Circular No. 133/2018/TT-BTC guiding the preparation of the State Financial Report

CIRCULAR

Guidelines for Preparing State Financial Reports

Pursuant to the Accounting Law dated November 20, 2015;

Pursuant to the State Budget Law dated June 25, 2015;

Pursuant to the Law on Electronic Transactions dated November 29, 2005;

Pursuant to Decree No. 25/2017/NĐ-CP dated March 14, 2017 of the Government on State Financial Reports;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to the Government Decree No. 27/2007/NĐ-CP dated February 23, 2007 on electronic transactions in financial activities;

Government Decree No. 156/2016/NĐ-CP dated November 21, 2016 amending and supplementing certain articles of Government Decree No. 27/2007/NĐ-CP dated February 23, 2007 on electronic transactions in financial activities;

Pursuant to Decision No. 26/2015/QĐ-TTg dated July 8, 2015 of the Prime Minister on the functions, tasks, powers, and organizational structure of the State Treasury under the Ministry of Finance;

At the proposal of the General Director of the State Treasury;

The Minister of Finance issues this Circular guiding the preparation of State Financial Reports.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the forms, procedures for preparing and submitting reports providing financial information to prepare State Financial Reports; specific indicators of State Financial Reports; and checking the preparation of State Financial Reports.

Article 2. Applicability

Units preparing State Financial Reports and agencies, units, organizations providing information to prepare State Financial Reports include:

1. The Ministry of Finance.

2. National Treasury at all levels - Ministry of Finance.

3. Department of State Budget - Ministry of Finance.

4. Tax Authorities at all levels - Ministry of Finance.

5. General Department of Customs - Ministry of Finance.

6. Department of Debt Management and External Finance - Ministry of Finance.

7. Department of Corporate Finance - Ministry of Finance.

8. Department of Banking and Financial Institutions Finance - Ministry of Finance.

9. Department of State Asset Management - Ministry of Finance.

10. General Department of National Reserves - Ministry of Finance.

11. Vietnam Social Security.

12. Local financial authorities: including Departments of Finance under provincial people's committees and municipal people's committees directly under the central government (hereinafter referred to as "Department of Finance"); Financial Planning Departments under district-level people's committees, town-level people's committees, city-level people's committees under provinces, and municipal-level people's committees directly under the central government (hereinafter referred to as "Financial Planning Department").

13. People's Committees of communes, wards, towns (hereinafter referred to as "People's Committee of Commune Level").

14. Primary budgetary units under central, provincial, and district budgets (hereinafter referred to as "Primary Budgetary Units").

Article 3. Submission of State Financial Report

1. The National Treasury prepares the national State Financial Report, submits it to the Ministry of Finance for submission to the Government, and reports to the National Assembly.

2. The Provincial Treasury prepares the provincial State Financial Report, seeks comments from the Department of Finance in writing (response time within 10 working days from the date of soliciting opinions), submits it to the provincial People's Committee to report to the People's Council of the province.

Article 4. Principles of Preparation and Requirements for Information in Financial Information Reports and State Financial Reports

1. Principles of Preparation

a. Financial information reports must be prepared in the same accounting year as the State Financial Report, from January 1 to December 31 of the Gregorian calendar year.

b. When preparing the State Financial Report, internal transaction data as stipulated in Article 11 of this Circular shall be excluded.

2. Information Requirements

a. Must truthfully, objectively, and reasonably reflect state financial information (for State Financial Reports); truthfully, objectively, and reasonably reflect financial information of their own unit and subordinate accounting units, if any (for Financial Information Reports).

b. Must be presented in accordance with management requirements.

c. Must ensure consistency, continuity, and comparability.

Chapter II

SPECIFIC PROVISIONS

Section 1

FINANCIAL INFORMATION REPORT

Article 5. Forms, contents, and procedures for preparing Financial Information Reports

1. State Treasury at all levels shall prepare Financial Information Reports to serve the compilation and preparation of the State Financial Report. Specifically:

a) State Treasury at all levels: Prepare reports on financial information related to budget revenue and expenditure activities of the state in the reporting year according to the guidance provided in Circular No. 77/2017/TT-BTC dated July 28, 2017 guiding the Accounting System for State Budgets and the operations of State Treasuries; additional information necessary for compiling and preparing the State Financial Report.

b. State Treasury: Prepare public debt reports according to the guidance provided in Circular No. 74/2018/TT-BTC dated August 16, 2018 guiding the Accounting System for government loans and repayments, local government borrowings; statistics and monitoring of government-guaranteed loans and guarantees.

c. State Treasury at the district level: Prepare consolidated financial information reports for the district (including: Consolidated report on the financial situation of the district; Consolidated report on the results of financial operations of the district; Consolidated report on cash flow of the district; Explanation of the consolidated financial information report for the district), prepared similarly to the State Financial Report.

