1. Execution status of budget, etc. regarding measures for COVID-19(Report on specific matters)
Ministries, agencies in chargeー－A significant part of the budget was spent for the following 5 measures related to COVID-19,
which were decided in FY2019 and FY2020.

– FY2019 (Amounts indicated in the decision by the Novel Coronavirus Response Control Headquarters, including a reserve fund)∙ Emergency Response Measures against COVID-19 (Emergency Response Package 1st)
∙ Emergency Response Measures against COVID-19 (Emergency Response Package 2nd)
∙ Emergency Measures to Respond to Life Concerns (Emergency Measures)

Backgroundof the Audit

15,300 million yen
430,800 million yen
10,400 million yen－FY2020 (supplementary budgets in the General Account, including reserve funds, and new countermeasures projects calculated as additional expenses after the decision by the Cabinet for the Emergency Economic Measures)∙ Emergency Economic Measures to Cope with COVID-19 (Emergency Economic Measures)
1st supplementary budget: 25,565,400 million yen








Status of
the Audit

Govt. decision on Feb 13, 2020
Govt. decision on Mar 10, 2020
Govt. decision on Mar 18, 2020

∙ Comprehensive Economic Measures to Secure People’s Lives and Livelihoods toward Relief and Hope (FY2020 Comprehensive Economic Measures)
Cabinet decision on Dec 8, 2020
3rd supplementary budget 19,176,100 million yen
Large amounts of reserve funds, including specific-purpose reserve funds for COVID-19 set up in FY2020 (9,650,000 million yen after 3rd supplementary budget)

The Board analyzed 854 projects related to COVID-19, including the 5 measures. (For the FY2020 Comprehensive Economic Measures,projects were chosen for their relevance with COVID-19 measures.)
For a total of 770 projects in which the implementation of the budget related to COVID-19 measures is separately managed, theBoard analyzed the status of the budget implementation by the 5 measures, expense items, ministries/agencies, and projects,
and found that there was a large amount of carry-over and unused amounts.
In the analysis of the budget implementation by expense items, the Board set up an expense item for each project based on its purpose,and analyzed the implementation status of the budget from FY2019 through FY2020.
"COVID-19 prevention measures"
301 projects"Economic and employment measures" 296 projects"International cooperation"
141 projects"Temporary subsidy for COVID-19"
3 projects



April 7, 2020 (partially revised on April 20) Cabinet decision
2nd supplementary budget: 31,817,000 million yen (including the new countermeasures projects)

Total budget: 9,650,000 million yen
Total budget: 46,152,900 million yen
Total budget: 281,300 million yen
Total budget: 7,879,200 million yen

Carry-over: 3,008,400 million yen
Carry-over: 13,036,100 million yen
Carry-over: 6,200 million yen
Carry-over: 5,264,000 million yen

Unused: 358,700 million yen
Unused: 539,900 million yen
Unused: 2 million yen
Unused: 700 million yen

Analysis on the implementation status of the whole actual amounts of budget items for which reserve funds were allocated∙ Number of budget items with a carry-over amount larger than or equal to the allocated reserve fund: 9 items in FY2019 / 19 items in FY2020∙ Number of budget items with an unused amount larger than or equal to the allocated reserve fund: 17 items in FY2019 / 3 items in FY2020

Findings
Copyright©2021

For budget items in which the allocated reserve funds accounted for more than half of the actual budget amount (16 items in
FY2019 / 10 items in FY2020), based on the assumption that the budget was executed by prioritizing the use of the allocated reserve
fund, the Board conservatively estimated the amount equivalent to unused amounts related to the allocated reserve funds, and foundthat the number of budget items where there are amounts equivalent to the unused amounts related to the allocated reserve
fund is 7 items in FY2019 (61,100 million yen) and 0 item in FY2020.



Ministries/agencies should provide sufficient information to the public on the large amounts of carry-over and unused
amounts in order to push forward with measures related to COVID-19, ensuring the understanding and cooperation of the people.
Ministries/agencies should analyze the causes of the large amounts of carried-over and unused amounts of the projects related to
COVID-19, make an effort to execute the projects in a timely and appropriate manner, and provide the public with informationon the implementation status of budgets for the projects.

Board of Audit of Japan

Note: The fiscal year in Japan starts on April 1 and ends on March 31 of the following year.

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

11. Execution status of budget, etc. regarding measures for COVID-19(Report on specific matters)

Ministries, agencies in chargeー－

Relations between measures related to COVID-19 and budgets appropriated by the government in FY2019 and FY2020
FY

MeasureContent of measures

Budget related to measures

Emergency Strengthening measures against domestic infections: 6,500 million yen
Response

Strengthening quarantine policies:

Package

Support for Japanese people returning from abroad: 3,000 million yen

1stStrengthening international cooperation, etc.:

15,300 million yen (of which,

3,400 million yen

allocated reserve funds were
10,300 million yen)

1,800 million yen

FYEmergency

2019

Response

Supporting families with children amid tentative closure of schools: 246,300 million yen

Package

Protecting employment and keeping businesses viable:

430,800 million yen (of which,

119,200 million yen

2nd

the measures related to

10,300 million yen

Measures to prevent the spread of infection, build medical care provision systems,
and develop pharmaceuticals:

1,809,600 million yen

Emergency Recovery of economic activities through public and private cooperation: 1,848,100 million yen
Economic

Reserve funds to cope with COVID-19: 1,500,000 million yen

Measures

Enhancing responses of financing: 11,639,000 million yen

Strengthening medical provision systems:

FY

271,400 million yen)

Measures19,490,400 million yen

New2020 support
project
FY2020approved budgets
were used to implement

Reserve funds were allocated:

Protecting employment and keeping businesses viable:

funds as well as the

allocated reserve funds wereEmergency Expansion of exceptional cases such as emergency small loans for individuals, etc.: 10,400 million yen
Deferred payment of national taxes and social insurance premiums

For FY2019, reserve

Of the first supplementary budget in
FY2020, expenses for emergency

COVID-19

For FY2020, part of theeconomic measures were

initial budget, and the25,565,400 million yen

1st to 3rd
supplementary

Reserve funds to cope with COVID-19: 10,000,000 million yen

budgets and reserve

2,989,200 million yen

Expanding temporary subsidies for regional revitalization against COVID-19: 2,000,000 million yen

Of the second supplementary budget

Strengthening responses of sustainability subsidies: 1,939,900 million yen

in FY2020, expenses related to

Establishing rent support benefits: 2,024,100 million yen

COVID-19 control were

Establishing the support fund for the leave forced to be taken under the COVID-19 outbreak (tentative name):

31,817,000 million yen

funds were used to
implement themeasures related to
COVID-19.

171,000 million yen
Promoting structural change and virtuous economic cycle for post-COVID-19 era: 11,676,500 million yen

Comprehensi Measures to prevent the spread of COVID-19:

4,358,100 million yen

ve Economic Ensuring safety and security by promoting disaster prevention/mitigation and national resilience:
Measures

Of the third supplementary budget in
FY2020, expenses related to FY2020
Comprehensive Economic Measures

3,141,400 million yen were 19,176,100 million yen

NewTemporary support fund:supportSpecial benefits for Supporting Families with Children: 217,400 million yen

project

Student support emergency benefits:

A significant part of thebudget wasappropriated for the 5249,000 million yen
Reserve funds were allocated53,100 million yen

measures and the new
support projects

Note 1: For FY2020, only the budget amount for General Accounts is listed.
Note 2: "New support projects" were additionally included in the budget and implemented by ministries and agencies after the Cabinet decision on emergency economic measures.

The Reserve Fund for COVID-19 was established separately from the general reserve fund, to be only used for paying expenses for preventing the spread of COVID-19 and other related
urgent expenses. (see the marking in red. 1,850,000 million yen was reduced in the third supplementary budget.)
Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

21. Execution status of budget, etc. regarding measures for COVID-19(Report on specific matters)

Ministries, agencies in charge－ーAs main financial resources for the 5 measures and the new support projects, supplementary budgets were set and reserve funds were allocated. However,the supplementary budgets and the allocated reserved funds were combined with the initial budgets to be spent in the implementation phase of the measuresand projects. Thus, it is basically not possible to identify financial resources for individual expenses paid to implement the measures and projects.

<<Analysis by the Board>>(1) Ministries and agencies subdivided the 5 measures and the new support projects into projects based on certain conditions, separately from budget items under laws and regulations. In many cases, they
managed the use of budget for each of such projects. The Board identified 854 projects out of those of the 5 measures and the new support projects based on the above management, andanalyzed 770 projects for each of which ministries and agencies managed the use of the budget for the portion related to COVID-19, by the 5 measures and the new support projects, expense
items (See table below), ministries and agencies, and project.

Execution status of budgets by expense items in total from FY2019 thorough FY2020(Unit: projects, million yen, %)NumberExpense itemofLarge category

projects

Measures to prevent COVID-19
Economic and employment
measures301

Total budget

Expended

Carry-overUnusedExecutionamount (A)amount (B)amountbudgetrate (B/A)

9,650,003

6,282,639

3,008,436

358,770

65.1(Reference) Budget execution status by expense item / subcategory (down of the left table)
Selected only subcategory items with a total budget of 1 trillion yen or more.
Partial breakdown of the left table)(Unit: projects, million yen, %)Large
category

296

46,152,950

32,576,855

13,036,100

539,99470.5

141281,389

275,111

6,276

2

97.7

COVID-19

Total

of

budgetprojects

amount (a)121

6,828,941

4,617,856

2,071,125

139,80267.6

30

1,920,174

1,128,254

787,726

4,192

58.7

35

16,985,618

8,107,131

8,865,526

12,96147.7

32

13,244,860

10,078,683

3,058,566

107,61076.0

30

24,236,621

17,626,289

6,257,778

352,55372.7

342,936,426

1,028,100

1,905,884

2,441

35.0

Expendedamount (b)Carry-overUnusedamountbudgetExecution
rate
(b/a)

development of medical provisionsystems, etc.
Expenses related to thedevelopment of pharmaceuticals
and vaccines, etc.

Temporary subsidy forregional revitalization for

3

7,879,208

2,614,470

5,264,026

711

33.1

31

1,464,913

822,475

465,176

177,26156.1

770

65,416,529

42,560,298

21,779,684

1,076,390

65.0

COVID-19
Other
Net total (deducting duplicates
per expense item)

NumberExpenses related to the

Measures toprevent

International cooperation

Subcategories

Expenses related to financial
support measures, etc.
Expenses related to support for
Economic and small and medium-sized
employment
enterprises
measures

Expenses related to people inneed
Expenses related to tourism,

The Board categorized the 5 measures and the new support
projects into expense items for analysis.

cultural and artistic projects, etc.

Significant carry-over and unused amounts(2) For the reserve fund, the Board analyzed the implementation status of the whole actual amounts of budget items for which reserve funds were allocated.
→ Number of budget items with a carry-over amount larger than or equal to the allocated reserve fund: 9 items in FY2019, 19 items in FY2020 / Number of budget items with an unused amount larger
than or equal to the allocated reserve fund: 17 items in FY2019, 3 items in FY2020
For budget items in which the allocated reserve funds accounted for more than half of the actual budget amount (16 items in FY2019 and 10 items in FY2020), based on the assumption that the budget
was executed by prioritizing the use of the allocated reserve fund, the Board conservatively estimated the amounts equivalent to unused amounts related to the allocated reserve funds.
→ Number of budget items with amounts equivalent to unused amounts related to the amounts of the allocated reserve funds: 7 items and 61,100 million yen in FY2019 and 0 items in FY2020

Findings
Ministries and agencies should provide sufficient information to the public on the large amounts of carry-over and unused amounts in order to push forward with measuresrelated to COVID-19, ensuring the understanding and cooperation of the people, and analyze the causes of the carry-over and unused amounts, make an effort to execute theprojects in a timely and appropriate manner, and provide the public with information on the implementation status of budgets for the projects.
Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

32. Financing support for SMEs, etc. in measures related to COVID-19 control(Report on specific matters)

Backgroundof the Audit

Statusof the
Audit








FindingsCopyright©2021

Ministries, agencies in chargeーSince March 2020, in accordance with the government's emergency response measures, etc. Japan Finance Corporation (JFC), Shoko
Chukin Bank (SCB), and Credit Guarantee Corporations (CGC) have been working on projects such as special loans and other loans
to cope with COVID-19, credit guarantee related to effectively interest-free and unsecured loans by private financial
institutions (zero-zero loans), and special interest subsidies as financing support for SMEs that experience temporary declining
performance due to the spread of COVID-19.
For implementing this financing support, the government prepared a large budget, and related ministries and agencies repeatedly called
upon JFC and other institutions to make an effort and other institutions to simplify and accelerate examinations of applications so thatthey can respond quickly to the demand for funds by enterprises.

Financing support provided by JFC and other institutions consisted of 15,540,100 million yen in loans to SMEs, 30,934,600 million yen inpermitted credit guarantees, and 145,100 million yen in interest subsidies.
The government's financial support included loans (financial loan fund: 14,709,200 million yen, investment: 2,726,900 million yen), credit
guarantees, etc. (investment: 1,412,000 million yen, subsidies: 2,039,800 million yen), and interest subsidies (subsidies: 1,849,700 million yen).
Regarding special loans and other loans to cope with COVID-19, the volume of outstanding loans have become larger, and the number of loans
has significantly increased.
In order to expedite decisions on loans, JFC and SCB established temporary relaxation measures to simplify the collection of documents fromloan applicants and to omit on-site investigations for loan applicants' stores as necessary.
There was quite a few number of special loans and other loans to cope with COVID-19, whose first repayment had not been due as of the endof FY2020.
Regarding credit guarantees, when estimating the repayment schedules of the zero-zero loans, 63.4% of the loans will have their first
repayments after FY2021.

JFC and SCB should continue to understand the status of loan applicants efficiently and appropriately, considering that the
number of loans related to special loans and other loans to cope with COVID-19 significantly increased, and that unusual methods andsystems are used for implementing special loans and other loans to cope with COVID-19, such as temporary relaxation measures for
examination procedures which are applied as necessary.
JFC and SCB should continue to understand the status of debtors efficiently and appropriately, considering the fact that there
are quite a few loans that have not started repayments.
The Small and Medium Enterprise Agency (SMEA) should supervise CGC appropriately by receiving reports from CGC in a timely
manner and paying attention to the CGC's work for understanding the status of debtors in cooperation with private financial institutions,considering that there is a substantial amount of zero-zero loans that have not yet started repayments.

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

42. Financing support for SMEs, etc. in measures related to COVID-19 control(Report on specific matters)••

Ministries, agencies in chargeー
Request for simplified / faster screening

Since March 2020, JFC, SCB, CGC, SME Support Japan (SMEJ), and otherinstitutions have provided financing support to SMEs which have experienced
temporary declining performance due to the spread of COVID-19.

Financial loans, funds, and subsidies

The government prepared a large budget and called upon JFC and other institutions
to make an effort to simplify and accelerate examinations of applications so that they
can respond quickly to the demand for funds by enterprises.

JFC
Loan

SMEJ

Credit guarantee

Interest subsidy

15,540,100 million yen

30,934,600 million yen

145,100 million yen

Ministry of
FinanceMHLW

National financial support

Investment

Investment
865,100 million yen

Investment

SMEA

24,200 million yen

Okinawa Development
Finance Corporation

Loans for SMEs / Businessaccounts for supporting
conversion into securities

Subsidy

Copyright©2021

JFC

Interest subsidy

Board of Audit of Japan•(Operation such as
credit insurance)

Investments for special loans and loans
for crisis response by SMEs:

Federation
Fund

CGC
Guarantee charge
subsidy

2,726,900 million yen•

National financial support for credit
guarantees

794,200 million yen

Investments: 1,412,000 million yen

Business accounts for
streamlining crisis responses

Fund

Loans from financing funds such as JFC:
14,709,200 million yen

JFC

Subsidy
794,300 million yen

Interest subsidy
Interest subsidy
3,200 million yen

SMEJ

Investment
1,412,000 million yen

Subsidy
1,245,500 million yen

Business accounts
for the public

Capital337,000 million yen

Ministry of
Finance

JFC

JFC

•

Credit guarantee

Investment

41,600 million yen

Loan

Financial resources for the financial support provided by JFC and other institutions include their own
resources, fiscal loan resources based on Fiscal Investment and Loan Program (FILP) Plan, andinvestment and subsidies from the national government.

Loan
Investment
1,765,000 million yen

Credit guarantee

Special Loans and other loans to cope with COVID-19, credit guarantee related
to effectively interest-free and no collateral loans by private financial institutions(zero-zero loans), special interest subsidies, etc.

