Circular No. 01/2007/TT-BTC guiding the examination, verification, and notification of annual settlement for administrative agencies, public service units, organizations supported by the state budget, and budgets at all levels.

 

CIRCULAR

Guidelines for reviewing, auditing, and announcing annual settlement for

administrative agencies, public service units, organizations supported by state budget, and local budgets

The Ministry of Finance provides guidelines for reviewing, auditing, and announcing annual settlement for administrative agencies, public service units, organizations supported by the state budget, and local budgets as follows:

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Pursuant to Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the Law on State Budget;

1. The scope of application of this Circular is state budget funds allocated for the approved budget estimates, retained revenue for expenditure according to prescribed regulations, and local government budgets.

Chapter I. GENERAL PROVISIONS

This Circular does not apply to the settlement of construction investment capital, expenditures for the East Sea - Island Program, interest subsidy payments, and transfers of funds to banks for lending to approved recipients according to prescribed regulations.

2. The subjects of application of this Circular are administrative agencies, public service organizations, political organizations, political-social organizations, social-professional organizations, social organizations, social-professional organizations, and other organizations using state budget funds (hereinafter referred to collectively as budgetary units) and financial authorities at all levels.

3. Budgetary units and financial authorities at all levels shall be responsible for preparing, submitting, reviewing, auditing, and announcing annual settlements from the 2006 state budget settlement according to relevant guiding documents and the provisions of this Circular within their respective duties and powers.

For the review, audit, and announcement of the 2005 state budget settlement, continue to implement according to the provisions of Circular No. 10/2004/TT-BTC dated February 19, 2004, issued by the Ministry of Finance on guidelines for reviewing, auditing, and announcing annual settlement for administrative agencies, public service units, and local budgets.

Chapter II. SPECIFIC PROVISIONS

1. Preparation and submission of annual settlement reports:

a) For third-level budgetary units:

Third-level budgetary units prepare annual settlement reports to submit to higher-level budgetary units or to the same-level financial authority (in cases where there is no higher-level budgetary unit), including:

- Financial statements and annual settlement reports according to the list applicable to basic accounting units as stipulated in the current Accounting Regulations for Administrative and Public Service Units (annexed to Decision No. 19/2006/QD-BTC dated March 30, 2006, of the Minister of Finance);

- Annual settlement report on national strategic reserves, if any (as stipulated in Circular No. 48/2005/TT-BTC dated June 9, 2005, of the Ministry of Finance guiding the implementation of Decree No. 196/2004/NĐ-CP dated December 2, 2004, of the Government detailing the implementation of the National Strategic Reserves Law);

- Report on the implementation of audit, inspection, and financial authority recommendations (prepared according to Form 01 attached to this Circular);

- Other annual settlement reports as required by related documents (if any).

b) For second-level budgetary units:

Second-level budgetary units consolidate and prepare annual settlement reports including their own annual settlement reports (if any) and annual settlement reports of subordinate third-level budgetary units that have been reviewed according to this Circular, to submit to first-level budgetary units, including:

- Financial statements and annual settlement reports according to the list applicable to higher-level accounting units as stipulated in the current Accounting Regulations for Administrative and Public Service Units (annexed to Decision No. 19/2006/QD-BTC dated March 30, 2006, of the Minister of Finance);

- Comparative annual settlement report with the budget estimate (prepared according to Form 02 attached to this Circular);

- Other annual settlement reports as required by related documents (if any).

- Consolidated annual settlement report on national strategic reserves, if any (as stipulated in Circular No. 48/2005/TT-BTC dated June 9, 2005, of the Ministry of Finance);

- Other annual settlement reports as required by related documents (if any);

- Notifications of annual settlement reviews for subordinate third-level budgetary units according to this Circular.

c) For first-level budgetary units:

First-level budgetary units consolidate and prepare annual settlement reports including their own annual settlement reports (if any) and annual settlement reports of subordinate third-level budgetary units that have been reviewed and audited according to this Circular, to submit to the same-level financial authority.