2. Agencies, units, and organizations specified from Clause 4 to Clause 12 of Article 2 of this Circular shall prepare Financial Information Reports and submit them to the State Treasury at the same level. Specifically:

a. Tax Authorities at all levels: Prepare reports according to the guidance provided in the Accounting System for Domestic Tax Operations reflecting information on: tax revenues, fees, charges, and other domestic revenues generated during the reporting year; money receivable and payable at the end of the reporting year related to tax collection operations and other domestic revenues managed by the Tax Authority.

b. General Department of Customs: Prepare reports on tax revenues, fees, and charges generated during the reporting year; money receivable and payable at the end of the reporting year related to tax collection operations and other revenues from export and import goods according to the guidance provided in Circular No. 112/2018/TT-BTC dated November 15, 2018 amending and supplementing certain provisions of Circular No. 174/2015/TT-BTC dated November 10, 2015 of the Minister of Finance guiding accounting for tax and other revenues from export and import goods.

c. Debt Management and External Finance Department - Ministry of Finance: Prepare financial statements of the Debt Repayment Reserve Fund according to the guidance provided in Circular No. 109/2018/TT-BTC dated November 15, 2018 of the Minister of Finance guiding the Accounting System applicable to the Debt Repayment Reserve Fund.

d. Corporate Finance Department - Ministry of Finance: Prepare reports according to Form 0 BIE/CNTT attached to this Circular reflecting the state capital in centrally-managed enterprises at the end of the reporting year; Financial statements of the Enterprise Restructuring and Development Support Fund prepared according to the guidance provided in the Accounting System applicable to the Fund.

đ) Financial Affairs of Banks and Financial Institutions Department - Ministry of Finance: Prepare reports according to Form 02/TCT attached to this Circular reflecting the state capital in banks and financial institutions centrally-managed at the end of the reporting year.

e. State Asset Management Department - Ministry of Finance: Prepare reports according to Form 03/TT attached to this Circular, reflecting state financial information related to state assets by region (central, province, district) monitored and managed by the Department in the national database on state assets.

g. National Reserves Administration - Ministry of Finance: Prepare consolidated financial statements of national reserves operations according to the guidance provided in Circular No. 108/2018/TT-BTC dated November 15, 2018 of the Minister of Finance guiding the Accounting System for National Reserves.

h. Vietnam Social Security:

Prepare consolidated financial statements of funds under its management according to the guidance provided in Circular No. 102/2018/TT-BTC dated November 14, 2018 guiding the Accounting System for Social Insurance and additional information necessary for compiling and preparing the State Financial Report.

Prepare consolidated financial statements and supplementary financial information reports for internal operations according to the guidance provided in Circular No. 99/2018/TT-BTC dated November 1, 2018 regarding the guidance on preparing consolidated financial statements of state accounting entities that are superior accounting entities.

i. Provincial Finance Departments: Prepare reports according to Form 04/TT attached to this Circular, reflecting state financial information related to state capital in enterprises, banks, and other financial institutions (if any) managed by localities.

3. People's Committees at the commune level shall prepare Commune Financial Statements according to the Accounting System for State Budgets and Commune Finances and submit them to the State Treasury at the district level.

4. Primary budgetary units shall prepare Financial Information Reports and submit them to the State Treasury at the same level, including:

a. In cases where primary budgetary units do not have subordinate accounting units: Financial statements shall be prepared according to the guidance provided in Circular No. 107/2017/TT-BTC dated October 10, 2017 guiding the Accounting System for Administrative and Public Services and supplementary financial information reports shall be prepared according to the guidance provided in Circular No. 99/2018/TT-BTC dated November 1, 2018 regarding the guidance on preparing consolidated financial statements of state accounting entities that are superior accounting entities.

b. In cases where primary budgetary units have subordinate accounting units: Consolidated financial statements and supplementary financial information reports shall be prepared according to the guidance provided in Circular No. 99/2018/TT-BTC dated November 1, 2018 regarding the guidance on preparing consolidated financial statements of state accounting entities that are superior accounting entities.

5. Other primary budgetary units (excluding those specified in Clause 4 of this Article) with specific regulations on preparing Financial Statements or Consolidated Financial Statements (consolidated): Financial Statements or Consolidated Financial Statements (consolidated) shall be prepared according to the Accounting System applicable to the unit.

6. The Director-General of the State Treasury shall provide detailed guidance on providing additional information necessary for compiling and preparing the State Financial Report.

Article 6. Submission of Financial Information Reports and Additional Information for Compilation and Preparation of the State Financial Report

1. The financial information report as prescribed in Clauses 2, 3, 4, and 5 of Article 5 of the Circular:

a) Form of submission of the report:

The report shall be prepared in electronic form (electronic file), approved and signed digitally in accordance with the provisions of the law, guidelines of the State Treasury, and submitted through the State Treasury's electronic portal in the electronic file format announced by the State Treasury.

