Circular No. 07/2005/TT-BTC guiding financial management for the activities of the Red Cross Society

CIRCULAR

Guidelines for Financial Management of Red Cross Activities

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;

Pursuant to Decree No. 17/2001/NĐ-CP dated May 4, 2001 of the Government promulgating the Regulation on Management and Utilization of Official Development Assistance;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 64/2001/QĐ-TTg dated April 26, 2001 of the Prime Minister promulgating the Regulation on Management and Utilization of Non-Governmental Foreign Aid;

Pursuant to Decision No. 21/2003/QĐ-TTg dated January 29, 2003 of the Prime Minister regarding State budget support for political-social organizations, social organizations, and social-professional organizations for activities related to state tasks;

After reaching consensus with the Vietnam Red Cross, the Ministry of Finance provides guidelines for financial management of Red Cross activities at all levels as follows:

I. FINANCIAL REVENUE SOURCES OF THE RED CROSS

The Red Cross is a people's humanitarian social organization operating in accordance with the Constitution, laws, the Charter of the Red Cross, and the seven principles of the International Red Cross and Red Crescent Movement. The financial sources of the Red Cross include the following revenues:

1.Revenue from membership fees paid by members to the organization.

2.Revenue from production, business, and service activities of the Red Cross in accordance with the law.

3.Revenue from charitable donations from individuals and organizations both domestically and internationally supporting the Red Cross and the Humanitarian Fund.

4.Revenue from foreign disaster relief and humanitarian aid, projects, and development programs provided by individuals and international organizations through the Red Cross.

5.State budget support in accordance with the Law on State Budget.

6.Other lawful revenues as prescribed by law.

II. USE OF REVENUE SOURCES

1. For overseas relief funds:

All overseas relief funds received by the Red Cross at various levels must be transferred to the designated recipients in accordance with the agreements of the donors. The Red Cross may not retain these funds without permission from the government. For relief projects and programs where the donor does not cover management costs (such as transportation, handling, warehousing, etc.), the following procedures shall apply:

- For consignments with delivery addresses specified: The receiving units and localities must bear their own expenses for receiving the goods. The Vietnam Red Cross will assist the units and localities with the procedures for receiving the goods.

- For consignments without specified delivery addresses: The Vietnam Red Cross will directly receive them and request the Ministry of Finance to provide funding according to the State Budget Law to handle, manage, distribute, and deliver the goods to the designated locations based on valid and legal documentation.

- In cases where relief funds are provided to purchase relief goods in Vietnam, the value-added tax on the relief goods will be refunded according to current regulations for humanitarian purposes.

2. For non-reimbursable foreign aid for programs and projects:

- Non-reimbursable foreign aid directly provided to the Red Cross at various levels shall be recorded as an increase in the organization's revenue and implemented in accordance with the agreements of the donor.

- For non-reimbursable aid for government or local programs that the Red Cross is tasked with implementing, the Red Cross shall process the necessary procedures to record income and expenditure through the State budget, and implement the project according to the signed and approved project documents. If the project documents stipulate that the Vietnamese side will contribute management costs from its matching funds, the Red Cross at various levels shall prepare the budget plan in accordance with Circular No. 02/2003/TTLT-BKH-BTC dated March 17, 2003 of the Joint Circular of the Ministry of Planning and Investment and the Ministry of Finance guiding the preparation of financial plans for programs and projects using official development assistance (ODA) funds.

3. For domestic charitable donations:

- The Red Cross at various levels (where donations are directly received) shall maintain detailed records of the agencies, organizations, and individuals who have contributed, supported, and sponsored, as well as lists and addresses of the beneficiaries. They shall provide relief and support in accordance with the requirements and purposes of the contributing organizations and individuals.

- Based on the total amount of donations received annually (excluding donations with specific addresses and government support), the Red Cross may allocate between 5% and 10% of the total actual receipts to cover direct management costs, including: publicity and mobilization expenses, salaries and allowances for management staff, office supplies, communication and public service payment expenses, travel and professional expenses (reception, storage, handling, etc.), rental expenses, and rewards for individuals and groups with outstanding contributions to donations, fundraising, and relief efforts according to current national financial regulations.

- Any surplus funds and interest earned annually (including management fees) shall be carried over to the next year and used for humanitarian purposes.

4.- State budget support for Red Cross activities related to state tasks shall be implemented in accordance with Circular No. 123/2003/TT-BTC dated December 16, 2003 of the Ministry of Finance guiding the provision of financial support from the State budget to political-social organizations, social organizations, and social-professional organizations for activities related to state tasks.

5.- Revenues from production and service activities of the Red Cross at various levels shall be managed under the principle of self-financing, and the excess revenue after fulfilling financial obligations to the State budget shall be distributed according to current regulations applicable to revenue-generating public institutions.

III. MANAGEMENT OF REVENUE AND EXPENDITURE SOURCES

1.In order for financial authorities to have grounds to consider funding for operational expenses, each level of the Association annually prepares budgets for income and expenditure in accordance with Circular No. 59/2003/TT-BTC dated March 26, 2003, issued by the Ministry of Finance guiding the implementation of Decree No. 60/2003/NĐ-CP dated June 6, 2003, of the Government detailing and guiding the implementation of the State Budget Law and other related documents; and Circular No. 123/2003/TT-BTC dated December 16, 2003, issued by the Ministry of Finance guiding the provision of financial support from the state budget to political organizations, social occupational organizations, social organizations, and social-occupational organizations for activities related to state tasks.

2.At all levels, the Red Cross Association is responsible for preparing budgets, managing, implementing, and settling accounts for non-repayable aid in the form of money or goods provided by foreign governments, organizations, and individuals according to Circular No. 70/2001/TT-BTC dated August 24, 2001, issued by the Ministry of Finance, and other supplementary documents guiding the state financial management system for non-repayable aid.

In cases where donated goods or support items are not suitable for the intended recipients' conditions, the Association may request competent authorities to permit their sale through public auction in accordance with the auction regulations set by the state; the proceeds from such auctions must be used for the specific purposes and requirements stipulated by the donating organizations or individuals.

3.Each level of the Association is responsible for transferring all funds and materials collected from the people and international humanitarian aid to the intended beneficiaries; maintaining records, documenting, and reflecting all income and expenditures accurately; performing accounting, statistics, reporting, and settlement in accordance with current state regulations; and ensuring financial transparency.

IV. IMPLEMENTATION PROVISIONS

1.This Circular takes effect fifteen days after its publication in the Official Gazette and replaces Circular No. 85/1997/TT-BTC dated November 22, 1997, issued by the Ministry of Finance guiding the implementation of Directive No. 254/TTg dated May 16, 1994, of the Prime Minister regarding support and facilitation by local authorities to enhance the effectiveness of the Vietnam Red Cross operations. Any provisions contrary to those in this Circular are hereby abolished.

2.During the implementation process, if there are any difficulties, they should be promptly reported to the Ministry of Finance for appropriate amendments and supplements./.