Circular No. 11/2009/TT-BTC guiding the ordering and plan allocation for units responsible for managing and operating water conservancy works and financial management regulations for state-owned companies engaged in managing and operating such works.

CIRCULAR

Guidelines for placing orders and allocating plans to units responsible for managing and operating water conservancy works and

financial management regulations for state-owned companies responsible for managing and operating such works.

_______________________________________

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 143/2003/NĐ-CP dated November 28, 2003 of the Government detailing the implementation of certain Articles of the Ordinance on Water Conservancy Works Operation and Protection (hereinafter referred to as Decree No. 143/2003/NĐ-CP);

Pursuant to Decree No. 115/2008/NĐ-CP dated November 14, 2008 of the Government amending and supplementing certain Articles of Decree No. 143/2003/NĐ-CP dated November 28, 2003 of the Government detailing the implementation of certain Articles of the Ordinance on Water Conservancy Works Operation and Protection (hereinafter referred to as Decree No. 115/2008/NĐ-CP);

Pursuant to Decree No. 31/2005/NĐ-CP dated March 11, 2005 of the Government on the production and supply of public goods and services (hereinafter referred to as Decree No. 31/2005/NĐ-CP);

Pursuant to Decision No. 256/2006/QĐ-TTg dated November 9, 2006 of the Prime Minister on Bidding Regulations, Order Placement, and Plan Allocation for the Production and Supply of Public Goods and Services (hereinafter referred to as Decision No. 256/2006/QĐ-TTg);

Pursuant to Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government stipulating the rights of self-management and self-responsibility for the execution of tasks, organizational structure, staffing, and finance for public service units;

Pursuant to Decision No. 39/2008/QĐ-TTg dated March 14, 2008 of the Prime Minister promulgating Bidding Regulations, Order Placement, and Task Assignment for Providing State-Supported Public Services;

Pursuant to Financial Management Regulations for State-Owned Companies and Management of State Capital Investment in Other Enterprises issued together with Decree No. 199/2004/NĐ-CP dated December 3, 2004 of the Government and other guiding documents implementing said Decree;

The Ministry of Finance issues guidelines for placing orders and allocating plans to units responsible for managing and operating water conservancy works and financial management regulations for state-owned companies responsible for managing and operating water conservancy works as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. Ordering agency or plan allocation agency: The Ministry of Agriculture and Rural Development, People's Committees of provinces and centrally governed cities (hereinafter referred to as the ordering agency or plan allocation agency).

2. Units receiving orders, units allocated plans:

2.1. Units receiving orders: State-owned companies, state-owned limited liability companies holding 100% capital, joint-stock companies, private enterprises, cooperatives, organizations using water participating in the management and operation of water conservancy works (hereinafter referred to as units receiving orders).

2.2. Units allocated plans: State-owned companies, state-owned limited liability companies holding 100% capital, public service units assigned the task of providing public services, other state organizations assigned the task of managing and operating water conservancy works (hereinafter referred to as units allocated plans).

Based on the scale of water conservancy works and the specific characteristics of each locality, the People's Committee of provinces and centrally governed cities decides to apply either order placement or plan allocation to ensure the efficient management and operation of water conservancy works.

3. Products subject to order placement or plan allocation: The irrigated area (hectares) or volume of water (cubic meters) for irrigation, drainage, and water supply.

4. Price and unit price for order placement or plan allocation are determined based on the water conservancy fee rate set by the Government or based on economic and technical norms, cost standards approved by competent authorities.

5. Units responsible for managing, operating, and protecting water conservancy works shall be reimbursed by the state budget for the amount of water conservancy fees waived according to current regulations.

For water conservancy fees collected from entities not exempted, the units receiving orders or plans must collect such fees in accordance with current regulations.

