Joint Circular No. 1213/KHCN-TC guiding the financial management of state-level science and technology programs for the period 1991-1995

CIRCULAR OF THE JOINT BOARD OF THE STATE SCIENCE COUNCIL AND THE MINISTRY OF FINANCE

ON THE FINANCIAL MANAGEMENT OF NATIONAL SCIENCE AND TECHNOLOGY PROGRAMS FOR THE PERIOD 1991-1995

Guidelines for
The financial management of national science and technology programs
for the period 1991-1995.

The Chairman of the Council of Ministers issued Decision No. 246/TC on August 8, 1991 approving the list of national science and technology programs (hereinafter referred to as programs) for the period 1991-1995. Clause 4 of the decision assigned the State Science Council to organize the implementation of the programs through the method of signing research and development contracts (hereinafter referred to as contracts) between the State Science Council and the program directors. On January 28, 1992, the Council of Ministers also issued Decree No. 35-HĐBT on the management of science and technology (KHCN).

To guide the implementation of Decree No. 35/HĐBT dated January 28, 1992 of the Council of Ministers to reform the financial management mechanism of national science and technology programs, the State Science Council and the Ministry of Finance issue this circular to guide the financial management of national science and technology programs for the period 1991-1995.

PART I
PRINCIPLES OF MANAGING FUNDS FROM THE STATE BUDGET
ALLOCATED TO NATIONAL SCIENCE AND TECHNOLOGY PROGRAMS

1. Funds allocated to programs must be used effectively to create specific scientific products aimed at achieving important goals for national economic development as well as building scientific grounds for Party and State resolutions and policies.

2. The basis for the Ministry of Finance to allocate funds to programs and national-level projects is the approved budget of the program and project as stated in the contract.

Based on the budget of the State Science Council, the Ministry of Finance allocates funds to ministries managing the programs so that these ministries can distribute funds to the program directors according to the contractual mechanism. At the same time, the Ministry of Finance allocates funds to the State Science Council so that the Council can distribute funds to program directors directly managed by the Council according to the contractual mechanism.

3. The main agencies of programs and projects, program directors, and project directors are responsible for implementing current financial regulations such as preparing budgets, allocating funds, and settling accounts when receiving state science and technology funds.

PART II
PROCEDURE FOR PREPARING BUDGETS FOR PROGRAMS AND PROJECTS

A) PREPARATION OF PROGRAM BUDGETS:

National-level programs typically need to be implemented over more than two years. The preparation of program budgets is carried out in the following two steps:

1. Preparation of overall estimated budgets for programs.

- When starting to implement the program, there is not enough basis to prepare a detailed budget. Program directors and project directors prepare overall estimated budgets for their programs and projects from the start to the end. These estimates are allocated annually and will be adjusted during the implementation process.

- After the overall estimated budget for the program has been reviewed and approved by the State Science Council and the projected funding for the program in the planning year has been announced, program directors estimate the allocation of funds to projects and the operating costs of the program steering committee based on the research and development plan for the planning year.

2. Preparation of annual budgets:

- Based on the approved overall estimated budget and the projected funding allocated for the planning year, project directors prepare annual budgets consistent with the research and development plan and the projected funding allocation.

- Program directors balance and consolidate the annual budgets of the projects and the operating costs of the program steering committee into the annual budget of the entire program. They then submit it to the State Science Council, the Ministry of Finance, and the supervising ministry.

- The State Science Council coordinates with the supervising ministry and the Ministry of Finance to review the budgets of the programs, balance them with the annual budgetary capacity, allocate funds to the programs, incorporate them into the annual financial plan for science and technology, and submit them for approval by the State.

B) CONTENT, TIME LIMITS FOR PREPARATION AND APPROVAL OF BUDGETS:

The preparation and approval of program and project budgets must be based on the content and workload to be implemented in the planning year as described in the general description of the program and project, state expenditure regulations, and the provisions of this joint ministerial circular.

The content and forms for preparing program and project budgets are guided in the annexes of this joint ministerial circular.

The time limits for preparing and approving program and project budgets are conducted concurrently with the time limits for preparing and approving the annual science and technology plans (from September to December of the year preceding the planning year).

C) Remuneration for the steering committees of national-level programs and national-level project directors is temporarily set as follows:

- Program director: 100,000 VND/month

- Deputy director and secretary member: 80,000 VND/month

- Steering committee member: 50,000 VND/month

- Program accountant: 50,000 VND/month

- Project director: 80,000 VND/month

In cases where members of the program steering committee also serve as project directors, they shall only receive the highest remuneration.

PART III
REGIME OF DISTRIBUTION AND SETTLEMENT

Annual distribution and settlement of funds for programs are carried out in accordance with general state regulations. The joint board specifies certain points below to ensure that the distribution and settlement of funds for programs align with the organizational characteristics of national-level programs for the period 1991-1995.

