Decree No. 120/1997/ND-CP on management and use of state budget and assets for certain activities in the fields of national defense and security.

DECREE

Regulations on management and use of state budget and assets for certain activities in the defense and security sector

for certain activities within the national defense and security sectors

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;

pursuant to the State Budget Law dated March 20, 1996;

Pursuant to Decree No. 87/CP dated December 19, 1996 of the Government detailing the division of authority, preparation, implementation, and settlement of the state budget;

At the proposal of the Minister of Finance,

DECREE:

Chapter I:
GENERAL PROVISIONS

Article 1. State budget expenditure for the defense and security sector includes:

Expenditure for defense and security work under the responsibility of the Ministry of National Defense and the Ministry of Public Security;

Expenditure for defense and security work at central agencies and localities. This expenditure is included in the budget estimates of the agencies and localities.

The Ministry of Finance shall coordinate with the Ministry of National Defense and the Ministry of Public Security to provide detailed guidance on each specific task's expenditure within the defense and security sector.

Article 2. All revenues from the defense and security sector must be fully remitted to the state budget in accordance with the provisions of the law, except for those revenues permitted by the Government to retain for expenditure according to regulations.

Article 3. All expenditures in the defense and security sector must be strictly controlled, consistent with the characteristics of defense and security and the nature and content of each expenditure.

Article 4. Preparation, implementation, and settlement of budget revenues and expenditures of the Ministry of National Defense and the Ministry of Public Security shall be carried out according to each level of budget estimate.

The Ministry of National Defense and the Ministry of Public Security are responsible for managing the budgets of subordinate units. The Ministry of Finance shall cooperate with the Ministry of National Defense and the Ministry of Public Security to manage down to the second-level budget unit as specified in point b, Clause 1 and point b, Clause 2, Article 18 of this Decree.

Chapter II:
BUDGET ESTIMATION IN THE DEFENSE AND SECURITY SECTOR

Article 5. Basis for annual budget estimation of the Ministry of National Defense and the Ministry of Public Security:

Guidelines for building and developing regular, efficient, and gradually modernized defense and security forces within the five-year plan and long-term goals of the Party and the State;

Tasks of ensuring defense and security;

Specific tasks of the Ministry of National Defense and the Ministry of Public Security;

Directive of the Prime Minister on the development of economic and social plans and annual budget estimates; Circulars guiding the preparation of the state budget by the Ministry of Finance and other guiding documents of the Ministry of National Defense and the Ministry of Public Security;

Implementation status of the state budget in previous years;

Budget estimate verification figures announced by authorized agencies;

Troop strength, staffing, equipment, construction volume, and maintenance for the year;

Current standards and norms for expenditure.

Article 6. Requirements for the annual budget estimate of the Ministry of National Defense and the Ministry of Public Security:

1. The annual budget estimate must be prepared in accordance with the prescribed reporting forms and timeframes guided by the Ministry of Finance, and must fully reflect all revenues and expenditures, including revenues retained to supplement the budget and detailed expenditures from these revenues;

2. The annual budget estimate must be accompanied by a detailed explanatory report on the basis and grounds for calculation. For expenditures requiring high confidentiality as stipulated by the Government (hereinafter referred to as "expenditures requiring high confidentiality"), only aggregate figures should be recorded without detailed explanations.

Article 7. Based on the decision of the competent authority regarding defense and security tasks, budget estimate verification figures, and instructions on preparing the state budget issued by the Ministry of Finance, the Ministers of National Defense and Public Security shall guide units, functional agencies, and specialized departments under their ministries to prepare budget revenue and expenditure estimates for the planning year.

Article 8.

1. Budget units under the Ministry of National Defense and the Ministry of Public Security shall prepare their own budget estimates based on the guidance of the Ministry of Finance, the Ministry of National Defense, the Ministry of Public Security, and the actual situation of the unit, and submit them to higher levels according to the current division of authority of each ministry.

2. The Ministry of National Defense and the Ministry of Public Security shall review the budget estimates prepared by subordinate units, consolidate them, and prepare the budget estimates of their ministries to be submitted to the Ministry of Finance for inclusion in the state budget, to be presented to the Government.

Article 9. Local military and public security agencies shall prepare their budget estimates in accordance with current national regulations.

