Joint Circular No. 13/2004/TTLT-BTC-BYT-BNV guides the financial management regime for public health service units with revenue operating in the public healthcare sector.

JOINT CIRCULAR

Guidelines for financial management of public health service units with revenue

operating in the healthcare sector

Pursuant to Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government on financial regulations applicable to service units with revenue.

To be consistent with the specific operations of the healthcare sector,  The Ministry of Finance, the Ministry of Health, and the Ministry of Home Affairs jointly provide additional guidelines on financial management for public health service units with revenue operating in the healthcare sector as follows:

I. Scope

1. The subjects to which this Circular applies are public health service units established by competent state authorities and operating in the healthcare sector (hereinafter referred to collectively as public health facilities), including:

Hospitals, institutes, and centers with hospital beds, rehabilitation and functional recovery facilities under ministries, sectors, and localities;

Healthcare examination and treatment facilities directly affiliated with research institutes and training institutions in the medical and pharmaceutical fields nationwide;

Health Centers (including district, county, town, city-level health centers, preventive health centers, centers for preventing social diseases, centers for health communication and education, centers for maternal and child health-family planning or reproductive health centers, and health information technology centers) under ministries, sectors, and localities;

Institutes, stations, camps, or other units with functions and tasks related to disease prevention and control under ministries, sectors, and localities;

Units responsible for vaccine, medical product, and medical equipment quality control; drug, cosmetic, and food testing; and quarantine under ministries, sectors, and localities;

Facilities producing vaccines, medical products, blood, and blood derivatives, infusions, or other products in the healthcare sector.

2. Public service units with revenue mentioned above shall implement Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government when they meet the following conditions:

a) Having legal personality:

Having a decision to establish the unit in writing from a competent state authority;

Having a separate seal;

Having an account at the State Treasury or bank;

Having a financial accounting organizational structure;

b) Having legitimate sources of income.

c) Having a proposal approved by a competent authority to allow the unit to apply the financial mechanism for service units with revenue as stipulated in Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government.

3. Competent authorities have the responsibility to create favorable conditions for public health facilities with revenue to implement Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government.

4. Subordinate budgetary units of public health facilities with revenue such as training, scientific research, and technology application units, and journals are subject to Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government and shall apply this Circular and other Circulars guiding each field of activity such as education and training, science and technology, culture-information.

II. Sources  of revenue for public health facilities

Public health facilities have the following sources of revenue:

1. Current fees and charges as prescribed:

a) Hospital fee revenue (including hospital fees paid by the Social Insurance Agency and the Poor Health Examination and Treatment Fund) from various types of healthcare services and patient support services retained by the unit according to current regulations. The level of hospital fee revenue for different types of healthcare services is implemented according to current regulations on hospital fees.

b) Other fees and charges of the healthcare sector retained by the unit for use according to laws on fees and charges.  2. Revenue tied to the activities of the unit:

a) Revenue from healthcare activities outside hospitals, preventive healthcare, training, and scientific research conducted by the unit under service contracts and other legal service activities. The level of revenue is agreed upon between both parties in the contract.

b) Revenue from drug compounding, infusion preparation, blood screening, and blood-derived products, vaccines, medical products, orthopedic shoes for leprosy patients, and products produced according to government orders. Prices for these products are set by the government to ensure cost recovery and accumulation.  c) Revenue from service and labor supply activities organized by the unit such as laundry, catering, cleaning, and patient transportation services. The level of revenue is determined by the head of the unit according to the principle of ensuring cost recovery and accumulation.

3. Other legitimate revenues retained for use according to legal provisions.  III. Contents of Regular Operational Expenditures

Public health facilities with revenue may use state budget funds and unit revenue to cover regular operational expenditures as follows:

1. Salaries, wages, allowances, bonuses, collective welfare benefits, contributions to social insurance, health insurance, and trade union fees for civil servants, officials, and contractual employees according to current state regulations. The contribution levels for social insurance, health insurance, and trade union fees for employees in the unit are implemented according to current regulations (excluding the additional salary increase factor specified in Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government).

Electricity, water, environmental sanitation (including industrial cleaning services), fuel, office supplies, public services, telecommunications, propaganda, travel expenses, conference fees, uniforms, shoes, and protective helmets for employees and other management and administrative operation costs.

3. Hiring domestic and foreign experts; renting equipment and facilities to serve the professional activities of the unit.

4. Direct professional expenses used in disease prevention and treatment work: Medicines, chemicals, infusions, blood, X-ray films, consumable materials, clothing, bedding, mattresses, sheets, blankets, low-cost consumables, and other expenses serving the professional activities of the unit.

2.  5. Expenses for directing lower-level facilities and strengthening medical personnel at grassroots levels.  6. Expenses for basic research projects of the unit.

3. Hiring experts both domestically and internationally; renting means of transport, facilities to serve the professional activities of the unit.

