saved amount from new construction cost for schools recognized by the Minister of

Education, Science and Technology

In item a. of the estimation criteria column in Attached Table 3 (1), the "Minister of Education and Human Resources" shall be amended to the "Minister of Education, Science and Technology."

<25> through <175> Omitted