논문

This study evaluates the financial analysis and diagnosis system which was
introduced by the Ministry of Government Administration and Home Affairs. The
criteria of evaluation are validity and reliability of analysing method. The scope of
financial analysis and measuring formula of indicators are reviewed. The method
of comparison among local governments in various level is also evaluated. This
article deals with the criteria to select local governments to be diagnosed.

This article suggests that the indicators outside the financial structure should be
developed such as performance indicators, and reviewed on the basis of
theoretical background. And a couple of alternatives of reform are also suggested
as reform agendas. They are the establishment of financial diagnosis
organization, the solution of time lag between financial analysis and financial
diagnosis, and the feedback of analysed results in the financial management
process.