Circular No. 13 TC/DT guiding the management, allocation, and lending of state budget funds according to Decision No. 327-CT.

CIRCULAR

Guidelines for managing, allocating, and lending state budget capital according to Decision 327-CT

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Pursuant to the conclusion of Prime Minister Vo Van Kiet on the implementation of Decision 327-CT as stated in Government Document No. 2908 KTN dated June 16, 1993, and Directive No. 525 TTg dated November 2, 1993 of the Prime Minister regarding certain policies and measures to continue developing the economy and society in mountainous regions. After reaching consensus with relevant government agencies, the Ministry of Finance hereby provides guidelines for managing, allocating, and lending capital for basic construction investment and economic service funds from the state budget under Program 327 as follows:

PART 1

GENERAL PRINCIPLES

1- The state budget allocates and lends capital for basic construction investment (including domestic and foreign capital) and economic service funds (hereinafter referred to as investment capital) to projects according to Decision 327-CT that have been approved by competent authorities.

2- The annual source of investment capital for projects (including: capital recorded in the plan; unused capital reported; capital recovered from loans) is balanced within the State Treasury and allocated according to the plan for the project management units to manage and use (People's Committees of provinces and cities; relevant ministries). The Ministry of Finance will implement allocations and loans through the National Treasury system.

3- Based on the project approved by competent authorities, project sponsors directly receive, manage, and use investment capital for its intended purpose effectively and in compliance with current financial management regulations of the State.

The project management unit is the higher-level unit of the project sponsor:

- For projects managed by localities, the project management unit is the People's Committee of the province or city.

- For projects managed by central sectors, the project management unit is the relevant ministries.

4- Annually, project management units are responsible before the Prime Minister for managing and using the approved capital according to the plan, ensuring allocation of investment capital for projects within their jurisdiction to implement investments according to the approved project in accordance with Decision 327-CT and Directive 525-TTG of the Government.

PART II

MANAGEMENT, ALLOCATION, AND LOANING OF INVESTMENT CAPITAL FOR PROJECTS

I- OBJECTS, SCOPE, CONTENT; PROCEDURES FOR PLANNING ALLOCATION AND LOANING OF INVESTMENT CAPITAL FOR PROJECTS

1- Objects eligible for central budget allocation of basic construction investment capital

1.1- Independent settlement projects may be at the village or cluster of villages level, implementing the following tasks:

- Protecting, enclosing, planting, and caring for protective forests and special-use forests within the project area.

- Clearing land, improving paddy fields; constructing low-voltage power lines; small profit-making works and drinking water facilities (where necessary); roads, schools, health stations, etc., serving directly the project area to stabilize production and long-term living conditions for ethnic groups practicing fixed farming and settlement.

1.2- Forestry-agriculture-industry; agriculture-forestry-industry; aquaculture projects implementing the following tasks:

- Protecting, enclosing, planting, and caring for: Protective forests, special-use forests (including national parks, nature reserves, historical and cultural forests), botanical gardens, seedling nurseries.

- Flood control embankments, main sluices (in river and coastal floodplains), transportation works, drinking water facilities where necessary, low-voltage power lines, and small irrigation works (if applicable), schools, health stations, etc., serving directly the project area.

2- Objects eligible for central budget allocation of economic service capital:

2.1- Population transfer and reception work (including travel expenses, house support, food subsidies for three or six months) is allocated according to the standard set by the Ministry of Labor, Invalids, and Social Affairs. For ethnic groups practicing fixed farming and settlement, the central budget supports capital for purchasing production tools, fertilizers, seeds, pesticides, initial relocation, and livelihood assistance.

2.2- Project management work

- Annually, the State allocates between 5% to 6% of the total investment capital under Program 327/CT for project management work.

- The objects eligible for project management capital include:

+ Central and local project management agencies

+ The Central Steering Committee for Program 327/CT

+ The National Treasury System

+ Relevant central ministries and agencies involved in implementing projects under Program 327/CT.

Based on the approved annual management capital amount, the Central Steering Committee for Program 327/CT allocates capital to these objects, which the Ministry of Finance uses as a basis for management and allocation.

- Management capital is used for the following purposes:

+ Project planning and approval

+ Training, propaganda, and awards

+ Annual summary meetings

+ Field surveys

+ Training for agricultural, forestry, fishery extension workers, and scientific and technical staff during direct guidance periods in project areas.

+ Establishing technology transfer models

+ Supplementing necessary equipment and office supplies for general management and supervision activities.

3- Objects eligible for central budget loans

3.1- In addition to the scope of tasks covered by projects receiving investment capital, the central budget provides preferential loans (interest rate = 0) for tasks included in projects approved by competent authorities, including:

- Costs for initial crop cultivation and animal husbandry and costs for caring for and protecting crops (industrial, fruit, specialty trees) until harvest according to the economic and technical cycle of each type of crop and livestock.

- Costs for building dikes, sluices, and drainage channels for each plot in the aquaculture project area.

3.2 Loan recipients are project sponsors; depending on the nature and characteristics of each project, the actual loan recipient may be individual farmers within the project area (designated by the project sponsor) or the project sponsor who receives the loan to lend it to individual farmers.

Direct loan recipients must use the funds for their intended purpose and repay them on time as guided by the National Treasury Bureau.

4.1- The total amount of capital allocated for basic construction investment in the planned year includes: the value of work volumes in the project to be completed within the planned year plus (+) the value of work volumes in the plan completed in the reporting year but not yet funded for settlement.

4.2- The total loan amount in the planned year includes: the loan amount for the value of work volumes in the project to be completed within the planned year plus (+) the value of work volumes already completed in the reporting year but not yet loaned minus (-) the amount of debt recovered in the planned year.

4.3- The total economic enterprise capital in the planned year is allocated from the Central Budget.

