Circular No. 117/2008/TT-BTC guiding the management and use of project management costs for projects funded by state budget capital.

CIRCULAR

Guidelines for managing and using project management costs for investment projects funded by state budget funds

 funded by state budget funds

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Pursuant to 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. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the State Budget Law No. 01/2002/QH11;

Pursuant to Decree No. 99/2007/NĐ-CP dated June 13, 2007 of the Government on Management of Construction Project Investment Costs; Decree No. 03/2008/NĐ-CP dated January 7, 2008 of the Government amending and supplementing certain articles of Decree No. 99/2007/NĐ-CP dated June 13, 2007 on Management of Construction Project Investment Costs.

The Ministry of Finance issues guidelines for managing and using project management costs for investment projects funded by state budget funds 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. Project management costs for investment are all necessary expenses required for the investor and project management board (PMO) to carry out project management tasks throughout the entire investment process of the project.

2. Scope and scope of application: All investors and PMOs managing projects funded by state budget funds (including Official Development Assistance (ODA) projects and government bond projects) must manage and use project management costs according to current laws and specific guidance provided in this Circular, ensuring proper purpose, economy, and effectiveness.

3. Consulting enterprises implementing project management under consulting contracts are not within the scope of regulation of this Circular.

II. SPECIFIC PROVISIONS

1. Project management cost estimate:

1.1. Annually, the investor and PMO shall prepare, review, and approve the project management cost estimate to ensure economical and effective use.

Investors and PMOs managing a project with a total investment amount of less than or equal to 7 billion VND may implement according to the approved project management cost estimate without having to prepare a separate project management cost estimate but must comply with the contents specified in Point 1(1.5) of the Specific Provisions section of this Circular and not exceed the prescribed rate.

1.2. Based on the specific conditions of the project, the investor decides whether to prepare and approve two separate project management cost estimates (one for the investor's use and one for the PMO's use) or a joint estimate for both the investor and PMO.

1.3. Basis for preparing the project management cost estimate:

- Current regulations on rates for project management costs, investment consulting fees, and construction costs for projects funded by state budget funds;

- Current financial management regulations applicable to state agencies and public service units;

- Investment decision; decision to establish the PMO; decision to allocate investment capital plan;

- Annual salary calculation table for project management staff.

- Other necessary bases of the project.

1.4. Method for preparing the project management cost estimate:

1.4.1. Prepare the Project Management Cost Calculation Table according to Model No. 01/DT.QLDA attached:

- Based on the approved total investment amount of the project and the rate for project management costs published by the competent authority to determine the project management costs of the project (denoted as of_QLDA). In cases where projects do not have rates in published documents or only undertake preparatory work for the project, they shall be based on the estimate approved by the entity assigning the task. For ODA projects, if the project agreement specifies the project management costs, it shall be implemented according to the agreement. 

- Based on the approved total investment amount of the project and the rate for investment consulting and construction costs published by the competent authority to determine the consulting and construction costs that the investor and PMO will undertake (denoted as of_TV).

- Determine the specific amount for those works included in project management costs that the investor and PMO need to hire consultants to perform (denoted as of_{c) Determine the specific expenditure levels for tasks within the project management costs that the investor and PMB need to hire consultants to perform (including cases where the investor hires specialized PMBs or regional PMBs to manage the project under a Delegation of Management Contract) (denoted as}).

- The project management costs portion that the investor and PMO can use during the project management process (denoted as of_{d) The portion of the project management fee that the investor and PMB can use for each project throughout the project management period (denoted as} ) is determined according to formula (1) below; specifically divided into: the portion for the investor to use, the portion for the PMO to use.

- Estimate the allocation of project management costs for each year of project implementation.

1.4.2. Prepare the Project Management Cost Calculation Table for use in the planned year according to Model No. 02/DT.QLDA attached.

1.4.3. Prepare the Annual Salary Calculation Table according to Model No. 03/DT.QLDA attached.

1.4.4. Prepare the annual project management cost estimate according to Model No. 04A/DT.QLDA attached. In cases where the project management cost estimate is prepared once for the entire implementation process according to Model No. 04B/DT.QLDA attached.

1.5. Contents of the project management cost estimate include:

1.5.1. Salary costs: grade and rank salaries according to the allocated salary fund; long-term contract salaries for individuals receiving salaries from the project according to the decision of the competent authority and current national regulations on salary systems.

Determination of the salary fund for project management staff must comply with the approved staffing level of the competent authority. In cases where other expenses are saved, the additional salary adjustment coefficient for those receiving salaries from project management costs can be applied according to current national regulations. 