4. Professional expenses directly used in disease prevention and treatment work: Medicine costs, chemical substances, intravenous fluids, blood, X-ray films, consumable materials and tools; bed linens, patient clothing, quilts, mattresses, sheets, pillows; low-cost expendable materials and other expenses serving the professional activities of the unit.

5. Expenses for directing operations and strengthening medical personnel at grassroots levels.

6. Research and scientific study expenses for projects at the unit level.

7. Training and instruction expenses for civil servants and officials within the unit (excluding training and capacity building expenses for cadres and civil servants according to national targets).

8. Direct costs for service activities, production, and labor supply such as purchasing raw materials, chemicals for vaccine, drug, infusion, distilled water production; blood screening costs (including blood donor incentives), purchasing food in the dietary department based on treatment needs; tax payments; depreciation of fixed assets...  producing vaccines, drugs, infusions, distilled water; blood screening costs (including blood donor incentives),  purchasing food in the dietary department based on treatment needs; tax payments; depreciation of fixed assets…

9. Regular expenses related to fee and charge collection work as stipulated currently.

10. Regular maintenance and upkeep costs for fixed assets (Tangible Fixed Assets) of the facility (purchasing replacement tools, maintenance, upkeep, and regular repair of machinery and equipment, and infrastructure projects).

11. Outgoing and incoming group expenses.

12.  Other expenses: Repayment of principal and interest on loans from domestic credit institutions and contributions raised (if any); charitable donations, meal and transportation assistance expenses for poor patients, burial expenses for homeless patients, contributions to villages and wards for environmental sanitation and public security...

Non-recurring expenses implemented in accordance with Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government and Circular No. 25/2002/TT-BTC dated March 21, 2002 of the Ministry of Finance.

IV. Allocation of annual revenue and expenditure budget

1. Regular revenue and expenditure budget:

a) Allocation of revenue budget:

For fees and charges revenue: The supervising authority allocates the revenue budget for fees and charges to units (total amount and detailed by each type of fee) as follows:

Total fees and charges revenue.

Total fees and charges retained by the unit for use according to regulations of competent state agencies.

Total fees and charges to be remitted to the State budget.            

For production and service revenue:

The supervising authority only allocates revenue budgets for stable production and service provision revenues of units without fee and charge revenue sources.

The supervising authority does not allocate revenue budgets for unstable production and service provision revenues of units with fee and charge revenue sources. Units develop their own revenue plans to manage throughout the year.

b) Allocation of regular expenditure budget:

For units that ensure all regular operational costs from self-generated revenue: Based on the reviewed expenditure budget, the supervising authority allocates the total regular operational expenditure from self-generated revenue (stable for three years) for units to proactively use for regular operations.

For units that ensure part of their regular operational costs from self-generated revenue:

Based on the reviewed expenditure budget by authorized agencies, the supervising authority allocates a stable expenditure budget for three years, including:

Total regular operational expenditure from retained fees and charges revenue for use according to regulations of competent state agencies for each type of fee and charge.

Total regular operational expenditure from the state budget allocation for the first year of the stability period determined based on the expenditure allocation standards set by the Minister, Head of a ministry-level agency, or head of a government agency for subordinate units (for units under central management); by the People's Councils (for units under local management) as stipulated in Decision No. 139/2003/QĐ-TTg dated July 11, 2003 of the Prime Minister. The regular expenditure level from the state budget allocation for the first year of the stability period shall not be lower than the allocation standard and the regular expenditure budget of the preceding year.

The level allocated for the next two years: Must ensure the regular operational costs of units equal to the first year of the stability period, plus additional funding determined by the supervising authority within the state budget allocation and additional tasks assigned by the authorized agency (if any).

At the end of the three-year stability period, the regular expenditure level guaranteed by the state budget will be reassessed accordingly.

2. Non-recurring expenditure budget from state budget allocation is managed according to current regulations, including:

Expenses for implementing national science and technology research projects;

Training and capacity building expenses for civil servants and officials from retraining funds;

Expenses for implementing national target programs;

Expenses for placing orders according to state regulations;

Expenses for streamlining staffing;

Counterpart funds for loan and aid projects;

Investment development expenses, including: construction investment expenses for physical facilities, equipment procurement, major repairs of assets, implementation expenses for approved investment projects by authorized agencies;

Expenses for urgent tasks assigned by authorized agencies;

Other non-recurring expenses (if any).

Public health facilities with revenue are financially autonomous and responsible for the following:

1. Regarding the use of state budget funds and self-generated revenue:

a) For units that fully cover their operational costs: Are allowed to proactively use self-generated revenue for regular unit activities to fulfill assigned professional tasks.

In cases where units exceed their revenue budget, they can use the entire surplus revenue (the portion of fees and charges retained by the unit according to regulations) to supplement the salary fund and operational expenses of the unit as stipulated.

