Joint Circular No. 129/2007/TTLT/BTC-BKHCN guiding the financial management regime for the National Science and Technology Development Fund

JOINT CIRCULAR

Guidelines for financial management regime

for the National Science and Technology Development Fund

Pursuant to the Charter on the organization and operation of the National Science and Technology Development Fund issued together with Decree No. 122/2003/NĐ-CP dated October 22, 2003 of the Government, the Ministry of Finance and the Ministry of Science and Technology jointly issue guidelines on the financial management regime for the National Science and Technology Development Fund (hereinafter referred to as the Fund) as follows:

I. GENERAL PROVISIONS

1. These Circulars guide the implementation of the financial management regime for the National Science and Technology Development Fund.

2. The National Science and Technology Development Fund operates without profit-making objectives, with the function of providing non-repayable full or partial grants, interest-free loans, or loans at low interest rates for scientific and technological tasks carried out by organizations and individuals.

3. The Fund is an independent accounting unit, has legal personality, its own seal and account, directly under the Ministry of Science and Technology. The Fund fulfills tax obligations and enjoys preferential tax policies for its financial activities in the field of science and technology development according to the provisions of Tax Laws and current legal documents.

4. Sources of capital for the Fund's operations include capital from the state budget, voluntary contributions and donations from domestic and foreign organizations and individuals, international organizations, loan interest, and other sources.

5. The Fund may open accounts at the State Treasury and commercial banks as stipulated.

6. The Fund implements accounting regulations as prescribed by the Law on Accounting and related implementing documents.

7. The Management Board and Director of the Fund are responsible to the Minister of Science and Technology for managing and using capital and assets in accordance with the Fund’s Charter and current state regulations.

8. The Ministry of Science and Technology performs state management functions over the Fund's activities, is responsible for guiding, inspecting, reviewing, and approving annual budget estimates and final accounts of state budget funds, financial income and expenditure activities of the Fund annually, and consolidating these in the annual final accounts report of the Ministry of Science and Technology according to current regulations.

9. The Fund is subject to inspection, audit, and examination by competent state agencies as prescribed by law..

II. PROVISIONS ON CAPITAL MANAGEMENT

1. Capital for the Fund's operations includes:

1.1. When established, the Fund receives an initial capital of 200 billion VND from the state budget for scientific research. Annually, the Fund receives additional funding based on the approved budget estimate by the authorized agency according to the State Budget Law to ensure that the Fund's operational capital from the state budget is at least 200 billion VND.

1.2. Capital raised from sources outside the state budget:

- Voluntary contributions and donations from domestic organizations and individuals, international organizations, and foreign organizations and individuals;

- Interest from loans for projects applying scientific research results and technological development.

1.3. The Fund can mobilize preferential capital from domestic and foreign financial institutions and banks to provide preferential loans for scientific and technological tasks, topics, projects, and programs.

1.4. Capital entrusted by domestic and foreign organizations and individuals according to entrustment contracts.

1.5. Recovered capital from expired grants and loans.

1.6. Other sources of capital.

2. The Fund's capital is used to finance and lend to eligible recipients as stipulated in this Circular and regulations issued by the Ministry of Science and Technology regarding the selection and evaluation of scientific and technological tasks, topics, projects, and programs supported by the Fund; and to cover the Fund's operational management costs.

3. Annually, the Fund must balance capital sources and needs, and plan capital sources.

- The Fund actively mobilizes and accepts capital from sources outside the state budget and other sources according to the Fund's regulations and relevant state regulations.

- The Fund balances state budget capital sources and needs to consolidate them in the Ministry of Science and Technology's state budget estimate.

4. The Fund opens accounts at the State Treasury according to the Ministry of Finance's regulations to withdraw state budget capital and open transaction accounts at commercial banks as stipulated.

5. The Fund is permitted to transfer surplus state budget capital from the fiscal year to the next year.

6. Expenditure levels and objects from the state budget capital are implemented according to current regulations on state budget expenditures.