The annual settlement report of first-level budgetary units is prepared according to the forms specified for second-level budgetary units. In cases where first-level budgetary units are also budget users, they prepare according to the forms specified for third-level budgetary units.

d) For financial authorities at all levels:

Financial authorities at all levels prepare and submit annual settlement reports on local government revenues and expenditures according to Circular No. 59/2003/TT-BTC dated June 23, 2003, and Circular No. 101/2005/TT-BTC dated November 17, 2005, of the Ministry of Finance.

2. Procedures for reviewing, auditing, and announcing annual settlements:

a) For second-level budgetary units:

Second-level budgetary units are responsible for reviewing and announcing the results of annual settlement reviews for subordinate third-level budgetary units according to Clause 3, Section II of this Circular.

Prior to reviewing annual settlements, the head of the second-level budgetary unit is responsible for notifying the annual settlement review plan to subordinate budgetary units, and simultaneously informing the first-level budgetary unit to coordinate implementation.

b) For first-level budgetary units:

First-level budgetary units are responsible for reviewing and announcing the results of annual settlement reviews for subordinate third-level budgetary units according to Clause 3, Section II of this Circular.

Specifically, for the annual settlements of third-level budgetary units already reviewed by subordinate second-level budgetary units, the first-level budgetary unit is responsible for auditing according to Clause 4, Section II of this Circular.

Prior to reviewing annual settlements, the head of the first-level budgetary unit is responsible for notifying the annual settlement review plan to subordinate budgetary units, and simultaneously informing the same-level financial authority to coordinate implementation.

c) For financial authorities at all levels:

- For the annual settlements of first-level budgetary units at the same level: The financial authority is responsible for auditing and announcing the results of annual settlement audits according to Clause 4, Section II of this Circular.

- For the final accounts of level I budgetary units at the same level: The financial authority shall be responsible for examining and announcing the results of the examination of the annual final accounts in accordance with Clause 4, Section II of this Circular.

In the case where a level I budgetary unit is simultaneously a budget-using entity, the financial authority shall examine and notify the results of the annual settlement examination in accordance with Clause 3, Section II of this Circular.

- For the settlement of local government budgets at all levels: The higher-level financial authority is responsible for reviewing and notifying the results of the annual settlement review for subordinate lower-level budgets in accordance with Clause 5, Section II of this Circular.

3. Examination and notification of the results of the annual settlement examination:

a) Contents of the annual settlement examination:

- Checking the list of financial reports and annual settlement reports prescribed in Point a, Clause 1, Section II of this Circular; if any are missing, requesting the examined unit to immediately prepare and submit supplementary ones to make them complete;

- Checking each receipt voucher for fees, charges, and other revenues managed and remitted to the state budget in accordance with the provisions of the law (if applicable);

- Checking the accuracy and legality of the allocated budget expenditure plan to ensure that it matches the total amount and detailed items of the budget allocation by the competent authority according to each spending category (including additional and adjusted allocations during the year). Specifically, for expenditures from non-repayable aid funds, they must be implemented in accordance with the current regulations on the management of state finances for non-repayable aid sources.

- Checking the legality of each expenditure item to ensure that it is included in the allocated state budget, adhering to the established standards, norms, and internal rules of the unit, and has been approved by the head of the unit or authorized person;

- Checking the procurement, management, and disposal of assets; the organization of bidding and price assessment for major procurement and repair expenses; ensuring that asset procurement, management, and utilization comply with relevant laws;

- Checking the accounting entries and records of revenues and expenditures to ensure compliance with the accounting system, fiscal year, budget level, and State Budget Schedule;

- Verifying the consistency of figures on revenue and expenditure vouchers, accounting books, and annual settlement reports;

- Verifying the carry-over balances of funds transferred to the next year for use and payment, including those approved in writing by the competent authority under Circular No. 101/2005/TT-BTC dated November 17, 2005, issued by the Ministry of Finance, and those automatically available for use and payment under the established regulations. For balances not allowed to be carried over, they must be recovered and remitted to the state budget;

- Verifying the implementation of recommendations made by competent state authorities through auditing, inspection, examination, or settlement verification activities;

Upon completion of the annual settlement examination, the competent authority conducting the examination must prepare an examination record of the annual settlement to serve as the basis for notifying the annual settlement (prepared according to Form 03 attached to this Circular);

b) When conducting the annual settlement examination, the higher-level budgetary unit and the same-level financial authority have the right:

- To request the examined unit to provide explanations or necessary information and data for the examination of the annual settlement;

- To cancel transactions involving revenues and expenditures that violate regulations or expenditures not included in the allocated budget; requiring the examined unit to recover and remit to the state budget any expenditures that violate regulations, carry-over balances not allowed to be carried over, and other amounts required to be paid according to the established regulations;

- To request the examined unit to correct any errors in the settlement figures and adjust the annual settlement report based on the examination results;

- To request the National Treasury branch where the examined unit maintains its account to cancel any carry-over balances of funds transferred to the next year for use and payment that do not comply with regulations;

- To refund or request the competent authority to refund any amounts improperly submitted to higher levels or the state budget;

- To handle or request the competent authority to handle, in accordance with the law, any heads of units who violate regulations and cause losses to the state budget;

c) Notification of the annual settlement examination results:

Based on the annual settlement report of the examined unit and the examination record of the annual settlement, the competent authority shall issue a notification of the annual settlement examination results to the examined unit (prepared according to Form 04 attached to this Circular);

4. Review and notification of the results of the annual settlement review:

a) Contents of the annual settlement review:

- Checking the list of financial reports and annual settlement reports prescribed in Clause 1, Section II of this Circular; if any are missing, requesting the reviewed unit to immediately prepare and submit supplementary ones to make them complete;

- Checking the accuracy of the settlement figures for fees, charges, and other revenues managed and remitted to the state budget in accordance with the law (if applicable), ensuring consistency with the settlement figures of subordinate lower-level budgetary units that have been examined or reviewed;

- Checking the accuracy and legality of the allocated budget expenditure plan to ensure that it matches the total amount and detailed items of the budget allocation by the competent authority according to each spending category (including additional and adjusted allocations during the year). Specifically, for expenditures from non-repayable aid funds, they must be implemented in accordance with the current regulations on the management of state finances for non-repayable aid sources.

- Checking the accuracy and legality of the settlement figures compared to the allocated budget, ensuring consistency with the settlement figures of subordinate lower-level budgetary units that have been examined or reviewed according to the State Budget Schedule;

- Checking the carry-over balances of funds transferred to the next year for use and payment, including those approved in writing by the competent authority under Circular No. 101/2005/TT-BTC dated November 17, 2005, issued by the Ministry of Finance, and those automatically available for use and payment under the established regulations. For balances not allowed to be carried over, they must be recovered and remitted to the state budget;

- Checking the implementation of recommendations made by competent state authorities through auditing, inspection, and annual settlement review activities;

Upon completion of the annual settlement review, the competent authority conducting the review must prepare a review record of the annual settlement to serve as the basis for notifying the annual settlement (prepared according to Form 03 attached to this Circular);

b) When conducting the annual settlement review, the higher-level budgetary unit and the same-level financial authority have the right:

- Request the unit being reviewed to provide explanations or necessary information and data for the settlement review;

- Request the unit being reviewed to adjust the settlement figures if there are errors and to revise the settlement report according to the results of the review;

- Request the unit being reviewed to require subordinate budget units to recover and pay to the state budget funds spent in violation of regulations, remaining funds that cannot be carried over to the next year, and other amounts due according to prescribed regulations;

- Refund or request the competent authority to refund the unit being reviewed the amounts paid to the state budget that were not in accordance with regulations.

c) Notification of the settlement review for the fiscal year:

Based on the settlement report of the unit being reviewed and the minutes of the settlement review for the fiscal year, the competent authority issues a notification of the settlement review for the fiscal year to send to the unit being reviewed (prepared according to Form 04 attached to this Circular).

