Audit Puts 2.86 Billion Won in Korean Geoscience Research Funds at Risk
A state research council audit found that the Korea Institute of Geoscience and Mineral Resources paid a Canadian research partner despite incomplete work, leaving 2.86 billion won potentially unrecoverable after a petroleum development project failed to secure a site.
A South Korean state research institute may struggle to recover 2.86 billion won in public research funds after an overseas partner failed to complete key work for a Canadian petroleum development project, according to an audit disclosed Saturday.
The National Research Council of Science and Technology said the Korea Institute of Geoscience and Mineral Resources did not adequately verify whether its Canadian partner had fulfilled required tasks before releasing research money. The finding was included in a special audit of the institute, known as KIGAM.
KIGAM signed an agreement worth 4.78 billion won with a Canadian organization in 2023 as part of a joint project to develop unconventional oil resources in Alberta. Such resources include oil sands and shale oil, which require extraction or processing methods different from those used for conventional crude.
The audit found that the agreement was concluded before the parties had sufficiently reviewed the suitability of the proposed development site. Investigators said pressure to avoid delays contributed to the rushed decision. The Canadian partner was responsible for obtaining approvals and purchasing equipment, but had not properly completed those duties by the time a second payment was due in July 2024.
Despite recognizing that the partner's report was inadequate and that required work remained unfinished, the project's research manager and spending official authorized the payment because they believed the project could still be completed. The effort later failed to secure the site after negotiations with an Indigenous consultative body broke down.
KIGAM subsequently demanded repayment of 2.859 billion won, but the audit said recovery remains uncertain because the Canadian organization's finances have deteriorated. The institute has changed the project manager, found another site and resumed the research. It has also sought international arbitration through the International Chamber of Commerce and pledged tighter controls over overseas research reports and payments.
The council's audit committee called for demotion-level disciplinary action against the two officials involved. It said they had exposed the institute to a major financial loss, while also noting there was no evidence of embezzlement and that they had tried to complete the project.
The same audit identified separate problems in the institute's management of an international event. These included an improperly arranged service contract, excessive accommodation and meal spending, and documents that described a meeting as having taken place when it had not. The committee also requested disciplinary action against managers responsible for that event.