Status of investment etc. and flow of financing support

30,900 million yen

CGC

SMEs

Loan

CabinetOfficeFederation

Interest subsidy<Financing support from JFC and other institutions to SMEs>

Status of national
financial support

Privatefinancial
institutions

National government

9 million yen

SMEA
SCB
DBJ

Special interest
Subsidy grant Enterp
rises
75,800 million yen

Subsidies: 2,039,800 million yen

Interest subsidy

Subsidy
1,512,700 million yen

SMEJ
Fund

•

Interest subsidy
grant66,300 million yen

Prefectures

National government's subsidies forinterest subsidies
Loans, etc.: 337,000 million yen
Credit guarantees, etc.: 1,512,700 million yen

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

52. Financing support for SMEs, etc. in measures related to COVID-19 control(Report on specific matters)

Ministries, agencies in chargeーStatus of financing support related to COVID-19 that JFC and other institutions provided to SMEs
The cumulative total of special loans and other loans to cope with COVID-19 provided Status of the repayments Number and proportion of loans that are scheduled for repayments to start after FY2021
by JFC as of the end of March 2021: 15,540,100 million yen (927,567 loans).
JFC's special loans (Micro Business and Individual Unit )518,808 loans (66.8%)
The total amount of outstanding loans have become larger, and the number of loans
There was quite ahas significantly increased.
few number of loans,
JFC's
special
loans
(SME
unit)
34,968loans(75.3%)
Cumulative total up to March
which did not start
Outstanding loans at the2021
Major loan
repayments at theend of 2020 (qty.)
Loans (qty.)
Crisis response loans to SMEs by SCB
25,643 loans (79.3%)
end of FY2020.
JFC's special loans (MicroBusiness and Individual Unit)

8,444,500 million yen(776,332 loans)

7,960,200 million yen(742,237 loans)

JFC's special loans (SME unit)

3,827,200 million yen(46,437 loans)

3,681,500 million yen(47,005 loans)

Crisis response loans by SCB

2,157,000 million yen(32,330 loans)

1,941,700 million yen(30,918 loans)

Status of impact on risk management loans and bad debt reserves
Status of risk management loans and bad debt reserves in JFC and other institutions at the end of FY2020(compared to FY2019)
Risk management loan

Bad debt reserve

Status of measures for simplifying and accelerating examinations

JFC (Micro Business and Individual Unit )510,100 million yen(13,900 million yen reduction)

282,500 million yen(164,700 million yen increase)

In order to expedite decisions on loans, JFC and SCB establishedtemporary relaxation measures to simplify the collection of
documents from loan applicants as necessary and dispatched support
personnel to branches with an increased number of loan applications.

JFC (SME unit)

794,800 million yen(268,700 million yen increase)474,100 million yen(171,800 million yen increase)

SCB

327,200 million yen(9,800 million yen reduction)

180,000 million yen(2,800 million yen increase)

Credit guarantees, etc. by CGC for loans from private financial institutions
Private financial institutions

CGC
Credit guarantee

Findings

•

•
•

Loan

As the number of guarantee applications increased significantly due to the launch of zero-zero loans program, the number of guarantee
acceptances and outstanding balance of guaranteed liabilities significantly increased in FY2020 from the previous fiscal year. When estimating
the repayment schedules of the zero-zero loans based on loan disbursement dates and the deferment periods, there are quite a few zero-zeroloans where repayments did not start at the end of FY2020 (63.4% of the total).

The outstanding balance of guaranteed liabilities, such as credit guarantees by CGC for loans from private financial institutions, also increased. (41,981,600 million yen at the end of FY2020)

JFC and SCB should continue to understand the status of loan applicants efficiently and appropriately, considering that the number of loans
related to special loans and other loans to cope with COVID-19 significantly increased, and that unusual methods and systems are used, such as
temporary relaxation measures for examination procedures which are applied as necessary.
JFC and SCB should continue to understand the status of debtors efficiently and appropriately, considering that there are quite a few loansthat have not started repayments.
SMEA should supervise CGC appropriately by receiving reports from CGC in a timely manner and paying attention to the CGC's work forunderstanding the status of debtors in cooperation with private financial institutions, considering that there is a substantial amount of zero-zero loansthat have not yet started repayments.
Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

63. Implementation of fabric mask distribution project(Report on specific matters)

Ministry of Health, Labour and Welfare (MHLW)
Ministry of Education, Culture, Sports, Science and Technology (MEXT)ー The fabric mask distribution project was
A project in which the national government purchased and distributed reusable fabric masks in bulk to deal with the shortage of masks, based on the"COVID-19 Emergency Response Package" and other measures established by the government after February 2020.
 Fabric mask distribution project classified by distribution target
The Ministry of Health, Labour and Welfare (MHLW): Project for distributing fabric masks to all households in Japan (Distribution project for all households);

Backgroundof the Audit

Project for distributing fabric masks to users and employees of nursing care facilities (Distribution project for nursing care facilities); andProject for distributing fabric masks to pregnant women (Distribution project for pregnant women)
The Ministry of Education, Culture, Sports, Science and Technology (MEXT): Project for distributing fabric masks to students, teachers, and school staff(Distribution project for schools)
 MHLW began distributing fabric masks to pregnant women on April 14, 2020, but MHLW and MEXT suspended fabric mask distribution on around April 16
and April 20 of the same year, respectively, following reports that some of the distributed fabric masks had problems such as dirt being adhered tothem. (Defective product problem) MHLW and MEXT concluded contracts for procurement of fabric masks between March and June 2020 for a total of 44,263.38 million yen(318.11 million masks). All of the contracts were negotiated contracts because of the urgent situation, for securing a large number of masks as early as
possible amid a tight supply.

Statusof theAudit

 MHLW did not prepare the specifications or clarify the size and quality standards of the fabric masks in a document.
MEXT prepared written specifications, only specifying that formaldehyde should be below detection criteria.
 Regarding the defective product problem, MHLW received reports from 635 municipalities that 60,000 (12.5％) out of 490,000 fabric masks distributed topregnant women were defective such as containing hair.
 Because MHLW and MEXT did not specify a measure to take if a defective product is detected in the conclusion of contracts to procure fabricmasks, they had to take ex-post responses.
 MHLW stores a total of 82.72 million fabric masks as inventory as of March 31, 2021.
Storage cost (including delivering cost) from August 2020 to March 2021: 600.96 million yen

 In the future procurements of sanitary goods such as masks, MHLW and MEXT should:

Findings∙ prepare specifications that clearly establish quality criteria and other information based on public standards, even in the emergency; and∙ specify in a contract measures to take if a defective product is detected when concluding the contract.
 MHLW should consider selling and transferring the stored fabric masks while making effective use of them and reducing the storage cost..

Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

7

3. Implementation of fabric mask distribution project(Report on specific matters)

Ministry of Health, Labour and Welfare (MHLW)
Ministry of Education, Culture, Sports, Science and Technology (MEXT)ーOutline of the fabric mask distribution project
Distribution target
Project name Responsible
ministry
Distribution
project for all
households

Distribution
project for
nursing carefacilities

Distribution
project for
pregnant womenDistribution
project forschools

Planned distribution timing

All households in From mid-April to end of
May in 2020
Japan
MHLW

MEXT

Originally planned numberof masks to distribute

2 masks per
address

Distribution method
Direct distribution to households

Users and
employees ofnursing carefacilities

End of March 2020
From April to
September, 2020

1 mask per person Distribution to nursing care facilities
in principle
1 mask every
Nursing care facilities distribute masksmonth per person to their users and employees

Pregnant
women

From April to
September, 2020

Distribution to municipalities in principle
2 masks every
month per person Municipalities distribute masks to pregnant

Students,
teachers, andschool staff

Two times in April and May(or a later month), 2020

1 masks perperson at a time

women

Status of the Audit

Distribution to schools in principle
Schools distribute masks to students,
teachers, and school staff[Average unit price of a mask] (unit: million)[Procurement contract]<MHLW> 17 companies; amount paid: 39,978.49 million yen (287.41 million pieces) Contract
month<MEXT> 3 companies; amount paid: 4,284.88 million yen (30.7 million pieces)

Total amount
paid
(yen)

A

Number of[Average unit
purchased
price of a mask]
masks (pieces)(yen/piece)

B

2020

A/B
141.24

All of the contracts were negotiated contracts because of the urgent situation,
for securing a large number of masks as early as possible amid a tight supply.

March

3,135.55

22.19

April

14,303.35

100.65142.10→ Statistics on production and supply volume of masks for households
showed that the supply and demand for masks were tight at the time.

May

134.04137.62

June

18,447.72
8,376.74

61.22

136.81

Total

44,263.38

318.11139.14

Copyright©2021

Board of Audit of Japan

GradualThis material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

decrease8

3. Implementation of fabric mask distribution project(Report on specific matters)

Ministry of Health, Labour and Welfare (MHLW)
Ministry of Education, Culture, Sports, Science and Technology (MEXT)ーStatus of the Audit (1)Finding (1)[Specifications, etc. concerning the procurement contracts for fabric masks]

MHLW and MEXT should prepare
specifications that clearly
establish quality criteria andother information based on publicstandards, etc., even in theemergency, because sanitary
goods such as masks need to be
procured with clear quality criteria,
etc. for sanitary reasons.

∙ MHLW:
MHLW did not prepare the specifications and clarify the size and quality standards of the fabric masks in adocument.
∙ MEXT:MEXT prepared the specifications, only specifying that formaldehyde should be below detection criteria.
MHLW considered that the size of 9.5 cm × 13.5 cm is appropriate on the basis of samples provided by companies
in advance→Flat-shaped fabric masks are sold mainly for home use, and most of them for adults were 9.5 cm x 13.5 cm in size.

Status of the Audit (2)[Contracts for inspection, etc. after defective products occurred]∙∙ MHLWsuspended distribution and collected the masks following reports from 635 municipalities that
60,000 (12.5%) out of 490,000 fabric masks distributed to pregnant women were defective such as
containing hair.
∙ Separately from the inspection by suppliers, MHLW and MEXT concluded an agreement with
Miyaoka Co., Ltd. for inspection and other work on April 2020 (total cost: 700.75 million yen).
∙ MHLW: 1,680,000 out of 10,890,000 pieces that were not accepted as a good product
MEXT: 8,223 out of 180,000 masks that were not accepted as a good product→ They could not have the suppliers repair and replace the unacceptable masks
at the suppliers’ expense.
∙ Kyowa Co., Ltd. requested both ministries not to pursue defect liability after delivery in the procurement contract
between the ministries and the company.
→ The two ministries accepted the request, saying that they would prefer to procure fabric masks promptly.
→ According to the two ministries, all of the defective masks provided by the company do not fall under latent
defects, and were replaced at the sole expense of the company.
Copyright©2021

Board of Audit of Japan

Finding (2)In concluding a contract, MHLW
and MEXT should specify in thecontract measures to take if a
defective product is detected,
such as having suppliers repair,
replace and take other necessary
measures at the suppliers'
responsibility and expense.

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

93. Implementation of fabric mask distribution project(Report on specific matters)

Ministry of Health, Labour and Welfare (MHLW)
Ministry of Education, Culture, Sports, Science and Technology (MEXT)

Status of the audit (3)ーManagement of goods[Number of procured fabric masks, number of masks in stock, etc.]
Number of masks
Responsible
Project name procured
ministry

Distribution
project for all
households

Number of masks
in stockStatus of distribution and storage

As of March 31 2021

∙ 121.83 million masks were distributed from April 17 to June 20 in 2020

130.04 million

4.05 million ∙ Masks were not distributed to places confirmed to be vacant.
→ 4.05 million masks were stored as stock.
∙ A total of 60.62 million masks were distributed in two installments
between March 26 and May 31 in 2020.

MHLW∙ Batch distribution was stopped in July, based on the opinions from
related organizations around July 2020 that the distribution of masks
was recovering in general.

Distribution
project for
nursing carefacilities
157.36 million∙ A total of 10.49 million masks were distributed to nursing care facilities
that requested them between August 2020 and March 2021.
78.66 million→ Part of the masks were stored as stock because there were few
requests.
∙ 0.49 million masks were distributed in the first distribution (between April
14 and April 30, 2020)∙ In the 2nd to 4th distributions, a total of 6.39 million masks were
distributed in the desired quantity reported from municipalities inprinciple.

Distribution
project for
pregnant
women

MEXT

∙ Goods that cannot be used or
disposed of can be sold after
a decision is made to not use
them
Act on Free Loans and Giftsof State-Owned Articles∙ When transferring daily living
necessaries, medical goods,
sanitary materials, and otherrelief items to disaster victims
or other people who require
first aid, the goods can betransferred to people who are
not the national government.

→ Part of the masks were stored as stock because there were few requests.

Total

287.41 million

82.72 million

Distribution
project forschools

30.70 million

Approx.
0.008million

Finding (3)∙ A total of 30.72 million masks were distributed in two installments on
April 11 and June 15 in 2020.
(Items returned due to unknown addresses were distributed to other schools.)∙ MHLW stored a total of 82.72 million masks as stock(their proportion to a total of 287.41 million masks procured: 28.7%)∙ MHLW's storage cost for the masks in stock(including delivery cost) from August 2020 to March 2021: 600.96 million yen
Copyright©2021

State-Owned Goods
Management Act

Board of Audit of JapanMHLW should consider
selling and transferring
the stored fabric masks
while making effective useof them and reducing thestorage cost.

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

10

4. Provision of employment adjustment subsidies, etc.
(Report on specific matters)

Backgroundof the Audit

Statusof the
Audit







FindingsCopyright©2021

Ministry of Health, Labour and Welfare (MHLW)―In response to workers taking leave, etc., due to the impact of COVID-19, various exceptions such as raising the subsidy rate (10/10
if no dismissals) for employment adjustment subsidies that provide assistance for the equivalent amount of leave allowancepaid by the employer, and easing requirements such as the scale that leave is carried out (special treatments for COVID-19) wereintroduced. Emergency employment stability grant-in-aid (referred to as employment adjustment subsidies, etc., collectively withthe other subsidy) was established to make workers who do not have employment insurance also subject to measures.
Establishment of a leave support grant and benefit system to provide relief for workers who are on leave but who are not paid a leaveallowance
The expenditure on employment adjustment subsidies, etc. was 3,190,441.91 million yen in FY2020
Employment insurance finances were tight due to a decrease in the balance of the employment stability fund and borrowing from reserve
funds for unemployment benefits, as well as large expenditures (961,384.96 million yen) made from General Accounts.
Although the system of the Public Employment Security Office (Hello Work) has been improved to enable retroactive registration of
information related to applications for employment adjustment subsidies, etc., MHLW did not develop a prospect on using the addedfunctions or completing retroactive registration
The following are the risks to be noted in future follow-ups by the Ministry of Health, Labour and Welfare (MHLW)· Situation in which 96.73 million yen in employment adjustment grants, etc. was received fraudulently by people submitting
applications for employment adjustment subsidies, etc. that stated false information, such as by employers falsely claiming tohave an employment relationship with a person when in fact they do not· Situation in which companies were deemed to have received employment adjustment subsidies, etc. by making an adjustment
between the companies so that the same person is eligible for benefits for each of business suspension at multiple companies
within multiple labour bureaus
The amount for employment adjustment subsidies exceeded the amount paid for leave allowance (the excess amount: 1,199.29
million yen), and the excess amount has not aligned with the role of grants for leave allowance
When carrying out the retroactive registration of information on applications for employment adjustment subsidies, etc. with the
Hello Work system, MHLW should appropriately plan and implement it, taking into account costs, time frame, etc.
In examining the appropriateness of employment adjustment subsidies, etc. in the future follow-ups, MHLW should consider sharing
among labour bureaus the knowledge and experience gained in investigating fraudulent cases, and other ways to make use ofthem
MHLW should consider measures to address the situation in which companies were deemed to have received employment
adjustment subsidies, etc., by making an adjustment between the companies so that the same person is eligible for benefits
for each business suspension at multiple companies within multiple labour bureaus
MHLW should improve the calculation method for the employment adjustment subsidy such as by revising the calculation method
for the equivalent amount of the leave allowance, to prevent the employment adjustment subsidy amount from exceeding the amount
paid for leave allowances as far as possible

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

11

4. Provision of employment adjustment subsidies, etc.

Ministry of Health, Labour and Welfare (MHLW)―(Report on specific matters)
Annual expenditure spent (FY2020)

Status of funds for employment adjustment subsidies, etc. and leave support grant and benefit (FY2020)<Assistance for business owners>

税金等
Taxes,
etc.