6. State-owned companies, state-owned limited liability companies holding 100% capital responsible for managing, operating, and protecting water conservancy works shall receive orders or plans based on the water conservancy fee rate set by the Government. If the collection rate is lower than the actual reasonable costs, they will receive state budget subsidies and price support; if the company does not make a profit or the profit is insufficient to establish incentive and welfare funds equivalent to two months' salary, the state will provide support to establish these funds at the equivalent level.

In cases where state-owned companies, state-owned limited liability companies holding 100% capital responsible for managing, operating, and protecting water conservancy works receive orders and the unit price includes a reasonable profit margin including incentive and welfare funds equivalent to two months' salary, they will no longer be entitled to the support for establishing incentive and welfare funds.

The central government budget will subsidize, support prices, provide financial assistance, and support the establishment of incentive and welfare funds for centrally managed water conservancy management and operation companies; local government budgets will subsidize, support prices, provide financial assistance, and support the establishment of incentive and welfare funds for locally managed water conservancy management and operation companies.

7. State-owned limited liability companies holding 100% capital responsible for managing and operating water conservancy works shall implement financial management regulations as stipulated in Decree No. 95/2006/NĐ-CP dated September 8, 2006 of the Government and Circular No. 24/2007/TT-BTC dated March 27, 2007 of the Ministry of Finance guiding the implementation of said Decree.

8. State-owned companies responsible for managing, operating, and protecting water conservancy works shall manage finances according to the current financial management regulations for state-owned companies and the provisions in this Circular.

II. ESTABLISHING PLANS, PREPARING PROJECTIONS, ORDERING CONTRACTS, DISTRIBUTION, SETTLEMENT OF PRODUCTS SUBJECT TO PLANNED ORDERS AND FINANCIAL SUPPORT FOR IRRIGATION, DRAINAGE, AND WATER SUPPLY SERVICES

1. Establishing Plans:

1.1. For cases involving plan allocation:

Each year, units assigned tasks to manage, operate, and protect water conservancy works must prepare plans for irrigation, drainage, and water supply under normal weather conditions, financial plans according to the forms prescribed in Appendix No. 01, and the Department of Finance must consolidate these plans according to the forms prescribed in Appendix No. 02 issued with this Circular and report them to the competent authority that assigns the plan for examination and decision.

When preparing plans, units must have supplementary tables to explain and detail the data for the supplementary form No. 01 issued with this Circular.

For units assigned tasks to manage, operate, and protect water conservancy works under the management of provinces and centrally-administered cities, they shall report to the People's Committee of the province or centrally-administered city; for units under the management of districts, they shall report to the People's Committee of the district.

For units assigned tasks to manage, operate, and protect centrally-managed water conservancy works, they shall report to the Ministry of Agriculture and Rural Development and the Ministry of Finance.

1.2. In the case of ordering services:

Each year, based on the actual situation of irrigation, drainage, and water supply under normal weather conditions, the ordering unit shall prepare specific plans for each task to be ordered and submit them to the financial agency for consolidation in the budget plan to be submitted to the competent authority for approval. The procedures and time limits for preparing the plan shall comply with the provisions of the State Budget Law and related guiding documents.

2. Consolidation of budget estimates, assignment of plans, and reporting on the implementation of plans with units managing and operating water conservancy works:

2.1. Consolidation of plans:

The Department of Finance shall take the lead in coordinating with the Department of Agriculture and Rural Development to consolidate the plans of units under provincial and centrally-administered city management (including plans of units under district management) to report to the People's Committee of the province or centrally-administered city. In the consolidated plan, it must clearly specify the amount of budget funds allocated according to each type:

- Compensation for exempted water conservancy fees;

- Subsidy and price support funds;

- Major repair funds;

- Support for two reward and welfare funds;

- Other support.

The support items need to be defined according to the sources of central government budget and local government budget.