The submission of the financial information report shall be carried out in accordance with the current laws on electronic transactions, electronic transactions in financial activities, and related guiding documents.

The paper form of submission (with attached electronic file) shall only be applied in cases where the unit does not meet the conditions for registering electronic transactions with the State Treasury as stipulated.

b) Deadline for submitting the report:

For the financial information report submitted to the district-level State Treasury for compiling the district financial information report: Before April 30 of the following fiscal year.

For the financial information report submitted to the provincial-level State Treasury for preparing the provincial state financial report: Before June 30 of the following fiscal year.

For the financial information report submitted to the State Treasury for preparing the national state financial report: Before October 1 of the following fiscal year.

2. The General Director of the State Treasury shall guide the submission of the financial information report prepared by State Treasuries at all levels.

Article 7. Verification of Financial Information Reports

1. State Treasuries at all levels shall verify the balance, reasonableness, and legality of the financial information reports of agencies, units, and organizations prepared according to the guidance provided in Article 5 of this Circular.

a. In case the report ensures balance, reasonableness, and legality: State Treasuries at all levels shall accept the report.

b. In case the report does not ensure balance, reasonableness, and legality: State Treasuries at all levels shall notify the unit on the State Treasury's electronic portal, specifying the reasons for rejecting the report. The unit shall have the responsibility to complete and resubmit the report in accordance with Clause 4 of this Article.

2. State Treasuries at the provincial level shall be responsible for verifying the consolidated financial information report of districts. The verification content shall be implemented similarly to the provisions of Clause 1 of Article 12 of this Circular.

3. Provincial-level State Treasuries shall be responsible for verifying the consolidated financial information report of districts. The verification content shall be implemented similarly to the provisions of Clause 1 of Article 12 of this Circular.

4. When there is a notification from State Treasuries at all levels requesting the completion of the financial information report to ensure balance, reasonableness, and legality, relevant agencies, units, and organizations shall have the responsibility to cooperate, explain, adjust, and resubmit the report within five working days from the date of notification.

5. In case agencies, units, and organizations do not fully and promptly comply with the information provision regime for State Treasuries at all levels as stipulated in Articles 5 and 6 and Clause 4 of Article 7 of this Circular, State Treasuries at all levels shall compile and report to competent authorities to publicly list and temporarily suspend budget disbursements for these agencies and units in accordance with Clause 3 of Article 9 of Decree No. 25/2017/NĐ-CP dated March 14, 2017 on State Financial Reporting.

Section 2

STATE FINANCIAL REPORT

Article 8. Forms and contents of indicators on the State Financial Report

1. The State Treasury, the Provincial State Treasury shall prepare the State Financial Report according to the form prescribed in Decree No. 25/2017/NĐ-CP dated March 14, 2017 of the Government on the State Financial Report.

2. The contents of the indicators on the State Financial Report are specified in the Appendix attached to this Circular.

Article 9. Basis for preparing the State Financial Report

1. Basis for preparing the national State Financial Report

a. Reports providing financial information of agencies, units, organizations as stipulated in Clause 2, Clause 4 to Clause 11, Article 2 of this Circular.

b. Reports providing financial information of first-level budgetary units under the central budget.

c. Provincial State Financial Report.

d. National State Financial Report of the previous year.

2. Basis for preparing the provincial State Financial Report

a. Reports providing financial information of agencies, units, organizations as stipulated in Clause 2, Clause 4, Clause 9, Clause 12, Article 2 of this Circular.

b. Reports providing financial information of first-level budgetary units under the provincial budget.

c. Reports consolidating financial information of districts within the province.

d. Provincial State Financial Report of the previous year.

Article 10. Procedure for preparing the State Financial Report

After receiving, checking, and classifying information from reports providing financial information of agencies, units, organizations; coordinating to complete these reports, State Treasuries at all levels shall prepare the State Financial Report according to the guidance in the Appendix attached to this Circular, following the procedure as follows:

1. Report on the state of financial affairs, Report on the results of financial operations

a. Step 1: Aggregate data

Aggregate data of relevant indicators presented in the reports used as the basis for preparing the State Financial Report as stipulated in Article 9 of this Circular.

b. Step 2: Exclude internal transactions

Exclude internal transactions according to the guidance in Article 11 of this Circular.

c. Step 3: Aggregate and present the report.

2. Cash Flow Statement

a. Step 1: Determine cash flows from main activities.

b. Step 2: Determine cash flows from investment activities.

c. Step 3: Determine cash flows from financing activities.

d. Step 4: Determine net cash flow for the period.

đ) Step 5: Determine cash and cash equivalents at the beginning of the period.

e. Step 6: Determine the effect of exchange rate differences.

g) Step 7: Determine cash and cash equivalents at the end of the period: aggregate from the indicators mentioned in Steps 4, 5, and 6.