•

Employment adjustment subsidies: 2,979,769.47 million yen•

Emergency employment stability grant-in-aid: 210,672.43

一般会計（9613億8496万余円）
General
Accounts: Slightly over 961,384.96 million yen

million yen⇒ Employment adjustment subsidies, etc.
(the above two subsidies)繰入れ6918億5644万余円
Transfer:
Slightly over
691,856.44 million yen

Slightly over 210,672.43
2106億7243万余円
million yen

15,000円

3,190,441.91 million yen in total<Assistance for workers>••

11,000円

Leave support grant: 29,650.10 million yen

Leave support benefit: 58,856.07 million yen
8,370円（令和2年7月末までは8,330
円）

General
Accounts
一般会計
Employment
adjustment
subsidies
雇用調整助成金(special
case for
COVID-19)（コロナ特例）【大企業】[Largeenterprises]

Financial resources situation (FY2020)•

Slightly over
588億5607万余円
58,856.07
million yen

一般会計
General
Accounts

General
Accounts
一般会計
Employment
adjustment subsidies
雇用調整助成金(special case for（コロナ特例）COVID-19)【中小企業】[Smalland medium
enterprises]

Leave
support fund
休業支援金
【大企業】
[Large enterprises]

Leave
support fund
休業支援金
[Smalland medium【中小企業】
enterprises]

Large expenses from General Accounts(961,384.96 million yen)•

General
Accounts
一般会計
Emergency
緊急雇用安定助成金
employment stability
Leave休業給付金
support benefit
grant-in-aid

Tight financial conditions of employment insurance

For workers that are
not persons on the left

For holders of employment insurance
2兆3175億6313万余円
2,317,563.13
million yen

Reserve fund forlabor
insurance
労働保険特別会計雇
special accounting
用勘定（失業等給付
employment
account(unemployment等）積立金
benefits,etc.)
Borrowing:1,069,700.00
借入れ 1兆0697億円
million yen
Insurance premiums, etc. split

between business owners and事業主と被保険者で折半しpersons insured
た保険料等

Labor insurance special accounting employment account

労働保険特別会計雇用勘定（雇用保険二事業）(Two projects regarding employment insurance)

Insurance premiums, etc. thatbusiness owners paid
事業主が負担した保険料等

Balance of the employment stability fund

Balance of reserves
4,413,200.00 million yen (end of FY2019) → 2,142,200.00 million yen (end of FY2020)
Copyright©2021

Board of Audit of Japan

Break
down
取崩し

Labor insurance special
accounting employment
労働保険特別会計雇用勘
account
定（雇用保険二事業）(Two projects regarding
雇用安定資金employment insurance)
Employment stability fund

1,389,000.00 million yen (end of FY2019)→ 86,600.00 million yen (end of FY2020)

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

12

4. Provision of employment adjustment subsidies, etc.
(Report on specific matters)

Ministry of Health, Labour and Welfare (MHLW)ーStatus of the Audit•

Follow-ups by MHLW are important to cope with fraudulent cases, etc.

•

The Board audited 49 employers in the jurisdiction of 8 labour bureaus to understand risks that MHLW should note in its future follow-ups.

(3) For employment adjustment subsidies provided for the training of workers, theapplication content was different from confirmation documents in 6,158
out of 30,041 man-days of self-teaching training at home. (1 employer)(1) Five employers illegally received a total of 96.73 million yen of
employment adjustment subsidies, etc. by falsely claiming that:∙ a person had an employment relationship even though he/she did not;∙ an employee was absent from work even though he/she was not; and∙ leave allowance was paid even though it was not.

(4) An adjustment was deemed to be made between companies so that the same
person is eligible for benefits for each business suspension at multiple
companies (See the table)(2) Employment adjustment subsidies, etc. were redundantly

Labour Bureau1

paid for leave by the same worker during the same period.

CompanyaDuplicate
Payment

CompanycLabour Bureau3
CompanydApplication by mailLabour Bureau

Submitted via systems

Workers on leave 1
Workers on leave 2
Workers on leave 3

Workers on leave 1
Workers on leave 2
Workers on leave 3...

EmployeeCompanyb...

Payment

Labour Bureau2

Workers on leave 1
Workers on leave 2
Workers on leave 3

Workers on leave1
Number of leave
hours = 25 hours
in total per day

Findings
 For (1), MHLW should consider sharing among labour bureaus the knowledge and experience gained in investigating fraudulent cases, andother ways to make use them
 For (2), follow-ups should be conducted, taking note of the duplicated payments
 For (3), received training on applications should be thoroughly verified by checking confirmation documents, in the follow-ups.
 For (4), measures to address the situation should be considered.
Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

13

4. Provision of employment adjustment subsidies, etc.
(Report on specific matters)
Retrospective registration of information related to applications for
employment adjustment subsidies, etc. into the system of Public
Employment Security Office (Hello Work)

The following situation occurred due to raising the grant rate under a special treatments for
COVID-19
Employment adjustment subsidy amount > Amount paid for leave allowance(amount equivalent to a leave allowance × grant rate (3/4 to 10/10) × man-days)
The excess percentage for the
daily unit amount of the leaveallowance is 12.8% to 94.3%

Board of Audit of Japan

Amountpaid

Employers

Employers

Workers

Application

MHLW told us that, considering that the number of applications for
employment adjustment subsidies, etc. remained high, a prospect onusing functions added under the improvement contract orcompleting retrospective registration had not been developed.

Copyright©2021

Payment
amountLabour Bureau

Status of retroactive registration (as of July 2021)

When carrying out the retroactive registration of information on
applications for employment adjustment subsidies, etc. with the
Hello Work System, MHLW should appropriately plan andimplement it, taking into account cost, time frame, etc.

ー―Method for calculating the amount of employment adjustment subsidies
Payment amount= amount equivalent to a leave allowance × grant rate
× number of man-days of leave, etc.

• Information related to the applications were entered into the
Hello Work System by using a certain function• In order to promptly provide employment adjustment subsidies,etc. under the special treatments for COVID-19, the informationentered into the Hello Work System was limited• On the other hand, MHLW concluded a system improvement
contract for 98.94 million yen to enable retrospective
registration of items that had not been entered. The
improvement was completed on March 31, 2021.

Findings

Ministry of Health, Labour and Welfare (MHLW)The total excess of 1,199.29 million yen in 37 employers

Findings
The Board found that the amount of employment adjustment subsidies exceeded
the amount paid for leave allowances for some employers due to the special
treatments for COVID-19, and the excess was not aligned with the role of grants
for leave allowances. Therefore, MHLW should improve the calculation
method for the employment adjustment subsidy by revising the calculation
method for the equivalent amount of the leave allowance and other ways,
to prevent the employment adjustment subsidy amount from exceeding theamount paid for leave allowances as far as possible.

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).
.

14

5. Project to stimulate consumption in the service industry(Go To Campaign project) (Report on specific matters)

Ministryof Agriculture, Forestry and Fisheries (MAFF)
4 ministries
Ministry of andTrade of Economy, Trade and Industry (METI)The Small and Medium Enterprise Agency (SMEA)
agencies
Japan
Tourism Agency (JTA）ー The spread of COVID-19 throughout the world since January 2020 has significantly reduced demand for tourism

Background  The government implemented the Go To Campaign project (Travel, Eat, Event, and Shopping District projects) to stimulate consumption
in the tourism/transport, food/beverage, and event/entertainment industries which suffered a significant impact on their sales or profits and toof the Audit
support campaigns to restore activity in shopping streets and other areas.

Statusof theAudit

 Of the actual budget amount of 2,747.00 billion yen for FY2020, the amount spent was 943.10 billion yen (budget use rate: 34.3%). The
government carried forward a significant part of the budget (1,803.90 billion yen) into FY2021 and extended project periods with the viewto resume business operations in the future.
 In its work as a Go To Eat campaign main office, The Ministry of Agriculture, Forestry and Fisheries (MAFF) told us it had concluded contractchanges for 144 Eat projects by the end of March 2021 for consignment contracts with 64 enterprises, but did not prepare written contractchanges for 85 of these projects as of July 2021 when our audit was conducted.
 The 0.40 billion yen difference between the benefit of 621.20 billion yen paid by Japan Tourism Agency (JTA) (project operator) to the Go To
Travel campaign main office (the Travel office) and the benefit of 620.70 billion yen paid by the Travel office to travel agencies and storesdealing with region-specific coupons was still in possession of the Travel office as of September 2021.
 The examinations conducted by JTA and the Travel office revealed that 83 travel products were not eligible for the Travel project (as of June 24,2021). The amount used for region-specific coupons in relation to "no-show" (a guest does not use accommodation without cancelling areservation, whereas using provided coupons on the reservation date) was 21.14 million yen (as of the end of March 2021).
 JTA had no idea on how the cancellation fee-related expenses paid to travel agencies were distributed from the travel agencies tohotels and tourism-related business operators.

Findings

 When resuming the Go To Campaign project in the future, the 4 ministries and agencies should appropriately implement the project while
making sure to endeavor to maximize the effectiveness of each project in relation to its objectives, and accumulate knowledge in preparation for
the implementation of similar projects in the future.
 When implementing similar projects to the Go To Eat campaign, MAFF should review implementation methods and systems for carryingout appropriate and efficient work, considering that the ministry was very busy carrying out the work while its direct control over the entire
project reduced consignment costs.
 Considering that the Travel office is still in possession of the difference between the benefit paid by JTA to the Travel office and the benefit paidby the Travel office to travel agencies and stores supporting region-specific coupons, JTA should establish rules for the treatment ofbenefits in such cases.
 JTA should endeavor to set up appropriate standards for benefits allocated to travel agencies, discount rates for travel fees, andtravel products covered by the Travel project, and to establish a system for the payment of benefits considering cases of illegal use ofregion-specific coupons.
 JTA should verify that the cancellation fee-related expenses paid to travel agencies were appropriately distributed among affected
tourism-related operators.

Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

15

Ministry of Agriculture, Forestry and Fisheries (MAFF)
Ministry of Trade of Economy, Trade and Industry (METI)The Small and Medium Enterprise Agency (SMEA)
Japan Tourism Agency (JTA）ー

5. Project to stimulate consumption in the service industry(Go To Campaign project) (Report on specific matters)
Go To Campaign Project∙ Of the actual budget amount of
2,747.00 billion yen for FY2020,
the amount spent was
943.10 billion yen(budget use rate: 34.3%).
∙ A total of 1,803.90 billion yen was
carried forward to FY2021.

Go To Campaign Project

Budget
use
rate
(%)

Travel project [JTA]

819,120.70 million

34.6

Tourism Industry Joint Proposal Body
(Travel office)19.2%

Eat project [MAFF]

116,885.51 million

46.4

ー

ー

6,728.75 million

5.6

Hakuhodo Inc. (Event office)64.4%

394.70 million

4.8

Hito-Machi-Mirai Shopping District Promotion
Consortium (Shopping District office)8.6%

Events project [METI]
Shopping District project[SMEA]

Subcontractor that oversees entire
projects

Public solicitation of a campaign main office to carry out the Go To Campaign project
When the four projects were planned to be outsourced to one office, the maximum consignment
expense was 309.50 billion yen, which was criticized as expensive.
→ The 4 ministries and agencies decided to select a contractor for each of the projects. As a result,the maximum consignment expense of all the projects turned out to be 292.80 billion yen (16.60
billion yen reduction *)* This is because MAFF did not outsource its project and carried out supervision of
the Eat project by itself.

MAFF% of re-consignment
expenses(as of the end of
March 31 2021)

FY2020 amount
spent
(yen)

Status of the Audit
MAFF told us that it had concluded contractchanges for 144 Eat projects by March 2021
for consignment contracts with 64 enterprises,
but did not prepare written contractchanges for 85 of the 144 projects as of July
2021, saying that it required time for checks
and other work because a large number ofenterprises were involved and contents andnumbers of contract changes varied among
enterprises.

(The number of staff for the Go To Eat Campaign Preparation Office of MAFF
increased from 9 to 20)

Findings
When implementing similar projects to the Eat project in the future, MAFF should review implementation methods and systems forcarrying out appropriate and efficient work, considering that the ministry was very busy carrying out the work due to a large number ofconsignment contracts, etc., while its direct control over the entire project reduced consignment costs.
Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

16

Ministry of Agriculture, Forestry and Fisheries (MAFF)
Ministry of Trade of Economy, Trade and Industry (METI)The Small and Medium Enterprise Agency (SMEA)
Japan Tourism Agency (JTA）ー

5. Project to stimulate consumption in the service industry(Go To Campaign project) (Report on specific matters)
Payment of benefits, etc.

Criteria to clarify the scope of trips to be supported by the Travel project

JTA paid benefits to travel agencies and stores supporting regionspecific coupons via the Travel office∙ Main purpose is sightseeing∙ Value of goods and services included in the travel product does not exceed
standard accommodation rates(Published on October 30, 2020)

Region-specific coupons∙ Electronic coupons can be used before lodging procedures

Status of the Audit
Payment
Travel office

JTA
JTA

621.20billion yen

after 3pm on the date of the stay

Payment

Travel agencies

620.70billion yen

Stores supporting
region-specificcoupons

Difference (0.40 billion yen)
• The Travel office’s possession of the difference is due to the fact that theoffice received benefits on behalf of tourists and accidentally applied for
duplicate benefits for the same trips and received the benefits again.

Status of the Audit• The examinations conducted by JTA and the Travel officerevealed that 83 travel products were not eligible for theTravel project, including those that did not meet the criteria(as of June 24, 2021).

• Any difference which is not expected to be paid to travel agencies andstores supporting region-specific coupons must be promptly resolved.

• Electronic coupons were used on the date of the stay despite
guests not using accommodation without cancelling thereservation (“no show”)(Coupon use amount: 21.14 million yen(as of the end of March 2021))

Findings

Findings

Considering that the Travel office is still in possession of the difference
between the benefit paid by JTA to the Travel office and the benefit paidby the Travel office to travel agencies and stores supporting regionspecific coupons, JTA should establish rules for the treatment ofbenefits in such cases.

Copyright©2021

Board of Audit of Japan

JTA should endeavor to set up appropriate standards andideas for benefits allocated to travel agencies, discount rates
for travel fees, and travel products covered by the Travel
project, and to establish a system for the payment of benefits
considering cases of illegal use of region-specific coupons.

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

17

Ministry of Agriculture, Forestry and Fisheries(MAFF)
4 ministries
andMinistry ofTrade Toof Economy, TradeandIndustry(METI)
5. Projectto stimulate
consumption
the service industry(Go
5. Projectto stimulate
consumption
in the service inindustry
MAFF,
METI,
SMEA,
JTA
agencies
The Small and Medium Enterprise Agency (SMEA)(Go To Campaign
project)(Report on specific matters)ーJapan Tourism Agency (JTA）
Campaign
project)(Identification)ーStatus of accommodation discounts by region and price range(July to December 2020)
The analysis was conducted based on data enteredinto systems regarding the number of guest andtravel cost discounts, which were submitted by theTravel office(as of July 2021).

Figure 1 Number of nights per month

Figure 3 Number of nights by travel destination and by tourist's place of residence
Travel destination(Unit: 10,000 nights)

Tourist's place of residence(Unit: 10,000 nights)(Unit: 10,000 nights)

Saga
Nagasaki

KumamotOitaoMiyazakiKagoshim

Okinawaa

Saga
Nagasaki

KumamotOitaoMiyazakiKagoshim

Okinawaa

Kochi

Fukuoka
Fukuoka

Ehime

Ehime
Kochi

Okayama

Hiroshima
Yamaguc
Tokushimhi
Kagawaa

Nara

Wakayam
Tottoria
Shimane

Osaka
Hyogo

Aichi
Mie
Shiga
Kyoto

Fukui

YamanasNaganohi
Gifu
Shizuoka

Niigataa
ToyamaIshikawa

Kanagaw

Chiba
Tokyo

IbarakiaTochigi
Gunma
Saitama

Dec

Yamagat

Nov

Fukushima

Oct

Sept

Iwate
Miyagi
Akita

Aug

July 2020

number of nights (per month; right)

Hokkaido
Aomorinumber of nights (cumulative total; left)

Figure 2. Distribution of price ranges related to travel expenses
Figure 4 Discount by travel destination and by tourist's place of residence< 5,000 yen

17.00 million nights (22.7%)
27.50 million nights (36.7%)≥ 5,000 yen,
< 10,000 yen≥ 10,000 yen,
< 15,000 yen

4.32 million nights (5.7%)
2.59 million nights (3.4%)
1.51 million nights (2.0%)

Copyright©2021

Board of Audit of Japan

Tokushimhi
Kagawaa

Okayama

Hiroshima
Yamaguc

Wakayam
Tottoria
Shimane

Hyogo
Nara

Kyoto
Osaka

Aichi
Mie
Shiga

Gifu
Shizuoka

ToyamaIshikawa
Fukui
YamanasNaganohi

Niigataa

Kanagaw

Chiba

Tokyo

Yamagat

Fukushima
IbarakiaTochigi
Gunma
Saitama(Note) Data include items that have not yet been paid by the Travel office to travel agencies, and do not include
items that are under scrutiny of their content (Figures 1 to 4). Number of nights in each month is calculatedusing the month to which the start date of a trip belongs (Figure 1). Percentages in the parentheses arepercentages of the total (Figures 2 to 4). For trips to multiple prefectures, the destination is a prefecture towhich the first night's accommodation belongs, and for trips with more than one person, the tourist's placeof residence is the place of residence of the representative of the group (Figures 3 and 4)

Iwate
MiyagiAkita

2.34 million nights (3.1%)

Hokkaido
Aomori≥ 35,000 yen

Tourist's place of residence

7.64 million nights (10.2%)≥ 20,000 yen,
< 25,000 yen≥ 30,000 yen,
< 35,000 yen

Travel destination

11.82 million nights (15.8%)≥ 15,000 yen,
< 20,000 yen≥ 25,000 yen,
< 30,000 yen(Unit: 100 million yen)This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

18

Ministry of Agriculture, Forestry and Fisheries (MAFF)
Ministry of Trade of Economy,Tradeand andIndustry(METI)
MAFF,
METI,
SMEA,
JTA
4 ministries
agencies
The Small and Medium Enterprise Agency (SMEA)
ーJapan Tourism Agency (JTA）

5. Project to stimulate consumption in the service industry(Go To Campaign project) (Report on specific matters)ーAllocation of cancellation fee-related expenses among
tourism-related business operators

Status of the Audit• Under the suspension measures for travel in the 5 cities,
and in the entire country during the New Year holidays andduring the state of emergency, the cancellation feerelated expenses paid by the Travel office to travel
agencies between February and July of 2021 was
115.70 billion yen.