2.2. Assignment of plans for units performing tasks to manage, operate, and protect water conservancy works:

The assignment of plans shall be carried out in accordance with Article 17 and Article 18 of the Bidding, Ordering, and Assigning Plans for Production and Supply of Public Goods and Services Regulation issued together with Decision No. 256/2006/QĐ-TTg dated November 9, 2006 of the Government; Article 5, Article 13, and Article 17 of Decree No. 143/2003/NĐ-CP dated November 28, 2003 of the Government.

For public service units performing tasks to manage, operate, and protect water conservancy works, they shall implement Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government on the rights of self-management and self-responsibility for implementing tasks, organizational structure, staffing, and finance for public service units and guiding documents of the Ministry of Finance.

The plan assignment time for units responsible for managing and operating irrigation works is before December 31 of the preceding year. Specifically as follows:

- For units performing tasks to manage, operate, and protect centrally-managed water conservancy works: The Ministry of Agriculture and Rural Development shall assign plans to units after receiving written comments from the Ministry of Finance.

- For units performing tasks to manage, operate, and protect water conservancy works under local management: The People's Committee of the province or centrally-administered city shall assign plans or delegate to Departments and Sectors under the province or People's Committee of the district (for units managed by the district) to assign plans to units.

2.3. Adjustment of plans:

During the implementation of the plan, if there are changes in wage policies or prices, the assigning agency shall review and adjust the plan accordingly.

2.4. At the end of the fiscal year, the unit assigned the plan must report on the implementation of the plan. The report on the implementation of the plan is prepared based on the minutes of the settlement of irrigation, drainage, and water supply contracts between the management and operation units of water conservancy works and organizations using water cooperatives, households using water (or water irrigation, drainage, and supply books). The report on the implementation of the plan is sent to the assigning agency and the financial agency (the Ministry of Finance, the Ministry of Agriculture and Rural Development for central-level management and operation units of water conservancy works; the Department of Finance, the Department of Agriculture and Rural Development, and the People's Committee of the district for local management and operation units of water conservancy works).

The report on the implementation of the plan serves as the basis for settling subsidy and financial assistance funds for units assigned plans.

3. Ordering contracts for units accepting orders:

3.1. Based on the budget estimate assigned by the competent authority, the Ministry of Agriculture and Rural Development or its subordinate units may sign ordering contracts with units performing tasks to manage and operate water conservancy works under its management; the People's Committee of the province or centrally-administered city or its subordinate Departments and Sectors, or the People's Committee of the district (for units managed by the district) may sign ordering contracts with units managing and operating water conservancy works under local management. The model contract is prescribed in Appendix No. 03 issued with this Circular (the content of the contract may include additional clauses and appendices suitable for the actual situation of each locality).

3.2. Based on the ordering contract with the state agency, companies operating water conservancy works shall sign contracts with organizations using water that manage part of the works within the system managed by the company.

3.3. Adjustment of contracts: During the implementation of the ordering contract, if there are changes in wage policies or prices, the ordering agency and the unit accepting the order shall review and agree to adjust the value of the ordering contract accordingly.

3.4. At the end of the year, the ordering agency and the unit accepting the order must complete the settlement and sign the minutes of the settlement of the ordering contract. The minutes of the settlement of the ordering contract serve as the basis for the ordering agency to settle and finalize the payment to the unit accepting the order and for the ordering agency to settle the payment with the state budget.

3.5. Some notes when signing ordering contracts:

- BASED ON THE ECONOMIC AND TECHNICAL STANDARDS, UNIT PRICES THAT HAVE BEEN APPROVED BY THE AUTHORIZED AUTHORITIES, THE ORDERING AGENCY SHALL ENTER INTO CONTRACTS WITH THE CONTRACTORS. IN CASE THE UNIT PRICE IN THE CONTRACT ALREADY INCLUDES A REASONABLE PROFIT INCLUDING THE AMOUNTS FOR TWO FUNDS FOR INCENTIVES AND WELFARE, NO SUPPLEMENTARY FUNDS FOR INCENTIVES AND WELFARE SHALL BE PROVIDED.