1.5.2. Labor remuneration paid under contracts.

1.5.3. Various allowances: position, region, attraction, hardship, night shift, overtime, hazardous, dangerous, mobile, responsibility, allowance for concurrently managing projects, etc., according to current regulations applicable to state agencies and public service units.

For concurrent project management allowances: based on the degree of time spent on management by each staff member and the specific source of project management costs to calculate the percentage of allowance received by those directly performing project management tasks but not receiving salaries from the project, including both PMO staff and investor staff. The maximum monthly concurrent project management allowance for an individual is 50% of their monthly salary and allowances (including cases of concurrently managing multiple projects).

For overtime allowances, compliance with the Labor Law and related guiding documents regarding working hours and rest periods is required.

1.5.4. Bonus costs: regular bonuses, ad hoc bonuses (if any), and related reward costs according to current regulations applicable to state agencies and public service units.

1.5.5. Collective welfare expenses: payment for leave, statutory leave, regular hardship allowances, emergency hardship allowances, medical expenses, etc., in accordance with current regulations applicable to state agencies and public service units.

1.5.6. Contributions: social insurance, health insurance, trade union fees, other deductions for individuals receiving salaries from the project as decided by the competent authority in accordance with current regulations applicable to state agencies and public service units.

1.5.7. Public service payment expenses: electricity, water, environmental sanitation, fuel, vehicle allocation, other services in accordance with current regulations applicable to state agencies and public service units.

1.5.8. Office supplies purchase expenses: office tools and equipment, filing cabinets, desks and chairs, office supplies, labor protection items, etc., in accordance with current regulations applicable to state agencies and public service units.

1.5.9. Information dissemination and communication expenses: telephone charges, postal services, fax, internet, books, newspapers, management materials, etc., in accordance with current regulations applicable to state agencies and public service units.

1.5.10. Conference expenses in accordance with current regulations applicable to state agencies and public service units.

1.5.11. Travel expense reimbursement in accordance with current regulations applicable to state agencies and public service units.

1.5.12. Rental expenses: rental of transportation means, working premises, various types of equipment, hiring experts and lecturers, training staff, etc., in accordance with current regulations applicable to state agencies and public service units.

1.5.13. Outbound travel expenses: airfare, train fare, bus fare, rental of transportation means; food, accommodation, incidental expenses, etc., in accordance with current regulations applicable to state agencies and public service units.

1.5.14. Inbound travel expenses: airfare, train fare, bus fare, rental of transportation means; food, accommodation, incidental expenses, etc., in accordance with current regulations applicable to state agencies and public service units.

1.5.15. Repair expenses for assets in accordance with current regulations applicable to state agencies and public service units.

1.5.16. Purchase expenses for assets used for project management: housing, transportation means, fire-fighting equipment, computers, computer software, office machines, etc., in accordance with current regulations applicable to state agencies and public service units. In cases where construction of office premises or purchase of cars is involved, such activities must comply with current national standards, norms, and management and usage regulations.

1.5.17. Other expenses: tax payments, fees, insurance for assets and transportation means, hospitality, etc., in accordance with current regulations applicable to state agencies and public service units.

1.5.18. Contingency reserve: 10% of the budget estimate.

2. Review and approval of project management cost estimates:

2.1. The project sponsor reviews and approves the project management cost estimates. If the Project Management Board manages multiple projects for multiple sponsors, the direct sponsor of the Project Management Board shall conduct the review and approval. If the sponsor manages five or more projects, the sponsor shall report to the directly supervising superior agency on the standard and total project management costs of the sponsor and the Project Management Board; after receiving the superior agency's document on the standard and total project management costs, the sponsor shall review and approve the project management cost estimates.

2.2. Documentation for reviewing project management cost estimates:

- Request for approval document; decision on establishment of the Project Management Board; investment decision; capital investment plan allocation decision;

- Table of project management cost calculation according to Model No. 01/DT.QLDA;

- Table of project management cost calculation for use in the planning year according to Model No. 02/DT.QLDA.

- Annual salary calculation table according to Model No. 03/DT.QLDA;

- Annual project management cost estimate according to Model No. 04A/DT.QLDA or Project management cost estimate according to Model No. 04B/DT.QLDA.

2.3. Content of project management cost estimate review:

- Review of work content, calculation methods, and appropriateness in allocating cost levels for each year in the project management cost calculation table according to Model No. 01/DT.QLDA;

- Review of appropriateness in the project management cost calculation table for use in the planning year according to Model No. 02/DT.QLDA;

- Review of appropriateness of expenditure items in the project management cost estimate according to Model No. 04A/DT.QLDA or 04B/DT.QLDA with current national financial standards, norms, and regulations.

2.4. Decision approving annual project management cost estimate according to Model No. 05A/QĐ.QLDA; Decision approving project management cost estimate according to Model No. 05B/QĐ.QLDA is sent to the sponsor, Project Management Board, payment agency, and related entities for implementation.