7. The Fund's operating capital and assets must be used for their intended purposes and effectively according to the Fund's grant methods. Cases of losses of capital and assets of the Fund must clearly identify causes and handle according to regulations.

8. The Ministry of Finance allocates and disburses annual state budget capital to the Fund according to the state budget estimate, the State Budget Law, and implementing documents of the State Budget Law.

Annual state budget capital allocated to the Fund is recorded in Item 153 "Support for Funds", Sub-item 08 "Expenditure for the Science and Technology Development Fund" of the State Budget Item List.

The Fund prepares financial reports for submission to the Ministry of Science and Technology for review and approval according to current regulations.

III. PROVISIONS ON FINANCIAL MANAGEMENT FOR THE FUND'S OPERATIONAL ACTIVITIES

The Fund's operational activities include financing and lending to implement scientific and technological tasks.

1. Grants

1.1. Grant Recipients:

1.1.1. Non-repayable full or partial grants for the implementation of scientific and technological tasks proposed by organizations and individuals, including:

a) Basic research in fields of science funded non-repayably at 100% of the research cost of the task, topic, project, or program;

b) Newly emerging urgent scientific and technological tasks of significant scientific and practical importance; scientific and technological tasks with promising prospects but high risk funded non-repayably up to 100% of the research cost of the task, topic, project, or program.

The content at points a and b of Section 1.1.1 includes funding for outgoing and incoming delegations, payment for consulting experts, conference and seminar organization costs both domestically and internationally. funds for organizing domestic and international scientific conferences and seminars.

c) Non-refundable sponsorship up to a maximum of 90% of the value of imported technology tied to mastering certain domestic technologies that have not yet been developed and have significant economic and social importance, encouraged by the State for transfer. In special cases, where some state organizations cannot self-finance the import of important research technology, the Fund Management Council may consider approving higher sponsorship levels than 90%, but must ensure efficiency and economy principles.

d) Sponsor up to 100% of the costs for publishing scientific works resulting from research topics, projects, and programs funded by the Fund (as specified in point a, b, Section 1.1.1 herein). Sponsor up to 50% of the costs for publishing scientific works resulting from other research topics, projects, and programs funded by the Fund.

d) Sponsorship up to a maximum of 100% of publication costs for scientific works resulting from basic research projects and tasks funded by the Fund (as specified at points a and b of Section 1.1.1). Sponsorship up to a maximum of 50% of publication costs for scientific works resulting from other research projects and programs funded by the Fund.

e) Sponsor up to 100% of reasonable costs directly related to registering intellectual property rights for inventions, integrated circuit layout designs, and plant varieties that are the results of state-funded research topics, projects, and programs, and self-funded research by individual Vietnamese citizens.

e) Sponsorship up to a maximum of 100% of reasonable costs directly related to registering intellectual property rights for inventions, integrated circuit layout designs, and plant varieties resulting from state-funded research projects and individual Vietnamese researchers' self-funded studies.

1.1.2. Partially sponsor pilot production projects not included in the national science and technology development plan; scientific and technological tasks in priority areas of science and technology carried out by enterprises according to current regulations.

1.2. Principles of sponsorship

a) Based on current laws and regulations of the Ministry of Science and Technology, the Fund Management Council issues specific criteria for selecting and evaluating tasks, projects, and programs to be sponsored from the Fund's capital, and sets sponsorship and recovery rates for each type of task, project, or program within its authority, or submits them to the competent authority for approval.

b) Based on the provisions of the Fund Management Board, the Fund Operating Agency shall organize Scientific and Technological Councils to review and select tasks, topics, projects, and programs to be sponsored and decide on the level of sponsorship and recovery for each specific task, topic, project, and program within their authority, or submit to the competent authority for approval. The selection process must be conducted openly, democratically, and equally in accordance with the regulations.

