Circular No. 107TC/ĐT guides the management and allocation of investment capital for projects funded from the State budget.

CIRCULAR

OF THE MINISTRY OF FINANCE NUMBER 107TC/ĐT DATE DECEMBER 8, 1994 GUIDING THE MANAGEMENT AND DISTRIBUTION OF CAPITAL FOR PROJECTS FUNDED BY THE STATE BUDGET

CAPITAL FOR PROJECTS FUNDED BY THE STATE BUDGET

Pursuant to the investment and construction management charter issued together with Decree No. 177/CP dated October 20, 1994 of the Government;

The Ministry of Finance guides the management and distribution of capital for projects funded by the State budget as follows:

PART I:

GENERAL PROVISIONS

1. The State budget only distributes capital for projects that have completed all necessary investment and construction procedures according to the current investment and construction management charter and have been included in the approved annual investment plan.

2. Capital from the State budget is directly managed and distributed by the System of the General Department of Investment Development under the Ministry of Finance.

3. For projects managed by localities, the supervising authority of the project proponent is the People's Committee of the province or city; for projects managed by central ministries, the supervising authority of the project proponent is the ministries, ministerial-level agencies, and government agencies.

The supervising authority of the project proponent and the project proponent are responsible for managing and using the investment capital for its intended purpose and effectively.

PART II:

SPECIFIC PROVISIONS

I. OBJECTS OF PROJECTS ELIGIBLE FOR CAPITAL DISTRIBUTION FROM THE STATE BUDGET.

Projects that do not have the ability to directly recover capital include:

- Projects for constructing economic infrastructure (transportation, water resources...).

- Projects for planting upstream forests, protective forests, national parks, and natural conservation areas.

- Veterinary stations, animal and plant breeding stations for researching new breeds and improving existing breeds.

- Projects for constructing cultural, social, sports, and public welfare facilities.

- Projects for constructing educational, training, and healthcare facilities.

- Projects for constructing state management, scientific, and technical facilities.

- Projects for environmental protection or specific regions, zones, or territories.

- Projects for constructing security and defense facilities.

- National key projects decided by the Government.

II. ANNUAL PLAN FOR CAPITAL DISTRIBUTION

1- Contents of the annual capital distribution plan:

The annual capital distribution plan includes the following contents:

- Capital for planning work.

- Capital for preparatory work.

- Value of completed construction works (construction, equipment, other costs) in the plan up to the end of the reporting year that have not yet received capital distribution.

- Value of construction works (construction, equipment, other costs) expected to be completed during the planned year that meet the conditions for capital distribution.

2- Basis for preparing the annual capital distribution plan:

a) Guidance plans of the State Planning Commission on:

- Capital for planning work;

- Preparing to implement projects.

b) Implementation of projects:

- Investment decisions and total project budgets already approved by competent authorities.

- Cumulative value of construction works and investment capital implemented up to the end of the reporting year.

- Approved investment plan for the planned year.

- Economic contracts signed between the project proponent and organizations undertaking the work.

3- Procedure for preparing and reviewing the annual capital distribution plan:

- Each year, based on guidance and plan objectives; the total investment capital and list of Class A projects already approved by the Government; Ministries, ministerial-level agencies, and provincial and municipal people's committees are responsible for directing project proponents to prepare the annual capital distribution plan for projects within their jurisdiction as outlined in point 1 above, to compile (according to form KH1 TC/ĐT of this circular) and submit and defend it before the Ministry of Finance and the State Planning Commission. The Ministry of Finance will notify the capital distribution plan to ministries, ministerial-level agencies, provincial and municipal people's committees, and the System of the General Department of Investment Development as the basis for distributing capital.

III. ADVANCE PAYMENTS; DISTRIBUTION AND SETTLEMENT OF INVESTMENT CAPITAL

1- Principles for advance payments; distribution and settlement of investment capital:

1. 1/ For projects implementing tendering or selection processes: During the year, the project proponent may temporarily receive part of the investment capital according to the tendering or selection regulations stipulated by the State. This amount will be gradually deducted from subsequent capital distributions throughout the year.

1. 2/ Distribution and settlement of investment capital for projects awarded through direct assignment, as permitted by the competent authority, shall be made according to the value of completed construction works each month within the approved annual plan and upon acceptance according to established procedures.

1. 3/ In the final year of the project, the project proponent can only receive a maximum of 95% of the planned value of completed works. The remaining 5% will be distributed after the project proponent submits and has the final account report approved by the competent authority.

1. 4/ To receive advance payments or capital distributions, project proponents must:

- Open an account (according to the current account opening regulations) at the Investment Development Bureau (or Branch) where transactions take place.

- On the first receipt of advance payment or capital distribution, the project proponent must send the following documents to the Investment Development Bureau (or Branch) directly handling the transaction:

+ Decision on project investment by the competent authority.