1. Issuing funds:

a) Programs directly managed by the State Science Council:

The Ministry of Finance directly distributes funds to the State Science Council, which then distributes funds to the main agencies implementing the programs. The main agency implementing the program distributes funds to the projects. Fund distribution is based on the annual contracts signed between the State Science Council and the program directors and the contracts signed between the program directors and the project directors.

b) Programs managed by the State Science Council through ministries:

The Ministry of Finance directly allocates funds to the managing ministry of the program for the managing ministry to distribute to the programs according to their implementation progress. The program director allocates funds to the projects. The allocation of funds is based on the annual contracts signed between the program director and the project directors.

To be eligible for subsequent fund allocations, the program directors must submit reports on the previous funding period's implementation status of the program, based on the consolidated reports submitted by the project directors to the program director.

For programs directly managed by the State Scientific Council, the program directors must submit reports to the State Scientific Council and the Ministry of Finance. The remaining programs must submit reports to the State Scientific Council, the Ministry of Finance, and the managing ministry.

During the implementation process, adjustments may be considered depending on specific circumstances; funding for programs and projects may be suspended or recovered in cases of violations as stipulated.

2. Recovery of Program Funding:

The recovery of funding shall be carried out in accordance with Circular No. 1308/TC-KHKT dated November 24, 1990, issued jointly by the Ministry of Finance and the State Scientific Council.

The amount and deadline for recovery shall be formally recorded as clauses in the contract.

For programs directly managed by the State Scientific Council, the program and project directors must deposit the recovered funds into the National Science and Technology Development Support Fund, directly managed by the State Scientific Council. For programs managed through ministries by the State Scientific Council, the program and project directors must deposit the recovered funds into the Science and Technology Development Fund of the managing ministry responsible for the program.

In cases where project directors delay in submitting recovered funds, it will affect the funding progress of the entire program.

3. Reporting and Settlement System:

The leading agency and the project director must prepare final settlement reports to be sent to the program director and the leading agency of the program. For programs directly funded by the State Scientific Council, the leading agency and the program director must prepare final settlement reports of the program to be sent to the State Scientific Council and the Ministry of Finance. The State Scientific Council will review and consolidate the final settlements to be sent to the Ministry of Finance.

For programs directly funded by the Ministry of Finance to the managing ministry, the managing ministry and the program director must prepare final settlement reports of the program to be sent to the Ministry of Finance and the State Scientific Council.

The accounting and quarterly and annual settlement systems shall be implemented in accordance with Decision No. 257 TC/CĐKT dated June 1, 1990, and Circular No. 15-TC/HCVX dated May 29, 1992, issued by the Ministry of Finance, and detailed guidelines provided by the State Scientific Council.

4. Inventory and Settlement Upon Completion of Programs and Projects:

Upon completion of projects and programs, the project directors and program directors must conduct inventory and settle assets according to prescribed regulations and submit reports to the State Scientific Council, the managing ministry, and the Ministry of Finance for examination and decision-making regarding the disposal of assets purchased using state science and technology funds.

After completing all professional tasks and financial responsibilities, a liquidation record will be prepared for the program.

PART IV
IMPLEMENTING PROVISIONS

This circular applies to the financial management of national-level independent programs and projects during the 1991-1995 period. This circular replaces Circular No. 34/TC-KHKT dated December 17, 1980, jointly issued by the Ministry of Finance and the State Scientific and Technical Commission.

Ministries, general administrations, and localities shall base their financial management systems for ministry and locality-level projects and programs on this circular.

This Circular takes effect from the date of signature.

ANNEX

GUIDELINES FOR THE PREPARATION OF BUDGET ESTIMATES FOR PROGRAMS,
SCIENTIFIC AND TECHNOLOGICAL PROJECTS

A. CONTENT OF PROJECT BUDGET ESTIMATES:

Project budget estimates are prepared according to the form specified in Appendix DN2 attached to this joint circular.

1. Clause 1: Salaries and Contracted Services.

1.1. Salaries and Allowances: Salaries and allowances of staff directly implementing the project are calculated annually based on the current state salary system.

This clause is only budgeted for economic accounting units. For units receiving salaries from the state budget through different sources, salaries and allowances will not be included in the budget estimate.

1.2. Specialized contracted services and honoraria: Partially contracting work contents to project staff. If the project director or the leading unit does not have the conditions to implement certain parts of the work or if self-execution would not be effective, contracted service funds can be used to sign contracts with other staff and units to perform the work.

2. Clause 2: Raw Materials, Tools, Spare Parts, and Energy for Research, Testing, and Experimentation, including:

2.1. Raw materials: Main raw materials (mineral, plant, animal, metal, chemical...) and auxiliary materials (lubricating oils, miscellaneous items...).

2.2. Tools and spare parts: Various types of tools, components, and working equipment.

2.3. Energy (electricity, coal, oil) and water.

3. Clause 3: Specialized Equipment and Machinery.

3.1. Purchase of technological equipment: New purchases, domestic design and manufacture, or repair and restoration.

3.2. Purchase of testing and measuring equipment: New purchases, domestic design and manufacture, or repair and restoration.

3.3. Depreciation of equipment.

3.4. Rental of equipment.

3.5. Transportation and installation costs for equipment.

Expenditures for purchasing and manufacturing technological equipment and testing and measuring equipment must be accounted for and settled separately.