b) Based on the Fund Management Council's regulations, the Fund Operating Agency organizes scientific and technological councils to select tasks, projects, and programs to be sponsored and decide on sponsorship and recovery rates for each specific task, project, or program within its authority, or submit them to the competent authority for approval. Selection must be conducted openly, democratically, and equally in accordance with regulations.

d) Sponsorship must be implemented correctly for the intended recipients, the sponsored capital must be used for the designated purpose, and must be disbursed according to the progress of the project. The content of scientific and technological tasks sponsored by the Fund must not overlap with research already or currently being conducted using Fund resources or other state resources.

f) The Fund sponsors scientific and technological tasks not included in the national science and technology development plan.

e) The period for recovering the funding of projects with recoverable funding shall be implemented according to the current regulations.

1.3. Formulating the sponsorship plan

a) Annually, based on the capital plan and funding needs of the subjects, the Fund Operating Agency prepares a funding plan for the subjects as prescribed.

b) The annual sponsorship plan must be approved by the Fund Management Board and reported to the Ministry of Science and Technology as prescribed.

2. Loans

2.1. Loan recipients:

a) Interest-free loans are provided for projects applying research and development results created domestically.

b) Provide loans at low interest rates for technology innovation projects, focusing on high-tech, clean technology, and technology producing highly competitive products.

The Fund Management Council establishes criteria for interest-free loans and low-interest loans as stipulated herein after reaching consensus with the Ministry of Science and Technology and the Ministry of Finance.

2.2. Principles of lending:

a) Ensure lending to the correct recipients in compliance with current state regulations and fund regulations.

b) Tasks, topics, projects, and programs applying for loans from the Fund must be reviewed openly, democratically, and equally through Scientific and Technological Councils.

The Fund provides loans for scientific and technological tasks not included in the state plan, having national significance, inter-sectoral, regional, and proposed by entities and individuals from all economic sectors.

2.3. The total outstanding loan balance from the state budget allocated to the Fund shall not exceed 20% of the total amount of state budget capital allocated to the Fund.

The total loan balance from the state budget allocated to the Fund shall not exceed 20% of the total state budget capital allocated to the Fund.

3.1. The Fund may accept entrusted capital from organizations and individuals both domestically and internationally to sponsor or lend tasks, topics, projects, and programs according to the Entrusted Contract.

The Fund accepts entrusted capital from domestic and foreign organizations and individuals to sponsor or lend to tasks, projects, and programs according to the Entrustment Contract.

4. Responsibilities of agencies and organizations regarding the implementation of sponsorship and lending contracts

Responsibilities of agencies and organizations regarding the implementation of sponsorship and loan contracts:

a) Decide on the method of sponsorship and lending by the Fund.

a) Decide on the Fund's sponsorship and loan methods.

c) Specify in detail the level of funding from the Fund's capital sources to be appropriate for each type of task, topic, project, and scientific research program.

d) Set interest rates as a basis for the Fund Management Agency to provide loans during each period, suitable for each type of task, topic, project, and program, ensuring that the loan interest rate is lower than the commercial loan interest rate and equivalent to the preferential investment credit interest rate of the state during the same period;

đ) Issue specific regulations on the implementation system of sponsorship and loan contracts as a basis for handling related violations and bear responsibility before the State for resolving violations of sponsorship and loan contracts and report to the Ministry of Science and Technology.

e) Supervise and inspect the activities of the Fund Management Agency in implementing state regulations and regulations of the Fund Management Board.

4.2. The Fund Management Agency shall perform:

a) Organize meetings of the Scientific and Technological Council to organize evaluations and selections of topics and projects, based on which decide on sponsorship, loans, and loan periods for each specific topic and project according to regulations.

b) Specify the loan period for each project, but not exceeding 36 months at maximum. In special cases where the loan period exceeds 36 months, the Fund Management Agency shall submit to the Fund Management Board for consideration and decision.

c) Based on current state regulations and rules issued by the Fund Management Board, the Fund Management Agency must sign sponsorship and loan contracts in accordance with the specified subjects.

d) Monitor and recover loan principal and interest on time according to signed loan contracts.

