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Private schools prone to corruption

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<p style='text-align: left;'>Lee Myun-young, unseen in the photo, chairman of Hongik, a private foundation that owns Hongik University, seen above, is among the school managers who are being investigated for involvement in irregularities. <br />                                                                                                                           / Yonhap</span><br /><br />

Lee Myun-young, unseen in the photo, chairman of Hongik, a private foundation that owns Hongik University, seen above, is among the school managers who are being investigated for involvement in irregularities.
/ Yonhap

Incoming gov't tasked to strengthen supervision

By Na Jeong-ju

At least three managers of private universities are being investigated for their involvement in multiple irregularities, including the manipulation of accounting books and misappropriation of school funds.

This is the latest in a series of corruption cases involving managers and owners of private schools. Analysts say such rampant corruption at private institutions is largely linked to opaque and questionable management practices there.

The managers who are being probed are Lee Hong-ha, founder of Seonam University; Lee Myun-young, chairman of Hongik Foundation; and Kim Seung-tae, president of Anyang University.

The new corruption cases suggest that the government's recent measures to enhance managerial transparency and the governance structures at private schools have not been effective.

"How to tackle the problem is a big challenge for the incoming administration because lax oversight of private schools could jeopardize its educational initiatives, including curbing college tuition. Managers' misuse of tuition income and school assets could lead to a tuition rise," said Woo Jong-hun, a civic activist participating in a tuition-cut drive.

According to experts, enhancing managerial transparency at universities has become more important than ever since the government increased state scholarships for college students.

The government plans to pay scholarships amounting to 2.77 trillion won to students this year, up over 60 percent from 1.7 trillion won in 2012. The scholarships will be provided through universities.

"Private universities account for 80 percent of higher education institutes, therefore we need to verify the integrity and morality of their owners, presidents and their family members," an official from the Korea Association of University Professors said.

Hotbed of corruption

Seonam University founder Lee was indicted last month for embezzling 90 billion won of school funds. With the money, he bought properties and registered them under the name of his children and relatives. He even purchased an expensive apartment in southern Seoul and gave it to his son.

Eight primary and secondary schools operated by Hongik are also being probed for allegedly manipulating accounting books to misappropriate 13.1 billion won ($11.6 million) of state subsidies and tuition income.

The foundation's 83-year-old Chairman Lee Myun-young and some 25 former and incumbent school officials have been questioned over the alleged fraud, according to Seoul's education authorities.

An audit conducted by the Seoul Metropolitan Office of Education in July showed that the eight schools kept subsidies they received from the government as well as tuition collected in secret accounts.

They include Hongik High, Middle and Elementary schools, and Gyeongseong High School.

The office said it ordered the schools to return the state subsidies amounting to some 3.7 billion won. The case has been referred to the prosecution.

Hongik is one of the largest private school foundations in Korea, mostly controlled by founding family members. Lee's children and grandchildren are also deeply involved in the management of schools.

Anyang University President Kim was also arrested last month for committing multiple irregularities while managing the school.

The Ministry of Education, Science and Technology found through an audit that the 54-year-old urban planning professor engaged in 34 counts of managerial misconduct.

Kim, a son of the university's late founder Kim Chi-seon, has served as its president since 2002. He took office only seven years after being hired as a professor by the school's board.

According to the ministry, Kim recruited 19 people as professors over the past three years even though they were not qualified to hold this senior academic position. In one case, the school stated in a public notice that only doctorate degree holders could apply for vacancies, but some master's degree holders were included among successful applicants.

Moreover, two candidates who had already been eliminated in the screening process were appointed by Kim. Ministry officials suspect the president might have taken money from them in return for selecting them.

Kim also engaged in a questionable property deal.

The school purchased an area of land in the mountainous area of Taebaek, Gangwon Province, in October 2010 at a much higher price than its market value. It paid some 5.4 billion won for the property, but the asking price was closer to 700 million won. The school said at the time that it would build a training institute for the faculty and students there, but it remains uninhabited.

The ministry also said the university signed contracts with some 20 unlicensed firms in 2009 to renovate school buildings. It paid 3.2 billion won to them.

"Our audit showed that Anyang failed to check the qualifications of contractors when initiating large-scale construction and renovation projects. That means that there is a high possibility that the firms might have bribed school officials," a ministry official said.

There is also a suspicion that the school's cash reserves were misused. The school reportedly invested some 4.4 billion won in financial derivatives through financial firms. The school paid more than 300 million won in service fees to the firms, but incurred a loss of some 16 million won from the investment.

It is also suspected that scores of Anyang students received diplomas although they failed to earn required credits.

Na Jeong-ju

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