Fri, Mar 11, 2016 - Page 4 News List

System’s lapses allowed tax evasion: Wu Se-hwa

FOUNDATION FOR CONCERN:The system was unable to detect that the donors to educational foundations were the beneficiaries of foundation research grants

By Sean Lin  /  Staff reporter

Minister of Education Wu Se-hwa yesterday smiles at the legislature in Taipei.

Photo: Lin Cheng-kung, Taipei Times

Minister of Education Wu Se-hwa (吳思華) yesterday admitted there were lapses in the system the ministry uses to monitor the finances of educational foundations constituted as legal persons, saying there is no mechanism in place to verify possible collusion between the foundations and their donors to prevent misappropriation of funds.

Wu made the remarks during a meeting of the legislature’s Education and Culture Committee in response to Democratic Progressive Party Legislator Huang Kuo-shu’s (黃國書) questions about a tax evasion case involving more than 250 professors and doctors.

The Taipei District Prosecutors’ Office yesterday granted probation to 225 suspects — doctors and medical school professors — who pleaded guilty to tax evasion, while indicting 26 who denied the allegations.

When Huang asked Wu whether Springsoft Education Foundation was a legal person registered with the ministry, Wu said: “Yes.”

The foundation was founded by former National Defense Medical Center director Tsai Tso-yung (蔡作雍) and used by Tsai to help the suspects evade taxes by making forged donations in exchange for research funds, Huang said.

Huang then cited the enforcement rules on the ministry’s duties to review the application process concerning the establishment of education foundations and to monitor their operations, which stipulate that the ministry is obligated to check the finances of education foundations during appraisals.

When asked whether the ministry regularly inspected the Springsoft Education Foundation, Wu said the foundation was last checked in 2011 and no irregularities were found in its finances based on the balance sheets it submitted.

“Donations were not the problem and neither was the application for research funds. The problem is that the donors were also the beneficiaries… This was not shown in past documents,” Wu said.

Wu said the ministry would improve the system to monitor educational foundations and launch a probe into foundations that have been accused of similar malpractice, adding that the ministry would need to upgrade its information technology to ascertain the relationship between the foundations and their benefactors.

He said the ministry would obtain a better understanding of the tax evasion case and punish Springsoft employees involved in no more than two months.

Meanwhile, Wu yesterday was adamant about a merger espoused by the ministry between Tainan National University of the Arts (TNNUA) and National Cheng Kung University (NCKU).

The proposed merger has angered many TNNUA students, who protested in front of the ministry on Monday, saying the move could hamper their studies.

Wu said the TNNUA has fared poorly in university appraisals in recent years and that it is encountering difficulty recruiting students.

“If the two schools do not merge, where is the future of TNNUA?” he asked, adding that it would benefit the TNNUA if the two schools merge.

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