- ACCORDING TO THE SPECIFIC CHARACTERISTICS OF EACH SYSTEM OF IRRIGATION WORKS, THE ORDERING AGENCY SHALL DETERMINE A RATIONAL PROPORTION OR LEVEL OF FUNDS FOR MAINTENANCE, REPAIR, AND UPGRADE OF IRRIGATION WORKS IN THE CONTRACT. THESE FUNDS SHALL BE USED SOLELY FOR THE MAINTENANCE, REPAIR, AND UPGRADE OF IRRIGATION WORKS AND SHALL NOT BE USED FOR OTHER PURPOSES NOR CONVERTED INTO PROFITS OF THE CONTRACTOR. UNEXPENDED FUNDS MAY BE CARRIED FORWARD TO THE NEXT YEAR FOR USE IN MAINTENANCE, REPAIR, AND UPGRADE OF IRRIGATION WORKS. THE PROPORTION OR LEVEL OF FUNDS FOR MAINTENANCE, REPAIR, AND UPGRADE SHALL SERVE AS THE BASIS FOR MONITORING THE IMPLEMENTATION OF THE CONTRACT, ENFORCING THE CONTRACTOR TO MAINTAIN, REPAIR, AND UPGRADE THE SYSTEM OF IRRIGATION WORKS TO PREVENT DEGRADATION.

4. ISSUANCE, PAYMENT, AND SETTLEMENT OF FUNDS FOR COMPENSATING WATER CHARGES WAIVED AND FINANCIAL SUPPORT FOR UNITS RESPONSIBLE FOR MANAGING AND OPERATING IRRIGATION WORKS:

4.1. THE ISSUANCE OF FUNDS TO COMPENSATE FOR WAIVED WATER CHARGES FOR UNITS RESPONSIBLE FOR MANAGING, OPERATING, AND PROTECTING IRRIGATION WORKS SHALL BE CONDUCTED IN ACCORDANCE WITH THE GUIDELINES OF THE MINISTRY OF FINANCE.

4.2. ISSUANCE OF FINANCIAL SUPPORT FUNDS FOR UNITS RESPONSIBLE FOR MANAGING, OPERATING, AND PROTECTING IRRIGATION WORKS:

THE ISSUANCE OF FINANCIAL SUPPORT FUNDS FOR UNITS RESPONSIBLE FOR MANAGING, OPERATING, AND PROTECTING IRRIGATION WORKS SHALL BE CONDUCTED IN ACCORDANCE WITH DECREE NUMBER 60/2003/NĐ-CP OF THE GOVERNMENT DATED JUNE 6, 2003, AND CIRCULAR NUMBER 59/2003/TT-BTC OF THE MINISTRY OF FINANCE DATED JUNE 23, 2003, WHICH PROVIDE DETAILS AND GUIDANCE ON THE STATE BUDGET LAW AND SHALL BE CONDUCTED IN THE FORM OF A PAYMENT ORDER.

4.2.1. ISSUANCE OF SUBSIDY AND PRICE SUPPORT FUNDS:

a) FOR UNITS ASSIGNED PLANS:

BASED ON THE PLANS ASSIGNED TO UNITS RESPONSIBLE FOR MANAGING, OPERATING, AND PROTECTING IRRIGATION WORKS, THE FINANCIAL AUTHORITY SHALL ISSUE A TEMPORARY ADVANCE OF 50% OF THE ANNUAL ESTIMATE IN THE FIRST QUARTER OF THE PLANNING YEAR. AT THE BEGINNING OF THE FOURTH QUARTER OF THE PLANNING YEAR, UNITS RESPONSIBLE FOR MANAGING, OPERATING, AND PROTECTING IRRIGATION WORKS SHALL REPORT ON THE IMPLEMENTATION OF THE FIRST NINE MONTHS AND THE PLAN FOR THE FOURTH QUARTER OF THE PLANNING YEAR, AND THE FINANCIAL AUTHORITY SHALL ISSUE FUNDS IN ACCORDANCE WITH THE PLAN AND THE BUDGET ESTIMATE ASSIGNED.

b) FOR CONTRACTED UNITS:

Based on the approved budget estimates, the procuring unit shall withdraw budget estimates to pay the contracted unit.

