Circular No. 113/2008/TT-BTC guides the management and supervision of state budget expenditure commitments through the State Treasury

CIRCULAR

Guidelines for Managing and Controlling Budget Expenditure Commitments through the State Treasury

Through the State Treasury

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Pursuant to Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the Law on State Budget;

Pursuant to Decree No. 77/2003/ND-CP dated July 1, 2003 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 235/2003/QD-TTg dated November 13, 2003 of the Prime Minister on the functions, tasks, powers, and organizational structure of the State Treasury under the Ministry of Finance.

To implement the budget-treasury management information system and gradually apply accrual accounting; support the preparation of medium-term budgets for financial agencies at all levels and ministries, sectors, and localities; strengthen the control over state budget expenditures of budgetary units and project sponsors/project management boards, contributing to preventing arrears in payments, the Ministry of Finance provides guidelines for managing and controlling state budget expenditure commitments through the State Treasury 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. Scope of application:

The scope of application includes: budgetary units using state budget funds (hereinafter referred to collectively as budgetary units); project sponsors/project management boards (hereinafter referred to collectively as sponsors) from state budget sources (excluding commune-level budgets); financial agencies and State Treasury units.

2. Concepts:

2.1. TABMIS: is the budget-treasury management information system.

2.2. Regular expenditure commitment refers to the commitment by budgetary units to use the annual regular budget expenditure plan assigned (either partially or entirely within the assigned annual plan) to pay for contracts signed between budgetary units and suppliers. The value of the commitment is:

- For contracts implemented within one fiscal year: It is the amount stated in the contract.

- For contracts implemented across multiple fiscal years: It is the amount planned to be allocated for the contract in the current year, ensuring it falls within the approved annual budget and the remaining contract value that can still be committed.

2.3. Investment commitment refers to the commitment by sponsors to use the annual investment capital plan assigned (either partially or entirely within the assigned annual plan) to pay for contracts signed between sponsors and suppliers. The value of the investment commitment equals the amount of funds planned to be allocated for the contract in the year, ensuring it falls within the approved annual investment plan and the remaining contract value that can still be committed.

2.4. Remaining contract value for commitment is the difference between the contract value and the total value of commitments made for the contract (including both settled and unsettled commitments).

2.5. Application interface is the method of exchanging data information between applications to perform business processes.

2.6. A budgetary unit with an interface to TABMIS is a unit with accounting software interfaced with TABMIS.

2.7. A budgetary unit without an interface to TABMIS is a unit without accounting software interfaced with TABMIS.

2.8. Remaining budget available for use:

- For regular expenditure, program-target expenditure, and economic public service expenditure with a regular nature (hereinafter collectively referred to as regular expenditure) is the difference between the annual budget assigned to the unit and the total amount of unprocessed commitments and processed payments (including both settled and temporarily advanced payments).

- For investment expenditure, program-target expenditure, and economic public service expenditure with an investment nature (hereinafter collectively referred to as investment expenditure) is the difference between the annual investment capital assigned to a project and the total value of commitments made in the year that have not been processed and the total amount of processed payments in the year (including both settled and temporarily advanced payments).

2.9. Commitment number (regular, investment) is the code generated by the TABMIS program for each commitment to track and manage the commitment on TABMIS.

2.10. Supplier's treasury office is the State Treasury office directly responsible for paying suppliers based on requests from budgetary units or sponsors.

3. Principles of Management and Control of Expenditure Commitments:

3.1. All state budget expenditures assigned by competent authorities as regular budget plans or investment capital plans (including advance allocations), with purchase contracts for goods and services according to regulations and contract values of 100 million VND or more for regular expenditures or 500 million VND or more for construction investment expenditures must be managed and controlled through the State Treasury except for the following specific cases:

- Commune-level budget expenditures;

- Expenditures for security and defense areas;

- Expenditures for national debt repayment obligations;

- Expenditures from foreign aid and loans under program/project funding methods; direct aid;

- Expenditures for share contributions, financial obligations, and annual fees to international organizations;

- Expenditures under cash payment orders issued by financial agencies at various levels;

- Expenditures from transaction accounts at the State Treasury;

- State budget expenditures in kind and labor days.

The threshold for contract values for goods and services requiring expenditure commitment control procedures with the State Treasury will be reviewed and adjusted to suit economic and social development conditions at different periods.