+ Total project budget and itemized budgets.

+ Annual approved capital distribution plan.

+ Economic contracts signed by the project proponent with organizations undertaking the work.

1. 5/ Within five working days of receiving all required documents (as stipulated in this circular), the Investment Development Bureau (or Branch) will process advance payments or capital distributions for project proponents and simultaneously settle accounts with related organizations undertaking the work.

2. Advance payments and settlements of investment capital:

- For projects implementing tendering and selection processes, they shall follow the State's tendering regulations.

- For projects utilizing domestic construction consultancy services, the project proponent may receive an advance payment equal to 25% of the consultancy contract value in the planned year.

- Based on current regulations, the Investment Development Bureau (or Branch) will process advance payments and settlements for project proponents and monitor to deduct from subsequent capital distributions the value of completed works in the last months of the year.

3- Distribution and settlement of investment capital:

3. 1- For each capital distribution, in addition to the application for capital distribution and settlement (attached model), the project proponent must send the following documents to the Investment Development Bureau (or Branch) handling the transaction:

- Inspection report (with confirmation from the consulting organization or auditing entity) accompanied by a price list: For the value of completed construction works monthly.

- Invoice combined with warehouse release form and related documents: For procurement or production of machinery and equipment domestically.

- Set of import documents: For procurement of imported machinery and equipment.

- Set of claims documents from organizations executing contracts: For transportation, loading/unloading, storage, and processing of machinery and equipment.

- Investment preparation decision, annual investment capital preparation plan, approved investment preparation cost estimate by the competent authority (for investment preparation work).

- Approved design cost estimate; record of receipt and delivery of design documents (for design work).

- Approved camp cost estimate; construction camp progress plan, camp capital usage requirements (for camp costs), permitted by the competent authority.

- Compensation and land clearance plan attached with approved cost estimate; list of compensation beneficiaries (for compensation and land clearance work).

3. 2- Based on the above provisions, the Investment Development Bureaus (or Sub-bureaus) shall process disbursement and payment of capital to the project sponsors (as stipulated in point 1.5, section 1 above).

3. 3- Specifically for machinery and equipment (excluding construction equipment), imported materials of turnkey projects funded by state loans or foreign aid; within five working days (from the date all documents are received), the General Department of Investment Development shall process the State Treasury to record revenue and simultaneously record expenditure for disbursement and payment of capital to the project sponsor.

IV. INSPECTION AND REPORTING REGIME

1- The General Department of Investment Development is responsible for regularly inspecting and guiding project sponsors in the proper and effective use of advance payments and disbursements according to their intended purposes and regulations; the Director-General of the General Department of Investment Development has the authority to temporarily suspend advance payments, disbursements, and payments, or recover previously disbursed funds upon recommendation of the Investment Development Bureau Director when sponsors misuse funds. Suspension of advance payments and disbursements shall be decided by the Minister of Finance based on the recommendation of the Director-General of the General Department of Investment Development.

2- Monthly on the fifth day, project sponsors with payment volumes must report the implementation status and capital usage of the previous month to the Investment Development Bureau (or Sub-bureau) where transactions are conducted.

PART III:

ARTICLE TRANSITION PROVISIONS

This Circular takes effect on January 1, 1995. Any issues encountered during implementation should be promptly reported to the Ministry of Finance by relevant ministries, agencies at ministerial level, localities, and units for study and supplementation or amendment.

SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness

APPLICATION FOR DISBURSEMENT OR ADVANCE PAYMENT OF CAPITAL

- Project name:...

- Total amount:...

Respectfully submitted to: Investment Development Bureau, Sub-bureau

 

 

Request the Investment Development Bureau, Sub-bureau...to disburse or advance payment to account...

Date...month...year 199...

(Project sponsor signs and stamps)

Approve this period: ...

Date Month Year 199...

Disbursement Officer Head of Disbursement Department (Director-General, or

Disbursement (Investment Development Bureau, Sub-bureau Director)

Director) signs and stamps)

 

Form Number: 01-KH

PROVINCE AND CITY PEOPLE'S COMMITTEES, SOCIALIST REPUBLIC OF VIETNAM

(Ministry...) Independence - Freedom - Happiness

Number: KH/ĐT

 

CAPITAL DISBURSEMENT PLAN FOR THE YEAR...

AGENCIES AT THE LEVEL OF MINISTRIES, AND AGENCIES UNDER THE GOVERNMENT

OR MINISTRY, PROVINCE, CITY

Unit of measurement: Million dong

Place of receipt: Date...Month...Year 199...

Ministry of Finance Heads of agencies at ministerial level, agencies under the Government, or People's Committees of provinces, cities

State Committee for Planning and Investment

People's Committees of provinces, cities

(signature, stamp)