사립대학 특례규칙상의 감가상각 제도에 관한 연구 = A Study on the Depreciation in Private Universities` Exceptional Rules

다국어 초록 (Multilingual Abstract)

The purpose of this study is: to look into the relations between private universities’ depreciation accounting and regulations on reserve for construction costs; review effectiveness of independent audit of any and all of related private universities; figure out sensible solutions to identified problems; and to provide policy insights. The findings of this research are summarized as follows: First, the Framework Act on Education’s Article 16 and the Private School Act’s Article 5 stipulate that the duty to ensure private universities’ educational facilities lies in incorporated school in principle, and the Framework Act on Education’s Article 32-2, Paragraph 1 contains a special condition that relates the obligation to ensure educational facilities to tuition accounting but it does not specify the ground for such special condition or looks vague. Therefore, we recommend devising a conditional clause for Article 16, Paragraph 1 of the Higher Education Act or Article 5, Paragraph 1 of the Private School Act, stipulating that ensuring educational facilities and making alternative investment are allowed for tuition accounting, and including detailed applicable cases in corresponding enforcement ordinances. Second, Article 34, Paragraph 5 of the special regulation sets a cap of reserve for construction costs at the amount of depreciation expense, with a purpose to ban private universities’ excessive accumulation of reserve for construction costs. However, this has brought unintended consequence, making private universities understand that they are allowed to book additional reserve for construction cost as much as their depreciation expense. Because depreciation expense is non-cash cost, it itself enables internal financing, or achieving alternative for fixed assets. Nevertheless, current depreciation accounting for universities is understood as a right to set aside fund at the amount of their depreciation expense, failing to deliver its intended purpose. Therefore, we recommend abolishing the special regulation, Article 34, Paragraph 5 that is considered to define the condition of the Framework Act on Education’s Article 32-2, Paragraph 1 under its sub-regulation as well as making a regulation that supplements such side effect set forth above. Third, regulation on unlawful reporting of plan on reserve for construction costs is insufficient. Therefore, excessive accumulation of reserve for construction costs shall be subject to tougher regulation by reflecting such fact on the government’s financial supports or university evaluation. Fourth, current special regulation allows revaluation of assets that include not only land, but also fixed assets including buildings. By contrast, accounting for depreciation is based on purchase price. This may cause confusions during revaluation for buildings. Taking note of this, we recommend limiting assets subject to revaluation to land only, and making sure that accounting for depreciation shall be based on purchase cost. Fifth, Article 22-2 and Paragraph 1 of the Regulation on Finance and Accounting of Private School, which regulates accounting of additional reserve for construction costs and mandatory report of the plan for use, falls in the scope of the Private School Act, not of the Ministry of Education’s orders. Hence, it should be enacted as the exception clause to the Article 32, Paragraph 2 of the Private School Act. Sixth, independent audit of depreciation accounting to prove its appropriateness has grown in importance because accumulating reserve for construction costs based on depreciation expense is closely related to how tuitions are calculated. So far, several issues have been raised regarding effectiveness of independent audit for private universities. To solve this problem, we, from the long-term perspective, recommend getting the government to take on part of the audit fees, expanding independent auditor designation system, and reviewing several options including granting greater rights to investigate to independent auditors.