The budget estimates prepared by local military and public security agencies must clearly distinguish:

The portion guaranteed by the central budget shall be consolidated and submitted to the superior level according to the分级管理 of the Ministry of National Defense and the Ministry of Public Security;

The portion guaranteed by the local budget shall be sent to the financial agency at the same level for submission to the People's Council at the local level for decision-making, and simultaneously forwarded to the superior agency for consolidation. Upon receiving the notification from the local authority regarding the budget allocation for their unit, the military and public security agencies at the local level shall report upwards level by level for the Ministry of National Defense and the Ministry of Public Security to consolidate.

Article 10. Central agencies shall prepare the budget expenditure plan for national defense and security tasks within their own agencies in accordance with current regulations.

Chapter III:
IMPLEMENTATION OF THE BUDGET IN THE FIELD OF NATIONAL DEFENSE AND SECURITY

Article 11. After being allocated the budget by the Government, the Ministry of National Defense and the Ministry of Public Security shall allocate the received budget to subordinate budget units, ensuring compliance with the allocated budget. The results of the budget allocation, including the allocation of remaining initial-year budgets, to secondary budget units and centralized expenditures of the Ministries must be reported to the Ministry of Finance, the State Treasury Central Office, and the State Treasury where transactions take place.

Article 12. Conditions for budget spending in the field of national defense and security:

1. It must be included in the allocated budget. In special cases not included in the budget, it must be decided by the competent authority;

2. It must comply with the systems, standards, and quotas issued by the competent state authorities applicable in the field of national defense and security;

3. It must have been approved by the head of the budget-using unit or the authorized person;

4. In addition to the conditions stipulated in Clauses 1, 2, and 3 of this Article, when using state budget funds for basic construction investment, equipment procurement, work vehicles, and other works that require bidding, bidding procedures must also be organized in accordance with the Government's regulations, except for works with high confidentiality requirements.

Article 13. Responsibilities of state agencies in managing and disbursing budget expenditures in the field of national defense and security are as follows:

1. Ministry of Finance:

a) Inspect the annual budget allocation of the Ministry of National Defense and the Ministry of Public Security to subordinate units;

b) Announce quarterly expenditure limits to the Ministry of National Defense and the Ministry of Public Security, consistent with the content and progress of the assigned expenditure tasks within the approved annual budget;

c) Coordinate with the Ministry of National Defense and the Ministry of Public Security in distributing quarterly expenditure limits to secondary budget units;

d) Inspect the purpose and nature of each expenditure item, ensuring all stipulated expenditure conditions before issuing a budget fund withdrawal order, if the Ministry of Finance issues a payment authorization;

đ) Inspect the use of the budget in budget-using units after consultation with the Ministry of National Defense and the Ministry of Public Security.

2. Local financial agencies:

a) Announce quarterly expenditure limits guaranteed by the local budget to the same-level military and public security agencies;

b) Inspect the use of the budget by local military and public security agencies for the portion guaranteed by the local budget.

3. State Treasury Agencies:

Inspect the payment authorization orders; if the payment authorization order complies with the expenditure limit announced by the competent authority and meets the stipulated expenditure conditions under Article 12 of this Decree, then payment will be made to the recipient. For expenditures with high confidentiality requirements, detailed content inspections will not be conducted.

4. Ministry of National Defense, Ministry of Public Security:

a) Allocate the annual budget to subordinate units in accordance with the assigned tasks and systems, standards, and quotas issued by the competent authorities;

b) Based on the quarterly expenditure limits announced by the Ministry of Finance, after consultation with the Ministry of Finance, distribute the quarterly expenditure limits to secondary budget units; simultaneously send to the State Treasury Central Office, the State Treasury where transactions take place, and consolidate and submit to the Ministry of Finance;

c) Guide, monitor, and inspect the use of the budget by subordinate units;

d) Organize expenditure control for expenditures with high confidentiality requirements carried out by subordinate units.

5. Budget-using units:

a) Authorize payments in accordance with the systems and standards issued by the competent authorities, based on the distributed expenditure levels;

b) Manage and use budget funds for the intended purposes, economically and effectively.

