Joint Circular No. 13/2004/TTLT/BTC-BYT-BNV guiding financial management regimes for public health service units with income operating in the field of public healthcare.

MINISTRY OF INTERIOR-MINISTRY OF FINANCE-MINISTRY OF HEALTH ********	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ********
Number: 13/2004/TTLT-BTC-BYT-BNV	Hanoi, February 27, 2004

JOINT CIRCULAR

JOINT CIRCULAR NO. 13/2004/TTLT-BTC-BYT-BNV OF THE MINISTRY OF FINANCE - MINISTRY OF HEALTH - MINISTRY OF INTERIOR DATED FEBRUARY 27, 2004 GUIDING THE FINANCIAL MANAGEMENT REGIME FOR PUBLIC HEALTH INSTITUTIONS WITH REVENUE

Pursuant to Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government on financial regulations applicable to public institutions with revenue.
To be consistent with the specific activities of the health sector, the Ministry of Finance, the Ministry of Health, and the Ministry of Interior issue additional guidance on certain aspects of financial management for public health institutions with revenue as follows:

I. OBJECTS

1. The subject of this Circular is public health institutions established and operating in the health sector by competent state authorities (hereinafter referred to collectively as public health facilities), including:

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

- Medical examination and treatment facilities directly under research institutes and training schools of medicine and pharmacy 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 medical information technology centers under ministries, sectors, and localities;

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

- Units with functions of vaccine and medical product testing, medical equipment inspection, 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 health sector.

2. Public institutions 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 and being authorized by a competent authority to apply the financial mechanism for public institutions 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 institutions, scientific research and technological application institutions, journals are subjects implementing 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 OPERATING REVENUE FOR PUBLIC HEALTH FACILITIES

Public health facilities have the following sources of operating revenue:

1. Current fees and charges according to regulations:

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

b) Other fees and charges of the health sector retained by the unit for use according to laws on fees and charges.

2. Revenue tied to the unit's activities:

a) Revenue from out-of-hospital medical examination and treatment, preventive healthcare, training, and scientific research activities of the unit conducted under service contracts and other legal service activities. The level of revenue is agreed upon between both parties in the contract.

b) Revenue from pharmaceutical compounding, infusion preparation, blood screening, and blood-derived products, vaccines, medical products, orthopedic shoes for leprosy patients. Products produced according to government orders are priced according to the principle of cost recovery and accumulation.

c) Revenue from service and supply activities organized by the unit such as laundry, catering, sanitation, patient transportation services. The level of revenue is determined by the head of the unit according to the principle of cost recovery and accumulation.

3. Other legitimate revenues retained for use according to legal provisions.

III. CONTENTS OF REGULAR EXPENSES

Public health facilities with revenue may use state budget funds and their own operating revenue to cover regular expenses for the following purposes:

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 level of social insurance, health insurance, and trade union fee contributions for employees in the unit is 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).

2. Electricity, water, environmental sanitation (including industrial cleaning services), fuel, office supplies, public services, telecommunications, propaganda, travel expenses, conference fees, clothing, footwear, helmets for employees, and other management and operational expenses of the unit.

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

4. Direct professional expenses for disease prevention and treatment: Medicines, chemicals, infusions, blood, X-ray films, consumable materials, bed linens, beds, quilts, sheets, pillows; low-cost consumables and other expenses serving the unit's professional activities.

5. Expenses for line management work and strengthening health staff at grassroots levels.

6. Expenses for scientific research projects at the grassroots level of the unit.

7. Training and training 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), food purchases in the nutrition department based on treatment conditions; tax payments; depreciation of fixed assets.…

9. Regular expenses related to fee and charge collection work as stipulated by current regulations.

10. Regular maintenance and repair costs for fixed assets (Tangible Fixed Assets) of the facility (purchase of replacement equipment, maintenance, repair, and regular machine and equipment repairs and infrastructure works).

11. Expenses for incoming and outgoing groups.

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

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

IV. ASSIGN ANNUAL INCOME AND EXPENSE BUDGETS

1. Regular income and expense budgets:

a) Assigning regular income budgets:

- For fees and charges revenue: The supervisory authority assigns the fee and charge revenue budget for units (total and detailed by each type of fee) as follows:

+ Total fee and charge revenue.

+ Total amount of fees and charges retained by the unit for use in accordance with the regulations of competent state agencies.

+ Total amount of fees and charges to be remitted to the state budget.

