Circular No. 09-TC/VP guiding the implementation of Decision No. 50-TTg dated February 16, 1971 of the Government Chairman on strictly prohibiting illegal funds in enterprises and state agencies.

CIRCULAR

Guidelines for Implementing Decision No. 50-TTg dated February 16, 1971 of the Prime Minister on Strictly Prohibiting Illegal Funds in State Enterprises and Agencies

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The Prime Minister has issued Decision No. 50-TTg dated February 16, 1971, strictly prohibiting illegal funds in state enterprises and agencies. Below, the Ministry of Finance provides guidance on implementing the aforementioned decision.

I. ILLEGAL FUNDS PROHIBITED BY THE STATE

1. Illegal funds are those not officially established by a competent state authority based on current laws and regulations of the state.

These are funds whose origins stem from the infringement upon state assets, collective assets, and individual assets of citizens. For illegal funds originating from the infringement upon collective assets, specific regulations will be provided later by the state.

2. All funds established through the infringement upon state assets or individual assets of citizens shall be considered illegal, regardless of the method of infringement, such as:

a) Appropriating state assets, selling them to establish funds, including raw materials, fuels, supplies, goods, machinery, equipment, scrap, packaging, surplus goods, low-quality goods, samples, gifts, products from workshops and laboratories, public profits...

b) Using fraudulent means to extract or embezzle state budget funds, such as fabricating expenses, settling accounts fraudulently, falsifying vouchers and documents...

c) Illegally using state assets, such as transportation vehicles, tools, machinery... of the state to earn money for private funds.

d) Exploiting loopholes in financial management policies and systems of the state, or deliberately violating existing policies and systems to obtain money or supplies to establish funds, such as:

- Retaining funds allocated by the state but not fully expended;

- Retaining state revenues without submitting them to the state budget;

- Misappropriating state budget funds; using funds donated by organizations and individuals to support the state (supporting war invalids, families of martyrs...) for business operations to establish funds; using state funds to temporarily lend to grassroots trade unions or to borrow to organize livestock farms, canteens... earning interest to establish funds;

- Retaining and not returning to the state, funds and assets of dissolved organizations;

- Misappropriating excess capital due to changes in basic construction cost estimates;

- Using funds reserved for state employees' salaries to pay workers transferred to independent business units of the agency or enterprise;

- Unilaterally imposing a system requiring subordinate business units to pay fees to higher levels and using that money to establish private funds;

- Using the difference between the estimated construction costs and the actual payments made to students participating in construction work...

đ) Infringing upon individual assets of citizens to establish funds, such as:

- Unilaterally imposing additional charges on citizens beyond the state policy and regulations;

- Embezzling labor compensation, remuneration for civilian workers, etc...

3. Even if some agencies and enterprises openly or semi-openly use illegal fund money for public welfare projects (such as building latrines, wells...), common benefits (such as constructing office buildings for agencies...), collective welfare (such as organizing livestock farms to improve meals for cadres, workers, staff), etc., because the origin of the funds is from infringing upon state or citizen assets, these funds are still considered illegal.

More serious are cases where illegal funds are established and used secretly, with the money spent on inappropriate activities, such as banquets, miscellaneous purchases, lending, granting subsidies, awards outside the state standards, paying wages to workers outside the official roster; funding activities of self-established organizations, etc...

4. All funds established through the infringement upon state and citizen assets are considered illegal, regardless of the name under which they were established or managed, such as:

- Illegal funds common to the entire agency or enterprise, or funds specific to smaller units within the agency or enterprise;

- Illegal funds entrusted to mass organizations within the agency or enterprise for management (trade unions, women's organizations, youth organizations, etc.).

II. INVENTORY OF ASSETS BELONGING TO ILLEGAL FUNDS

Upon receiving the Prime Minister's decision, all units at the county level and above currently holding illegal funds must immediately cease all income and expenditure activities related to these funds, both at their own units and at businesses established with these funds, lock up any books (if available), and conduct an inventory of assets belonging to illegal funds. Conducting a thorough inventory demonstrates responsibility in implementing the government's decision to prohibit illegal funds.

This inventory should be conducted as an unexpected inspection, following the state's inventory procedures (refer to the inventory plan for zero hour on January 1, 1969, jointly issued by the Ministry of Finance and the General Statistics Office under Decision No. 885-LB dated October 24, 1968, and Circular No. 732-TC/CĐKT of the Ministry of Finance...). The requirement of the inventory is to accurately grasp the quantity, quality, and value of each unit's assets, serving as the basis for recovering and submitting to the state budget the entire amount of funds currently held in illegal funds, while also serving as the basis for determining appropriate measures for handling assets purchased with these funds.