5. Review and notify the results of the settlement review for the fiscal year for local government budgets at all levels:

a) The higher financial agency reviews the annual settlement of the lower-level budget according to the following contents:

- Check the list of settlement reports for the fiscal year as stipulated in Circular No. 59/2003/TT-BTC dated June 23, 2003, and Circular No. 101/2005/TT-BTC dated November 17, 2005, of the Ministry of Finance, and related regulatory documents; if incomplete, request the lower financial agency to supplement and submit immediately;

- Examine and determine the accuracy and legality of the settlement figures of increases and decreases compared to the approved budget estimates;

- Check the settlement revenue figures at each level against the actual revenue figures deposited at the State Treasury;

- Check the supplementary figures from the higher-level budget to the lower-level budget against the figures of the higher financial agency and the records through the State Treasury;

- Check the implementation of recommendations by authorized state agencies through auditing, inspection, and settlement review activities;

- Comment on the annual settlement: Time of submitting the settlement report to the higher financial agency and time of submitting the settlement report after approval by the People's Council, regarding the use and establishment of the Financial Reserve Fund, explanations, and clarifications of the settlement figures.

b) When conducting the annual settlement review of the lower-level budget, the higher financial agency has the right:

- To request the lower financial agency to provide additional necessary information and data for the settlement review;

- To request the responsible agency to recover expenditures not in accordance with regulations and order the immediate payment of amounts due to the state budget according to prescribed regulations;

- To recommend the People's Committee to submit to the People's Council at the same level for adjustment of the lower-level budget settlement if there are errors.

c) Notification of the settlement review for the fiscal year:

Based on the revenue and expenditure settlement report of the lower-level budget approved by the People's Council, the higher financial agency reviews and issues the annual settlement notification to the lower financial agency (prepared according to Form 05 attached to this Circular); in case of changes in the settlement figures, it sends to the lower People's Committee for submission to the People's Council for consideration and approval of the adjustment.

6. Preparation, submission, examination, review, and notification of the annual settlement for delegated funds:

a) The unit directly using the delegated funds from the higher-level budget prepares the annual settlement report for delegated funds in accordance with point a, clause 1, section II of this Circular and submits it to the same-level financial agency.

b) The financial agency receiving delegated funds takes the lead and coordinates with the same-level specialized management agency to examine and notify the results of the examination of the annual settlement report for delegated funds of the unit directly using delegated funds in accordance with clause 3, section II of this Circular; then aggregates and prepares the settlement report to submit to the delegating financial agency and the higher-level specialized management agency.

c) The delegating financial agency takes the lead and coordinates with the same-level specialized management agency to review and notify the results of the review of the annual settlement report for delegated funds of the receiving financial agency in accordance with clause 4, section II of this Circular; then aggregates into the settlement of the delegated budget expenditure.

In the case where delegated funds are allocated in the budget estimate of the first-level budget unit under the delegated budget level:

- The first-level budget unit under the delegated budget level aggregates and prepares the annual settlement report for delegated funds which have been jointly examined by the receiving financial agency along with the portion of funds managed by the unit, and submits it to the same-level financial agency (except in cases with specific provisions).

- The delegating financial agency reviews and notifies the results of the review of the annual settlement report for delegated funds jointly with the portion of funds managed by the first-level budget unit in accordance with clause 4, section II of this Circular.

For delegated funds implementing the Ordinance on Preferential Treatment for Persons Contributing to the Revolution, follow the separate guidance of the Ministry of Finance and the Ministry of Labor, Invalids, and Social Affairs.

7. Responsibilities of agencies and units in examining, reviewing, and notifying the annual settlement:

a) Responsibilities of the unit directly using budget funds:

- Be responsible for the accuracy and honesty of accounting vouchers;

- Strictly implement recommendations from higher-level budget units or authorized state agencies regarding adjustments to figures, ledgers, audits, recovery, and payment to the state budget in accordance with regulations and deadlines;

- Upon receipt of the examination notification or adjustment notification of the annual settlement from the higher-level budget unit (in the case of being under a higher-level budget unit) or the examination notification of the annual settlement from the same-level financial agency, within ten working days must complete the recommendations in the examination or adjustment notification.

In the case where the figures in the examination notification from the authorized agency differ from the settlement figures of the unit directly using the budget:

In case it is the examination and approval notification of the second-level budget entity: If the entity has objections to the examination and approval notification of the second-level budget entity, it must submit a written document to the first-level budget entity for review and decision.

In case it is the examination and approval notification of the first-level budget entity: If the entity has objections to the examination and approval notification of the first-level budget entity, it must submit a written document to the financial authority at the same level as the first-level budget entity for review and decision.