- For production and service revenue:

+ The supervisory authority only assigns revenue budgets for stable production and service provision revenues of units without fee and charge revenue sources.

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

b) Assigning regular expense budgets:

- For units that fully cover their regular operational expenses from business income: Based on the approved expense budget, the supervisory authority assigns the total regular operational expenses from business income (stable for three years) for units to proactively use for regular operations.

- For units that partially cover their regular operational expenses from business income:

Based on the approved expense budget by the competent authority, the supervisory authority assigns a stable expense budget for three years, including:

+ Total regular operational expenses from retained fees and charges for use in accordance with the regulations of competent state agencies for each type of fee and charge.

+ Total regular operational expenses 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 equivalent to a ministry, or agency under the Government (for units managed centrally); by the People's Council (for units managed locally) as stipulated in Decision No. 139/2003/QĐ-TTg dated July 11, 2003, of the Prime Minister. The regular operational expenses from the state budget allocation for the first year of the stability period must not be lower than the allocation standard and the regular operational budget of the preceding year.

The amount assigned for the next two years: Must ensure the regular operational expenses of units equal to the first year of the stability period, plus additional funding determined by the supervisory authority within the allocated state budget and additional tasks assigned by the competent authority (if any).

At the end of the three-year stability period, the regular operational expenses covered by the state budget will be reassessed accordingly.

2. Non-recurring expense budgets from state budget allocations are managed in accordance with current regulations, including:

- Expenses for implementing national science and technology research projects at the state and ministry levels;

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

- Expenses for implementing national target programs;

- Expenses for ordering goods and services according to state regulations;

- Expenses for reducing staffing;

- Counterpart funds for loan and aid projects;

- Development investment expenses, including construction of physical facilities, procurement of equipment, major repairs of assets, implementation of investment projects approved by competent authorities.

- Expenses for urgent tasks assigned by competent authorities;

- Other non-recurring expenses (if any).

V. PUBLIC HEALTH ESTABLISHMENTS WITH INCOME ARE SELF-FINANCING AND SELF-DECIDING WITH THE FOLLOWING RESPONSIBILITIES:

1. Regarding the use of state budget allocations and business income:

a) For units that fully cover their operational expenses: Are allowed to proactively use business income for regular unit activities to fulfill assigned professional tasks.

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

- In cases where units fall short of their assigned revenue budget, they must adjust their expenses accordingly.

b) For units that partially cover their operational expenses:

- In cases where units save on regular expenses or increase fees and charges compared to the assigned budget, they can use the entire saved funds and increased revenue (fees and charges retained according to regulations) to supplement the salary fund and operational expenses of the unit.

- In cases where units fall short of their assigned revenue budget, they must adjust their expenses accordingly.

c) For fees and charges payable to the State budget at a percentage rate (%), each year the competent authority shall adjust the revenue budget forecast to be consistent with the activities of the unit.

2. The number of workers serving as the basis for building a stable salary and wage fund over three years includes the number of staff positions assigned by the competent authority, the number of people signed to work contracts for one year or more, and those who are 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 public health facility that generates income may proactively manage staffing and labor as follows:

a) Arrange, utilize, and allocate civil servants and public officials to enhance the efficiency and quality of operations of the unit. Task assignments for civil servants and public officials must ensure preventive healthcare, medical examination, treatment, and patient care according to regulations of the Ministry of Health. Those within the scope of reduced staffing will enjoy simplified staffing benefits as prescribed by the state.

b) The head of a public health facility generating income may decide on additional staffing annually to meet job requirements, financial capacity of the unit, and guidelines on labor standards issued by authorized state agencies.

c) The head of a public health facility generating income may sign initial employment contracts for additional annual staffing positions after recruitment. Those with indefinite-term labor contracts must meet the qualifications and professional titles as prescribed by the sectoral management ministry and be classified under the administrative public service pay scale as prescribed by the state, enjoying rights and obligations as stipulated by law.

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

đ) Implement democratic regulations and transparency in recruitment, utilization, and allocation of civil servants and public officials according to legal provisions and guidance from the competent management agency.

3. Salary Fund and Income:

a) The salary fund and income of public health facilities generating income shall be sourced from the following:

- State budget funds for paying salaries, wages, and allowances linked to salaries for civil servants and public officials within the staffing quota and contractual employees (for units ensuring part of their regular operational costs) shall be 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 allowances.