4.4- The prices and norms for calculating the above contents shall be based on current market prices and norms.

4.5- Annually, based on the State's plan assigned and the aforementioned regulations, the managing agency of the project shall prepare the capital allocation and loan plan for projects under its management (as per Table No. 01 KH/ĐT) and submit it to the Ministry of Finance. The Ministry of Labor, Invalids and Social Affairs (Migration Development and New Economic Zone Bureau), the Ethnic Minorities Commission (Settlement Bureau) shall prepare the economic enterprise capital allocation plan and submit it to the Ministry of Finance for consolidation and notification to the State Treasury Bureau as the basis for capital allocation and loans.

II- TRANSFER OF ALLOCATED CAPITAL, LOANS AND INVESTMENT FUNDS PAYMENTS

1- Based on the approved total investment amount in the planned year, the Ministry of Finance shall transfer capital; allocate, lend and settle investment funds quarterly as follows:

1.1- For investment in construction and development (from foreign sources). The Ministry of Finance shall implement capital allocation according to the revenue and expenditure system for central and local projects.

1.2- For allocated capital and loans for investment in construction and development (domestic sources) for projects of Ministries and localities, the Ministry of Finance shall transfer capital according to the progress plan of the projects through the State Treasury Bureau, and notify the project managing agencies. The State Treasury Bureau shall distribute the capital and direct the local State Treasury Branches to conduct audits, directly allocate and lend, settle investment funds for project owners, and recover loans.

1.3- For project management enterprise capital, the Ministry of Finance shall allocate capital according to the provisions in Circular No. 2426 TC/ĐT dated October 30, 1993 issued by the Ministry of Finance.

1.4- For economic enterprise capital for resettlement and agricultural settlement work, the Ministry of Finance shall allocate capital according to the plan by setting budget limits for the Ministry of Labor, Invalids and Social Affairs (Migration Development and New Economic Zone Bureau); the Ethnic Minorities Commission (Settlement Bureau) as first-level budget units under the Central Budget. The Ministry of Labor, Invalids and Social Affairs (Migration Development and New Economic Zone Bureau); the Ethnic Minorities Commission (Settlement Bureau) shall be responsible for managing and distributing the budget limits to project owners through the State Treasury system.

2- Allocation, lending, and payment at local State Treasuries.

2. 1- Project owners shall submit the following documents to the State Treasury where their accounts are opened:

- DECISION APPOINTING THE PROJECT MANAGER FROM THE AUTHORIZED BODY.

- DECISION APPROVING THE PROJECT AND THE TOTAL ESTIMATE (INCLUDING ANY SUPPLEMENTS).

- Approved technical design and general estimate for construction works (within the project area) such as transportation, water conservancy with complex technology and large capital.

- Approved estimates for construction works (within the project area) such as health stations, schools, wells according to standard designs with simple technology.

- Contracts signed between Party A and Party B in accordance with prescribed regulations.

- Completion certificates and related documents.

- Loan application and loan agreement.

2. 2- Local State Treasuries shall implement capital allocation and lending according to the principle:

- For large-scale construction works with complex technology, capital shall be allocated according to the investment management and construction management regulations.

- For other construction works, capital allocation and lending shall be carried out according to the approved budget.

- Advance payments of 20% of the planned work volume value will be made and gradually recovered when capital is allocated and lent.

PART III

INSPECTION, REPORTING AND SETTLEMENT OF PROJECT INVESTMENT FUNDS

1- The project managing agency; central and local functional management agencies; the State Treasury system shall regularly inspect the implementation of plans and financial management systems of project owners; promptly reflect any issues and difficulties in management to the Ministry of Finance and the State Planning Committee for resolution.

2- Monthly, the State Treasury Branches of provinces and cities shall be responsible for summarizing the implementation of capital allocation and lending plans for projects in their respective areas and report via telegraph to the State Treasury Bureau. The State Treasury Bureau shall consolidate the situation of capital allocation and lending, report to the Ministry of Finance, and send copies to the Central Steering Committee for Program 327/CT.

3- Quarterly, the State Treasury Branches of provinces and cities shall be responsible for summarizing the implementation of capital allocation and lending plans for projects in their respective areas and report to the State Treasury Bureau (with copies sent to the local Steering Committee for Program 327/CT). The State Treasury Bureau shall consolidate the implementation of capital allocation and lending plans nationwide and report to the Ministry of Finance, with copies sent to the Central Steering Committee for Program 327/CT.

4- Annual settlement of investment funds and settlement of investment funds upon completion of the project.

- Project owners shall be responsible for settling investment funds for construction and development with the State Treasury that provided the capital.

- The State Treasury Branches of provinces and cities shall be responsible for consolidating annual investment fund settlements for construction and development projects in their respective areas and submit them to the State Treasury Bureau, with copies sent to the local project managing agency.

Annually, the State Treasury Bureau shall be responsible for consolidating investment fund settlements for construction and development projects (central and local) and report to the Ministry of Finance for review.

- Entities receiving project management enterprise capital shall be responsible for annual settlement with the Ministry of Finance. Annually, the Migration Development and New Economic Zone Branches and Settlement Branches shall be responsible for settling economic enterprise capital with the Migration Development and New Economic Zone Bureau and the Settlement Bureau. The Migration Development and New Economic Zone Bureau and the Settlement Bureau shall be responsible for settling economic enterprise capital with the Ministry of Finance.

- The settlement of construction investment capital for completed works and the settlement of investment capital at the end of the project shall be carried out in accordance with the provisions of Circular No. 28 TC/ĐT dated May 10, 1991, issued by the Ministry of Finance.

PART IV

ARTICLE TRANSITION PROVISIONS

This Circular takes effect from January 1, 1994, and previous documents that conflict with this Circular shall cease to be effective./.