2.5. During implementation, the sponsor is responsible for approving any additional, adjustment, or supplementary cases (if any) of the project management cost estimate.

3. Control of project management cost payment::

The capital investment payment control agency implements control over project management cost payment according to the capital investment payment system, current financial management regulations, and specific provisions in this Circular.

4. Settlement of project management costs:   

4.1. Settlement documentation:

4.1.1. Annual project management cost settlement documentation:

- Request for approval of settlement;

- Annual project management cost settlement report according to Model No. 01/QT.QLDA;

- Expense vouchers generated during the year.

4.1.2. Project management cost settlement documentation:

4.1.2.1. For annual settlements already approved:

- Summary of project management cost settlement according to Model No. 02/QT.QLDA;

- Collection of copies of decisions approving project management cost settlement for each year of the project.

4.1.2.2. For single-time settlement:

- Project management cost settlement report according to Model No. 03/QT.QLDA;

- Expense vouchers generated during the project implementation process.

4.2. Audit of project management cost settlement:

4.2.1. Audit of annual project management cost settlement:

- Audit of project management cost allocation and investment consulting construction costs by year and planning year.

- Compare the data in the Final Account Report on Project Management Costs for the planned year according to Model No. 01/QT.QLDA with the approved budget or adjusted budget if applicable.

- Review the legality and validity of expenditure vouchers in accordance with current state regulations.

4.2.2. Review of final account settlement of project management costs:

4.2.2.1. In cases where annual settlements have been approved:

- Review the application of norms to determine the total amount of project management costs and investment consulting fees that can be extracted, as implemented by the project sponsor and the Project Management Board (BQLDA).

- Compare the consistency between the proposed settlement figures and the annual allocation of project management costs according to the decision approving the annual settlement of project management costs.

4.2.2.2. In cases of one-time settlement:

- Compare the consistency between the proposed settlement figures and the extracted norms and approved or adjusted project management cost budgets.

- Review the legality and validity of expenditure vouchers in accordance with current state regulations.

4.3. Decision to approve the final account settlement of project management costs

- The decision to approve the final account settlement of project management costs for the planned year according to Model No. 04/QT.QLDA attached.

- The final account settlement of total project management costs when the project is completed will be jointly approved in the decision approving the final account settlement of the completed project.

4.4. Allocation of project management costs

4.4.1. When reporting the final account settlement of project management costs for the year, the project sponsor and BQLDA estimate the allocation value of the proposed settlement for specific projects according to Point 3 of Model No. 01/QT.QLDA attached.

4.4.2. When approving the final account settlement of project management costs for the year, the approving authority decides on the allocation value of the annual settlement of project management costs for specific projects according to Article 2 of Model No. 04/QT.QLDA attached.

4.4.3. Principles for allocating project management costs

- For investment construction consulting fees belonging to a specific project, they shall be directly allocated to that project;

- For general project management costs allocated to multiple projects, they shall be distributed proportionally based on the value of the completed work volume strictly accepted within the planned year;

- The annual allocation value of project management costs for a project will be included in the final account settlement value of project management costs when the project is settled upon completion.

5. Inspection:

5.1. Financial management units under ministries, sectors, and localities shall plan to inspect the management and use of project management costs at project sponsors and BQLDAs within their jurisdiction.

5.2. Project sponsors and BQLDAs shall organize regular inspections of the implementation of project management cost management and use within their units.

6. Responsibilities of related units

6.1. Responsibilities of project sponsors and BQLDAs

- Bear full responsibility for the management and use of project management costs.

- Implement the preparation of project management cost budgets and final accounts; review and approve project management cost budgets in accordance with the timeframes and contents stipulated in this Circular.

6.2. Responsibilities of payment oversight agencies

Bear responsibility for overseeing and paying project management costs for investment projects in accordance with regulations on capital disbursement, current financial management systems of the state, and specific provisions in this Circular.

6.3. Responsibilities of ministries, sectors, and localities

Regularly inspect the management and use of project management costs for investment projects using state budget funds within their jurisdiction; take measures to handle violations in the management and use of project management costs for investment projects in accordance with legal provisions.

III. IMPLEMENTATION

1. This Circular takes effect fifteen days from the date of publication in the Official Gazette and replaces Circular No. 118/2007/TT-BTC dated October 2, 2007, issued by the Ministry of Finance, guiding the management and use of project management costs for investment projects funded by the state budget.

2. Project sponsors and BQLDAs who have had their project management cost budgets approved before the effective date of this Circular shall continue to implement according to the approved budget. If necessary, adjustments to the content of project management costs may be made in accordance with the provisions of this Circular./.