JOINT CIRCULAR No. 04/1997/TTLB/BTCQTTU-BTC GUIDING THE FINANCIAL MANAGEMENT MECHANISM OF THE COMMUNIST PARTY OF VIETNAM

JOINT CIRCULAR

Circular No. 04/1997/TT-LB dated September 24, 1997 of the Central Finance-Management Board and the Ministry of Finance guiding the implementation of the financial management mechanism of the Party

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Implementing Notification No. 74 TB/TW dated June 10, 1997 and Notification No. 85 TB/TW dated August 6, 1997 of the Standing Committee of the Politburo on the financial management mechanism of the Party; based on the State Budget Law and other guiding documents for its implementation, after thorough discussion and agreement, the Central Finance-Management Board and the Ministry of Finance provide guidance as follows:

I. GENERAL PROVISIONS:

1. The finances and assets of the Communist Party of Vietnam shall be uniformly managed and directed by the Party according to the principle of democratic centralism combined with decentralized management, ensuring independence and autonomy in the Party's budget management work to serve the tasks of each level of Party committees and the entire Party.

2. The Central Party Committee shall uniformly stipulate principles and systems for managing the Party’s finances and assets, and the levels of party fees paid by members. Each level of Party committee shall be responsible for managing the finances and assets of their own level and shall be subject to the direction and guidance of the higher-level Party committee. Financial agencies of each level of Party committee shall act on behalf of the Party committee as the owner of Party assets.

3. Based on the total annual regular budget estimate approved by the Standing Committee of each level of Party committee, state financial agencies at each level shall have the responsibility to allocate regular funds to Party agencies in the form of payment orders and settle accounts according to the state budget as prescribed by the State Budget Law.

4. The Party’s budget shall be managed at different levels corresponding to the state budget levels, including:

- The Central Party budget.

- Provincial and municipal budgets (referred to as provincial budgets).

- District and county budgets (referred to as district budgets).

- Commune Party budgets (referred to as commune Party budgets).

State budget levels shall ensure balanced funding for the operations of Party agencies at the four aforementioned levels.

5. Financial agencies of Party committees:

- The Central Finance-Management Board is the financial agency of the Central Party, a first-tier budget unit of the central state budget. Agencies directly under the Central Party are second-tier budget units.

- The Provincial and Municipal Finance-Management Boards are the financial agencies of provincial and municipal Party committees, first-tier budget units of provincial and municipal state budgets.

- The County Party Committee Office is the financial agency of the County Party Committee, a budget unit of the county state budget.

- The Commune Party Committee Office is the financial agency of the Commune Party Committee.

II. SPECIFIC PROVISIONS:

1. The sources of income and expenditure of the Central Party, provincial, and county Party budgets include:

1.1. Sources of income:

- Party fees: The level of party fees paid by members is stipulated by the Politburo.

- Income from enterprises managed by the Party (excluding taxes and other amounts required to be paid to the state budget according to law). This source of income only occurs at the Central and provincial levels.

- Revenue from public services provided by publishing units and revenue-generating public service units of the Party.

- Other income: Proceeds from the liquidation of fixed assets, donations, etc. (if any).

- Carryover revenue from the previous year.

- Income from the state budget: This is the difference between the total approved budget expenditure and the aforementioned sources of income.

1.2. Expenditure tasks:

- Regular budget expenditures of the Party, ensuring the operation of Party agencies at all levels, including:

+ Recurrent expenditures necessary to maintain the operation of the administrative apparatus, expenditures for internal and external activities, training and education expenses, and subsidies for publication costs.

+ Expenditures beyond the regular budget standards to fulfill the Party's political tasks.

+ Unforeseen expenditures of the Party committee.

- Expenditures funded directly by the state outside the regular Party budget, including:

+ Investment expenditures for construction projects of Party agencies at all levels included in the centralized investment plan of the state, research project expenditures, target program expenditures, retraining expenditures for civil servants, etc., which are allocated and managed according to current government regulations.

2. The main sources of income and expenditure tasks of the Commune Party Committee include:

2.1. Sources of income:

- Party fees: As stipulated by the Politburo.

- Subsidies and donations (if any).

- Carryover revenue from the previous year.

- The commune budget allocates the difference between the approved expenditure budget and the aforementioned sources of income according to Circular No. 14-TC/NSNN dated March 28, 1997 of the Ministry of Finance.

2.2. Expenditure tasks:

- Regular expenditures: Conference expenses; business fees; hospitality expenses; purchase of assets... Expenditures for Party building activities such as cadre training and development, Party congresses, implementation of resolutions, purchase of newspapers and magazines (ensuring that each branch has a copy of the People's Newspaper and a local Party newspaper, and each Party organization has a copy of the Communist Review and other Party-building magazines).