BASED ON THE CONTRACT BETWEEN THE ORDERING AGENCY AND THE CONTRACTOR, THE ORDERING AGENCY SHALL ISSUE A TEMPORARY ADVANCE OF 50% OF THE FUNDS AFTER THE CONTRACT IS SIGNED. AFTER THE MID-YEAR REPORT ON THE IMPLEMENTATION OF THE CONTRACT, THE ORDERING AGENCY SHALL ISSUE AN ADDITIONAL TEMPORARY ADVANCE OF 40% OF THE FUNDS ACCORDING TO THE CONTRACT. UPON COMPLETION AND ACCEPTANCE OF THE CONTRACT, THE ORDERING AGENCY SHALL PAY THE REMAINING AMOUNT CORRESPONDING TO THE ACCEPTED VOLUME.

UNITS RESPONSIBLE FOR MANAGING, OPERATING, AND PROTECTING IRRIGATION WORKS SHALL RECEIVE SUPPORT WITHIN THE SCOPE OF THE APPROVED BUDGET ESTIMATE. IF THE ACTUAL EXPENDITURE EXCEEDS THE APPROVED ESTIMATE, IT SHALL BE HANDLED IN ACCORDANCE WITH THE STATE BUDGET LAW AND CURRENT REGULATIONS.

THE ISSUANCE OF FUNDS AS DESCRIBED ABOVE SHALL BE CONDUCTED UNDER NORMAL WEATHER CONDITIONS. IN CASE OF UNUSUAL NATURAL DISASTERS SUCH AS STORMS AND FLOODS, UNITS RESPONSIBLE FOR MANAGING AND OPERATING IRRIGATION WORKS MAY REQUEST THE ORDERING AGENCY AND THE AUTHORITY ASSIGNING THE PLAN TO ISSUE TEMPORARY ADVANCES TO MITIGATE THE EFFECTS OF THE DISASTER WITHIN THE SCOPE OF THE ASSIGNED PLAN; SIMULTANEOUSLY, THEY SHALL AGGREGATE THE LOSSES AND REPORT TO THE AUTHORITY ASSIGNING THE PLAN FOR REVIEW AND DECISION. THE LOCAL GOVERNMENT WHERE THE IRRIGATION WORKS ARE MANAGED SHALL USE THE LOCAL BUDGET TO RESOLVE THE ISSUE. IN CASE OF DIFFICULTIES WITH THE LOCAL BUDGET, THE PEOPLE'S COMMITTEE OF THE PROVINCES AND DIRECTLY-GOVERNED CITIES SHALL REPORT TO THE MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT AND THE MINISTRY OF FINANCE FOR AGGREGATION AND REPORT TO THE PRIME MINISTER FOR REVIEW AND DECISION.

4.2.2. ISSUANCE OF FUNDS FOR LARGE-SCALE REPAIRS: FUNDS SHALL BE ISSUED IN ACCORDANCE WITH THE PROCEDURES AND REGULATIONS FOR MANAGEMENT AND CONSTRUCTION OF BASIC INFRASTRUCTURE PROJECTS (FOR LARGE-SCALE REPAIRS NOT FUNDED FROM WATER CHARGE REVENUE AND BUSINESS OPERATIONS).

4.2.3. ISSUANCE OF FUNDS TO SUPPORT THE TWO FUNDS FOR INCENTIVES AND WELFARE:

THE ISSUANCE OF FUNDS TO SUPPORT THE TWO FUNDS FOR INCENTIVES AND WELFARE SHALL BE CONDUCTED SIMILARLY TO THE ISSUANCE OF FUNDS TO COMPENSATE FOR WAIVED WATER CHARGES BASED ON THE PLAN FOR ESTABLISHING INCENTIVE AND WELFARE FUNDS APPROVED BY THE AUTHORIZED AUTHORITIES.