4. Clause 4: Small Construction and Minor Repairs of Construction Works.

This expenditure is only applicable in extremely necessary cases and is solely for the implementation of the project, such as repairing electrical circuits, water systems, experimental equipment bases, ceilings, floors, enclosures for equipment, pilot workshops, chimneys, etc., directly related to the project implementation.

When a project requires small construction, a detailed budget estimate must be prepared and reviewed, and it must not overlap with the anti-degradation plans of research institutions funded by the state for each ministry annually.

5. Clause 5: Management, Administrative Expenses, and Other Expenditures, including:

5.1. Travel expenses.

5.2. Management fees for the project: including postage, hospitality expenses, transactions... and payment of management fees to the host entity of the project.

The annual level of expenditure for management fees for the project shall be determined as follows:

- Each project will have this level of expenditure calculated at 2.5% of the annual budget of the project.

- If the annual budget of the project is less than 200 million VND, an additional 0.5% of the difference between 200 million VND and the annual budget of the project will be added.

- The maximum annual level of expenditure for management fees for the project is 5 million VND/year.

Calculation Formula:

Symbol: Q - Management fees for the project.

K - Annual budget of the project.

Q = 0.025.K + 0.005(200-K)

Example:

The annual budget of the project is 80 million VND. The annual level of expenditure for management fees for the project is:

0.025.80 + 0.005(200 - 80) = 2.6 million VND.

The head of the project will allocate a portion of the aforementioned management fees of the project to pay management fees for the host entity of the project. Higher-level supervisory entities of the host entity shall not benefit from nor demand that the head of the project/host entity allocate this management fee to them.

5.3. Project acceptance costs (when the project concludes):

+ Acceptance at the institutional level: 1,000,000 VND

+ National-level acceptance: 1,500,000 VND

Project acceptance costs are used to cover the expenses for the Acceptance Council, reviewers, and the acceptance conference.

If prior to the Acceptance Council meeting, it is necessary to organize on-site inspections or some members of the Council and representatives from other regions attend the meeting, additional travel and accommodation expenses for these representatives and the Acceptance Council should be budgeted.

5.4. Translation of materials serving the project.

5.5. Printing of research materials and results, purchasing of professional literature, office supplies.

5.6. Conference and scientific seminar expenses.

5.7. Other expense items outside the above contents: remuneration for the head of the project, etc.

B. ESTIMATE OF EXPENSES FOR THE ACTIVITIES OF THE PROJECT MANAGEMENT BOARD
BAN CHỦ NHIỆM CHƯƠNG TRÌNH

1. Regular expenses for the activities of the project management board:

To standardize the management work of the project management board, the inter-ministerial agency temporarily stipulates certain regular expenses for the activities of the project management board as follows:

1.1. Remuneration for the project management board.

In addition to the salary prescribed by the State, members of the project management board and the program accountant are entitled to additional remuneration according to the levels mentioned above.

The aforementioned remuneration will be adjusted when there is inflation according to the State's regulations or when there is a salary reform.

1.2. Scientific conferences organized by the project management board.

1.3. Travel expenses of the project management board.

1.4. Inspection of projects, evaluation and acceptance of the program.

1.5. Printing of management documents, scientific reports and research results. Office supplies, telephone, telegraph, electricity, rent if applicable.

1.6. Annual management base of the program's host entity: up to a maximum of 10% of the total regular expenses for the activities of the project management board.

1.7. Other expense items outside the above contents (less than 5% of the regular expenses for the activities of the project management board).

The annual regular expenses for the activities of the project management board are determined as follows:

- Each program will have its level of expenditure calculated at 3% of the annual budget of the program (excluding funds for implementing production trial-experimental projects).

- If the annual budget of the program is less than 2 billion VND, an additional 1.5% of the difference between 2 billion VND and the annual budget of the program will be added.

- The maximum annual regular expenses for the activities of the project management board is 60 million VND/year.

Calculation Formula:

Code:

C - Annual regular expenses for the activities of the project management board.

K - Annual budget of the program.

C = 0.03.K + 0.015 (2000 - K)

Example:

The annual budget of the program is 1,400 million VND. The annual regular expenses for the activities of the project management board are:

0.03.1400 + 0.015(2000 - 1400) = 51 million VND.

2. Irregular expenses for the activities of the project management board:

In addition to the aforementioned regular expenses, when there is a need for irregular expenses such as purchasing machinery and equipment, international cooperation needs according to the program and project tasks, after considering feasibility, the program head prepares a budget proposal sent to the State Science Council and the Ministry of Finance for review (for programs directly managed by the State Science Council). For programs managed through ministries by the State Science Council, the program head sends the proposal to the main managing ministry for comments before sending it to the State Science Council and the Ministry of Finance for review.

In principle, irregular expenses are balanced within the annual budget allocated to the program. In case of urgent needs that cannot be covered by the program's budget, the State Science Council, the Ministry of Finance, and the corresponding main managing ministry will consider providing additional support.

C. PROGRAM BUDGET

The program budget is compiled from the budgets of the projects within the program and the budget for the activities of the project management board.

The program budget is prepared according to the form specified in Appendix N2 attached to this joint ministerial circular.