- Construction expenditures (if there is construction of Party headquarters and other facilities).

Management systems and standards for income and expenditure of the Commune Party Committee will be separately regulated.

3. Regarding the preparation of the Party budget estimates.

Annual Party budget estimates are prepared according to the fiscal year of the state budget.

3.1. Basis for preparing the budget estimates:

When preparing the budget estimates, it must be based on the Party's resolutions and policies regarding the economic and social situation and tasks for the coming year, the Prime Minister's directives on the tasks of building economic and social plans and budget estimates. On this basis, the actual implementation of the previous year's budget should be reviewed to prepare the next year's budget estimate.

a) Regarding budget revenue: According to the sources of income specified in Point 1.1 - Section II. The revenues of the Party budget generated at each level shall be balanced within the budget of that level.

b) Regarding regular expenditures: The Party's regular budget estimate must be based on:

- The budget expenditure standards applicable to the same-level state administrative agencies.

- The requirements of the Party committee's political tasks, ensuring all internal and external activities of Party organizations.

- A contingency fund to meet the unexpected expenditure needs of the Party. c) Regarding other expenditures (outside regular expenditures): Based on the current standards, norms, and systems of the Party and the state.

3.2. The budget estimate of the Party's budget includes:

a) The budget estimate for regular expenditures: The regular expenditure budget estimate of each level of the Party's leadership body includes:

- Expenditures to ensure the operation of the organizational apparatus: While the appropriate expenditure standards for the Party's operations have not yet been studied and established, temporarily, the calculation will be based on the expenditure standards applicable to administrative agencies at the same level, plus additional funds to cover special nature expenditures of the Party (not included in the existing system, standards, and norms) such as foreign affairs expenses, expenses for preparing and implementing resolutions, training and cadre development expenses, expenses for Party congresses at all levels, subsidies for publication costs, expenses related to cadre policies and revolutionary veterans...

- Expenditures from the contingency fund of the Party's budget: The contingency fund is established to promptly meet unexpected expenditures in carrying out the political tasks of the Central Committee of the Party, provincial committees, county committees, and equivalent bodies. The contingency fund is set aside at 5% of the approved regular expenditure budget estimate of each level.

The regular expenditure budget estimate of each level of the Party's leadership body and subordinate units must fully reflect all revenues and expenditures according to the state budget classification applied to Party agencies, supplemented appropriately with the specific revenue and expenditure requirements of the Party as issued by the Central Finance and Administration Board after consultation with the Ministry of Finance.

Before submitting to the Standing Committee of the Party's leadership body for approval, the Party's financial agency shall consult with the state financial agency at the same level regarding the ability to provide funding for the Party's agencies from the state budget at that level. After being approved by the Standing Committee of the Party's leadership body, the state financial agency at the same level shall consolidate, balance, and report to the competent authorities in accordance with the law.

The budget estimate approved by the Party's leadership body must be reported to the higher-level Party's financial agency.

b) The budget estimate for construction investment funds directly allocated by the state budget outside the regular expenditure budget of the Party: Based on the capital needs for construction investment in the year, the Party's financial agency shall consult and reach consensus with the state planning and investment agencies at various levels on projects to be included in the plan and the distribution of construction investment capital. The procedures, formalities, and timing for the preparation of the capital plan and the allocation of construction investment capital shall be carried out in accordance with current regulations of the state.

c) The budget estimate for research project funds and other sources of funds directly allocated by the state budget outside the regular expenditure budget of the Party: At all levels, the Party's financial agencies shall base their budget estimates on the need for research and implementation of projects, the need for funds for programs and targets, staff retraining... in the year. The Party's financial agency and the agency responsible for managing and implementing the projects shall consult and reach consensus with the relevant state agencies on the amount of state funds allocated for the year. The procedures, formalities, and expenditure systems shall be implemented in accordance with current regulations of the state.

d) Investment in Party-owned enterprises: This is carried out based on the production and business orientation of the Party during each period in accordance with the general regime of the state.

4. Implementation of the Budget (Regular Expenditure Funds of the Party)

4.1. After officially announcing the Party's budgets at all levels, the financial agency of the Party's leadership body shall prepare a plan for allocation, report to the Standing Committee of the Party's leadership body, and notify the directly subordinate budget units, while also sending it to the state financial agency at the same level.