đ) Manage research results and handle violations of sponsorship and loan contracts.

4.3. Responsibilities of the Fund Audit Board:

a) Check and report to the Fund Management Board on the implementation of the Fund Charter and decisions of the Fund Management Board.

b) Examine and submit to competent authorities for resolution complaints from organizations and individuals related to the Fund's activities.

4.4. Responsibilities of organizations and individuals receiving sponsorship and loans from the Fund:

a) Fulfill all terms stipulated in signed sponsorship and loan contracts, mobilize sufficient funds as committed to implement tasks, topics, projects, and programs.

b) Use funds for their intended purposes and in accordance with established standards; periodically report on the use of state budget funds according to the Fund's regulations.

c) The organization primarily responsible for tasks receiving sponsorship and loans from the Fund must settle accounts with the heads of topics and projects and report to the Fund Management Agency. Individuals executing tasks receiving sponsorship and loans from the Fund must directly settle accounts with the Fund according to the Fund's regulations.

4.5. Handling of certain cases of incorrect sponsorship and loan recipients:

a) The Fund Management Board and the Fund Management Agency shall be responsible for sponsorship and loan decisions made to incorrect recipients. Violations will be subject to penalties as prescribed by law.

b) For tasks, topics, projects, and programs that have received incorrect sponsorship or loans, failed to mobilize sufficient funds, misused funds for unintended purposes or in violation of established standards, the Fund Management Agency shall report to the Fund Management Board to decide to stop remaining payments and recover improperly used funds.

Additionally, in cases of improper fund usage, depending on the severity of the violation, the primary organization or head of the topic, project, or program may also face other penalties as prescribed by law.

c) In cases where tasks, topics, projects, or programs must be halted or fail to achieve expected results due to objective reasons (the primary organization being bankrupt, the head of the topic, project, or program dying or missing, research projects being affected by natural disasters, typhoons, fires...) leading to inability to repay borrowed funds, then such cases can be considered for exemption or reduction of repayment amounts, loan interest rates, and extension of loan periods.

In such cases, the primary organization of the topic, project, or program must promptly report to the Fund Management Agency in writing (along with relevant documents such as bankruptcy announcements, death certificates, local government confirmation of disappearance, fire department and flood control agency confirmations of damage to the topic, project, or program...) for the Fund Management Agency to verify the implementation process and reasons for halting projects; the ability to repay state budget sponsored and loaned funds.

After verifying the risk management application file, the Fund Management Agency shall report to the Fund Management Board for decision-making within its authority or report to the state management agency for decision-making.

d) Authority to handle risks:

- The Chairman of the Fund Management Board decides to extend the loan period for topics, projects, and programs, but the total loan period after extension shall not exceed the maximum loan period for each type of topic, project, or program.

- The Ministry of Finance and the Ministry of Science and Technology shall examine and decide on risk management for cases of exemption or reduction of repayment amounts and loan interest rates for topics, projects, and programs based on the Fund Management Board's recommendations.

- The Ministry of Finance and the Ministry of Science and Technology shall report to the Prime Minister for decision on waiving the principal loan debt for topics, projects, and programs based on the recommendations of the Ministry of Finance and the Ministry of Science and Technology.

đ) In cases where projects have recovered funds, violated loan contracts, failed to repay loans on time, the project leader must pay overdue interest at 150% of the loan interest rate within the term. At the same time, they must bear responsibility for implementing legal measures regarding overdue debt recovery and interest according to the law.

IV. REGULATIONS ON FINANCIAL MANAGEMENT FOR THE OPERATIONAL MANAGEMENT OF THE FUND:

1. Sources of operating funds for the Fund's organizational structure:

1.1. State budget funds allocated according to the annual budget estimate.

1.2. Income from business operations:

- Interest income from loans provided by Fund projects.

- Income from cooperation activities with foreign organizations and individuals, international organizations related to the Fund's operations;

- Fees from entrusted activities (if any);

- Income from other business and service activities.