JTA had no idea of how the cancellation fee-related expenses(115.70 billion yen) paid to travel agencies were distributed
from the travel agencies to hotels and tourism-related business
operators.

• JTA thought that the cancellation fee-related expenses
should be fairly distributed among all affected tourismrelated business operators, and requested travel
agencies to fairly distribute the expenses to accommodationand other operators.

• JTA had paid the Travel office 11.50 billion yen by theend of March 2021 as cancellation fee-related office
expenses with the amount equivalent to administrative
expenses for adjustments of business operators involved in
distribution.
The Travel office had paid 8.10 billion yen to travel
agencies by July 2021 as cancellation fee-related
administrative expenses.

The Travel officeConsignment expenses

Cancellation fee-related
expenses and cancellation
fee-related office expenses

Travel agencies

JTA
JTA

No clue?

・・・・
Allocation ofcancellation feerelated expenses

Hotels and tourism-related operators

・・・・

Findings
JTA should verify the cancellation fee-related expenses paid to travel agencies were appropriately distributed among
affected tourism-related operators, because they should be fairly distributed and cancellation fee-related office expenses fortravel agencies’ distribution work were paid.

Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

19

6. Implementation of the sustainability subsidy project(Report on specific matters)

Ministry of Trade of Economy, Trade and Industry (METI)The Small and Medium Enterprise Agency (SMEA)ー In FY2020, the Small and Medium Enterprise Agency (SMEA) provided SMEs which were heavily affected by the spread of COVID-19 withsustainability subsidies that can be widely used for general operations in order to support the continuation of business.
 SMEA held a bidding by open tender for administrative work necessary for granting the subsidy using a scoring auction and in April 2020, it
concluded the contract for the entrustment of business with the Service Design Engineering Council (SDEC) for 76,902.08 million yen(subsidy administrative project 1).
Background  According to The Ministry of Economy, Trade and Industry (METI)'s guideline on the contract for the entrustment of business, hearing
opinions from multiple private enterprises before an invitation to bidding (solicitation process) is considered very important.
of the Audit According to the guideline on the contract for the entrustment of business, in the event that a contractor recommissions the work contracted by
the national government, the contractor shall provide the name of the low-tier subcontractor in a written paper and obtain approval when
considered appropriate. The procedure is also applicable for the commission of subsidy administrative projects.
 According to the guideline on the contract for the entrustment of business, planning and management work cannot be recommissioned,
and if the ratio of the recommission cost exceeds 50%, the reason must be checked at the time of concluding the contract.

Status of
the Audit

 SMEA had granted 5,514,742.97 million yen for 4.23 million cases by the end of March 2021. It took within 2 weeks from application to
payment for 2.89 million cases (68.4% of total) and over 2 weeks for 1.33 million cases (31.6%).
 SMEA did not record the details of communications with some private enterprises to solicit their opinions before bidding for thesubsidy project 1. SMEA only requested Service Design Engineering Council (SDEC) and one entity for the solicitation process, andonly one another private enterprise who requested SMEA for the process.
 The proportion of the recommission expenses to the total commission amount was 99.8% when concluding the contract for subsidy
project 1, which was significantly higher than others, but SMEA did not specify in a written document what kind of work wasconsidered planning and management that could not be recommissioned, and the Board was not able to examine details of
consideration by SMEA regarding the necessity of the recommission since there were not related records. The total number ofenterprises that participated in the project was 723, including ninth-tier subcontractors for the recommission.
 SMEA had identified 591 cases (a total of 589.58 million yen of benefits) as illegal receipts by September 2021, but all or part of illegallyreceived subsidies in 222 cases was not returned to the national treasury as of September 2021 (221.08 million yen).

Findings

 In the event of a solicitation process with a particular private enterprise, etc., METI, including SMEA, should record the communications
in detail to avoid any doubt that fair competition is hindered. METI also should consider making business outlines public in advance andother systems to ensure that entities other than private enterprises for whose opinions METI solicits will get the same information as well.
 When concluding a contract, METI should define the range of operations whose recommissions are prohibited and check whether acontracted party is not attempting to recommission such operations. If the proportion of the recommission cost is expected to besignificantly high, METI should carry out a process for approving the recommission, and record the results of the process. METI also
should endeavor to ensure that the main operations will be implemented only by project participants whom the contractor (national
government) can easily manage.
 METI should demand illegal recipients to return money that has not been paid to the national treasury. METI also should endeavor toprevent inappropriate receipts from being overlooked, by speeding up work for identifying unauthorized recipients and other measures..

Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

20

6. Implementation of the sustainability subsidy project(Report on specific matters)

Ministry of Trade of Economy, Trade and Industry (METI)The Small and Medium Enterprise Agency (SMEA)ーOutline of subsidy administrative project 1, and the status of payment, etc. of the sustainability subsidy(as of the end of March 2021)● Outline of subsidy administrative project 1● Number and amount of subsidy payments: 4.23 million payments; 5,514,742.97 million yen

Contract amount: 76,920.80 million yen
Contracting party: Service Design Engineering Council (SDEC)● Period from application to payment: within 2 weeks: 2.89 million cases (68.4% of total payments)
Over 2 weeks: 1.33 million cases (31.6% of total payments)

Status of the solicitation process subsidy administrative project 1

Status of the return of unauthorized receipts (as of the end of Sept 2021)● Guideline on the contract for the entrustment of business:hearing opinions from multiple parties is important.

(Unit: cases; thousand yen)
Date
Item

SDEC and one other entity

No detailed recordsof transactions(1) Cumulative number of identified
unauthorized receipts

METI

Private enterpriseJune 2020: A "study group on the procurement, etc." was established, consistingof external experts.
In a report compiled by the study group in January 2021, it suggested
that more fairness and transparency be ensured in a solicitation
process for a contract of over 1,000 million yen.
➔Following the report, guidelines and other documents were revisedin January 2021.

30

End ofJuly

12,00028,00011

13

6

11,00013,0006,000(5) Number of cases in (3) whererecipient names were disclosed

-

-

2

5

(6) Benefit amount related to (5)

-

-

2,000

5,000

(4) Benefit amount related to (3)Only one applicant

End ofJune

End ofMay

28(3) Number of unreturned benefits in (1)SMEA

End ofApril

12(2) Payments related to (1)Solicitation
process

End ofMarch 2021

130

30,000 129,888

59

252

End ofAugustEnd of
September

390

591

251,626 390,168 589,586
118

58,888 117,726

134

222

133,530 221,082
13

31

5,000 12,988

30,9885

Number and amount of identified unauthorized receipts: 591 cases, 589.58 million yen
Number and amount of unauthorized benefits that were not returned to the nationaltreasury:
222 cases, 221.08 million yen

Findings

Findings

In the event of a solicitation process with a particular private
enterprise, etc., METI, including SMEA, should record thecommunications in detail to avoid any doubt that fair competition is being
hindered. METI also should make business outlines public in advanceand other systems to ensure that entities other than private enterprises
for whose opinions METI solicits will get the same information as well.

METI should demand illegal recipients to return money that has notbeen paid to the national treasury. METI also should endeavor to prevent
inappropriate receipts from being overlooked, by speeding up work for
identifying unauthorized recipients and other measures.

Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

21

Ministry of Trade of Economy, Trade and Industry (METI)The Small and Medium Enterprise Agency (SMEA)

6. Implementation of the sustainability subsidy project(Report on specific matters)ー

Final implementation system

Status of the proportion of the recommission expenses to the total commission
amount and implementation system for subsidy administrative project 1

Recommission procedures for commissioned projects
SDEC
1st tier (2)Guide for recommission contracts

Dentsu Works Inc.

Recommissioned
party

ConsignRe-consign
Recommissioned
party

Total of 723 project participants Hierarchy
includes up to ninth-tier recommissioned
party(Work related to transfer of subsidies)

Second-tier recommissioned party

Dentsu ＊(Subsidy payment work)● Planning and management cannot be recommissioned● If the percentage of a recommission cost is more than one-half, the reason for
the recommissioning must be explained to the recommissioned party.

3rd tier(37 in total)

Dentsu Live ＊Pasona Inc.＊

2

Dai Nippon
Printing Co,
Ltd. ＊

1(Subsidy payment work)

Proportion of therecommission cost: 99.8%
Very highWhile the proportion of the recommission
cost is well above 50% (standard value),
SMEA did not specify what kind of work
was considered planning andmanagement that could berecommissioned, and the Board was notable to examine details of consideration
by SMEA regarding the necessity of therecommission, since it there were notrelated records.

Average proportion of the recommission cost: 54.6%(Other 61 projects by METI)

5th tier

6th tier

7th tier

8th tier

9th tier(120 in total) (239 in total) (244 in total) (73 in total) (3 in total) (1 in total)

Transcosmos
Inc. ＊

Status of the proportion of the recommission cost to the total commission amountContract amount: 76,920.80 million yen
Recommission amount: 76,713.91 million yen

4th tier

2nd tier(4 in total)

DentsuTEC Inc.
(Public relations)TOW Co,.
Ltd. ＊

10

46

155

59

2

20

102

193

89

14

1

Dai Nippon
Printing Co.,
Ltd. ＊

2

1

8
Dentsu Digital
4
Inc.
(Website production, public relations)

3

Information Services
International-Dentsu, Ltd. ＊(System construction work)

Note: Project participants who are employees or members of the Service Design Engineering
Council (SDEC) are marked with "＊".

Findings
When concluding a contract, METI should define the range of operations whose recommissions are prohibited and check whether acontracted party is not attempting to recommission such operations. If the proportion of the recommission cost is expected to be significantly
high, METI should carry out a process for approving the recommission, and record the results of the process. METI also should endeavor to ensurethat main operations will be implemented only by project participants whom the contractor (national government) can easily manage.
Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

22

7. Implementation of a support policy package for airlines and airport-related companies
and the status regarding revenue of airport improvement account and the income ofthree airport companies (Report on specific matters)

Ministry of Land, Infrastructure, Transport andTourism (MLIT), 3 international airport companies－

Backgroundof Audit Since the demand for aviation significantly decreased due to the impact of COVID-19, there is a severe financial condition regarding
airline companies
 The Ministry of Land, Infrastructure and Transport (MILT) compiled a variety of support measures in the "Support measure package formanagement base reinforcement of airlines/airports in COVID-19 era" in October, 2020, in order to reinforce a management base forairline/airport-related companies and to maintain the aviation network by supporting activities such as improving the fiscal balance ofairline/airport-related companies (revised in December 2020).
 In case that the demand for aviation decreases significantly, it will have a significant impact on the amount of revenue of the Special Accountfor Motor Vehicles Safety (Airport improvement account) and the operating profit of the three airport companies (Narita International Airport
Corporation, New Kansai International Airport Co., Ltd., and Central Japan International Airport Co., Ltd.).

Statusof Audit In order to maintain the aviation network, MLIT reviewed the requests received from the 3 airport companies and the Scheduled Airlines
Association of Japan and carried out consultations/coordination with the three airport companies and business operators of a concession
system of airports. Following this, MLIT implemented various support measures, compiled as a support measure package.
 The three airport companies also determined and implemented support measures in order to reduce the cost burden on airline
companies and business operators in airports, etc.
 The settlement account for airport fee income, etc., in the revenue of airport improvement account in FY2020 significantly decreased
compared to the initial budget.
 The decreased amount in revenue was 186.10 billion yen (the reduction amount for landing and parking charges was 4.20 billion yen,estimated by the Board). The amount not received in FY2020 revenue, totaling the decreased revenue and FY2020 payment deferrals, is296.90 billion yen.
 In the airport improvement account, an approximate reduction of 10 billion yen in financial resources is expected to occur annually fromFY2025 to FY2036 due to the redemption of 117.8 billion yen of debt from fiscal investment and loan program (FILP). If the impact of COVID19 continues in the future, the fiscal balance may vary greatly depending on the income of airport fees, etc.
 The settlement amount of operating profit of the three airport companies in FY 2020 has decreased significantly compared to therevenue and expenditure budget.
 The decrease in operating profit: 85.00 billion yen (of which, the reduction in operating profits due to the support measures for airline
companies, etc. was 8.60 billion yen) for Narita International Airport Corporation, 52.80 billion yen (0.80 billion yen) for Central Japan
International Airport Co., Ltd. was, and 3.50 billion yen for New Kansai International Airport Co., Ltd.
 The three airport companies have issued FILP agency bonds, which is funds for their operation such as business expenses, and they are underthe burden of redemption and interest payments. Narita International Airport Corporation and Central Japan International Airport Co., Ltd. havedecided to continue to support airline companies, etc. in the event that COVID-19 continues to have an impact in the future. Thus, the fiscal
balance in future may continue to remain in a severe situation.

Findings

 In order to maintain the airline network, MLIT and the 3 airport companies should continue to pay close attention to the trends regarding
the demand for aviation, and when implementing support measures for airlines and airport-related companies, should provide clear
explanations to the public, in light of the fact that these measures temporarily accompany a reduction in revenue of the airport improvement
account, and take note of the influence of the support measures on the airport improvement account and operating profit, etc. of thethree airport companies.

Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

23

7. Implementation of a support policy package for airlines and airport-related companies
and the status regarding revenue of airport improvement account and the income ofthree airport companies (Report on specific matters)○ Implementation of the support measure package●Support measures related to revenue of airport
improvement accountMinistry of Land, Infrastructure, Transport andTourism (MLIT ), 3 international airport companies－-

With regard to the landing charge at national airports(excluding concession airports), on the premise that thecollection system shall be revised from the system based
mainly on aircraft weight to a system based on airline’s
passenger numbers in March, 2021, a uniform reduction of
45% was implemented for landing and parking charges ofdomestic passenger flights from August, 2020 to February,
2021, in order to obtain the same reduction effect (estimated5.50 billion yen) as the revised collection system.

-

For FY2021, reductions/exemptions for landing charges,
parking charges, navigation assistance facility charges andthe aviation fuel tax for a total 120.00 billion yen was
implemented.

-

The due date of payment of airport fees for all international anddomestic airlines from August, 2020 to January, 2021, wasextended from the one set within 20 days after the issuance of thewritten payment notice that is issued approximately two months
after the month of operation, to approximately one year after
the issuance of the written payment notice.

Reduced/exempted amount of landing and parking charges
Reduction/exemption of landing charges, parking charges, navigation assistance facility
charges and aviation fuel tax
Payment deferral of airport fees

Payment deferral of the installment amount for operating right consideration, etc.
Approval of no dividend payment for Narita International Airport Corporation
Payment deferral of the use fee for administrative assets at airports, etc.

● Support measures related to expenditure of
airport improvement account
Loan without interest for the business operators of concession airports (*)
Loan without interest for Narita International Airport Corporation● Support measures related to the three
airport companies
Approval of no dividend payment for the Narita International Airport Corporation (see above)
Loan without interest for Narita International Airport Corporation (see above)
Authorization of advanced issuance of government-guaranteed bonds for Central Japan
International Airport Co., Ltd.
Authorization of issuance of government-guaranteed bonds for Central Japan International
Airport Co., Ltd..
Use of fiscal loan fund at New Kansai International Airport Co., Ltd.

● Other support measures
Extension of airport operation business period at concession airports (*)
Mitigation of major performance obligations under the operation contract at concession airports (*)
Early purchase of a facility for reinforcing disaster prevention functions by New KansaiInternational Airport Co., Ltd..
Copyright©2021

Board of Audit of Japan* Concession airport- Airports that have introduced a concession system (a system
where an operation contract is concluded between the national
government, etc. and a private business operator, with the said
private business operator acting as the operating right holder,
integrating the management of air transportation business
related to airport operation (excluding air traffic control service)and non-air transportation business related to terminalbuildings, etc.).

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

24

7. Implementation of a support policy package for airlines and airport-related companies
and the status regarding revenue of airport improvement account and the income ofthree airport companies (Report on specific matters)○ Decreased revenue in airport improvement account(FY2020) (Unit: million yen, %)FY2020 initial Determinedcollection amountbudgetin FY2020
amount-Ministry of Land, Infrastructure, Transport andTourism (MLIT ), 3 international airport companies－

FY2020 settlement amounts for "(Item) Airport fee income" and"(Item) Receipt from General Accounts" decreased significantly

settlement amountAmount ofdecreased
revenue
(A-B)

A

B

C

(Clause) Airport fee income

249,874

85,753

164,12165.7(Item) Income from landing
charges, etc.
(Item) Income from navigation
assistance facility charges(Clause) Receipt from
General Accounts

88,184

21,887

66,29775.2

and parking charges from August, 2020 to January, 2021

161,689

63,86597,82360.5

was 4.20 billion yen (estimated by the Board).