- Revenue from public services and savings from regular expenses from the state budget:

Based on financial results and the implementation of professional tasks, the salary fund and income of public health facilities generating income shall be 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 public service units generating income.

b) Units shall establish rules for salary and wage payments and openly discuss and reach consensus at the meeting of civil servants and public officials of the unit.

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

c) Any surplus in the actual salary fund of the unit at the end of the year shall be 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 provided by the state budget and revenue from public services), the unit head may proactively establish internal expenditure regulations based on legal provisions and consistent with the unique activities of the unit.

- The establishment of internal expenditure regulations must comply with the provisions of Circular No. 50/2003/TT-BTC dated May 22, 2003 of the Ministry of Finance guiding public service units generating income to establish internal expenditure regulations as stipulated in Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government.

- In internal expenditure regulations, public health facilities generating income must prioritize expenditures on business operations to ensure preventive healthcare and medical examinations and treatments for individuals exempted or granted reduced hospital fees according to current state regulations.

- The internal expenditure regulations of the unit must have the opinion of the superior state management agency and must be submitted to the same-level finance agency and the State Treasury where transactions take place for coordination and supervision of implementation.

5. Regarding Depreciation and Utilization of Fixed Assets:

- Public health facilities generating income and engaging in demand-based medical services and production and service supply activities must establish regulations for 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 shall be recorded as expenses for demand-based medical services, production, and service supply activities and retained to establish a development fund for public service activities to strengthen infrastructure, update equipment, or repay loans for purchasing fixed assets as prescribed by law.

6. Regarding asset disposal: Public health facilities with revenue that require asset liquidation shall establish an Asset Liquidation Committee pursuant to Decision No. 55/2000/QĐ-BTC dated April 19, 2000, issued by the Minister of Finance on the management regulations for State asset disposal at administrative and public service agencies. The proceeds from asset liquidation (after deducting liquidation costs) shall be deposited into the development fund for public service activities. In cases where assets formed from borrowed funds have not been fully repaid, the entity may use the proceeds from liquidation (after deducting liquidation costs) to repay the loan; if the loan has been fully repaid, the proceeds shall be deposited into the development fund for public service activities.

7. Public health facilities are permitted to legally raise capital from organizations and individuals both domestically and internationally to invest in physical infrastructure, 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 funded by raised capital based on the principle of ensuring cost recovery and accumulation.

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

9. At year-end, any unspent regular budget funding allocated according to the approved budget and retained revenue (as stipulated) of public health facilities with revenue shall be transferred to the following year for use and settlement within the subsequent fiscal year. Based on reconciliation between the State Treasury and the unit by December 31, the State Treasury shall process the transfer of unspent funds to the following year for the unit in accordance with current regulations and notify the same-level financial authority in writing for management purposes.

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

VI. IMPLEMENTATION

Health service public institutions falling under the category defined in Section I of this Circular shall base their budget planning and proposal development for implementing Decree No. 10/2002/NĐ-CP of the Government on their financial capacity and local economic conditions, and submit these proposals to the supervising authority, specifically as follows:

1. For units directly under Ministries, agencies equivalent to Ministries, and central government agencies: The supervising authority shall review the unit's revenue and expenditure budget; determine the amount of regular budget funding guaranteed by the State budget for three years (for units partially self-funding regular operational expenses); and consolidate and submit 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 revenue-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 unit's revenue and expenditure budget; determine the amount of regular budget funding guaranteed by the State budget for three years (for units partially self-funding regular operational expenses); and consolidate and submit to the same-level financial authority (in accordance with current financial management levels). Based on the supervising authority's and same-level financial authority's recommendations, the Chairperson of the People's Committees at all levels shall issue a decision allowing the unit to apply the financial mechanism for revenue-generating public service units as stipulated in Decree No. 10/2002/NĐ-CP dated January 16, 2002, of the Government.

VII. IMPLEMENTATION PROVISIONS

This Circular shall take effect fifteen days after its publication in the Official Gazette. Other financial regulations shall be implemented in accordance with Circular No. 25/TT-BTC dated March 21, 2002, of the Ministry of Finance, providing guidance on the implementation of Decree No. 10/NĐ-CP dated January 16, 2002, of the Government regarding the financial system applicable to revenue-generating public service units and other guiding documents. During implementation, any issues encountered should be promptly reported to the relevant ministries for timely revision and supplementation to ensure compliance.

Huỳnh Thị Nhân (Signed)

Nguyen Trong Dieu (Signed)

Le Ngoc Trong (Signed)