Assets belonging to illegal funds currently held by independent business organizations (subsidiary workshops, livestock farms...) established by agencies and enterprises, or by mass organizations within agencies and enterprises (trade unions, youth organizations, women's organizations...), must also be inventoried.

The objects to be inventoried are all existing assets belonging to illegal funds, that is, all private assets currently existing whose origin is from the infringement of state property and personal property of citizens, regardless of whether such assets are stored in warehouses, kept at other locations, entrusted to households or others for safekeeping, leased, processed on commission, transported, lent out, or used by other units, etc.

Assets include two types: fixed assets and current assets (including cash funds and securities with monetary value).

Inventory indicators consist of two types: value indicators and physical indicators. When calculating the value of physical items, it should be based on the actual price at which they were entered into inventory and the remaining value to reflect the current situation of the type of asset being inventoried.

The time for inventory shall be decided by the head of the unit. The inventory must be carried out promptly to ensure compliance with the deadline set by the Prime Minister.

Regarding the method of inventory: the actual number of assets must be determined through weighing, measuring, gauging, and counting. Units conducting the inventory must follow the regulations on inventory as stated in the plan for the zero hour inventory on January 1, 1969.

For accounts payable, it is necessary to reconcile and verify debts with each unit and individual involved in transactions to accurately determine the total amount of payments owed to each unit and individual; to prevent any misuse or embezzlement of money or assets belonging to illegal funds.

Units, especially those established using illegal funds, need to rely on mass organizations such as trade unions, youth associations, etc., to mobilize everyone involved to conduct the inventory.

At each unit, an asset inventory committee must be established, headed by the unit's head, with participation from accounting, finance, statistics, supply, and trade union departments. It is not necessary to establish a directive organization for inventory from top to bottom. The chief accountant has the responsibility to assist the head in implementing the Prime Minister's decision effectively, particularly in the inventory of assets.

III. THE HANDLING OF FUNDS BELONGING TO ILLEGAL FUNDS AND THEIR SUBMISSION TO THE STATE BUDGET.

All funds belonging to illegal funds managed by management agencies or directly by business establishments (such as livestock farms, canteens, etc.) must be submitted to the state budget immediately after the inventory is completed, including:

- Cash on hand as of the date of inventory;

- Funds currently deposited in state bank accounts (regardless of which account they are deposited in);

- Funds deposited in savings accounts.

Additionally, any funds that have been lent or borrowed by agencies or enterprises to collectives or individuals but remain unused or partially used must also be collected and submitted to the state budget immediately.

These funds must be submitted to the state budget according to current procedures and recorded under category V-Other Revenue, item 116, subcategory 4 - miscellaneous items, in the current state budget schedule.

IV. THE PRESERVATION OF ASSETS AND ITEMS BELONGING TO ILLEGAL FUNDS

Fixed assets and current assets purchased or constructed using illegal funds, currently in use or not yet in use, lent to collectives or individuals, or allocated to other units, whether located at the agency or elsewhere, must all be inventoried.

After completing the inventory, units must fully recover all assets lent to individuals or collectives for borrowing or use; while awaiting decisions on the handling of these assets, they must continue to strictly preserve them, preventing their dispersion, concealment, division, sale, exchange, destruction, etc.

V. THE HANDLING OF ASSETS AND ITEMS BELONGING TO ILLEGAL FUNDS

The Prime Minister has clearly defined the direction for handling assets and items belonging to illegal funds and assigned the responsibility to the Ministry of Finance (for central sectors) and Provincial People's Committees (for localities) to decide on the specific handling of each case.

It is requested that Ministries, agencies equivalent to Ministries, and Provincial People's Committees guide subordinate units with assets belonging to illegal funds to contact financial authorities at the same level for detailed declaration guidance. Heads of sectors base their handling of declared assets of subordinate units on the direction set by the Prime Minister, study the handling of each unit's assets, and submit to the Ministry of Finance, or Provincial People's Committee for local sectors, requesting specific handling for each case.

After receiving the decision from the Ministry of Finance or Provincial People's Committee, the transfer of assets between the unit holding the assets and the unit receiving the assets will be carried out according to current regulations on asset transfer, settlement, and accounting.

VI. REPORTING REGIME

To enable the Ministry of Finance to compile and report to the Government before August 1, 1971, on the implementation of the Prime Minister's decision in various sectors and localities, it is requested that Ministries, agencies equivalent to Ministries, and Provincial People's Committees compile the implementation status of this decision in subordinate units within their sectors and localities and submit to the Ministry of Finance before July 15, 1971, using the attached forms.(1).

To ensure strict declaration of illegal funds, units without illegal funds must also report that they do not have such funds, using the attached forms.