54,661

32,661

22,00040.2

304,535

118,414

AA186,121

61.1

Revenue items

Total

Percentage

compared to the FY2020 initial budget amounts(C/A)(Decrease in revenue: 186.10 billion yen). A-○ Amount of revenue not received in FY2020 (Unit: million yen)Amount ofdecreased
revenue

Revenue
items

C

Reduction/
exemptionamountAmount of decreased
revenue due todecreased demand
for aviation

F(Clause) Airport fee income

G

FY2020
Paymentdeferralamount, etc.

Amount ofrevenue notreceived in
FY2020

(C+H)

H

I

164,121

4,232

159,889

45,058209,179

66,297

4,232

62,065

10,562

76,86097,823-

97,82334,496132,319

22,000-22,00021,00043,000186,121

4,232

181,889

66,058252,179(Clause) Dividend income

7,534

7,534

(Clause) Miscellaneous income (part)

37,27337,273(Item) Land and water surface rent

17,46817,468(Item) Building and object rent

1,829

1,829

(Item) Income for consideration of operatingrights regarding public facilities, etc.

17,976

17,976

Total

44,80744,807(Item) Income from landing
charges, etc.
(Item) Income from navigation
assistance facility charges(Clause) Receipt from General
Accounts

Total

Total

Copyright©2021

AA 186,121
Board of Audit of Japan

4,232

181,889

B
B 110,866 C
C 296,987

Of 186.10 billion yen, the reduction/exemption amount for landing- Because the due date of payment of airport fees, etc. was extended
from FY2020 to FY2021 and beyond, a temporary decrease
occurred due to the amount not received within FY 2020 for
revenue of the airport improvement account.
(FY2020 Payment deferral amount, etc.: 110.80 billion yen) B

Amount of revenue that was considered notreceived in FY2020, mainly due to the impact
of COVID-19

Total

C

296.90 billion yen

In addition, in the FY2021 budget for the airport improvement
account, 117.80 billion yen will be borrowed from a fiscal
investment and loan program (FILP), and it is estimated that a newinterest burden will occur.
In the airport improvement account, an approximate reduction of
10 billion yen per year in financial resources is expected to occur
annually from FY2025 to FY2036 due to the redemption of the debt
from FILP.

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

25

7. Implementation of a support policy package for airlines and airport-related companies
and the status regarding revenue of airport improvement account and the income ofthree airport companies (Report on specific matters)

Ministry of Land, Infrastructure, Transport and－Tourism (MLIT ), 3 international airport companies－* Decrease in operating profit amount ･･･
Calculation is made by comparing the non-consolidated revenue and expenditure budget in the project plan with the operating profit in the non-consolidated settlement amount.

○ Decrease in operating profit for Narita International Airport Corporation (FY2020) Decrease in operating profit: 85,000.00 million yen(Unit: million yen)
- Landing charges, parking charges, building rents, business
Decreaseinoperation
profitAmount in the
Balance
operation fees, etc. were discounted/exempted as support
Items
amount (reduction rate)
settlement
Decrease in operation
Amount forbudgetprofit amount due tosupportaccount
measures for airline companies, etc. (support measures amount:measures taken decreased demand for(C)=(A)-(B)(A)(B)
aviationby company
8,600.00 million yen)
Airport fee income
Income from passenger
facility fees
Income from oil service
facility fees

33,90820,48013,428(39.6%)

2,115

11,31335,093

2,036

33,057(94.2%)-

33,057

12,256

6,953

5,302

(43.3%)-

5,302

Other income

68,81135,541

33,270(48.3%)

6,493

26,776

Total (operation profit)

150,070

65,01285,058(56.7%)

8,608

76,449- In FY2020, corporate bonds were issued to additionally raise
17,000.00 million yen due to the impact of COVID-19.
- The Corporation will be burdened with a total 1,100.00 million yen ininterest from FY2021 to FY2040 (maturity).

○ Decrease in operating profit for Central Japan International Airport Co., Ltd. (FY2020) Decrease in operating profit: 52,800.00 million yen(Unit: million yen)
Items

Balancebudget(A)

Facility fee income

Amount in thesettlement
account

Decrease in operation profit
amount (reduction rate)(B)(C)=(A)-(B)Amount for support
measures taken bycompany

Decrease in operation
profit amount due todecreased demand foraviation

37,864

13,28824,575(64.9%)

882

23,692Other sales

27,331
2,483

1,014
554

26,316
1,928(96.3%)(77.6%)-

26,316
1,928

Total (operation profit)

67,67814,85852,819(78.0%)

882

51,936

Sales amount of the
product- Building rents and business operation fees, etc. werediscounted/exempted as support measures for airline companies, etc.
(support measures amount: 800.00 million yen)
- In FY2020, FILP agency bonds were issued to additionally raise
19,500.00 million yen due to the impact of COVID-19.
- The Company will be burdened with a total 200.00 million yen ininterest from FY2021 to FY2030 (maturity)○ Decrease in operating profit for New Kansai International Airport Co., Ltd. (FY2020) Decrease in operating profit: 3,500.00 million yen(Unit: million yen)

Items

Airport business operation
profitRailway business operation
profitTotal (operation profit)

BalancebudgetAmount in thesettlement
account(A)(B)

61,22759,2202,006(3.3%)

-

2,006

4,371

2,847

1,523

(34.9%)-

1,523

65,59862,0683,529(5.4%)-

3,529

Decrease in operation profit
amount (reduction rate)
Amount for

Decrease in operation
supportprofit amount due tomeasures taken decreased demand forby company
aviation(C)=(A)-(B)- Kansai and Osaka International Airports are operated by aconcession system. New Kansai International Airport Co., Ltd. did
not implement support measures such as discounts/exemptions
for landing fees, so there was no support measures amount.
- In FY2020, no fund was raised in order to compensate for the
reduced income due to the impact of COVID-19.

Findings In order to maintain the airline network, MLIT and the three airport companies should continue to pay close attention to the trends regarding
demand for aviation, and when implementing support measures for airlines and airport-related companies, should provide clear explanations
to the public, in light of the fact that these measures temporarily accompany a reduction in revenue of the airport improvement account, and take noteof the influence of the support measures on the airport improvement account and operating profit, etc. of the three airport companies.
Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

26

8. Method of managing funds for overseas Supply Chain (SC)contributions, etc. (Measures taken)

Ministry of Economy, Trade and Industry (METI)
512.54 million yen (Improper amount)

Outline ofOverseas
SC
Project

 With the spread of COVID-19, the vulnerability in Japan's supply chain has become apparent.
→ The Ministry of Economy, Trade and Industry (METI) contributed a total of 35,166.37 million yen as an AEM-METI
Economic and Industrial Cooperation Contribution (overseas SC contribution) to the AEM-METI Economic andIndustrial Cooperation Committee Secretariat (AMEICC Secretariat) in FY2020, for the purpose of supply chain
enforcement through diversifying production, etc. especially in the Asia area.
 METI requested the AMEICC Secretariat to implement subsidy projects, etc. by introducing facilities, etc. to help diversify
overseas supply chains (overseas SC projects). METI also instructed the AMEICC Secretariat and the Association for
Overseas Technical Cooperation and Sustainable Partnerships (AOTS) who manages contributions from METI, etc. on behalfof the AMEICC Secretariat to have a trust-based fund management in order to assure fund security and firm fundmanagement, and to prioritize fund security and not to carry out fund investments.
 AOTS has established funds and commissioned the business of the review and selection of overseas SC projects anddecision of the amount of subsidies to the Japan External Trade Organization (JETRO), and concluded a trust contract forfund management with a Japanese trustee bank (trust bank). The trust fund is divided into a fund for subsidies to be paid,
and a fund for the payment of a trust remuneration to the trust bank, etc., and cannot be used for any other purposes.

Audit
Results

 With regard to subsidy projects for domestic supply chain diversification (domestic SC projects), METI did not restrict thefund management method to a trust-based fund management. As the result, the fund was managed by an alternative method
which is not a trust.
→ There was no payment of management expenses for managing funds to financial institutions, such as trust
remuneration in overseas SC projects
 In overseas SC projects, the overseas SC contribution amount is large and significantly exceeds the total amount of AOTS
assets. Therefore, METI told us that the fund management method is restricted to a trust-based fund management
assuming that AOTS’s bankruptcy or financial institution’s insolvency, etc. may occur.
→ Considering that the funds are managed by a Japanese financial institution that is subject to the Banking Act, etc., for the
purpose of which is to protect depositors, etc., and METI itself can select the legal entity where the fund is established, itcannot be considered that trust-based fund management was the only possible measures to mitigate risks.
 From these results, it cannot be considered appropriate that in overseas SC projects, a fund (512.54 million yen) was
separated in advance for the payment of trust remuneration to a trust bank, and said fund was not able to be allocatedto granting subsidies, which is the operating expense of overseas SC projects

MeasuresTaken

 In June 2021, METI issued instructions to the AMEICC Secretariat and AOTS on overseas SC contribution, etc., to proceedwith the necessary procedures to terminate the trust contract by the end of July 2021, and also to proceed with thenecessary procedures to transfer the balance of the trust fund to the account of deposits newly opened by AOTS.
→ AOTS changed its fund management method for overseas SC contribution, etc. in July 2021 in accordance with the
instruction of METI.

Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

27

8. Method of managing funds for overseas Supply Chain (SC)contributions, etc. (Measures taken)

Ministry of Economy, Trade and Industry (METI)
512.54 million yen (Improper amount)

Outline of overseas SC project

Audit Results

Ministry of Economy, Trade and Industry- METI provided the AEM-METI Economic and Industrial Cooperation Contribution (Overseas SC
Contribution) for the purpose of supply chain enforcement through diversifying production, etc. in
Asia area- METI requested the AMEICC Secretariat to implement subsidy projects, etc. introducing facilities, etc. tohelp diversify overseas supply chains (overseas SC projects).

Request forcontribution/ execution
Instruction for thefund management
methodAEM-METI Economic and Industrial
Cooperation Committee
AMEICC Secretariat

Payment
instructions Trustee bank (trust bank)(Note 1)

(In AOTS Bangkok Office)Payment based on
instruction

Fund management
Request related to implementationof overseas SC project(Breakdown of payment,by purpose etc. of 35.10 billion yen)
Instruction for the fundmanagement method
Remittance ofoverseas SC
contribution
35.10 billion yen

AOTS(Note 2)Fund building
35.10 billion yen

Trustagreement
35.10
billion yen

Guidance/ advice, etc.

31.90 billion yen
0.075 billion yen
2.60 billion yen

Trustee bank

0.50 billion yen

Payments
related tosubsidy

Review of subsidy
project Consignment
agreement related towork such as selection
Reports/ consultations, etc.

Subsidy
AOTS
JETRO

JETRO

(Note 3)

Application

Public offer

Selection

Approval

Business
operator

There was no payment of management
expenses to financial institutions, such astrust remuneration in overseas SC
projects- In overseas SC projects, the overseas SC
contribution amount is large and significantly
exceeds the total amount of AOTS assets.
Therefore, the fund management method isrestricted to a trust-based fundmanagement assuming that AOTS’s
bankruptcy or financial institution’s
insolvency, etc. may occur.

(ASEAN member countries, etc.)

Remittance

Grant agreement(In Japan)(Note 1) AMEICC is a AEM-METI Economic and Industrial Cooperation Committee(Note 2) AOTS is an Association for Overseas Technical Cooperation and Sustainable Partnerships(Note 3) JETRO is a Japan External Trade Organization- With regard to subsidy projects for domestic
supply chain diversification implemented by
METI (domestic SC projects), the fund ismanaged by the method other than a trustbased management.

Overseassubsidiaries, etc.
of business
operator
Introduction offacilities, etc.

Since the funds are managed by aJapanese financial institution that is subject
to the Banking Act, etc., whose purpose is toprotect depositors, etc., and METI itself canselect the entity where the fund isestablished, it cannot be considered that atrust-based fund management was the
only possible measures to mitigate risks.

Measures Taken In June 2021, METI issued instructions to the AMEICC Secretariat and AOTS on overseas SC contributions, etc., to proceed with thenecessary procedures to terminate the trust contract by the end of July 2021, and also to proceed with the necessary procedures to transfer the balanceof the trust fund to the account of deposits newly opened by AOTS.
AOTS changed its fund management method for overseas SC contributions, etc. in July 2021 in accordance with the instruction of METI.
Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

28

9. Development and maintenance of COVID-19 Contact-Confirming
Application (COCOA) (Demand for measures)

Ministry of Health, Labour and Welfare (MHLW)
380.88 million yen (Background amount)

Outlineof
COCOA

 The introduction of the COVID-19 Contact-Confirming Application (COCOA) for smartphones was considered as an effective tool
for measures against COVID-19, and the Ministry of Health, Labour and Welfare (MHLW) has implemented its development andsubsequent maintenance.
 The contract related to the development and maintenance, etc. of the “Health Center Real-time Information-sharing System on
COVID-19” (HER-SYS) which MHLW concluded with Persol Process & Technology Co., Ltd. (Persol Co., Ltd.) was modified toinclude the business service for the development/maintenance, etc. of COCOA (COCOA business service).
 According to the above contract, even after a delivered product has been validated in the delivery inspection and is received, if
MHLW recognizes that the delivered product does not conform to the conditions of the contract and notifies the said matter to
Persol Co., Ltd. within one year, MHLW may choose either to have Persol Co., Ltd repair the delivered product at its
responsibility and expense or immediately discount its price.
 The main function of COCOA is to notify if a user (contact-confirmed person) has been in continuous close contact(approx. 1 m or less) with a person who has tested positive for COVID-19 for 15 minutes or more within a certain period of time(contact-confirming function)
 In February 2021, MHLW announced that a situation occurred where no notification was provided to contact-confirmed
persons when the app was used on certain terminals (the defect) after COCOA was updated in September 2020.

Audit
Results

 Because specific details for conducting testing or contents which the contractor should report were not included in thespecifications, the contact-confirming function, which is a key function of COCOA, had not been tested properly.
 The COCOA source code was published on a website for software development, for the purpose of obtaining opinions from a wide
range of people and for improving the function of the app. However, MHLW did not provide clear instructions to Persol Co., Ltd.
regarding the management procedure when external opinions were posted on the said website. Thus, even though indications
related to the defect were posted in November, 2020 which would enable MHLW to recognize the defect, MHLW had not beenable to recognize the occurrence of the defect for a long period of time.
 With regard to the defect, no request to repair or discount to the price was made to Persol Co., Ltd. based on the contract. MHLW
should have Persol Co. Ltd. submit appropriate materials for their invoice and should verify the repair expense related to the defectnot being included in the invoice amount. However, MHLW considered that the repair was carried out at the expense of Persol Co.
Ltd., without verifying it.

Demandfor
Measures In order to ensure that tests on the major functions of various systems are conducted properly, MHLW should clearly specify
details for the test to be described in the specifications and contents that should be reported from the contractor for
gaining a sufficient understanding of the implementation of the test, and thoroughly inform these points to the relevant
personnel through the preparation of manuals, etc.
 MHLW should consider measures to properly manage external indications, etc., and make use of them in the work,and thoroughly inform them to the relevant personnel through the preparation of manuals, etc.
 In order to clarify who is responsible for repair costs, etc. in the event that a delivered product does not conform to theterms of the contract, MHLW should thoroughly inform relevant personnel of the need to have a contractor submit theappropriate materials and to validate that the invoice amount does not include repair costs, etc. by issuing a written
notification, etc.

