JOINT CIRCULAR No. 1042-TTLB/VH/TC ON THE FINANCIAL MANAGEMENT MECHANISM AND STATE SUBSIDY POLICY FOR PERFORMING ARTS UNITS

CIRCULAR

OF THE JOINT MINISTRY OF CULTURE AND FINANCE DECREE NO. 1042/TTLB-VH-TC DATED JULY 22, 1989 ON THE MANAGEMENT MECHANISM AND STATE SUBSIDY POLICY FOR PERFORMING ART UNITS

OF THE STATE TOWARD PERFORMING ARTS UNITS

Performing arts, including theatrical performances and music and dance performances, are a special form of cultural activity, a creative labor of artists serving the spiritual life of the people. In recent years, the central and local state budgets have continued to invest in equipment, infrastructure, and subsidize performing arts to ensure that this activity fulfills its educational and aesthetic functions according to the policies of the Party and the State. However, in the current situation where the state budget faces many difficulties, along with the transition from the subsidized mechanism to socialist business accounting, the subsidy policy of the state budget for performing arts units has not been uniformly guided, each place proceeding differently; at the same time, many performing arts units have not paid sufficient attention to artistic quality, chasing after low-level tastes to increase revenue, traditional art forms have seriously declined, and the function of building new individuals has been neglected.

To implement Resolution No. 6 of the Sixth Plenary Session of the Central Committee of the Party, transferring cultural and artistic institutions to a self-sustaining mechanism gradually and partially, implementing the Resolution of the Fifth Session of the Eighth National Assembly, and Directive No. 1135-KG dated June 28, 1989 of the Chairman of the Council of Ministers on urgent issues in the Cultural sector, to ensure that performing arts activities develop in the right direction, the Ministry of Culture and Finance guides the financial management system and state subsidy policy for performing arts activities, implemented uniformly nationwide for state-owned professional performing arts units.

1- Combating fake goods is the responsibility of all Ministries, sectors, People's Committees at all levels, political and social organizations, enterprises, business households, and the entire population.

1. Performing arts units are income-generating public service units managed under the revenue-to-cover-expenditure mechanism, receiving state subsidies for the difference. The state budget subsidy is necessary to create conditions for performing arts to develop in the right direction, maintain quality, and promote the initiative and creativity of performing arts units and the talents and intelligence of the cultural and artistic cadre.

2. The state budget ensures minimum and necessary funding for various types of performing arts activities. This includes ensuring salaries according to the current regulations, costs for building programs according to political requirements, while encouraging high-quality performances to generate higher revenues, ensuring social effectiveness and the livelihood of performers.

3. Gradually supplementing necessary technical facilities for performing arts troupes through multiple sources to improve performance quality and effectiveness.

II - CONDITIONS FOR STATE SUBSIDIES FROM THE STATE BANK

Performing arts units need to be reorganized towards efficiency, gradually building a trained actor team with a reasonable balance between different art forms. Units that cannot cover their expenses and meet the following conditions will receive state budget subsidies:

1. Recognized by competent authorities as units serving timely propaganda of the Party's and State's policies, with correct artistic directions.

2. Must develop an operational plan, achieving minimum industry standards such as creating at least two new programs annually, having at least 150 performances, and reaching the revenue level set by the State.

Traditional performing arts units, units in border and mountainous provinces, units serving children, and units requiring high artistic levels (opera, symphony, chorus, etc.) will be given preferential treatment, but must still create at least one new program annually, have at least 80 performances, and reach the revenue level set by the State.

Based on these conditions, the supervising authority will consult with the finance authority at the same level to classify performing arts troupes, balance the overall subsidy level in planning, management, and distribution.

III - SUBSIDY METHODS

1. The subsidy level for performing arts units is the difference between total reasonable regular expenses minus total revenue (after deducting two funds).

Regular expenses include:

a) Salaries and allowances according to current regulations.

b) Management costs.

c) Costs for building new programs.

d) Performance costs.

Determining the total reasonable regular expenses and setting total revenue targets for each type of art form are reviewed by the supervising authority and the finance authority at the same level based on current policies and local prices.

In addition to the above subsidy, annually, the supervising authority and the finance authority may consider additional funding for purchasing equipment and means of operation to continuously improve artistic quality (excluding basic construction investment).

2. Distribution and settlement.

The supervising authority compiles the approved annual plans of the units, sends them to the finance authority at the same level for distribution of the state budget subsidy.

- To facilitate the activities of the units, the state budget will distribute 50% of the quarterly subsidy plan at the beginning of each quarter. After the quarterly settlement report, the remaining subsidy will be distributed.

- Quarterly and annual settlements are carried out according to the current Statistics and Accounting Law. A previous quarter's settlement is required before the next quarter's subsidy can be provided.

IV - DISTRIBUTION OF REVENUE AND FORMATION OF ART DEVELOPMENT FUNDS AND WELFARE FUNDS

1. Revenue distribution:

To encourage the creative labor of performing arts units and to reflect the results of labor after performances, it is now stipulated that actual performance revenue shall be distributed as follows:

- From 30% to 40% of performance revenue is used to pay salaries and performance allowances to actors and supporting staff.

- From 10% to 20% of revenue is used to build new programs, including paying rehearsal allowances, author fees, director fees, and incentives.

- Five to ten percent of the performance revenue shall be established as an art development fund for purchasing additional equipment, props, building new performances, and rewarding artistic quality.

- Five to ten percent of the performance revenue shall be established as a welfare fund to increase training allowances, performance subsidies serving political tasks, and those places with low income.

- The remainder shall be used for other expenses related to performances.

State sponsorship according to the plan combined with actual revenue shall be used to promptly address necessary expenses. When state budget sponsorship is not timely provided, post-performance revenue shall be prioritized for paying salaries, performance allowances, and other necessary expenses.

2. Art Development Fund and Welfare Fund:

The Art Development Fund and Welfare Fund shall be allocated as a percentage from performance revenue according to the distribution ratio specified in point 1 above.

Art units that have self-funded to cover costs if there is a surplus of revenue over expenditure, or if the unit has exceeded the assigned revenue target, or if the unit has reduced costs compared to approved costs, shall allocate into the two funds as follows:

- Seventy percent for the Art Development Fund.

- Thirty percent for the Welfare Fund.

Art units that fail to achieve the assigned revenue level or whose actual costs exceed the approved regular costs must self-fund to cover the shortfall, and the state budget will not sponsor the revenue deficit or increased costs.

V - EFFECTIVE DATE OF IMPLEMENTATION

1. Ministries and levels need to reorganize art units towards efficiency and effectiveness. The Ministry of Culture, after consultation with the Ministry of Finance, shall guide the classification of art units entitled to state sponsorship according to the above regulations, as well as provide specific guidance on establishing the two funds and distributing revenue according to maximum and minimum ratios through separate documentation.

2. This Circular takes effect from the date of signature and is uniformly implemented throughout the country. Any difficulties encountered during implementation shall be reported to the two ministries for study and resolution.