5. SETTLEMENT OF FINANCIAL SUPPORT FUNDS:

5.1. THE SETTLEMENT OF FINANCIAL SUPPORT FUNDS WHEN IMPLEMENTING THE POLICY OF WAIVING WATER CHARGES SHALL BE CONDUCTED IN ACCORDANCE WITH CURRENT REGULATIONS. SPECIFICALLY:

- FOR UNITS ASSIGNED PLANS: THE AUTHORITY ASSIGNING THE PLAN SHALL COOPERATE WITH THE FINANCIAL AUTHORITY TO REVIEW AND APPROVE ANNUAL FINANCIAL SUPPORT FUNDS TOGETHER WITH THE TIME OF APPROVING THE ANNUAL FINANCIAL REPORT.

- FOR CONTRACTED UNITS: THE ORDERING AGENCY SHALL SETTLE THE FUNDS WITH THE FINANCIAL AUTHORITY IN ACCORDANCE WITH THE CURRENT SETTLEMENT REGULATIONS FOR GOVERNMENT BUDGET FUNDS.

5.2. HANDLING SURPLUS OR SHORTFALL FUNDS:

5.2.1. FOR FUNDS ISSUED IN THE FORM OF ASSIGNING PLANS:

AFTER THE SETTLEMENT OF THE YEAR HAS BEEN APPROVED BY THE AUTHORIZED AUTHORITIES, IF THE FUNDS ISSUED IN THE YEAR EXCEED THE FUNDS SUPPORTED IN THE SETTLEMENT, THE DIFFERENCE SHALL BE TRANSFERRED TO THE FUNDS ISSUED IN THE FOLLOWING YEAR; IN CASE THE FUNDS ISSUED ARE LESS THAN THE FUNDS SUPPORTED IN THE SETTLEMENT, THE SHORTFALL SHALL BE ISSUED AGAIN. THE FUNDS TO BE ISSUED AGAIN SHALL BE DRAWN FROM THE BUDGET ESTIMATE OF THE FOLLOWING YEAR.

5.2.2. FOR FUNDS ISSUED IN THE FORM OF CONTRACTS:

BASED ON THE SETTLEMENT OF FUNDS APPROVED BY THE ORDERING AGENCY, IF FUNDS ISSUED IN THE PREVIOUS YEAR HAVE NOT BEEN USED UP, THE CONTRACTOR MUST RETURN THE UNUSED FUNDS TO THE STATE BUDGET.

IF FUNDS ISSUED IN THE PREVIOUS YEAR ARE INSUFFICIENT TO PAY THE CONTRACTORS, THE SHORTFALL SHALL BE DRAWN FROM THE BUDGET ESTIMATE OF THE CURRENT YEAR TO COVER THE PAYMENTS.

III. FINANCIAL REPORTING, SUPERVISION, AND EVALUATION OF THE EFFECTIVENESS OF UNITS RESPONSIBLE FOR MANAGING AND OPERATING IRRIGATION WORKS

1. Preparation of financial reports:

- The entity responsible for managing, operating, and protecting water conservancy works shall be responsible for preparing financial statements in accordance with current regulations. The General Director of the enterprise, the legal representative of the company, and the heads of entities responsible for managing, operating, and protecting water conservancy works must bear responsibility before the State and the law for the accuracy and truthfulness of the financial statements.

- The financial statements of entities responsible for managing and operating water conservancy works shall be submitted to the agency that decided on the establishment of the entity, the enterprise, the tax authority, the finance agency, the specialized agency managing state affairs regarding the operation of water conservancy works, and other state management agencies in accordance with current regulations.