Copyright©2021

Board of Audit of Japan. This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

29

9. Development and maintenance of COVID-19 Contact-Confirming
Application (COCOA) (Demand for measures)
Outline of COCOA

Ministry of Health, Labour and Welfare (MHLW)
380.88 million yen (Background amount)- An application that uses smartphones' short-range communication function(Bluetooth) to notify and record contact between people

Server- The main function is to notify if a user has been in continuous close contact(approx. 1 m or less) with a person who has tested positive for COVID-19 for
15 minutes or more within a certain period of time (contact-confirming function)

Audit Results

Chronology of COCOA-related events
May, 2020
September

November

Added COCOA work by modifying thecontract with Persol Co., Ltd.
Source code was published on the website
The defect occurred after the version was updated(1) The contact-confirming function, which is a key function of COCOA,
was not tested properly

Indications related to the defect were postedon the website(2) Even though indications posted would enable MHLW to recognize thedefect, MHLW was not able to recognize the occurrence of thedefect for a long period of time

January, 2021 Persol Co., Ltd. reported the defect to MHLW
February

The defect was resolved- MHLW did not specify any specific matters for implementing testing in thespecifications- MHLW did not provide clear instructions regarding the management
procedure when external opinions were posted on the website(3) MHLW did not have Persol Co., Ltd. submit appropriate materials anddid not validate that the invoice amount charged by Persol Co., Ltd.
did not include the repair costs associated with the defectDemand for Measures
 MHLW should clearly specify details for the tests, and thoroughly inform them through the preparation of manuals, etc.
 MHLW should consider measures to make use of external indications, etc. in work, and thoroughly inform them through the
preparation of manuals, etc.
 In order to clarify who is responsible for repair costs, etc. in the event that a delivered product does not conform to the terms ofthe contact, MHLW should thoroughly inform the need to have a contractor submit the appropriate materials and to validate that theinvoice amount does not include repair costs, etc., by issuing a written notification, etc.
Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

30

10. Maintenance of pieces of mechanical equipment for rivermanagement facilities (Measures Taken)
Outline ofmaintenanceofmechanicalequipment








Audit
ResultsMeasures
Taken

Copyright©2021

Ministry of Land, Infrastructure, Transport and Tourism (MLIT) ,5 Regional Development Bureaus, 8 Prefectures
143.34 million yen (Improper amount)
2,653.59 million yen (Background amount)

The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) prepared a manual that clarifies preventive maintenance methods,
in order to promote the introduction of preventive maintenance for upkeep of functions through preventive repairs at an early stage.
In order to reduce the total cost of maintenance and to level out budgets, river management authorities shall formulate or review
the "machinery maintenance plans", by1) conducting regular (annual/monthly) and other inspections of pieces of mechanical equipment,2) evaluating soundness based on the inspections, and
3) prioritizing maintenance, renewal and other actions for pieces of mechanical equipment.
As the standard period for the replacement and renewal of machines (including parts), there is an average period (years of use to
be used as an indicator for the preventive maintenance in the machinery maintenance plan above) and a reliable period (years of use
after which soundness of a machine need to be monitored with greater care; approx. half of the average period).
In the case of a critical machine failure, an urgent measure shall be taken to restore it (emergency maintenance).
The Board conducted an audit of 499 river management facilities in 22 project implementing entities which underwent annual
inspections, renewal of machines and other actions in FY 2017 to FY2019.
The total cost of maintenance could not be reduced appropriately because the soundness of machines were not evaluated andmaintenance, renewal and other actions were not prioritized. (12 entities, 256 facilities)
Using reliable periods as the standard period in machinery maintenance plans, the replacement and renewal of machines were
determined only after the reliable periods had passed without evaluating their soundness, leading to unnecessarily too early
replacement and renewal of machines, which did not reduce and level out costs for maintenance and renewal.
(6 entities, 13 facilities)
Some critical machines that had been found to have functional defects in annual inspections did not undergo emergency maintenancebased on the manual for over a year. It is necessary to ensure the reliability of pieces of mechanical equipment so that they canoperate when needed, by carrying out emergency maintenance timely based on the result of annual inspections and preventing the
malfunction of the pieces of mechanical equipment. (6 entities, 12 facilities)

MLIT informed implementing entities:
 That they should formulate and periodically review machinery maintenance plans, after evaluating soundness of machinesannually based on annual inspection results and prioritizing their maintenance and renewal, in accordance with the manual.
 That they should use average periods as the standard period for replacement and renewal of machines in machinery maintenance plansand determine whether to replace or renew machines, based on the evaluation of soundness and other factors.
 That they should promptly carry out emergency maintenance based on the manual for critical machines that are found to have afunctional defect as a result of annual inspections or other checks.
Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

31

10. Maintenance of pieces of mechanical equipment for rivermanagement facilities (Measures Taken)

143.34 million
yen (pointed
Ministry of Land, Infrastructure, Transport
and Tourism(MLIT)MLIT,
MLIT
5 Regional Development Bureaus, out
8 Prefectures
amount)2653.59 million yen
143.34 million yen(Improper
amount)2653.59
millionyen
amount)2,653.59 million(backgroundyen (Backgroundamount)(background amount)

Procedures from inspection to formulating machinery maintenance plans
Classify those machines whose
evaluation results are ‘B’ into
‘B1’ to ‘B3’ depending on theirsoundness.

Inspection
点検

Evaluation of
健全度の評価Soundness
Prioritize maintenance, renewal etc. based on the
健全度による整備、更新等の優先度決定
soundness

Take appropriate actions
based on machinery
management plans before
a failure occurs:

Prioritize maintenance, renewal
整備、更新等の優先順位決定etc.
Formulate or review machinery
機械維持管理計画の策定又は見直し
maintenance plans

Preventive maintenance

Outline of mechanical equipment
Facility
Equipment

A machine that cannot secure
the mechanical equipment’s
functions when it fails:
Critical machine
Rusted auxiliary roller for a water gate
in a drainage pump station

Parts

MachineParts

Machine

Parts

Parts

Machine

Parts

Parts

Parts

MachineParts

Equipment

Classify machines into ‘A’,
‘B’, and ‘C’ based on
inspection results.
→ ‘C’ means that a machine
has a functional defect andrequires an urgent action:
Emergency maintenanceSource: MLIT

Audit Results
 The total cost of maintenance could not have been
reduced appropriately because the soundness ofmachines were not evaluated and maintenance, renewal
and other actions were not prioritized.
(Projects implemented by the National Government: 223 facilities in 7 entities;
Grant projects: 33 facilities in 5 entities)

 Using reliable periods mistakenly as the standard period, thereplacement and renewal of machines were determined
only after the reliable periods had passed, which did not
reduce and level out costs.
(Projects implemented by the National Government: 5 facilities in 2 entities;
Grant projects: 8 facilities in 4 entities)

 Some critical machines did not undergo emergency
maintenance timely in view of the result of annual
inspections, based on the manual.
(Projects implemented by the National Government: 2 facilities in 1 entity;
Grant projects: 10 facilities in 5 entities)

Measures Taken

 Implementing entities should formulate and periodically review machinery management plans, after evaluating soundness of machinesannually based on annual inspection results and prioritizing maintenance and renewal, in accordance with the manual.
 Implementing entities should use average periods as the standard period for replacement and renewal of machines in machinery
maintenance plans and determine whether to replace or renew machines, based on the evaluation of soundness and other factors.
 Implementing entities should carry out emergency maintenance based on the manual promptly for critical machines that are found to havea functional defect as a result of annual inspections or other checks.
Copyright©2021 Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

32

11. Grant amounts of insurance foundation stability payment fornational health insurance (Demand for Measures)Outline ofthePaymentMinistry of Health, Labour and Welfare (MHLW)
14.09 million yen (Improper amount)
50,681.32 million yen (Background amount)

The national government has introduced the Support Program for Financial Stabilization of the National Health Insurance , which covers the equivalentamount of reductions in insurance premiums for persons with low income by public expenses, and further established the insurer support portion, which
covers a designated ratio of average premiums by public expenses, according to the number of persons with low income. Municipalities transfer funds forthe insurer support portion, which is calculated based on the number of persons with low income and other factors, from general accounts to special
accounts, and the national government bears one-half of the transferred funds.
The amount of funds to be transferred is obtained by calculating the average insurance premium (a total of billed insurance premiums divided by the numberof general insured persons) and multiplying this by the number of general insured persons in households with reduced insurance premiums, and aprescribed ratio. The numbers of households and general insured persons, insurance premiums, and other data are based on the status of the date forassessment of insurance premiums (on April 1 each year), which was known by October 20 of the relevant fiscal year.
Of the total of billed insurance premiums, the total of per-capita based charges is equal to the amount obtained by multiplying the number of generalinsured persons and a per-capita based charge, and the total of per-capita (per household) charges is equal to the amount obtained bymultiplying the number of households and a per-capita (per household) charge.
According to the preparation guidelines, the amount of funds to be transferred shall be calculated by entering the numbers of households and generalinsured persons, the total of billed insurance premiums into a calculation base table as of the date of assessment, which were known by October 20 of
the relevant fiscal year, and the amount to be granted shall be calculated by multiplying this by one-half.
Municipalities have introduced their own systems to manage data such as the numbers of households and general insured persons. They extract
relevant data by setting criteria, such as the timing of extraction, in their systems, enter aggregated figures into a calculation base table, and calculate
the amounts of funds to be transferred and the amount to be granted.



Audit
Results

In 111 municipalities in 19 prefectures, a total of per-capita based charges and/or a total of per-capita (per household) charges did not tally with theamount obtained by multiplying the number of general insured persons by a per-capita based charge and/or the amount obtained by multiplying the number ofhouseholds by a per-capita (per household) charges. Therefore, the total of transferred amounts and the total of granted amounts (63,707.64 million yen;from FY2016 to FY 2019) were not appropriately calculated.
➢ This was because of wrong criteria applied for extracting the numbers of households and general insured persons, and the total of billed insurance
premiums, to be entered into calculation base tables, and other reasons.
➢ The 19 prefectures did not confirm whether the total of per-capita based charges was equal to the amount obtained by multiplying the number of generalinsured persons and a per-capita based charge, and whether the total of per-capita (per household) charges was equal to the amount obtained by multiplying
the number of households and a per-capita (per household) charge in calculation base tables, in the review of performance reports on granted amounts.

For 30 municipalities in 12 prefectures, the appropriate transferred and granted amounts were able to be recalculated. 12 municipalities of them were overgranted 14.09 million yen. For 84 municipalities (granted amounts: 50,681.32 million yen) in 19 prefectures, these amounts cannot be appropriately
recalculated, because relevant data for the past fiscal years cannot be extracted due to data overwriting and data disposal during system updates.

Demandfor
MeasuresMHLW should:
Require the 12 municipalities that had been over-granted funds to immediately return the over-granted amounts, and the 84 municipalities for whichappropriate amounts to be granted cannot be recalculated to recalculate them properly using currently available documents, and to immediately
return funds if over-granted.
Inform municipalities thoroughly of extraction criteria, such as the timing of data extraction, for calculating amounts to be transferred and granted.
Inform prefectures and municipalities about checking whether granted amounts are calculated based on appropriate transferred amounts.

Inform municipalities about organizing and storing data necessary for recalculating granted amounts.

Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to .it;
see the FY2020 Audit Report (Japanese only).

33

11. Grant amounts of insurance foundation stability payment fornational health insurance (Demand for Measures)

The total of percapita based charges=

a per-capita based
charge×

Number of generalinsured persons

The total of per-capita(per household) charges=

a per-capita (perhousehold) charge

×

Number ofhouseholds

 Criteria for extracting information that are entered into the calculation base table•

Information such as the numbers of households
and general insured persons, and the total of billedinsurance premiums

April 1 (Assessment date)•

October 20

Criteria for extracting the total of billed insurance
premiums in the preparation guideline applied
before FY2015

April 1 (Assessment date)

Extract information as of
the assessment date
(April 1), which was
known by October 20 of
the relevant fiscal year

Actualcalculationdate

Individual municipalities have introduced their own
systems to manage data such as the number ofgeneral insured persons and extract relevant data.

The Board checked calculation base tables and found that the right and left
sides of the equations for the total of per-capita based charges and/or the
total of per-capita (per household) charges did not match, and therefore, thetotals of transferred and granted amounts were not appropriately calculated. (111municipalities in 19 prefectures,a total of granted amounts: 63,707.64 million yen)

The 19 prefectures did not confirm in their review whether the right and left sidesof the equations matched.

Causes (78 municipalities in 16 prefectures)∙ Extracted information as of October 20 by mistake∙ Extracted information on the date of the actual calculation date,
which was the criteria applied before the guideline was revised.

30 municipalities in 12
prefectures
Extract information as of
the assessment date
(April 1), which was
known by the actual
calculation date

14.09 million yen (Improper amount)
50,681.32 million yen (Background amount)

Audit Results

Information to be entered in the calculation base table Of the total of billed insurance premiums, the total of per-capita based charges and thetotal of per-capita (per household) charges are expressed as the equations below.

Ministry of Health, Labour and Welfare (MHLW)

84 municipalities in 19
prefectures (granted amounts:
50,681.32million yen)Re-calculation

As a result of recalculation of amounts to be granted
based on properly extracted information, it was found that
14.09 million yen was over-granted for 12 municipalities.
Amounts to be granted cannot be appropriately
recalculated.

Causes∙ Overwriting of data, such as the number of households, stored in their systems∙ Disposal of data during system updates
Data

Extract

Demand for MeasuresRequire the 12 municipalities that have been over-granted funds to immediately return the over-granted amounts, and the 84 municipalities forwhich appropriate amounts to be granted cannot be recalculated to recalculate them properly using currently available documents, and toreturn funds if over-granted.
Inform municipalities thoroughly of extraction criteria, such as the timing of data extraction, for calculating amounts to be transferred andgranted.
Inform prefectures and municipalities about checking whether granted amounts are calculated based on appropriate transferred amounts.
Inform municipalities about organizing and storing data necessary for recalculating granted amounts.
Copyright©2021 Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

34

Japan Pension Service (JPS) HQ

12. Procurement of portable terminals (Demand for Measures)Outline of
portableterminals









Audit
Results

113.77 million yen (Improper amount)65.72 million yen (Background amount)

For the implementation of pension consultation and administrative work for the national pension, the Japan Pension Service (JPS)
procures laptop PCs and peripheral devices (portable terminals) that can be connected to the social insurance online system to accesspersonal pension information. JPS distributes the portable terminals to pension offices, and leases them to municipalities free ofcharge.
With the service life of portable terminals ending, JPS concluded consignment contracts, including leasing and maintenance of portableterminals in 2018 and 2019 (the 2018 contract and the 2019 contract), and procured a total of 3,226 portable terminals.
For portable terminals loaned to municipalities under the 2019 contract, the procured quantity was calculated based on the result of the
February 2018 survey on municipalities’ intentions of lease by MHLW (the MHLW survey), and the recipients and leased quantity were
determined based on the result of the May 2019 survey on municipalities’ requests for lease by JPS (the JPS survey).
Of the 3,226 portable terminals procured under the 2018 and 2019 contracts, a total of 1,003 terminals have not been distributed orleased, and are held in the JPS HQ and branch offices.
111 out of 426 portable terminals distributed to pension offices, and 209 out of 1,646 leased to municipalities were not used at all. The
Board looked into the background and found the following issues.
The procured quantity for the 2018 contract was determined based on the number of terminals to be distributed that included 257
terminals (36.25 million yen) to renew the same number of terminals that had been distributed in anticipation of a temporary increasein the number of consultations in 2017. This was made, however, without carefully considering the necessity of the renewal.
The procured quantity for the 2019 contract included 471 terminals (63.09 million yen) which corresponded to the number of
portable terminals that had been already procured under the 2018 contract and their spares, and 220 terminals (29.47 million yen)for 220 municipalities that did not respond to the MHLW survey.
Although the number of procured portable terminals under the 2019 contract included 165 terminals (22.10 million yen) for 106
municipalities that requested a lease in the MHLW survey, portable terminals procured under the 2019 contract were not leased out
to the 106 municipalities, because they were not covered by the JPS survey.
Although 209 portable terminals (28.58 million yen) leased to municipalities were not used at all, JPS did not check why they were notused or review the necessity of continuing the lease.

Demandfor
Measures

JPS should: Inform thoroughly related departments that the procured quantity needs to be calculated by carefully examining the necessity of renewal
in anticipation of changes in the number of consultations, fully confirming other procurement contracts of portable terminals, andtaking into account the status of requests by municipalities.
 Perform a request survey for municipalities that were not covered by the JPS survey and lease portable terminals based on the survey's
result.
 Establish a system to check the reason why portable terminals leased to municipalities have not been used for a long period of time andreview the necessity of continuing the lease, and consider using terminals that do not need to be leased successively, for otherpurposes.

Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

35

Japan Pension Service (JPS) HQ

12. Procurement of portable terminals (Demand for Measures)

Outline of portable terminals
Portable terminals

113.77 million yen (Improper amount)65.72 million yen (Background amount)

Status of distribution and lease of portable terminals
Of the 3,226 portable terminals procured,a total of 1,003 terminals have not been
distributed or leased, and are held in the
JPS HQ and branch offices.

∙ Laptop PCs and peripheral devices∙ Used for pension consultation work and administrative work
∙ JPS concluded consignment contracts, including leasing andmaintenance of portable terminals, in 2018 and 2019 (the 2018 contract
and the 2019 contract), and procured a total of 3,226 portable terminals.
∙ For portal terminals loaned to municipalities under the 2019 contract, theprocured quantity was calculated based on the result of the February
2018 survey on municipalities’ intentions of lease by MHLW (the MHLW
survey), and the recipients and leased quantity were determinedbased on the result of the May 2019 survey on municipalities’ requests
for lease by JPS (the JPS survey).

Social insurance
online system

Management

JPS HQ

Distributed portableterminals
Leased portableterminals(via pension offices)

111 of the 426
distributed terminals

JPS HQ

Pension officeDistributed portableterminals
Connect to the system
and view personal
pension information

In-field consultations,pension counseling,
Pension officeetc.

Leased portable terminals(via pension offices)

209 of the 1,646
leased terminals

Municipality

Municipality

320 terminals in total
not used at all
Insured persons,recipients, etc.
Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

36

Japan Pension Service (JPS) HQ

12. Procurement of portable terminals (Demand for Measures)

113.77 million yen (Improper amount)65.72 million yen (Background amount)

Audit Findings

Demand for Measures∙ The procured quantity for the 2018 contract was determined based on the number ofterminals to be distributed that included 257 terminals (36.25 million yen) to renew
the same number of terminals that had been distributed in anticipation of a temporary
increase in the number of consultations in 2017. This was made, however, without
carefully considering the necessity of the renewal.
JPS HQ∙ The procured quantity for the 2019 contract
included 471 terminals (63.09 million yen)which corresponded to the number of
portable terminals that had been alreadyprocured under the 2018 contract and theirspares, and 220 terminals (29.47 million
yen) for 220 municipalities that did not
respond to the MHLW survey.
∙ Although the number of procured portableterminals under the 2019 contract included
165 terminals (22.10 million yen) for 106
municipalities that requested a lease in
the MHLW survey, portable terminals
procured under the 2019 contract were notleased to the 106 municipalities, because
they were not covered by the JPS survey.