3.2. State budget expenditure commitments must be recorded in Vietnamese Dong; state budget expenditure commitments in foreign currency must be tracked in their original currency; simultaneously, they must be converted into Vietnamese Dong according to the monthly foreign exchange rate set by the Ministry of Finance for recording commitments. Detailed sub-ledger entries of state budget expenditure accounts (if applicable) must be recorded at the most detailed level.

In cases where state budget expenditure commitments involve multiple sources of funds (commitments for procurement contracts of ODA projects, etc.), they must be recorded in detail according to the amount committed from each source of funds.

3.3. A payment commitment can only be settled when the amount requested for settlement is less than or equal to the outstanding amount of that payment commitment.

In cases where the amount requested for settlement exceeds the remaining outstanding amount of the payment commitment, before processing the payment commitment settlement procedures, the budgetary unit or project investor must request the State Treasury at the transaction location to adjust the amount of the payment commitment to match the requested settlement amount and ensure compliance with the provisions set forth in Clause 2, Section II of this Circular.

3.4. During the management and supervision process, if any payment commitments found to violate prescribed regulations or any budgeted amounts intended for payment commitments that cannot be carried over to the next year, or if the budgetary units or project investors no longer have a need to use them, such payment commitments will be canceled. The State Treasury shall cancel the payment commitments of budgetary units or project investors according to the prescribed regulations (for payment commitments not permitted to be carried over to the next year) or based on the decision of the financial authority or competent state agency (for payment commitments that violate regulations) or upon the request of the budgetary unit or project investor (for payment commitments that the unit no longer needs to use).

II. SPECIFIC PROVISIONS:

1. Management and Supervision of Payment Commitments:

1.1. Time Limit for Submission and Approval of Payment Commitments:

- Within five working days from the date of signing a goods or service purchase contract with a value equal to or exceeding the threshold specified in Point 3.1, Clause 3, Section I of this Circular, the budgetary unit or project investor must submit the contract along with the request for a payment commitment to the State Treasury at the transaction location.

- Within two working days from the date of receipt of the request from the budgetary unit or project investor, the State Treasury must notify the unit of its approval or rejection of the payment commitment.

1.2. Forms of Submission for New Creation, Adjustment, and Cancellation of Payment Commitments:

1.2.1. Creation and Adjustment of Payment Commitments:

- For regular expenditures:

+ For budgetary units interfacing with TABMIS, the request for a payment commitment or adjustment of a payment commitment should be sent to the State Treasury through the interface program between the unit's accounting software and TABMIS. Specifically, for procurement contracts for goods and services (as the basis for controlling payment commitments), the budgetary unit should send these to the State Treasury in writing or electronically in accordance with the information exchange principles outlined in Point 1.3, Clause 1, Section II of this Circular.

+ For budgetary units without an interface with TABMIS, the request for a payment commitment or adjustment of a payment commitment and procurement contracts for goods and services (as the basis for controlling payment commitments) should be sent to the State Treasury in writing (using Form 01 or 02 attached).

- For investment expenditures: The project investor should send the request for a payment commitment or adjustment of an investment payment commitment and procurement contracts for goods and services (as the basis for controlling payment commitments) to the State Treasury in writing (using Form 01 or 02 attached).

1.2.2. Cancellation of Payment Commitments:

- If there is no further need to make payments for committed amounts, the budgetary unit or project investor should submit a cancellation request for the payment commitment to the State Treasury in writing (using Form 03 attached).

- If payment commitments are found to violate prescribed regulations, the State Treasury shall cancel the payment commitments of the budgetary unit or project investor based on the decision of the competent state authority.

1.3. Principles for Information and Electronic Data Exchange:

Automatic electronic data exchange regarding payment commitments shall be conducted via the interface program between the unit's accounting software and TABMIS; simultaneously, all necessary information fields must be complete, secure, and comply with the electronic data exchange format as stipulated by the Law on E-commerce, and related government and Ministry of Finance guidelines.

All agencies and units participating in the electronic data exchange regarding payment commitments must ensure the security, confidentiality, accuracy, and integrity of electronic data within their scope of responsibility; they must also cooperate with relevant agencies to implement necessary technical measures to ensure the security and confidentiality of the system.