1.3. Financial activity income:

- Interest income from deposits;

- Other financial service income.

1.4. Income from other activities:

- Fine income;

- Proceeds from liquidation and sale of Fund assets (after deducting residual value and liquidation and sale expenses);

- Gains from revaluation of collateral assets when the unit or individual responsible for the project cannot repay the debt; assets formed from non-budgetary funds and other funds of the Fund;

- Recovery of previously written-off debts;

- Other income.

2. Operating Expenses

2.1. Operating expenses of the Fund, including:

a) Regular operating expenses for administrative operations, including:

- Salaries, salary-like allowances, deductions based on salaries, business expenses, travel expenses, and regular expenses for purchasing and repairing fixed assets, public services, office supplies, and other regular expenses according to regulations.

- Operating costs of the Fund Management Board, Supervisory Board, and Science and Technology Council.

- Expenses for organizing domestic and international scientific seminars according to plans approved by competent authorities.

- Expenses for purchasing materials, information for propaganda and promotion, building and maintaining websites serving the Fund's activities;

- Expenses for selecting, reviewing, and appraising projects and other tasks funded or lent: applied according to current regulations.

- Expenses for evaluating, inspecting, and accepting projects and programs funded or lent: applied according to current regulations.

- Expenses for recovering loans and interest from the Fund's capital.

- Rent expenses for premises and offices (if any).

- Other regular expenses.

b) Non-regular operating expenses for administrative operations, including: investment construction expenses, and other non-regular expenses.

2.2. The State budget ensures regular operating expenses for the Fund like those for public institutions that partially self-fund their operations according to Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government stipulating the rights to self-management and responsibility for implementing tasks, organizational structure, staffing, and finance for public institutions.

3. Management of Expenditures:

3.1. Based on the annual management expenditure budget approved by the Ministry of Science and Technology and the Fund's lawful revenues, the Fund applies the current regulations on staffing and finance autonomy for public institutions that partially self-fund their operations and specific provisions in this Circular.

3.2. The Director of the Fund is responsible for establishing internal expenditure rules and standards consistent with state regulations, submitting them to the Fund Management Board for approval as a basis for implementation, deciding on expenditures, and being accountable under the law. The Fund must submit its internal expenditure rules to the superior supervising authority for monitoring and management, and send them to the State Treasury where transactions are conducted for expenditure control as prescribed.

3.3. The Fund shall not include the following items in its expenses:

a) Losses compensated by the Government or insurance agencies, or by the party causing damage;

b) Administrative fines due to subjective reasons, financial system violations;

c) Investment construction expenses, procurement, upgrading, and renovation of fixed assets from investment construction funds;

d) Expenses for maintenance, repair, and equipment for welfare assets.

4. Management and Use of Assets:

4.1. Investment, procurement, management, and use of fixed assets for the Fund's operations are carried out according to regulations applicable to public institutions that partially self-fund their operations.

4.2. For fixed assets used in service activities, depreciation recovery must be made according to regulations applicable to state-owned enterprises.

4.3. The Fund may liquidate or sell off obsolete, substandard, irreparable, technologically outdated, or unused assets. When liquidating or selling assets, the Fund must appraise the assets and organize auctions according to the law.

4.4. The amount of depreciation, proceeds from the difference between the asset's remaining value on accounting books and the liquidation or sale price, and liquidation or sale expenses (if any) will be retained to supplement the Fund's development investment fund for asset regeneration, infrastructure construction, and equipment renewal. Depreciation amounts from purchased or acquired assets using raised funds are used to repay loans; if the loan has been fully repaid, they are added to the Fund's development investment fund.

4.5. In cases of asset losses, the Fund must identify the cause and handle it accordingly:

- If the loss is due to the fault of a collective or individual, the collective or individual must compensate according to the law.

- If the asset was insured according to the law, it will be handled according to the insurance contract.