PO

MHLW
Survey Inform thoroughly related departmentsthat the procured quantity need to be
calculated by carefully examining thenecessity of renewal in anticipation ofchanges in the number of consultations,fully confirming other procurement
contracts of the portable terminals,
and taking into account the status ofrequests by municipalities.

Procured
for lease(Not answered)

Municipality
JPS HQ
Leased tosurveysubjects

MHLW
Not
coveredSurveySurveyAnswered(requested)× Perform a request survey formunicipalities that were not coveredby the JPS survey, and lease portableterminals based on the survey's result.

Municipalities

 Establish a system to review the necessityof continuing the lease of portableterminals that have not been used bymunicipalities for a long period of time.

(Not leased)∙ Although 209 portable terminals (28.58 million yen) leased to municipalities were notused at all, JPS did not check why they were not used or review the necessity ofcontinuing the lease.
Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

37

13. Status of farmland consolidation by the cultivation condition
improvement project (Demand for Measures)Outline of
the Project







Audit
ResultsDemandfor
Measures

Copyright©2021

Ministry of Agriculture, Forestry and Fisheries (MAFF),
5 Regional Agricultural Administration Offices
1,710.22 million yen (Improper amount)

To strengthen Japan's agricultural competitiveness, the Ministry of Agriculture, Forestry and Fisheries (MAFF) develops agricultural
production infrastructure such as expansion of farmland partitions and development of multipurpose paddy fields, and promotes
consolidation of farmlands to business farmers in collaboration with Farmland Intermediary Management Institutions (Farmland Banks).
MAFF provides the subsidy for the cultivation condition improvement project to implementing entities, including municipalities and land
improvement districts, that implement regional farmland consolidation projects (consolidation project) to promote farmland
consolidation to business farmers within the regions by providing timely support for improving detailed cultivation conditions.
Implementing entities that carry out the consolidation project must prepare a regional farmland consolidation promotion plan (promotionplan) that includes a farmland consolidation target for each region where the consolidation project is implemented. Aftercompleting the consolidation project, the implementing entities must prepare a project achievement report (achievement report) on theachievement of the farmland consolidation target.
With regard to the farmland consolidation target, consolidated areas of business farmers before and after the consolidation project in aregion are written.
The farmland consolidation target is expected to be achieved to a considerable extent after implementation of the consolidation project.
7 entities in 9 districts did not prepare appropriate promotion plans, including plans which did not identify farmlands expected to beconsolidated. Further, these entities failed to include in achievement reports the actual figures of consolidated farmlands that werecomparable to the promotion plans, and did not understand the achievement status of the farmland consolidation targets established in
the plans. (Grant amount: 258.48 million yen)
41 entities in 56 districts achieved a figure as low as below 50% of the farmland consolidation targets. This was because they did
not thoroughly check the willingness of business farmers involved in farmland consolidation when they created promotion plans.
(Grant amount: 1,451.73 million yen)
23 entities in 32 districts out of the 41 entities in 56 districts above did not make any efforts to promote farmland consolidation after
implementing consolidation projects, despite the farmland consolidation targets not having been achieved.
(Grant amount: 856.04 million yen)

MAFF should: Clarify in project implementing guidelines that implementing entities must identify farmlands to be consolidated and include
farmland consolidation targets in promotion plans, and state, in achievement reports, the realized records related to the farmlands tobe consolidated set in the promotion plans.
 Instruct implementing entities via prefectures to thoroughly check the willingness of farmlands’ lessors and lessees, who areparties concerned in farmland consolidation, to lend and borrow farmlands after the consolidation project are implemented, when
the implementing entities create promotion plans.
 Instruct implementing entities via prefectures to make an effort to achieve farmland consolidation targets if they have not beenachieved even after they implemented the consolidation projects.
Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

38

Ministry of Agriculture, Forestry and Fisheries (MAFF),
5 Regional Agricultural Administration Offices
5 Regional
Agricultural
Administration
Offices
1,710.22
millionyen(Improper
amount)1,710,220,000yen(pointedout amount)

13. Status of farmland consolidation by the cultivation condition
improvement project (Demand for Measures)
Outline of the Project

Promotion Plan: includes farmland consolidation targets

Regional Agricultural
Administration Offices<Farmland consolidation ><Cultivation condition improvement project>

Expand farmland used by business farmers

Promote consolidation of farmlands to business
farmers within regions in collaboration with
Farmlands (area) that are
Check
Farmland Banks, by providing timely support for
expected to be consolidated bytheproject(=
Farmlands(area)
improving detailed cultivation conditions, such as
to be consolidated)
expansion of farmland partitions by removing dikes
Afterproject
completion:
Promotion planand developing production infrastructure including
PrepareAchievement status of
culvert drainage (consolidation project).
Achievement reportfarmland consolidation targets

Farmer A

FarmerB

Farmer C

Farmland owners (lessors)
establish the right of use of farmlands tobusiness farmers (lessees).

Consolidated areasof business farmers
after the project

Consolidated areasof business farmers
before the project

Grant

Prefecture
Grant

EntityFarm Bank, prefecture, municipality,
Land Improvement District (LID)

The consolidation project aims to improve cultivation conditions, which is achallenge in farmland consolidation, and expects farmland consolidation targets
to be largely achieved after the project.

Improve cultivation conditions

Audit Results
Promotion plans were not properly prepared

Poor achievement of farmland consolidation targets(7 entities in 9 regions)(41 entities in 56 regions)

Total grant: 1,451.73 million yen

In 56 districts (approx. 20% of the total), the ratio of "consolidated areas" to “areas to be consolidated" (achievement percentage) was less than 50%.

7 entities (total grant: 258.48 million yen) did
not identify farmlands to be consolidated
when they prepared promotion plans, andtheir consolidation targets had no concretebases. They prepared achievement reportsthat were not based on actual results, and did
not understand the status of achievement of
the farmland consolidation targets.

Achievement
percentage

100%≥ 50%, < 100%

< 50%

≥ 10%, < 50%< 10%

Number of districts

164 districts

61 districts

56 districts

30 districts

26 districts

Reason for poor achievement
Entities failed to check the willingness of business
farmers involved in farmland consolidation(lessors and lessees) when creating promotion
plans, among other things.

23 entities in 32 districts out of the 41 entities in
56 districts did not continue to work on individual
business farmers to promote farmland consolidation
after implementing the projects, despite the farmland
consolidation targets not having been achieved.
(Total grant: 856.04 million yen)

Demand for Measures
To clarify in project implementing guidelinesthat implementing entities must identify
farmlands to be consolidated and include
farmland consolidation targets when theycreate promotion plans
Copyright©2021 Board of Audit of Japan

To instruct implementing entities to thoroughly checkthe willingness of the farmland consolidation parties tolend and borrow farmlands after the projects are
implemented, when entities create promotion plans.

To instruct implementing entities to make aneffort to achieve farmland consolidation
targets if they have not been achieved evenafter they implemented the projects.

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

3914. Effective use of gold bullion possessed in the reserve fund forcollection of coinage (Measures Taken)
Outline ofthesystem









Audit
ResultsMeasures
Taken

Copyright©2021

Ministry of Finance (MOF)
160,197.76 million yen (Improper amount)

The reserve fund for collection of coinage (the fund) was established to secure issuance, exchange, and collection ofcoins by the government) and to contribute to maintaining trust in coinage, in accordance with the Act on Reserve Fundfor Collection of Coinage.
Bullion possessed in the fund (fund bullion) contains coins collected from the market, and used as materials for
manufacturing coins.
Fund bullion can be granted to Japan Mint (an incorporated administrative agency) as metal used for manufacturingcoins.
According to the Ministry of Finance, fund bullion can be sold if it will not be used as materials for manufacturingcoins, from the viewpoint of efficient management of fund bullion.
Gold bullion held at the fund has been used as materials for manufacturing commemorative coins.
At the end of FY2019, gold bullion held in the fund amounted to 129.49 tons at a book value of 256,708.89 million yen,accounting for approx. 92% of the total book value of fund bullion (279,194.64 million yen).
From FY2014 to FY2019, the amount of gold bullion possessed in the fund increased by 4.54 tons to 129.49 tons
In the 6 years from FY2014 to FY2019, the largest amount of granted gold bullion was 1.78 tons in FY2018, andthe 129.49 tons possessed at the end of FY2019 was 72.7 times larger than the granted amount.
The 129.49 tons of gold bullion held in the fund at the end of FY2019 was significantly larger than the collected andgranted amounts for the 6 years from FY2014 to FY2019, and the amount of gold bullion used (calculated value) after
1997 was smaller than 1993 and before. Thus, some of the gold bullion held at the end of FY2019 was notexpected to be used as materials for manufacturing commemorative coins. It was considered inappropriate toretain such amount of gold bullion and the situation should be improved by continuing efforts to review its
utilization such as selling it.
After determining the amount of gold bullion required for manufacturing commemorative coins in the future, the Ministry of
Finance sold 80.76 tons of gold bullion at a book value of 160,197.76 million yen, which were not expected to be used
for manufacturing commemorative coins and were deemed appropriate for sale, to the Foreign Exchange Fund Special
Account in March 2020. The sales price of 542,031.48 million yen was transferred to the fund, and the same amount
was transferred to the General Accounts.
The Ministry also determined that the amount of gold bullion held in the fund should be reviewed in a timely manner in viewof the past events and if gold bullion is not expected to be used as materials for manufacturing commemorative
coins, it shall be utilized, for example by reviewing its sale.

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

40

14. Effective use of gold bullion possessed in the reserve fund forcollection of coinage (Measures Taken)
Outline of the System

Ministry of Finance (MOF)
160,197.76 million yen (Improper amount)• The reserve fund for collection of coinage (the fund) was established to secure circulating coins (issuance, exchange, and collection of coins by the government) and tocontribute to maintaining trust in coinage.
• Gold bullion held in the fund is used as materials for manufacturing commemorative coins.
• Fund bullion can be granted to Japan Mint (an incorporated administrative agency) as materials for manufacturing coins, and can be sold if it will not be used asmaterials for manufacturing coins.
• At the end of FY2019, gold bullion held in the fund amounted to 129.49 tons at a book value of 256,708.89 million yen, accounting for approx. 92% of the total bookvalue of fund bullion (279,194.64 million yen).

Audit Results

Measures Taken

The 129.49 tons of gold bullion held in the fund at the end of FY2019 was 72.7 times larger than
1.78 tons which was the largest volume of gold bullion (FY2018) granted in 6 years from FY2014 toFY2019, and the amount of gold bullion increased by 4.54 tons in the 6 years.
[Amounts collected, granted, and possessed of gold bullion from FY2014 to FY2019] (Unit:（単位：ｔ）
tons)

区分
Category

平成26年度
27年度
FY2014 FY2015

28年度
FY2016

29年度
FY2017

30年度
FY2018

令和元年度
FY2019Possessed amount at the
年度当初保有量beginning of FY

124.95126.20127.67129.08130.37129.87

Collection
amount
回収量

1.95

1.46

1.41

1.29

1.28

1.25

Grant 交付量
amount

0.70

ー

ー

ー

1.78

1.62

126.20127.67129.08130.37129.87129.49Amount in possession
at 年度末保有量
FY endLargest grant After determining the amount of gold bullion required for manufacturingcommemorative coins in the future, the Ministry of Finance sold 80.76 tons ofgold bullion at a book value of 160,197.76 million yen, which were not expected
to be used for manufacturing commemorative coins and were deemed appropriate
for sale, to the Foreign Exchange Fund Special Account in March 2020. The sales
price of 542,031.48 million yen was transferred to the fund, and the sameamount was transferred to the General Account.
 The Ministry also determined that the amount of gold bullions held in the fundshould be reviewed in a timely manner in view of the past events and that if
gold bullion is not expected to be used as materials for manufacturingcommemorative coins, it shall be utilized, for example by reviewing its sale.

72 times

4.54 ton increase
The amount of gold bullion used (calculated value) after 1997 was smaller than 1993 and before.
[Flow of selling gold bullions][Amount of gold bullion used for commemorative coins]Year

Commemorative coin’s name

1997,98
1999
2002
2004
2009

Nagano Olympics (Series 1 to 3)

2015
2018
19,20
2019
2019
2019

The 60th year of the Emperor on the throne
The enthronement of the Emperor
The Wedding of His Imperial Highness the Crown Prince

The 10th year of the Emperor on the throne
2002 FIFA World Cup Korea/JapanTM
The EXPO 2005 AICHI JAPANThe 20th Anniversary of His Majesty the Emperor's
Enthronement
The Great East Japan Earthquake Reconstruction Project (the1st to 4th series)
Olympic Games Tokyo 2020 /Paralympic Games Tokyo 2020
(1st, 3rd and 4th)
The 30th Anniversary of the Enthronement of His Majesty theEmperor
Rugby World Cup 2019TM
The Enthronement of His Majesty the Emperor

Copyright©2021 Board of Audit of Japan

Issuedamount(A)

100,000
100,000
100,000
50,000100,000
100,000
100,000
50,000

10 mil
1 mil
2 mil
2 mil

20.0 g20.0 g30.0 g18.0 g200.00 t
20.00 t60.00 t36.00 t10,00010,00010,00010,00010,00038,73741,00040,00040,00080,000165,000
200,000
100,000
70,000100,000

15.6 g20.0 g15.6 g15.6 g20.0 g2.57 t4.00 t1.56 t1.09 t2.00 t10,00095,00045,00015.6 g0.70 t10,000111,112

123,000

15.6 g1.91 t10,000127,778

50,00020.0 g1.00 t10,00010,000111,112
127,778

10,00050,00015.6 g20.0 g0.15 t1.00 tReserve fund forcollection of coinage

Decreased in usage

The 60th year of the Emperor on the throne

Exchangevalue andselling price

After 1997

1986
1987
1990
1993

General Accounts

Weight perContained amountcommemorof gold bullions
ative coin(calculated)(A×B)(B)

Face value(yen)

Foreign Exchange Fund Special
Account (FEFSA) under thejurisdiction of the Ministry of
Finance (International Bureau)
Foreign exchange fund

Selling gold bullions
Gold bullions

Gold bullions(80.76 tons)(80.76 tons)
Receiving the sale price(542,031.48 million yen)

Yen
542,031.48 million yen
was carried over tothe General Accounts

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

4115. Lease contract for properties that do not meet specifications(Improprieties)

Outline of
the lease
contract









Audit
Results

CausesCopyright©2021

(IAA) Japan Sport Council (JSC)
381.23 million yen (Improper amount)

The Japan Sport Council (the Council) manages and runs the Prince Chichibu Memorial Sports Museum andLibrary (the Museum), which collects and conserves items such as approx. 60,000 articles related to sports history inJapan (including more than 2,000 items deposited by individuals and organizations), and approx.160,000 reports anddocuments on the past Olympic Games.
Because the former Japan National Stadium where the Museum existed was being demolished, the Council concluded alease contract for a warehouse located in Ayase, Adachi Ward, Tokyo (the Ayase Warehouse) with Nippon Express(NE) through general competitive bidding (duration: 6 years in the initial contract) in February 2014 with the aim of
temporarily storing the collected items. The council extended the contract for one year in March 2020.
According to the accounting rules of the Council, it must issue a public notice about a lease contract and make it open tocompetition. When concluding a contract with a successful bidder, the contract must be concluded with the publicly
announced specifications.
If a successful bidder does not enter into the contract with the specifications, the Council must modify the
specifications, issue a public notice, and put the contract out for bid again.
Since the Council stores special items (museum/library materials), it issued a public notice for bid with the specifications
below on locational conditions for a lease property.
∙ Within a 5 km radius of Yoyogi National Gymnasium (to ensure coordination with storage areas in the Gymnasium)∙ Outside the flood hazard area (to protect collected items from flood damage)
After NE won the bid, it informed the Council that it was not able to rent a warehouse that met the specifications on the locational
conditions and would rent the Ayase Warehouse instead. The Council concluded the initial contract, even though the Ayase
Warehouse is approx. 16 km away from the Gymnasium and is within the flood hazard area of Adachi Ward, Tokyo. The
Council extended the contract for one year.
The Council should not have concluded the contract with NE for ensuring fairness of open bidding, competitivenessand economy, and should have issued a public notice and put the contract out for bid again with the modified
specifications.
If an expected flood occurs, the Ayase Warehouse may suffer inundation damage. Further, commercial power supply’ssuspension may cause its elevators to shut down, making it impossible to carry in/out collected items, and its air conditioners toshut down, damaging collected items in conditions of high humidity.
The Council lacked awareness that contract procedures should be followed appropriately in accordance with its accounting
rules, when concluding a lease contract.

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

4215. Lease contract for properties that do not meet specifications(Improprieties)(IAA) Japan Sport Council (JSC)
381.23 million yen (Improper amount)

Outline of the lease contract
Prince Chichibu Memorial Sports Museum and Library(Located in the former National Stadium)

Demolition∙ Approx. 60,000 articles related to sports history in Japan∙ Approx. 160,000 reports and documents on the past Olympic
Games are collected and conserved

Because the former Japan National Stadium where the Museum existed was being demolished,
the Council concluded a lease contract for the Ayase Warehouse with Nippon Express (NE)(duration: 6 years in the initial contract), with the aim of temporarily storing the collected items.

