Joint Circular No. 04/LB-TC.TM on the results of financial inspection at the General Corporation of Machinery and Spare Parts

JOINT CIRCULAR

Regarding the results of financial inspection at the General Corporation of Machinery and Spare Parts

Implementing Circular No. 1371/TC-TTr dated July 28, 1992 of the Minister of Finance on continuing to review the implementation of the inspection recommendations for 1991 and conducting inspections until the end of the first quarter of 1992 at the General Corporation of Machinery and Spare Parts, the Ministry of Finance's Inspection Department has conducted inspections from August 3, 1992 to September 18, 1992.  After hearing the report on the inspection results, the two Ministers of Finance and Commerce have agreed to report to the Prime Minister the conclusions on the main violations that need to be addressed and the issues that need to be rectified.  Under the changing management mechanism, the General Corporation has made efforts to fulfill its business tasks, contributing to accumulating funds for the State Budget. The General Corporation decided the selling price of imported goods according to the Protocol at each time point during 1991 and the first quarter of 1992, earning a price difference of 60 billion dong compared to the price set by Decision No. 266/VGNN dated May 7, 1990 of the State Price Commission, ensuring employment for staff. The General Corporation implemented some of the inspection recommendations recorded in the 1990 inspection report, such as paying the State Budget and issuing documents to improve management work. However, the General Corporation still has several deficiencies that need to be addressed and issues in management that need to be rectified as follows:

I/ SOME DEFICIENCIES IN MANAGEMENT WORK THAT NEED TO BE HANDLED.  FINANCIAL MANAGEMENT.

1/ Selling and managing proceeds from the sale of imported goods under the Protocol.

The General Corporation has the direct obligation to settle with the State Budget regarding goods and proceeds from the sale of imported goods under the Protocol. In practice, imported goods under the Protocol are sold through the General Corporation's Office and the Ho Chi Minh City Machinery Import-Export Company (a subsidiary of the General Corporation with legal personality).

As of the first quarter of 1992 and up to April 15, due to underreporting actual revenue and delayed payment to the State Budget for proceeds from the sale of imported goods under the Protocol, the General Corporation has not paid the State Budget 18,592 million dong, arising from the Southern Company and misusing some amounts: The Ho Chi Minh City Machinery Import-Export Company spent 18,047 million dong on self-operating activities (including buying foreign currency to repay foreign debts amounting to 10,640 million dong).

2/ Nguyen Tien - Accountant of the Ho Chi Minh City Machinery Import-Export Company advised the company to reduce the selling price of goods to buyers by 213 million dong to receive 163 million dong back from the buyers.

3/ The Ngoc Khanh Store (belonging to the General Corporation) sold goods without recording in accounting books, did not deposit into the treasury, and lent to private individuals who defrauded 86.7 million dong. It has not been recovered to date.

Reduced prices without basis, sold with a price difference of 22 million dong, and used this amount for personal purposes.

Created a false loan contract for 200 million dong, recorded interest payable as circulation fees totaling 29 million dong, and distributed 25 million dong among employees.

4/ The Ho Chi Minh City Machinery Import-Export Company imported goods from the KOLON company, but when returning these goods to the company (in Vietnam), it did not calculate import tax to claim 133 thousand USD.

II/ SOME DEFICIENCIES IN ECONOMIC AND FINANCIAL MANAGEMENT THAT NEED TO BE RECTIFIED.

1/ It is necessary to address shortcomings in implementing state regulations on accounting work, settlement procedures for sales of imported goods under the Protocol, and self-operating activities.

2/ Reorganize to strictly manage income and expenditure activities in accordance with general state regulations.

3/ Develop measures to monitor and urge payment of receivables at units, especially those at the Ho Chi Minh City Machinery Import-Export Company.

Among the deficiencies mentioned above, subsidiaries of the General Corporation bear responsibility, and the General Corporation's leadership bears part of the responsibility for management, guidance, and supervision of financial activities throughout the General Corporation.

The Ministry of Commerce shall examine and impose strict legal penalties for violations and take measures to improve economic and financial management at the General Corporation.

2/ Reorganize to manage strictly the revenue and expenditure activities in accordance with the general regulations of the State.

3/ Take measures to monitor and urge payment of debts at units, especially debts at the Ho Chi Minh City Import-Export Machine Company.

Among the aforementioned weaknesses, subordinate units of the Corporation bear responsibility, and the Management Board of the Corporation also bears part of the responsibility for managing and directing financial activities throughout the Corporation.

The Ministry of Trade shall examine and impose strict legal penalties under the Law on violations and take corrective measures to improve economic and financial management within the Corporation.