Ending "Self-Evaluation": Government Shifts Fiscal Project Assessment to Integrated External Expert Review

2026 Fiscal Project Performance Management Implementation Plan
Evaluation Panel Composed of About 150 Experts Across 15 Fields
Evaluation Results Directly Linked to Budget Allocation

The government will completely overhaul the current performance management system for fiscal projects, which has so far been operated as a ministry-centered "self-evaluation." Going forward, performance will be assessed through integrated evaluations with the participation of external experts. Projects with insufficient results will have their budgets directly reduced or even abolished, and both the evaluation results and whether they are reflected in the budget will be made public, significantly strengthening fiscal accountability.

According to the Planning and Budget Office on January 27, a report titled "2026 Fiscal Project Performance Management Implementation Plan" was presented at the Cabinet meeting. Previously, the Planning and Budget Office explained in a briefing that "the focus was on changing the evaluation structure itself, based on the recognition that the existing performance evaluation system had become formalized and overly lenient." With mandatory spending expanding and investments to address future challenges increasing, the aim is to secure fiscal capacity through performance-based restructuring.

The core of this implementation plan is the introduction of a new "Integrated Fiscal Project Performance Evaluation." Until now, each ministry evaluated its own project performance, and the fiscal authorities would check and review these results-a dual structure. From now on, the process will be unified into a joint evaluation by relevant ministries, led primarily by external experts. The evaluation will target major fiscal projects that require performance management, and in principle, will be conducted down to the sub-project level.

The evaluation panel will be composed of approximately 150 experts across 15 fields, including employment and jobs, welfare, industry, small and medium-sized enterprises, environment and energy, land and transportation, science and technology, disaster safety, and regional balance. While the relevant ministries will participate in forming the evaluation panel and in the evaluation process to explain the policy characteristics and project context, the final decision will be made primarily by neutral external experts.

In particular, this reform is focused on addressing the limitations of the "self-evaluation" system that has been criticized until now. Park Bongyong, Director of Fiscal Performance at the Planning and Budget Office, emphasized, "Ministry self-evaluations have been limited in objectivity and effectiveness, as the ministries themselves, who possess the most information, conducted their own assessments. Now, a large-scale panel of external experts will directly examine the projects and link the results directly to the budget allocation process."

Planning and Budget Office Building (Sejong=Yonhap News) Reporter Juseong Kim = Signboard of the Planning and Budget Office building in the Government Complex Sejong. 2026.1.6 utzza@yna.co.kr (End)

The results of the integrated performance evaluation will be clearly categorized as ▲normal progress ▲project improvement ▲budget reduction ▲abolition or integration, and will be directly linked to the budget. In principle, projects with poor performance will have their budgets reduced, while outstanding projects will be recommended for increased funding, granted exemption from evaluation the following year, and their managers will be eligible for incentives such as awards. If the evaluation results are not reflected in the budget, the reasons for this must also be made public.

The Planning and Budget Office explained, "A system in which the evaluation results, whether they are reflected in the budget, and even the reasons for non-reflection are all made public, effectively acts as a 'shackle' for both ministries and fiscal authorities. This is a mechanism to enhance execution and ensure the effectiveness of expenditure restructuring." However, the scale or percentage of budget reductions will not be set in advance. Even if the scale of restructuring is reduced due to improved performance, as long as transparency and objectivity are ensured, the purpose of the system is considered to be achieved.

The extension evaluation of subsidy projects will also be strengthened. Previously, only one-third of all projects were evaluated every three years, but now, all subsidy projects will be reviewed as part of the integrated performance evaluation. This measure is intended to prevent duplicate evaluations, reduce the burden on ministries, and allow for a comprehensive assessment of overall project effectiveness at once.

In addition, in-depth evaluations of fiscal projects will focus on multi-ministry or large-scale projects with high complexity and importance. Rather than limiting the assessment to a single year, follow-up evaluations over two to three years will be possible to thoroughly verify project effectiveness. The results of these in-depth evaluations will focus on suggesting directions for improvement and assessing effectiveness, rather than making decisions about budget reduction or abolition.

The system for managing performance goals will also be revised. Responding to criticism that setting only one performance indicator per program does not reflect reality, multiple indicators may now be set if necessary, or the program itself may be divided. Performance indicators for each sub-project will also be included in the performance plan, allowing the National Assembly and the public to verify project results in greater detail.

The infrastructure for performance management will also be significantly strengthened. The government plans to introduce an artificial intelligence (AI)-based performance management system to automate the review of the appropriateness of performance indicators and basic analysis, enabling evaluators to focus on policy judgment and in-depth analysis. The Planning and Budget Office stated, "This reform will mark the first time that fiscal project performance evaluations are truly brought to the table. As this structure strengthens both autonomy and accountability, it will be a meaningful change."

This content was produced with the assistance of AI translation services.