According to the Council's Accounting Rules:∙ A contract must be concluded with the specificationsin the public notice; and∙ If a successful bidder does not enter into the contract
with the specifications, the Council must modify the
specifications, issue a public notice, and put thecontract out for bid again.

Audit Results
The specifications for the initial contract stated locational
conditions for a lease property, including:∙ Within a 5 km radius of Yoyogi National Gymnasium; and

5 km∙ Outside the flood hazard area
The Council concluded the initial contract (and extended it for oneyear), even though the Ayase Warehouse is approx. 16 km awayfrom the Gymnasium and is within the flood hazard area of Adachi
Ward, Tokyo (expected inundation depth was 2 m to 5 m according to
the hazard map as of the conclusion of the initial contract).
The Council should not have concluded the contract with NE
for ensuring fairness of open bidding, competitiveness andeconomy, and should have issued a public notice and put thecontract out for bid again, with the modified specifications.
Copyright©2021 Board of Audit of Japan

16 km

Within a 5 km radius of Yoyogi
National Gymnasium

The Warehouse isapprox. 16 km awayfrom Yoyogi National
Gymnasium.

Source: Prepared by modifying a map on the Geospatial Information Authority website.

If an expected flood occurs, the Ayase Warehouse may suffer
inundation damage, and commercial power supply’s suspension
may make it impossible to carry in/out collected items and damage
collected items.

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

4316. Improper retaining wall design (Improprieties)

Outline oftheProject

In a disaster prevention and safety grant project, Aomori Prefecture built retaining walls and rebuilt roads and sidewalks inorder to widen roads and improve intersections.



The Prefecture installed L-shaped retaining walls made of precast reinforced concrete to support road embankment,
adjusting their heights in accordance with deference in height between the road and the private land and waterways along theroad.
According to the guidelines for designing retaining walls used by the Prefecture:∙ Durability of structures will be significantly reduced if reinforcing bars inside concrete structures corrode.
∙ Corrosion of reinforcing bars occurs in an environment where both oxygen and water exist at the same time, and isaccelerated in areas where water such as rain water acts in the air.
∙ If concrete neutralization(note) reaches reinforcing bars in reinforced concrete, the bars will become vulnerable tocorrosion.
∙ Reinforcing bars need to be fully covered with concrete to prevent their corrosion.
(Note) Alkalinity decreasing in concrete as a result of a reaction between carbon dioxide in the air and the main componentsof the concrete.








CausesCopyright©2021

7.78 million yen (Improper amount)





Audit
Results

Ministry of Land, Infrastructure, Transport and Tourism (MLIT)The construction was performed in accordance with the following design: L-shaped retaining walls were built whose heights
were a few centimeters or more higher than the height difference between the road and private areas or waterways locatedbelow the road, and the projecting parts of L-shaped retaining walls were cut diagonally across the entire length of
the road in conformity with the vertical slope of the road, for aesthetic and other purposes.
The Prefecture did not review whether reinforcing bars would corrode, leading to impairing the structural durability of
the reinforced concrete, when the L-shaped retaining walls were cut.
In our field audit, it was found that all L-shaped retaining walls were cut across the entire length of the road with reinforcing
bars being exposed and not fully covered by concrete. As a result, the surfaces of reinforcing bars were exposed tooxygen and rainwater directly, and concrete neutralization could easily reach reinforcing bars inside concrete. Actually, thereinforcing bars exposed on the cut surfaces were corroded.
As the structural durability of the reinforced concrete was significantly poor due to improper design, it did notaccomplish the purpose of the construction.

The Prefecture did not fully understand the guidelines for designing reinforced concrete structures in a way that does not
impair their durability.

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

44

Ministry of Land, Infrastructure, Transport and Tourism (MLIT)

16. Improper retaining wall design (Improprieties)

7.78 million yen (Improper amount)

In a disaster prevention and safety grant project to rebuild roads, Aomori Prefecture installed L-shaped retaining walls made of
precast(note) reinforced concrete to support road embankment, adjusting the height of the wall in accordance with difference inheight between the road and, the private land and waterways along the road.
(Note) Precast means made into blocks at a factory.
Guidelines for designing retaining walls used by the Prefecture

Durability of structures will besignificantly reduced if reinforcing bars
inside concrete structures corrode.

∙ Corrosion of reinforcing bars occur in an environment where
both oxygen and water exist at the same time, and isaccelerated in areas where water such as rain water acts in the air.
∙ If concrete neutralization reaches reinforcing bars in reinforced
concrete, the bars will become vulnerable to corrosion.

Audit Results

Cut the projecting part diagonally L-shaped retaining walls were built whose heights were a few centimeters
or more larger than the height difference between the road and private
areas or waterways located below the road, and the projecting parts of
the L-shaped retaining walls were cut diagonally across the entire
length of the road in conformity with the vertical slope of the road.

切断面 surface
Exposed
10㎝

Road
side

道路の縦断勾配Road gradient

The Prefecture did not review whether reinforcing bards
would corrode, leading to impairing the structural durabilityof the reinforced concrete.
Reinforcing rods corroded by rainwater
As reinforcing bars were exposed on the
cutting surfaces of the walls and were notfully covered with concrete, the surfacesof the reinforcing bars were exposed tooxygen and rainwater directly, andconcrete neutralization could easily reachreinforcing bars inside concrete. Actually,
the reinforcing bars exposed on the cut
surfaces were corroded.

Reinforcing rods
need to be fully
covered with concrete

Privatearea /
waterwayside[Image of exposed surface]
切断さResult of audit

れた部
Removed分の鉄reinforced
筋コン
concrete
クリート

鉄筋がExposed
露出しreinforcing
ている
rods
箇所

Source: Aomori Prefecture

Copyright©2021 Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

45

17. Government debts (Report on specific matters)－－

Outline ofGovernment
debts

 The total amount of outstanding government debts continued to grow every year due to expanding social security expenses, among otherthings, and reached 1,173.2 trillion yen at the end of FY2019. The figure further increased to 1,279.6 trillion yen at the end of FY2020 due
to the COVID-19 pandemic.
 Construction bonds and special deficit-financing bonds account for the majority of outstanding government debts, and are to be
entirely redeemed in cash in a 60-year period in accordance with the 60-year redemption rule.

Status of
the Audit The Board analyzed the situation of government debts from FY2008 (when the global financial crisis occurred) to FY2020.
 The total amount of outstanding general bonds, including construction bonds and special deficit-financing bonds, increased constantly
from FY2008 to FY2020.
 Government debt-related expenditures (for redemption of Japanese government bonds (JGBs), interest payments, etc.) were on theincrease, and increased by 3.1 trillion yen from 19.1 trillion yen in FY2008 to 22.3 trillion yen in FY2020.
 Debt redemption expenses (for redemption of JGBs) of the government debt-related expenditures were on the increase from FY2010
onward, as fixed-rate transfers (which transfer the amount calculated based on the total amount of outstanding JGBs at the beginning of theprevious fiscal year, from the General Account to the Government Debt Consolidation Fund Special Account) increased as outstanding
general bonds increased.
 Interest payment expenses (for interest payments, etc.) of the government debt-related expenditures were on the increase up to FY2015,
because "the effect of an increase in outstanding general bonds " was higher than "the effect of a decrease in weighted average of interest
rates on general bonds", and have constantly decreased since FY2016 as the latter has exceeded the former.
 The principal resources of the debt redemption expenses are fixed-rate transfers, which decrease and become insufficient tofinance debt redemption in cash, as outstanding JGBs decrease. For this reason, debt redemption in cash, which is equivalent to the
JGB new issuance amount, is complemented with budget fund, a surplus fund, and proceeds from sales of government owned
shares.
 Regarding the relationship between fixed-rate transfers and debt redemption in cash based on the 60-year redemption rule, our estimation of
fixed-rate transfers and cash redemptions for 60 years for a model of JGBs issued in a fiscal year shows that fixed-rate transfers decrease as
outstanding JGBs decrease, which generates gaps between fixed-rate transfers and debt redemptions in cash after certain years
pass from the JGB issuance.
 Interest payment expenses are affected by the amount of JGB issuance and interest rates (coupon rates) determined at the time of issuance.
In FY2020, many short-term JGBs were additionally issued. If more short-term JGBs will be issued in the future, issuance of refunding
bonds will not be curbed every fiscal year. This will result in interest payment expenses being affected by variance in interest rates.
 Interest payment expenses have decreased since FY2016, because weighted average of interest rates on general bonds has decreased
mainly due to the monetary policy of the Bank of Japan. However, it is considered that an increase in government debt-related
expenditures, shown in an estimate made by the Cabinet Office, is largely affected by an increase in interest payment expenses due
to increased interest rates.

Findings

 The government should make efforts to curb the fiscal burden of government debt-related expenditures on the General Account,considering that the issuance of large amounts of JGBs including refunding bonds is estimated to continue, increasing
government debt-related expenditures due to an increase in outstanding JGBs, and that interest payment expenses will behugely affected by variance in future interest rates.

Copyright©2021

Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

46

－
－

17. Government debts (Report on specific matters)∙ Public bonds account for the majority (83.9%) of government debts at the end of FY2020.
∙ Results of analysis of the situation of government debts from FY2008 (when the global financial crisis occurred) to FY2020 are as follows.
○ Amount of outstanding JGBs

○ Final accounts of government debt-related expenditures

FLIP
Other
bondsgeneral bonds
Special deficit-financing bonds
Construction bond(Reference) Ratio of the amount of general bonds
issued to GDP (right axis)(Unit: trillion yen)

Debt redemption
債務償還費
expenses(Unit: trillion yen)
（単位：兆円）25

Government
debt-related
国債費
expenditures

Interest payment
利払費等
expenses

22.3

20
19.1

14.9

15
General bonds

10

8.3
7.6

7.3

5

0
2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

21
2009
2008
平成20

2020

22
2010

23
2011

24
2012

25
2013

26
2014

27
2015

28
2016

29
2017

30
2018

2019 2年度
令和元
2020

The amount of outstanding general bonds constantly increased.
(End of FY2008: 545.9 trillion yen → End of FY2020: 946.6 trillion yen)

Debt redemption expenses were on the increase from FY2010 onward,
as fixed-rate transfers increased as outstanding general bonds increased.

Ratio of the amount of outstanding general bonds to GDP constantly
increased. (End of FY2008: 105.7% → End of FY2020: 176.4%)

Interest payment expenses were on the increase up to FY2015, because"the effect of an increase in outstanding general bonds" was higher than "theeffect of a decrease in weighted average of the interest rates on generalbonds", and have constantly decreased since FY2016 as the latter has
exceeded the former.
Government debt-related expenditures, which combined both
debt redemption expenses and interest payment expenses,
were on the increase.

Copyright©2021 Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

47

－－60-year redemption rule: A system where construction bonds and special deficit-financing bonds (excluding special bonds for covering public pension funding) are entirely redeemedin cash in 60 years
Cash redemption: JGB redemption is financed by other resources than the issuance of refunding bonds
Fixed-rate transfer: The amount equal to 1.6% of the total outstanding government bonds, including construction bonds and special deficit-financing bonds, at the beginning of theprevious fiscal year is transferred from the General Account to the Government Debt Consolidation Fund Special Account.

17. Government debts (Report on specific matters)<Impact of debt redemption expenses on the national government's finance>○ JGB redemption based on the 60-year redemption rule
(60 billion yen of debt in fixed-rate coupon-bearing 10-year bonds)
Amount of
cash
現金償還額
redemption（単位：億円）(Unit:
100 million yen)Amount ofIssuance
借換債発行額of Refunding
Bonds

100

Amount ofRefunding Bonds

Amount of
New issue

100

500

400

300

10年後
10 years
later

20年後
20 years
later

30年後
30 years
later

新
規
発
行
額

借
換
債
発
行
額

600
Year
of issuance
発行年度

国債発行残高
JGBs
issued outstanding500

2 to 112～11年後
years later
600×1.6％
定率繰入額 transfer
Fixed-rate
×10＝96

Gap
開差額

4○ Cumulative total of fixed-rate transfers and cash redemptions of JGBs
issued in FY2020 (estimation based on the 60-year redemption rule)（単位：兆円）(Unit: trillion yen)
120
100

100

80

100
100

400
12～21年後
12 to 21years later
500×1.6％
×10＝8020300
22～31年後
22 to 31years later
400×1.6％
×10＝64

36

200
40年後
40 years
later

200
32～41年後
32 to 41years later
300×1.6％
×10＝48

52

100

50年後
50 years
later

60年後
60 years
later

40

100

0

20

42～51年後
42 to 51
years later 52 to 61 52～61年後
years later
200×1.6％
100×1.6％
計336
in total
×10＝32×10＝16 336

84

計264
264
in total

The fixed-rate transfer of each fiscal year is calculated based on the
JGB outstanding amount at the beginning of the previous fiscal year, it
decreases along with the decrease in the JGB outstanding amount.
Thus, fixed-rate transfers become insufficient to finance debt
redemption in cash. For this reason, debt redemption in cash, which isequivalent to the JGB new issuance amount, is complemented withbudget fund, a surplus fund, and proceeds from sales of government
possessed shares.
In the figure above, while the 10-year cash redemption amount (10 billion
yen) is constant, the fixed-rate transfer amount is decreasing (9.6 billion yen,
8 billion yen, ...., 1.6 billion yen) and the gap is increasing (0.4 billion yen, 2billion yen, ...., 8.4 billion yen).
Copyright©2021 Board of Audit of Japan

109.7

Cumulative total of
現金償還額累計
cash
redemption(Note) Discounted present value is ignored.

Cumulative
gap
開差額の累計
48.1
48.1

60

100

68

Cumulative total of
定率繰入額累計
fixed-ratetransfer

0
10 2032
14 2036
18 2040
22 2044
26 2048
30 2052
34 2056
38 2060
42 2064
46 2068
50 2072
54 207658
令和
20202 20246 2028

61.5

62
63年度
2081(FY)

The cumulative total of fixed-rate transfers gradually decreases overtime. The annual amount of cash redemptions, on the other hand, isrelatively small at an early stage after JGBs are issued because a few of
the JGBs reach maturity, but increases as extra long-term JGBs reachmaturity over the years. Finally, the cumulative total of cash redemptions
become equal to the amount of the issued JGBs.
As a result, the cumulative total of cash redemptions exceeds the
cumulative total of fixed-rate transfers, and, according to thisestimation, the cumulative total of gaps is 48.1 trillion yen.

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

48

－
－

17. Government debts (Report on specific matters)

The Board estimated changes in interest payment
expenses by deducting debt redemption expenses(estimated by us) from the “government debtrelated expenditures from FY2022 to FY 2030" inthe "Economic and Fiscal Projections for Medium
to Long Term Analysis" created by the Cabinet
Office (submitted to the Council on Economic andFiscal Policy on July 21, 2021).

○ Interest payment expenses (automatic estimation)(Unit: trillion yen)
Economic Growth Achieved
Case

Estimation

Baseline Case

Cabinet Office estimation

Economic Growth Achieved Case: a projectionin which the government’s policy goals ofovercoming deflation and economic
revitalization show solid results at a feasible
pace reflecting the past performance.
Baseline Case: a projection in which theeconomy will shift approximately at the rate ofcurrent potential growth.

Government debt-related expenditures
Debt redemption
expenditures

The Board estimation

Interest payment expenses
The Board estimation
2008

09

10

11

12

13

14

15

16

Estimation by the Board

17

18

19

20

21

22

23

24

25

26

27

28

29

30
(FY)

* Estimation in "Economic and Fiscal Projectionsfor Medium to Long Term Analysis" by the
Cabinet Office.

Debt redemption expenses increase constantly as more JGBs are issued, because the expenses are appropriated including fixed-rate transfers based on the 60year redemption rule.
On the other hand, interest payment expenses are 12.3 trillion yen (Economic Growth Achieved Case) or 8.9 trillion yen (Baseline Case) in FY2030, which is
a 4.9 trillion yen (Economic Growth Achieved Case) or 1.5 trillion yen (Baseline Case) increase from 7.3 trillion yen, the final accounts amount in FY2020.

According to the estimation by the Cabinet Office, interest payment expenses increase, as the nominal long-term interest rate increases from 0.0% in
FY2020 to 2.7% (Economic Growth Achieved Case) or 1.4% (Baseline Case) in FY2030.
The future increase in government debt-related expenditures in the Cabinet Office estimation is largely impacted by an increase in interest payment
expenses due to increased interest rates.
Audit Findings
The government should make efforts to curb the fiscal burden of government debt-related expenditures on the General Account, considering thatissuance of large amounts of JGBs including refunding bonds is estimated to continue with government debt-related expenditures growing due to anincrease in outstanding JGBs, and that interest payment expenses are hugely affected by variance in future interest rates.
Copyright©2021 Board of Audit of Japan

This material is a simplified version of the original Audit Report, and does not necessarily correspond to it;
see the FY2020 Audit Report (Japanese only).

49