1.4. Conditions for Implementing Payment Commitments:

1.4.1. Requests for payment commitments from budgetary units or project investors must include all required information fields as per the prescribed form and must be legally valid, specifically:

+ The seal and signature on the documents must match those registered with the State Treasury. If the budgetary unit sends a request for a payment commitment or adjustment of a payment commitment to the State Treasury through the interface program, it must comply with the principles outlined in Point 1.3, Clause 1, Section II of this Circular.

+ Procurement contracts for goods and services must comply with current bidding and direct award procedures.

+ The payment terms of procurement contracts for goods and services must be included in the approved investment project (for investment expenditures).

1.4.2. The amount requested for a payment commitment must not exceed the remaining allowable budget.

- If the budget and budget allocation plan have not yet been decided by the competent authority or require adjustment according to regulations, the State Treasury shall control payment commitments based on the provisional budget or adjusted budget of the budgetary unit.

- If advance payments from the next year's state budget are made, the State Treasury shall control payment commitments based on the advance budget of the budgetary unit or project investor.

1.4.3. Requests for payment commitments for the current fiscal year from budgetary units or project investors must be submitted to the State Treasury no later than December 30 of the current year.

1.5. Process for Managing and Controlling Regular Payment Commitments:

1.5.1. Documents for Regular Payment Commitments:

When there is a need for a payment commitment, in addition to the annual state budget expenditure plan submitted once at the beginning of the year, the budgetary unit should submit the following related documents to the State Treasury:

- Contracts for the sale and purchase of goods and services with a value of VND 100 million or more (submitted initially or when there is a modification to the contract);

- Requests for commitment to disburse funds or requests to modify commitments to disburse funds.

1.5.2. The State Treasury controls the documents and files of the budgetary unit, including:

- Controlling and comparing commitments to disburse funds against the state budget estimate, ensuring that the amount requested for commitment to disburse funds does not exceed the remaining permissible usage of the unit's estimate;

- Checking the legality of contracts for the sale and purchase of goods and services, ensuring compliance with the allocated budget estimate of the unit;

- Controlling and comparing the unit's request for commitment to disburse funds, ensuring all information indicators are complete and submitted before the deadline as prescribed;

1.5.3. After controlling the documents and files of the budgetary unit:

- In cases where all conditions stipulated in point 1.4 clause 1 section II of this Circular are met, the State Treasury records the commitment to disburse funds in the TABMIS system and informs the budgetary unit of the managed commitment to disburse funds on the TABMIS system for management and payment of the commitment to disburse funds;

- In cases where the conditions stipulated in point 1.4 clause 1 section II of this Circular are not met, the State Treasury refuses to approve the recording of the commitment to disburse funds in the TABMIS system and informs the budgetary unit according to point 1.3 clause 1 section III of this Circular (using form number 04 attached or through the interface program between the unit's accounting software and the TABMIS system);

1.5.4. Management of commitments to disburse funds for multi-year contracts:

For contracts for the sale and purchase of goods and services implemented over multiple fiscal years and with a value of VND 100 million or more, the budgetary unit sends the contract to the State Treasury at the transaction location for monitoring and management.

Annually, the head of the budgetary unit has the responsibility to determine the amount of funding allocated for procurement contracts; simultaneously, they have the right to proactively adjust the amount of funding allocated for these contracts within the approved state budget estimate and the remaining permissible value of the contract.

Based on the amount of funding allocated for the contract in one fiscal year, the budgetary unit submits a request for commitment to disburse funds for the contract to the State Treasury at the transaction location to process the control procedures for the commitment to disburse funds.

The management and control process for multi-year contracts and commitments to disburse funds for regular expenditures from multi-year contracts is carried out similarly to the management of investment contracts and commitments to disburse funds as stipulated in point 1.6 clause 1 section II of this Circular.

1.6. Process for managing and controlling commitments to disburse funds for investments:

1.6.1. Documents for commitments to disburse funds for investments:

When there is a need for a commitment to disburse funds, in addition to the documents and files sent once and annually according to the prescribed regulations, the project owner sends the State Treasury related documents and files as follows:

- Contracts with a value of VND 500 million or more (sent initially when requesting a commitment to disburse funds or sent when there is a modification to the contract);

- Requests for commitment to disburse funds or requests to modify commitments to disburse funds.