2. Inspection, supervision, and evaluation of operational efficiency:

- State-owned enterprises responsible for managing, operating, and protecting water conservancy works shall be subject to inspection and supervision of their production and business operations and the effectiveness of such operations in accordance with Decision No. 224/2006/QĐ-TTg dated October 6, 2006, of the Prime Minister and Circular No. 115/2007/TT-BTC dated September 25, 2007, of the Ministry of Finance guiding the aforementioned decision.

- The agency that decided on the establishment of entities responsible for managing, operating, and protecting water conservancy works shall take the lead, together with the finance agency at the same level, to organize the inspection and approval of annual financial reports of entities responsible for managing and operating water conservancy works before June 30 of the following year.

- Violations of accounting systems, financial income and expenditure systems, budget revenue submission, and fund establishment and utilization systems of entities responsible for managing and operating water conservancy works shall be penalized in accordance with the provisions of the law.

IV. FINANCIAL MANAGEMENT REGULATIONS FOR STATE ENTERPRISES RESPONSIBLE FOR MANAGING AND OPERATING WATER CONSERVANCY WORKS

State enterprises responsible for managing and operating water conservancy works shall implement financial management regulations for state enterprises and manage state capital investment in other enterprises in accordance with current laws and the following guidelines:

1. Depreciation of fixed assets:

The depreciation of fixed assets of enterprises operating water conservancy works shall be carried out in accordance with the current regulations of the State. In addition, the following assets of enterprises operating water conservancy works shall not be subject to depreciation:

- Assets constructed from concrete and earth directly serving irrigation and drainage purposes.

- Water pumps with a capacity of 8,000 cubic meters per hour or more, along with structures used for operating the works.

The depreciation of fixed assets of enterprises operating water conservancy works shall apply the straight-line method. Under all circumstances, enterprises operating water conservancy works shall not depreciate fixed assets outside the framework prescribed by the Minister of Finance's Decision. If it is necessary to increase or decrease the depreciation rate beyond the prescribed limit, written opinions from the Ministry of Finance shall be required.

2. Liquidation and sale of fixed assets:

Important machinery and equipment, production lines directly serving irrigation and drainage services such as water pumps with a capacity of 8,000 cubic meters per hour or more, canal systems... when sold or liquidated, must obtain written consent from the asset owner's representative.

For fixed assets that are not subject to depreciation, when sold, the reduction in business capital of the enterprise shall be recorded, and the proceeds from the sale, after deducting selling expenses, shall be fully remitted to the state budget or supplemented to the registered capital after obtaining written opinions from the finance agency and the asset owner's representative.

3. Management of receivables:

For receivables related to water conservancy fees, water charges, and sewage discharge fees: The company has the responsibility to urge timely and full payment.

The establishment and management of provisions for doubtful receivables, including water conservancy fee revenues, shall be carried out in accordance with Circular No. 13/2006/TT-BTC dated February 27, 2006, of the Ministry of Finance, guiding the establishment and use of provisions for inventory write-downs, losses on financial investments, bad debts, and product warranty costs at enterprises.

4. Revenue, expenses, and profit distribution:

The revenue, expenses, and profit distribution of enterprises operating water conservancy works shall be implemented in accordance with current regulations, specifically as follows:

4.1. Revenue of enterprises operating water conservancy works includes revenue from water service fees for irrigation and drainage and water supply; revenue from comprehensive exploitation activities of water conservancy works; revenue from state support funds as stipulated; other revenues...

4.1.1. Revenue from water service activities for irrigation and drainage: This is the amount of water conservancy fee subsidies already approved according to the contract between the enterprise operating water conservancy works and the water users. Water conservancy fees from non-exempted objects.

4.1.2. Revenue from comprehensive exploitation activities of water conservancy works includes aquaculture, boat mooring rental, tourism, power generation, industrial water supply, residential water supply for industrial zones, or other business activities.