In cases where units fall short of their revenue budget, they must correspondingly reduce expenditures. 

b) For units that partially cover their operational costs:  If units save on regular expenses or increase fees and charges revenue compared to the allocated budget, they can use the entire saved funds and increased revenue (the portion of fees and charges retained by the unit according to regulations)

to supplement the salary fund and operational expenses of the unit. If units fall short of their revenue budget, they must correspondingly reduce expenditures.

c) For fees and charges that must be remitted to the state budget at a certain percentage, the authorized agency annually adjusts the revenue budget to align with the unit's activities.

c) For fees and charges that must be remitted to the State budget according to a percentage rate (%), the competent authority shall adjust the annual revenue budget estimate each year to align with the unit's activities.

2. The number of workers serving as the basis for preparing the budget for the stable salary and wage fund over three years includes the number of positions assigned by the competent authority, the number of people signed to work contracts for one year or more, and those signed to initial employment contracts with probation periods as stipulated in Article 19 of Decree No. 116/2003/NĐ-CP dated October 10, 2003 of the Government on recruitment, utilization, and management of cadres and civil servants in state-owned public institutions up to December 31 of the preceding year.

During the course of operation, the head of a publicly-funded healthcare facility with revenue has the authority to proactively utilize positions and labor as follows:

a) Organize, utilize, and arrange civil servants and employees to enhance the efficiency and quality of unit operations. Task assignments for civil servants and employees must ensure disease prevention, medical examination, treatment, and patient care according to regulations of the Ministry of Health. Those within the scope of reduction in positions shall enjoy simplified staffing benefits as prescribed by the State.

b) The head of a publicly-funded healthcare facility with revenue may decide on additional staffing each year to suit job requirements, financial capacity of the unit, and guidelines on labor norms issued by the competent state agency.

c) The head of a publicly-funded healthcare facility with revenue may sign initial employment contracts for additional positions each year after recruitment. Those who enter into indefinite-term labor contracts must meet the standards and professional titles as prescribed by the sectoral management ministry and be classified under the administrative public service pay scale prescribed by the State, enjoying rights and obligations as stipulated by law.

d) The head of a publicly-funded healthcare facility may decide on outsourcing contracts for tasks that do not require regular staffing; terminate outsourcing labor contracts and employment contracts for those signed by the unit according to legal procedures.

đ) Implement democratic regulations and transparency in recruitment, utilization, and arrangement of civil servants and employees in accordance with legal provisions and guidance from the competent management agency.

3. Salary Fund and Income:

a) The salary fund and income of publicly-funded healthcare facilities with revenue are sourced from the following:

State budget funds for paying salaries, wages, and allowances linked to salaries for civil servants and employees within the staffing quota and contractual labor (for units covering part of their regular operational costs) are implemented according to Decree No. 25/NĐ-CP dated May 23, 1993 of the Government, Decree No. 68/2000/NĐ-CP dated November 17, 2003 of the Government, and current guiding documents on salaries and salary-related allowances.

Revenue from public services and savings from regular expenses funded by the State budget:

Based on financial performance results and the implementation of specialized tasks, the salary fund and income of publicly-funded healthcare facilities with revenue are determined according to Point 1, Section IV of Circular No. 25/2002/TT-BTC dated March 21, 2002 of the Ministry of Finance guiding the implementation of Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government on financial systems applicable to revenue-generating public institutions.

b) Units establish rules for salary and wage payments and discuss them openly and unanimously at the unit's civil servant and employee conference.

Based on the unit's salary and wage payment rules and the determined salary fund, the unit head decides on monthly salary and wage payments for civil servants, employees, and contractual labor based on individual work performance.

c)  Any unused portion of the actual salary fund of the unit at the end of the year is transferred to the stable income reserve fund and carried forward to the next year for continued use.

4. Establishing Internal Expenditure Regulations:

Within the scope of the unit's financial resources (including regular operating expenses from the state budget and revenue from public services), the unit head may proactively establish internal expenditure regulations based on legal provisions and the specific nature of the unit's activities.

The establishment of internal expenditure regulations must comply with Circular No. 50/2003/TT-BTC dated May 22, 2003 of the Ministry of Finance guiding revenue-generating public institutions to establish internal expenditure regulations according to Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government.

In internal expenditure  regulations, healthcare facilities with revenue must  prioritize expenditures on business operations to ensure disease prevention and medical examination and treatment services for individuals exempted or granted reduced hospital fees according to current State regulations.

The unit's internal expenditure regulations must be reviewed by the superior administrative agency and submitted to the same-level finance agency and the State Treasury where transactions take place for coordination and supervision.

5. Regarding Depreciation and Utilization of Fixed Assets:

Healthcare facilities with revenue engaged in demand-based medical examination and treatment services and production and service supply activities must establish regulations on the accrual of depreciation of fixed assets according to current State regulations.