1.6.2. Management of investment procurement contracts:

Based on the procurement contracts for goods and services sent by the project owner, the State Treasury controls the legality of the contract according to paragraph 1.4.1 point 1.4 clause 1 part II of this Circular, if it is appropriate, then it enters the contract information into the TABMIS system and informs the project owner of the managed commitment to disburse funds on the TABMIS system for management and payment of the commitment to disburse funds.

- Annually, the project owner must have the responsibility to determine the investment capital allocated for each contract; simultaneously, they have the right to proactively adjust the amount of investment capital allocated for each contract within the approved annual investment plan and the remaining permissible value of the contract.

+ In cases where the contract is fully executed within one fiscal year, the amount of capital allocated in the year for the contract is equal to the value of the contract.

+ In cases where the contract for the sale and purchase of goods and services involves multiple currencies (commitments to disburse funds for procurement contracts of ODA projects, etc.), the project owner must have the responsibility to determine the detailed allocation of investment capital in the year for the contract according to each currency.

+ In cases where the contract for the sale and purchase of goods and services involves multiple sources of capital, the project owner has the responsibility to determine the detailed allocation of investment capital in the year for the contract according to each source of capital.

1.6.3. The State Treasury controls the documents and files of the project owner:

Based on the capital already allocated for each investment procurement contract in the year, the project owner sends a request for commitment to disburse funds for investment to the State Treasury at the transaction location. Based on the request of the project owner, the State Treasury performs:

- Controlling and comparing to ensure that the amount requested for commitment to disburse funds does not exceed the allocated annual investment plan for the project and the remaining permissible value of the contract.

- Controlling and comparing the project owner's request for commitment to disburse funds, ensuring all information indicators are complete and submitted before the deadline as prescribed;

1.6.4. After controlling the documents and files of the project owner:

- In cases where all conditions stipulated in point 1.4 clause 1 section II of this Circular are met, the State Treasury records the commitment to disburse funds in the TABMIS system and informs the project owner.

- In cases where the conditions stipulated in point 1.4 clause 1 section II of this Circular are not met, the State Treasury may refuse to record the commitment to disburse funds in the TABMIS system and inform the project owner according to point 4.3 clause 4 section I of this Circular (form number 04 attached).

2. Adjustment and cancellation of commitments to disburse funds and contracts:

2.1. Adjustment of commitments to disburse funds and contracts:

2.1.1. Cases of adjustment:

- The budget estimate of the budgetary unit or the investment capital plan of the project owner is reduced, leading to a need to adjust the commitment to disburse funds.

- Adjusting the amount of money in the contract for the sale and purchase of goods and services between the budgetary unit, the project owner, and the supplier, or adjusting the amount of funding allocated for the contract (multi-year contracts for regular expenditures or investment contracts) in the fiscal year.

The adjustment of the amount already committed to disburse funds can only be made for the remaining amount of that commitment to disburse funds, detailing for each item of the commitment to disburse funds;

The adjustment of the contract amount (multi-year contracts for recurrent expenditure or investment contracts) must ensure that the amount after adjustment is not less than the amount already committed to be spent under the contract.

- Adjusting the value of the segments of the accounting account for committed expenditure and providing detailed explanations for each item of committed expenditure.

- Changing the accounting date of the committed expenditure item.

2.1.2. Adjustment Process:

The budget unit or project owner sends a request to adjust the committed expenditure or the contract (multi-year contracts for recurrent expenditure or investment contracts) to the State Treasury where transactions are conducted (using form number 02 attached). Based on the request from the budget unit or project owner, the State Treasury will implement the adjustment and notify the approval (or rejection) of the adjustment of the committed expenditure or contract back to the budget unit or project owner.

2.2. Revocation of Committed Expenditure and Contracts:

2.2.1. Cases for revoking committed expenditure and contracts:

- Revoking the contract or temporarily suspending or delaying the implementation of the contract leading to the budget unit or project owner having no need to use the committed expenditure to pay for the contracts within the year;

- Committed expenditure items or contracts (multi-year contracts for recurrent expenditure or investment contracts) which the budget unit or project owner does not have a need to continue using;

- Committed expenditure items that do not meet the conditions for payment as stipulated by the State Budget Law;

- The budget allocated for committed expenditure that has not been permitted by the competent authority to be carried over to the next year;

- Procurement contracts for goods or services that have been revoked or there has been a change in currency or information related to the supplier (name, code, and supplier point).