4.1.3. Other revenues: Include recovered amounts from previously written-off bad debts, proceeds from asset liquidation and sales, joint venture and cooperation revenues, financial leasing revenues, consulting and design revenues for construction projects, and other revenues...

4.1.4. Revenue from state support funds as stipulated includes grants and subsidies (excluding revenues such as funding for major repairs, upgrading, and restoring water conservancy works damaged by natural disasters, and funding for two reward and welfare funds).

4.2. Expenses of enterprises operating water conservancy works include:

4.2.1. Expenses for irrigation and drainage activities:

a) Wages, salaries, and allowances of a wage nature (including meal allowances during work hours).

b) Social insurance, health insurance, and trade union fees payable based on wages paid directly by the enterprise.

c) Basic depreciation of fixed assets that are subject to depreciation.

d) Raw materials, fuels, and materials for operating and maintaining the works, machinery, and equipment used for irrigation and drainage services.

đ) Major repair costs of fixed assets (excluding major repair costs funded separately).

e) Regular maintenance costs of fixed assets and hydraulic works.

g) Electricity costs for pumping water for irrigation and drainage (including electricity costs for pumping water to prevent flooding and drought within the quota and beyond the quota).

h) Costs for creating water sources (if applicable).

i) Management expenses of the enterprise (including communication costs using computer systems to operate water supply for production).

k) Costs for flood and storm prevention and mitigation (including under normal weather conditions and natural disasters).

l) Training, scientific research, and new technology application costs for establishing economic and technical standards.

m) Costs for labor protection, safety, and protection of hydraulic works...

n) Costs for collecting water resource fees from entities required to pay such fees.

o) Provisional costs: reduction in inventory value, long-term investment losses, difficult-to-collect receivables, unemployment benefits.

p) Other costs...

4.2.2. Operating costs for comprehensive exploitation activities include costs for aquaculture, fishing, protection, and other business activities...

4.2.3. Other activity costs include costs for recovering difficult-to-collect debts that have been written off, costs for collecting fines, and costs for selling and liquidating fixed assets including residual values of fixed assets.

Expenditures must be supported by legal documentation as stipulated by current regulations.

The company managing hydraulic works may use revenue to offset costs, including:

- Revenue from irrigation, drainage, and water supply services is used to cover service operation costs, taxes, and other state revenues as prescribed by law (excluding corporate income tax).

- Revenue from comprehensive exploitation operations is used to cover comprehensive exploitation operation costs, taxes, and other state revenues as prescribed by law (excluding corporate income tax).

- Other activity revenue is used to cover other activity costs (including sewage discharge fees), taxes, and other state revenues as prescribed by law (excluding corporate income tax).

4.3. Profit and profit distribution:

4.3.1. Profit:

The profit realized by the company managing hydraulic works in a year is the total profit from irrigation, drainage, water supply activities, and comprehensive exploitation activities and other activities.

4.3.2. Profit Distribution:

The profit distribution of the company managing hydraulic works shall be carried out according to the current regulations of the State on state-owned enterprises. If the company managing and exploiting hydraulic works does not have profits or the profits are insufficient to allocate bonus and welfare funds equal to two months' actual salary of the staff present as of December 31 of the previous year, the state budget will provide financial support to ensure the allocation of these two funds at the level of two months' actual salary.

V. IMPLEMENTATION

1. This Circular takes effect 45 days from the date of signature and replaces Circular Joint No. 90/1997/TTLT/TC-NN dated December 19, 1997, issued by the Ministry of Finance and the Ministry of Agriculture and Rural Development guiding the financial management system for state-owned enterprises operating in the field of hydraulic works exploitation and protection. All previous financial management regulations for hydraulic works exploitation companies that conflict with this Circular are hereby abolished.

2. During implementation, if there are any difficulties, please report them to the Ministry of Finance for study and appropriate amendments and supplements by relevant ministries, provincial people's committees, and units managing and exploiting hydraulic works./.