Article 14. Regular funding allocation to the Ministry of National Defense and the Ministry of Public Security, excluding construction-related expenditures:

1. Based on the allocated budget, budget-using units under the Ministry of National Defense and the Ministry of Public Security shall prepare quarterly budget expenditure plans and submit them to the immediate superior agency; the Ministry of National Defense and the Ministry of Public Security shall consolidate and submit to the Ministry of Finance.

2. The Ministry of Finance shall review the quarterly budget expenditure plans of the Ministry of National Defense and the Ministry of Public Security and, based on the state budget capacity, allocate expenditure levels for the Ministries and authorize the Ministry of National Defense and the Ministry of Public Security to distribute quarterly expenditure limits to secondary budget units.

3. The Ministry of National Defense and the Ministry of Public Security shall announce quarterly expenditure limits to secondary budget units in accordance with Clause 4, Point b of Article 13 of this Decree.

4. Secondary budget units shall base their expenditure on the announced limits, withdraw funds to transfer to subordinate units or spend according to regulations.

In addition to the expenditure limit account, secondary budget units may open deposit accounts at the State Treasury to receive and use state budget funds.

5. Budget units from the third level downwards as stipulated in Clause 1, Points c, d, đ and Clause 2, Points c, d of Article 18 of this Decree may open deposit accounts at the State Treasury where transactions take place to receive upper-level funds, allocate to lower-level units, or spend according to the budget items in the State Budget Manual.

6. Heads of budget-using units shall issue payment authorizations based on the distributed quarterly expenditure levels and the unit's expenditure needs, accompanied by payment documentation, except for those with high confidentiality requirements, and send them to the State Treasury where transactions take place.

7. The State Treasury where transactions take place shall inspect the legality of the payment documentation and the payment authorization orders from the heads of budget-using units, ensure compliance with budget expenditure conditions, and carry out disbursement and payment to budget-using units or suppliers of materials and services.

8. For special expenditures as prescribed by the Prime Minister and for unexpected expenditures, the Ministry of Finance shall allocate funds to the Ministry of National Defense and the Ministry of Public Security in the form of expenditure orders.

9. For expenditures in foreign currency, the Ministry of National Defense and the Ministry of Public Security shall prepare quarterly budgets for such expenditures, submit them to the Ministry of Finance for approval and disbursement according to current regulations.

Article 15. Allocation of investment capital for construction within the regular budget of the Ministry of National Defense and the Ministry of Public Security:

1. Quarterly, the Ministry of National Defense and the Ministry of Public Security shall compile detailed investment construction budgets of subordinate units at the second-level budget unit level and submit them to the Ministry of Finance.

2. The Ministry of Finance shall review the quarterly investment construction budgets of the Ministry of National Defense and the Ministry of Public Security based on the state budget capacity, allocate the quarterly expenditure levels, and notify the Ministry of National Defense and the Ministry of Public Security; simultaneously send to the State Treasury Central Office.

3. The Ministry of National Defense and the Ministry of Public Security shall organize the disbursement to units according to the current Investment Management Regulations and Construction Regulations.

4. The Ministry of National Defense and the Ministry of Public Security shall implement settlement and final accounting of investment and construction expenditures with units; compile reports and submit them to the Ministry of Finance according to current regulations.

Article 16. Allocation of capital for projects and constructions in the defense and security sector from the centralized basic construction investment fund of the state shall be carried out through the General Department of Investment Development according to the current Investment Management and Construction Regulations.

Article 17. Allocation of capital for special basic construction projects in the defense and security sector shall be implemented under a separate mechanism; the Ministry of Finance shall provide detailed guidance for the Ministry of National Defense and the Ministry of Public Security to follow.

Chapter IV:
ACCOUNTING AND FINAL ACCOUNTING OF THE STATE BUDGET IN THE DEFENSE AND SECURITY SECTOR

Article 18. Budget accounting of budgetary units under the Ministry of National Defense and the Ministry of Public Security is divided into the following levels:

1. Ministry of National Defense:

a) The Ministry of National Defense is a first-level budget unit, directly related to the Ministry of Finance;

b) Military regions, corps, branches, general departments, and equivalent units are second-level budget units, directly related to first-level budget units;

c) Divisions and equivalent units are third-level budget units, directly related to second-level budget units (academies, schools, and equivalent units directly under the Ministry are third-level budget units, directly related to first-level budget units);

d) Regiments and equivalent units are fourth-level budget units, directly related to third-level budget units;

e) Subordinate units without independent budgets are base expenditure budget levels; accounting records the receipt of funds from higher levels for expenditure and settlement with higher levels.