2.2.2. Revocation Process:

- The budget unit, project owner, or state agency with the appropriate authority shall issue a document clearly stating the reasons and the committed expenditure amounts or contract codes (multi-year contracts for recurrent expenditure or investment contracts) managed in TABMIS that need to be revoked, and send it to the State Treasury where transactions are conducted (using form number 03 attached).

- Based on the request from the budget unit, project owner, or state agency with the appropriate authority, the State Treasury shall verify and ensure:

+ In the case of revoking committed expenditure: The unit can only request the revocation of the remaining unspent amount of the committed expenditure item.

+ In the case of revoking multi-year contracts for recurrent expenditure or investment contracts: The request for revocation from the unit will only be approved if these contracts have not yet created committed expenditure or all committed expenditure items of the contract have been revoked previously.

After verification, if the conditions for revocation as prescribed are met, the State Treasury will carry out the revocation of committed expenditure or contracts on TABMIS.

3. End-of-Year Processing:

3.1. Processing of Committed Expenditure Items from Allocated Budgets for the Year:

Committed expenditure items belonging to a specific fiscal year can only be expended within that fiscal year, and the payment deadline for committed expenditure items should align with the expenditure deadlines specified for recurrent and investment expenditures. Upon expiration of the state budget expenditure period, any unused or partially used committed expenditure items must be revoked, except in the following cases:

- For remaining budgets transferred to the next year for continued spending according to regulations (no need for the competent authority to review the transfer for central government budgets), the State Treasury will transfer the budget or capital plan along with the committed expenditure of the budget unit or project owner to the next year for monitoring, management, and continued payment.

- For remaining budgets allowed to be transferred to the next year for continued spending based on the Decision of the Minister of Finance (for central government budgets) or the Chairman of the People's Committee or head of the authorized financial agency (for local government budgets): Based on the decision allowing the transfer of remaining budgets to the next year for continued spending from the competent authority, the State Treasury will transfer the committed expenditure of the budget unit or project owner to the next year for monitoring, management, and continued payment.

3.2. Processing of Committed Expenditure Items from Advance Budget Appropriations:

Any remaining unpaid committed expenditure items as of December 31 will automatically be transferred to the next year for payment and recorded in the next fiscal year's budget period.

4. Accounting Entries for Committed Expenditure at the State Treasury:

Recording committed expenditure, adjusting committed expenditure, paying committed expenditure, and transferring committed expenditure from the previous year to the next year will be carried out according to the national accounting system applicable to TABMIS.

III. IMPLEMENTATION:

1. Responsibilities and Authorities of Agencies and Units:

1.1. For Ministries, agencies equivalent to ministries, government agencies, other central-level agencies, provincial people's committees directly under the central government: They are responsible for directing, guiding, and inspecting subordinate units to implement state budget committed expenditure as prescribed in this Circular.

1.2. For budget units and project owners:

- All budget units and project owners are responsible for signing procurement contracts for goods and services, ensuring they are consistent with assigned tasks; simultaneously, they must complete the procedures to control committed expenditure with the State Treasury before making payments for those expenditures that fall within the scope of required committed expenditure according to regulations.

- Heads of budget units and project owners are responsible for complying with current state regulations on expenditure management and control, and the contents outlined in this Circular. Violations will be subject to disciplinary action or administrative penalties depending on the nature and severity, as stipulated by law.

1.3. For the State Treasury:

1.3.1. The State Treasury is responsible for controlling the documentation submitted by budget units and project owners for committed expenditure requests and recording the accounting entries for committed expenditure in TABMIS for items meeting the conditions stipulated in Point 1.4 Clause 1 Section II of this Circular.

1.3.2. The State Treasury has the right to refuse payment for committed expenditure that does not comply with regulations and inform the budget unit or project owner; concurrently, it bears responsibility for its decisions in the following situations:

- Economic contracts between budget units or project owners and suppliers do not meet legal requirements;

- The amount proposed for commitment expenditure exceeds the remaining budget estimate allowed to be used or exceeds the total value of the contract allowed to be committed.

2. Effectiveness of enforcement:

2.1. This Circular shall take effect fifteen days from the date of publication in the Official Gazette and shall apply to the management and control of budget commitment expenditures starting from the 2009 fiscal year.

2.2. Financial agencies, units under the State Treasury System, budgetary units, and project sponsors are responsible for implementing this Circular./.