Directive No. 11/1999/CT-TTg On Rectifying Financial Irregularities Discovered Through Financial Audits in 1998

DIRECTIVE

Rectifying the violations discovered through financial inspection in 1998

The results of the inspection of financial management and state budget work in 1998 at some provinces, cities, ministries, sectors, and state-owned enterprises show that there are still many violations and weaknesses. The budget preparation stage lacks thoroughness, does not closely follow tasks and regulations set by the state, leading to many units having excess funds while the state budget is extremely difficult. In managing the state budget, many localities still exclude certain revenue items such as rental income from state-owned property, land compensation surplus, land use right transfer fees, etc., from the state budget; fail to account for aid, medical expenses, tuition fees, etc., in the state budget; grant tax exemptions and reductions beyond their authority; apply incorrect laws on exemption and reduction of stamp duty, special consumption tax, etc.

The situation of improper expenditures remains widespread; administrative expenditure exceeds the budget significantly; car purchases and office building construction do not comply with regulations and result in waste.

Investment capital allocation for basic construction projects is scattered; some plans allocate capital to projects without investment decisions, economic and technical justifications, or approved budgets; capital disbursement exceeds the approved budget, and project completion payments are not made according to actual work done.

In financial management at state-owned enterprises, there are still many loopholes, poor use of investment capital causing significant losses; joint ventures and collaborations in some enterprises are ineffective, with low capital recovery rates, large debts, and loss of payment capability; compliance with accounting and bookkeeping systems is weak in many enterprises.

To address these deficiencies and violations in financial management and state budget work, it is required that heads of ministries, sectors, localities, and units immediately implement the following actions:

1. Direct related units to promptly rectify financial shortcomings and violations identified by the Financial Inspection; clearly identify the causes and responsibilities of each organization and individual for these deficiencies and violations, and strictly handle them according to the law. At the same time, regularly inspect and guide units to comply with financial principles and regulations.

State-owned enterprises must strictly adhere to national financial management regulations, and rigorously address and take measures to correct weaknesses and violations found in financial inspections and audits, particularly in accounting and bookkeeping.

Provincial People's Committees must correctly exercise their authority and comply with regulations on fee and tax management, ensuring no revenues are excluded from the state budget settlement and no expenditures exceed the budget.

Prepare and allocate funds for administrative and public service units and affiliated organizations in accordance with state regulations. Review other legitimate sources of funding and surplus funds to reduce reliance on state budget allocations.

Ensure expenditures align with tasks and regulations, organize regular reviews of administrative and public service expenditures according to regulations, hold accountable and strictly punish violations in review and approval processes as identified by the Financial Inspection.

Implement financial transparency and budget disclosure according to the Financial Disclosure Regulations for state budgets at all levels, budgetary units, state-owned enterprises, and funds derived from public contributions, as stipulated in Decision No. 225/1998/QĐ-TTg dated November 20, 1998, issued by the Prime Minister.

3. Assign the Ministry of Labor, Invalids and Social Affairs to coordinate with the Ministry of Finance and relevant ministries, sectors, and localities to review and rectify wage fund approval and settlement for enterprises; supplement legal responsibilities for individuals and groups who approve incorrect wage rates for subordinate units.

4. Strictly follow bidding regulations in investment and construction, immediately rectify the situation where many projects should be subject to bidding but are instead awarded through arbitrary designation.

- Clearly define the responsibilities of project sponsors and construction contractors regarding project acceptance, settlement, and finalization, ending the practice of incorrect price and volume settlements;

- Specifically regulate price management in investment and construction and the use of foreign loans (ODA) for construction, machinery, and equipment purchases on credit terms;

- Direct enterprises to expand production, including joint ventures and collaborations, in accordance with regulations and sector development plans, ensuring practical effectiveness.

5. The Ministry of Finance shall guide ministries, sectors, and localities on the content and methods of reviewing the use of funds across all managed units and directly audit and inspect funds of key administrative and public service units and enterprises; supervise and urge implementation of this Directive, and report the results to the Prime Minister before July 30, 1999.

6. Starting from 1999, the Ministry of Finance shall periodically (every six months, annually) compile inspection results and handling of discovered violations, reporting to the Prime Minister.

Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairmen of provincial and municipal People's Committees, and heads of related units shall strictly implement this Directive.