2. The Ministry of Home Affairs:

a) The Ministry of Public Security is a first-level budget unit, directly related to the Ministry of Finance;

b) Departments, bureaus, academies, and equivalent units directly under the Ministry, provincial public security departments, and municipal public security departments directly under the central government are second-level budget units, directly related to first-level budget units;

c) Prisons under the Ministry, some large and special expenditure police district and county units may establish third-level budget units, directly related to second-level budget units;

d) Subordinate units without independent budgets are base expenditure budget levels; accounting records the receipt of funds from higher levels for expenditure and settlement with higher levels.

Article 19. Budgetary units under the Ministry of National Defense and the Ministry of Public Security must organize accounting, reporting, and final accounting of the budget according to the state accounting system; strictly comply with the Accounting and Statistics Ordinance. Specific applications must be agreed upon by the Ministry of Finance to suit the characteristics of national defense and security.

Article 20. Accounting reports and final accounts must ensure accuracy and truthfulness with the figures recorded in the accounting books. The content of the final account report must be consistent with the approved budget and the State Budget Item List.

Article 21.

1. Final accounting of the budget of units under the Ministry of National Defense and the Ministry of Public Security shall be conducted according to the principle of higher levels approving lower levels;

2. The Ministry of Finance shall approve the annual income and expenditure final accounts of the Ministry of National Defense and the Ministry of Public Security. Depending on conditions and specific contents, the Ministry of Finance may participate in approving the annual final accounts of some second-level budget units.

Article 22. Local military and public security agencies shall settle the annual budget (local budget portion) with local financial agencies.

Article 23. Reports on the final accounts of income and expenditure of the Ministry of National Defense and the Ministry of Public Security shall be audited annually by the State Audit Agency according to the plan approved by the Prime Minister.

Chapter V:
MANAGEMENT OF STATE ASSETS IN THE DEFENSE AND SECURITY SECTOR

Article 24. The Ministry of National Defense, the Ministry of Public Security, and their subordinate units are responsible for managing and using state assets in the defense and security sector in accordance with the purpose, regime, and high efficiency, ensuring safety and confidentiality as prescribed by competent authorities.

Article 25. State assets assigned to the Ministry of National Defense and the Ministry of Public Security for management and use include:

1. Special-use assets serving national defense and security, including technical equipment, weapons, military supplies, barracks, airports, ports, defensive works, combat works, land used for military purposes, detention facilities, and other assets serving national defense and security operations;

2. Assets serving administrative work, which are other assets under the management and use of the Ministry of National Defense and the Ministry of Public Security, but not included in the types of assets mentioned in Clause 1 of this Article.

Article 26.

1. For special-use assets serving national defense and security, the Ministry of National Defense and the Ministry of Public Security shall organize management and use according to special regulations issued by competent authorities; regularly report to relevant agencies as prescribed by the Government.

2. For assets serving administrative work, the Ministry of National Defense and the Ministry of Public Security shall organize management and use in accordance with current state regulations on asset management.

Article 27. Assets at enterprises under the Ministry of National Defense and the Ministry of Public Security shall be managed according to current regulations on asset management at state-owned enterprises.

Chapter VI:
IMPLEMENTING PROVISIONS

Article 28. This Decree takes effect from the 1998 fiscal year. Other provisions regarding budget preparation, implementation, and final accounting not specified in this Decree shall be implemented according to the provisions of Government Decree No. 87/CP dated December 19, 1996.

Previous regulations on the management and use of the state budget and assets in the fields of national defense and security that are contrary to the content of Government Decree No. 87/CP dated December 19, 1996 and this Decree are hereby abolished.

Article 29. The Minister of Finance shall take the lead and coordinate with the Minister of National Defense and the Minister of Public Security to guide the implementation of this Decree in accordance with the characteristics of each Ministry.

Article 30. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial people's councils under the central government are responsible for enforcing this Decree./.