In case it is the examination and approval notification of the financial authority at the same level: If the entity has objections to the examination and approval notification of the financial authority, it must submit the matter to the People's Committee at the same level (for budget entities under local administrative authorities) or submit to the Prime Minister (for budget entities under central authorities) for review and decision.

While awaiting the decision of the competent authority, the budget entity directly using state funds must comply with the examination and approval notification of the competent authority.

b) Responsibilities of the second-level budget entity:

- Bear responsibility for the results of the examination and approval and the annual settlement notification for subordinate budget entities.

- Upon receiving the examination and approval notification or the adjustment notification of the annual settlement from the first-level budget entity, within ten working days, it must complete all recommendations in the examination and approval notification or the adjustment notification of the annual settlement and adjust the examination and approval notification for subordinate budget entities.

In case the second-level budget entity has objections to the examination and approval notification of the first-level budget entity, it must submit a written document to the financial authority at the same level as the first-level budget entity for review and decision. While awaiting the decision of the financial authority, the second-level budget entity must comply with the examination and approval notification of the first-level budget entity.

c) Responsibilities of the first-level budget entity:

- Guide subordinate budget entities to implement correctly the regulations on examination, verification, and annual settlement notification; simultaneously aggregate, prepare, and submit the annual settlement report according to the prescribed deadlines;

- Bear responsibility for the results of the examination or verification and the annual settlement notification for subordinate budget entities;

- Upon receiving the verification notification of the annual settlement from the financial authority at the same level, within ten working days, it must complete all recommendations in the verification notification of the annual settlement and adjust the examination and approval notification of the annual settlement for subordinate budget entities;

In case the data in the verification notification of the annual settlement from the financial authority differs from the data in the annual settlement of the first-level budget entity; if the first-level budget entity has objections to the verification notification of the annual settlement from the financial authority, it must submit the matter to the People's Committee at the same level (if it is a budget entity under local administrative authorities) or submit to the Prime Minister (if it is a budget entity under central authorities) for review and decision.

While awaiting the decision of the People's Committee at the same level or the Prime Minister, the first-level budget entity must comply with the verification notification of the annual settlement from the financial authority at the same level.

d) Responsibilities of financial authorities at various levels:

- Upon receiving the annual settlement report of the budget entity at the same level, or of the sub-budget entity with complete settlement forms as prescribed, within a maximum of thirty days, it must complete the examination, verification, and annual settlement notification;

- Bear responsibility for the results of the examination, verification, and annual settlement notification for related entities;

- During the period of examination, verification, and annual settlement notification for budget entities at the same level, financial authorities at various levels will not consider resolving the transfer of surplus funds to be used in the following year and payment, except for cases still within the period of adjusting the annual settlement according to the prescribed regulations.

đ) Responsibilities of the State Treasury:

- Bear responsibility for the conditions of payment and settlement for state budget expenditures of budget entities that have been checked and controlled by the State Treasury during the disbursement and settlement process according to the prescribed regulations;

- Confirm and bear responsibility for confirming the situation of budget estimates, advance payments, and advance payment settlements for budget entities according to the prescribed regulations;

- Temporarily suspend payment upon request of the financial authority (in writing) for budget entities that fail to submit the annual settlement report within the prescribed time until the annual settlement is received, except for items such as salaries, salary allowances, subsidies, scholarships, and certain essential expenses to ensure the operation of the machinery, excluding expenses for purchasing equipment and repairs.

Chapter III. IMPLEMENTATION

This Circular takes effect fifteen days after its publication in the Official Gazette and replaces Circular No. 10/2004/TT-BTC dated February 19, 2004, issued by the Ministry of Finance guiding the examination, verification, and annual settlement notification for administrative agencies, public service units, and budgets at various levels. During implementation, if there are difficulties, they should be promptly reported to the Ministry of Finance for research and resolution.

During the implementation process, if there are any difficulties, please promptly reflect them to the Ministry of Finance for research and resolution./.

                                                                              DEPUTY MINISTER
                                                                               VICE MINISTER



 
                                                                               DO HOANG ANH TUAN