4.2. The financial agency of the Party's leadership body shall prepare the quarterly budget estimate and send it to the state financial agency at the same level; the state financial agency shall allocate regular funds (including contingency funds) to the Party's financial agency through a payment order based on the approved budget estimate. State treasuries at all levels are responsible for transferring funds according to the orders of the state financial agency.

4.3. Based on the budget allocation notification from the Party's financial agency, the second-level budget unit shall prepare a quarterly budget expenditure estimate (broken down by month).

The Party's financial agency shall examine and review the expenditure requests, approve the budget expenditure estimate, and simultaneously send it to the state treasury where the second-level budget unit has its account opened. State treasuries at all levels are responsible for transferring funds monthly and quarterly to the second-level budget unit according to the requirements of the Party's financial agency.

4.4. Adjustment and supplementation of the annual budget estimate (if necessary):

The head of the Party's financial agency may adjust the expenditure tasks within the approved budget ceiling to timely serve the activities of the Party's leadership body. The decision on adjustment shall be sent to the state financial agency and the state treasury at the same level for implementation.

To implement urgent political tasks assigned, if the approved and announced annual budget does not meet the requirements, the Party's financial agency shall consult with the state financial agency at the same level about the amount of supplementary funds to be submitted to the Standing Committee of the Party's leadership body and the competent state authority at the same level for approval.

4.5. Internal revenues of the Party: Party fees, revenues from Party-owned enterprises and public institutions, and other revenues are managed and utilized in accordance with current regulations of the Party.

4.6. Management and utilization of the contingency fund:

For the central budget, the Central Finance and Administration Board directly manages the contingency fund. Based on the degree and importance of the expenditure requirement, the Standing Committee of the Politburo decides or delegates the Central Finance and Administration Board Chairman to decide on expenditures from the contingency fund.

For provincial and county budgets, the Party's financial agency directly manages the contingency fund. Based on the degree and importance of the expenditure requirement, the Standing Committee of the Party's leadership body decides, and the head of the Party's financial agency implements expenditures from the contingency fund.

5. Accounting and Settlement of the Budget

5.1. Budget accounting:

- Accounting vouchers; accounting accounts, ledgers, reporting forms, accounting periods are implemented in accordance with current regulations of the state.

- Some changes and supplements to suit the special characteristics of the Party's budget are stipulated by the Central Finance and Administration Board after consultation with the Ministry of Finance.

- At the end of the budget year, the estimated funds on the deposit account of the financial agency and budgetary units of the Party at all levels shall be transferred to the next year for expenditure. The procedures for transferring the estimates shall be carried out in accordance with the current regulations of the State.

5.2. Settlement of the budget:

According to a regular schedule (quarterly, annually), the financial agency of the Party committee shall approve the settlement of the budget of subordinate units; consolidate and prepare annual budget settlement reports to submit to the Standing Committee of the Party committee for approval.

The Party's financial agency shall settle accounts with the corresponding state financial agency regarding the state budget funds transferred to the Party budget according to the state budget classification.

6. Reporting system of the Party's budget system:

- Financial agencies of the Party at all levels and their subordinate units shall uniformly implement the provisions on reporting periods, forms of budget estimates and settlements as stipulated by the Central Finance and Administration Board.

- Financial agencies of the Party at all levels shall implement the consolidated reporting system for budget estimates and settlements, management and utilization of assets to the Party committee, and send copies to the higher-level financial agency of the Party committee on a quarterly, semi-annual, and annual basis. The Central Finance and Administration Board shall consolidate the annual budget estimates and settlements of the entire Party and report to the Politburo, which will then report to the Central Committee as prescribed by the Party Constitution.

7. Financial inspection of the Party:

- The Inspection Committee of the Party committee shall be responsible for inspecting the finances of lower-level Party committees and the financial agencies of the same-level Party committee in accordance with the provisions of the Party Constitution. Any violations of laws in the management of finances and budgets of the Party, in addition to disciplinary actions by the Party, must also be handled in accordance with the relevant legal provisions.

- Higher-level Party committee financial agencies shall be responsible for inspecting and guiding the operations of lower-level Party committee financial agencies.

- Enterprises under the Party, in addition to being subject to financial inspections by the Inspection Committee and the Party committee financial agency, shall also be subject to supervision and inspection by state functional agencies in accordance with current regulations.

III. IMPLEMENTATION ORGANIZATION

The Central Finance and Administration Board and the Ministry of Finance shall be responsible for researching and establishing standards and norms for budget expenditures in Party agencies to be decided by the Standing Committee of the Politburo.

This Circular shall take effect from the 1998 budget year.

All previous regulations that conflict with this Circular are hereby abolished.