Article 11. Internal Transactions

1. Internal transactions are transactions between agencies, units, organizations within the scope of preparing the State Financial Report and must be excluded when preparing the State Financial Report according to the guidance in Clause 2, Clause 3, and Clause 4 of this Article.

2. Internal transactions that must be excluded when preparing the national State Financial Report include:

a) Supplementing the budget balance; supplementing with specific purposes, recovering, refunding expenses between the central budget and the provincial budget.

b. Borrowing from state financial funds outside the budget through the issuance of government bonds.

c. Lending local budgets from ODA funds, preferential foreign loans.

d. Expenditure, advance payment for operational expenses; expenditure, advance payment, advance payment for program/project expenses, construction investment expenses... from the state budget for agencies, units, organizations under the central budget.

đ) Internal transactions between state financial funds outside the budget managed by the central level and agencies, units, organizations under various levels of budget; internal transactions between agencies, units, organizations under various levels of budget with each other (excluding internal transactions already excluded when preparing the provincial State Financial Report, as stated in point c, Clause 3 of this Article).

3. Internal transactions that must be excluded when preparing the provincial State Financial Report include:

a. Supplementing the budget balance; supplementing with specific purposes, recovering, refunding expenses between the provincial budget and the district budget.

b. Expenditure, advance payment for operational expenses; expenditure, advance payment, advance payment for program/project expenses, construction investment expenses for agencies, organizations, public institutions using the state budget under the provincial budget.

c. Internal transactions between agencies, units, organizations within the scope of preparing the provincial State Financial Report (transactions between agencies, units, organizations within the same province, excluding transactions already excluded when preparing the consolidated financial information report of districts within the province, as stated in point c, Clause 4 of this Article).

4. Internal transactions that must be excluded when preparing the consolidated financial information report of districts include:

a. Supplementing the budget balance; supplementing with specific purposes, recovering, refunding expenses between the district budget and the commune budget.

b. Expenditure, advance payment for operational expenses; expenditure, advance payment, advance payment for program/project expenses, construction investment expenses for agencies, organizations, public institutions using the state budget under the district budget.

c. Internal transactions between agencies, units, organizations within the scope of preparing the consolidated financial information report of districts.

5. Before submitting the reports providing financial information to State Treasuries at all levels as stipulated in Article 5 of this Circular, agencies, units, organizations have the responsibility to check and reconcile internal transactions related to their own state financial information or those they oversee and manage.

Article 12. Inspection of State Financial Reports

1. Contents of Inspection of State Financial Reports

a. Inspect the list of State Financial Reports as prescribed in Article 30 of the Accounting Law No. 88/2015/QH13 dated November 20, 2015.

b. Inspect the legality of State Financial Reports: ensuring that the reports are fully approved within the appropriate authority.

c. Inspect the consolidation of reports: ensuring the comprehensive inclusion of data from information-providing units, and excluding according to the provisions of this Circular.

2. Authorities inspecting State Financial Reports

a. The Ministry of Finance inspects the national State Financial Report.

b. The State Treasury inspects the provincial State Financial Report.

Article 13. Adjustment of Data in State Financial Reports

In case of errors found in State Financial Reports, the adjustment of data shall be carried out as follows:

1. For the national State Financial Report: If it has not yet been reported to the National Assembly, the State Treasury adjusts the data on the national State Financial Report for that year; if it has already been reported to the National Assembly, the State Treasury adjusts the data on the national State Financial Report for the year in which the error was discovered and provides an explanation about the adjustment.

2. For the provincial State Financial Report: If it has not yet been reported to the Provincial People's Council, the provincial State Treasury adjusts the data on the provincial State Financial Report for that year; if it has already been reported to the Provincial People's Council, the provincial State Treasury adjusts the data on the provincial State Financial Report for the year in which the error was discovered and provides an explanation about the adjustment.

Chapter III

IMPLEMENTATION

Article 14. Effective Date

This Circular takes effect from February 15, 2019.

The first State Financial Report is established based on financial data from 2018.

Article 15. Implementation Organization

1. Before January 15 each year, the Department of State Budget - Ministry of Finance provides a list of primary budgetary units under the central budget; the Department of Finance provides a list of primary budgetary units under the provincial budget; the Office of Finance and Planning provides a list of primary budgetary units under the district budget to the corresponding State Treasury to compile the list of primary budgetary units.

In case there is an increase or decrease in primary budgetary units during the year, the relevant units must promptly provide the list to the corresponding State Treasury.

2. Units preparing State Financial Reports and agencies, units, organizations with the responsibility to provide information for the preparation of State Financial Reports have the responsibility to organize implementation, guidance, and inspection of the execution of this Circular.

3. During the implementation process, if there are difficulties, agencies and units are requested to report to the Ministry of Finance for research and resolution./.