Korean local governments consists of 16 upper-level regional governments, and 230 lower-level local governments. The size of Korea`s local public spending has grown rapidly in recent years. The paradigm of public management has shifted towards efficient use of limited resources to provide better services to residents since 1980. In the light of rapid growth of local public spending, Korea needs a new evaluation framework to make local governments more accountable, efficient and productive. The Evaluation Research Institute, a research arm of the Board of Audit and Inspection of Korea has developed a new framework to evaluate and compare the management capabilities of local governments and their program results. It is widely believed that good management contributes to good performance. However, the head of local governments used to be responsible for poor management capability due to unfair personnel management, establishment of unnecessary administrative bodies, and waste of local finance by implementing a project that is impossible to carry out. The management capability factor in our model is composed of 4 sub-factors: internal human resources, local finance, business activity, and cooperation capability. The program results factor is composed of 8 sub-factors: local economy, regulation management, urban planning and transportation, local marketing, public appeal management, social welfare and cultural service, disaster prevention, and environment management. According to the ``RACE`` principle, the ERI selects 23 indicators from the program results factor and 19 indicators in the management capability factor, so that the ERI evaluation model consists of a total of 42 indicators.