In special cases, the unit head may establish higher depreciation rates subject to approval by the supervising agency to recover capital promptly but must align with the asset's technical life and the service user's payment capacity.

The entire amount of depreciation of fixed assets is recorded as an expense for demand-based medical examination and treatment services, production, service supply, and labor activities and is retained to establish a development fund for public service activities to invest in enhancing infrastructure, updating equipment, or repaying loans for purchasing fixed assets  as prescribed by law.

6. On Asset Disposal: Healthcare facilities with revenue that need  to dispose of assets shall establish an asset disposal committee according to Decision No. 55/2000/QĐ-BTC dated April 19, 2000 of the Minister of Finance on the issuance of regulations on the management of the disposal of state assets in administrative and public service agencies. The proceeds from asset disposal (after deducting disposal costs) are transferred to the development fund for public service activities. In the case of asset disposal  assets  formed from borrowed capital, if the borrowed capital has not been fully repaid, the unit may use the proceeds from liquidation (after deducting liquidation expenses) to repay the borrowed capital; in the case where the borrowed capital has been fully repaid, the proceeds may be transferred to the development fund for public service activities.

7. Public health facilities are permitted to raise lawful capital from organizations and individuals both within and outside the country to invest in physical assets, purchase equipment to serve their professional activities, production, and service provision according to current legal regulations. The heads of units may determine the revenue levels of production and service supply activities from this raised capital based on the principle of ensuring cost recovery and accumulation.

8. The management and utilization of hospital fees, service charges, and administrative fees shall be carried out in accordance with the provisions of the Ordinance on Service Charges and Administrative Fees and Decree No. 57/2002/NĐ-CP dated June 3, 2002, detailing the implementation of the Ordinance on Service Charges and Administrative Fees. Specifically, hospital fees and other types of service charges and administrative fees currently implemented under existing guiding documents shall continue to be applied until new guiding documents are issued.

9. At year-end, the regular budget funds allocated according to the approved budget and the retained proceeds from public service activities (as stipulated) of public health facilities with income that have not been fully utilized may be carried over to the next year for use and settlement in the following fiscal year. Based on the reconciliation between the State Treasury and the unit by December 31, the State Treasury will process the transfer of unused funds to the next year for the unit in accordance with current regulations. simultaneously notify the financial authority at the same level in writing for management..

10. Public health facilities with income shall implement accounting procedures in accordance with Circular No. 121/2002/TT-BTC dated December 31, 2002, of the Ministry of Finance guiding accounting for public service units with income.

VI. Implementation Organization

Public health service units falling within the scope defined in Section I of this Circular shall base their budget estimates and develop implementation plans for Decree No. 10/2002/NĐ-CP of the Government, to be submitted to the supervising authority, specifically as follows:

1. For units directly under the Ministries, agencies equivalent to Ministries, and central government agencies: The supervising authority shall review the budget estimates of income and expenditure of the unit; determine the amount of regular budget funds guaranteed by the state budget for three years (for units partially self-financing regular operating costs); and submit the consolidated report to the Ministry of Finance. The Ministry of Finance will consider and issue a response for the supervising authority to issue a decision allowing the unit to apply the financial mechanism for income-generating public service units as stipulated in Decree No. 10/2002/NĐ-CP dated January 16, 2002, of the Government.

2. For units directly under localities: The supervising authority shall review the budget estimates of income and expenditure of the unit; determine the amount of regular budget funds guaranteed by the state budget for three years (for units partially self-financing regular operating costs) for the unit and consolidate and submit to the financial authority at the same level (in accordance with the current financial management hierarchy). Based on the proposal of the supervising authority and the financial authority at the same level, the Chairperson of the People's Committee at all levels shall issue a decision allowing the unit to apply the financial mechanism for income-generating public service units as stipulated in Decree No. 10/2002/NĐ-CP dated January 16, 2002, of the Government.  The State budget ensures stability over three years (for units partially self-financing their regular operational costs) for the unit and consolidates and forwards this to the financial management agency at the same level (in accordance with the current financial management hierarchy). Based on the proposal from the supervising agency and the financial management agency at the same level, the Chairman of the People's Committee at all levels issues a decision allowing the unit to apply the financial mechanism for income-generating public service organizations as stipulated in Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government.

VII.  Implementation Provisions

This Circular takes effect fifteen days after its publication in the Official Gazette. Other provisions regarding financial systems shall be implemented in accordance with Circular No. 25/TT-BTC dated March 21, 2002, of the Ministry of Finance guiding the implementation of Decree No. 10/NĐ-CP dated January 16, 2002, of the Government on financial systems applicable to income-generating public service units and other guiding documents. During the implementation period, any difficulties should be promptly reported to the relevant ministries for appropriate amendments and supplements./.