4.6. The Fund must conduct asset inventory according to current regulations.

5. Distribution of Income and Use of Funds

5.1. Income Distribution: The annual financial surplus of the Fund is distributed as follows:

a) 25% is allocated to the development investment fund;

b) Additional income for employees, rewards fund, welfare fund, and income stabilization reserve fund are allocated as for public institutions that partially self-fund their operations according to Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government stipulatingthe right to self-management and responsibility for implementing tasks, organizational structure, staffing, and finance for public institutions.

c) The remainder after setting up the above funds will be supplemented to the development investment fund.

5.2. Purpose of Using Funds:

a) The development investment fund is used for investment, procurement of assets, technological innovation, equipment, and working conditions.

b) The reward fund is used for:

- Year-end or regular bonuses for Fund staff;

- Granting special bonuses to individuals and groups of the Fund who have innovative ideas for improving technical skills and business processes that yield efficiency.

- Awarding bonuses to individuals and units outside the Fund that effectively contribute to the Fund's activities.

c) The Income Stability Reserve Fund shall be used to ensure income for employees.

d) The welfare fund is used for:

- Investing in the construction, repair, or supplementary capital for the Fund's welfare projects, contributing capital to build common welfare projects within the industry, or with other units according to agreed contracts;

- Funding sports, cultural, and public welfare activities for the collective of the Fund's staff;

- Providing regular and emergency hardship allowances to the Fund's staff;

- Contributing to the social welfare fund and funding other welfare activities.

đ) The Director of the Fund shall coordinate with the Trade Union Executive Board of the Fund to manage and utilize the aforementioned reward and welfare funds.

6. Establishing and approving the annual financial plan of the Fund:

6.1. Annually, at the time of preparing the budget estimate, the Director of the Fund establishes the Fund's financial plan including the following contents:

- Projected surplus of state budget capital sources, plans for recovering capital, recovering interest on loans, projected plans for raising funds from other sources...

- Plans for financing and lending from state budget capital sources and non-state budget capital sources.

- Regular expenditure plans for the Fund's management machinery.

- Plans for additional capital from the state budget.

6.2. The Director of the Fund submits the Fund's financial plan to the Supervisory Board and the Management Council of the Fund. The Management Council of the Fund reviews and sends it to the Ministry of Science and Technology for consolidation into the state budget estimate.

6.3. The Director of the Fund prepares the final financial report of the Fund and submits it to the Supervisory Board and the Management Council of the Fund. The Management Council of the Fund reviews and sends it to the Ministry of Science and Technology for approval to be sent to the Ministry of Finance.

V. ACCOUNTING AND STATISTICAL WORK

1. The Fund must organize accounting work in accordance with the Accounting Law and guiding documents implementing the Accounting Law. The Fund conducts statistical work in accordance with the Statistics Law and guiding documents implementing the Statistics Law.

2. The Fund applies the Administrative and Public Institution Accounting System (issued pursuant to Decision No. 19/2006/QD-BTC dated March 30, 2006 of the Minister of Finance) to carry out its accounting work.

3. Annually, the Fund prepares and submits financial reports to the Ministry of Science and Technology and the Ministry of Finance. The Ministry of Science and Technology reviews and approves the Fund's final accounts according to current regulations and consolidates them into the Ministry of Science and Technology's annual final accounts report sent to the Ministry of Finance.

4. Annually, the Fund must conduct self-audit of financial and accounting matters according to the "Regulations on Self-Audit of Financial and Accounting Matters in Agencies and Units Using State Budget" issued pursuant to Decision No. 67/2004/QD-BTC dated August 13, 2004 of the Minister of Finance.

5. The Fund is subject to financial audits by the Ministry of Science and Technology, the Ministry of Finance, and the National Audit Office according to current regulations.

VI. IMPLEMENTATION

This Circular takes effect fifteen days after its publication in the Official Gazette. During implementation, if there are any difficulties, the National Fund for Science and Technology Development shall reflect and report to the Ministry of Science and Technology so that the Ministry of Science and Technology can cooperate with the Ministry of Finance to study and resolve them./.