Little reason for huge discount on sale of state land to Moritomo Gakuen: Audit board

The Board of Audit of Japan (BOA) has deemed that there was little basis for the government to give a huge discount to scandal-hit school operator Moritomo Gakuen on its purchase of a state-owned land plot, sources familiar with the case said.

The BOA is set to submit a report on the outcome of its audit of the deal to the Diet on Nov. 22.

The board's report will contradict the explanations by the Land, Infrastructure, Transport and Tourism Ministry and the Finance Ministry that the ministries have calculated the cost to remove trash from the site in an appropriate manner based on relevant criteria.

In its report to the Diet, the BOA points to the possibility that the estimated amount of garbage buried at the site may have been padded. However, as some of the documents that the transport ministry used to make the estimate are missing, the board is expected to neither mention the accurate amount of the costs of removing waste nor judge whether the deduction of 800 million yen as garbage disposal costs is appropriate.

Since the two ministries have already discarded documents recording their negotiations with Moritomo Gakuen officials, the board is expected to urge the ministries to improve the way they manage administrative documents.

Moritomo Gakuen purchased the land lot in Toyonaka, Osaka Prefecture, in June 2016 for its elementary school project. The land lot's value was appraised at 956 million yen at the time, but approximately 820 million yen -- the estimated cost of removing waste plus other expenses -- was deducted from the amount when the school operator purchased the property.

Opposition parties grilled the government in Diet deliberations over the land deal, pointing out that the process of negotiations lacked transparency.

In response, the two ministries explained that they calculated the amount of waste by multiplying the size of the land by the depth of the waste (mostly 3.8 meters deep, but 9.9 meters in parts) and the rate of garbage contained (47.1 percent), based on which they estimated the cost of removing the trash at approximately 800 million yen.

According to the sources, the BOA has deemed that photos showing the depth of the garbage were too unclear and that the garbage mix rate was calculated based on insufficient data. The audit board said such data is insufficient as the basis for the estimation of the volume of the waste.

After a request by the House of Councillors, the BOA had been inspecting the case since March this year.