Circular No. 134/1998/TT-BTC guides the financial management mechanism for the Forest Protection and Rural Development Project, including IDA loans, Dutch aid, and the corresponding government funding from Vietnam.

CIRCULAR

CIRCULAR NO. 134/1998/TT/BTC OF OCTOBER 15, 1998 GUIDING THE FINANCIAL MANAGEMENT MECHANISM FOR THE FOREST PROTECTION AND RURAL DEVELOPMENT PROJECT

Pursuant to:

The Development Credit Agreement signed between the Government of Vietnam and the International Development Association (IDA) on November 8, 1997 regarding the Forest Protection and Rural Development Project;

The Agreement between the Government of Vietnam and the International Development Association signed on November 8, 1997 concerning the Dutch Government's grant entrusted through the International Development Association to implement the Forest Protection and Rural Development Project;

Decree No. 87/CP dated August 5, 1997 of the Government promulgating the regulations on management and use of official development assistance;

Decree No. 42/CP dated July 16, 1996 and Decree No. 92/CP dated August 23, 1997 of the Government promulgating and amending the investment and construction management charter; Decree No. 43/CP dated July 16, 1996 and Decree No. 93/CP dated August 23, 1997 of the Government promulgating and amending the bidding regulations; Decree No. 87/CP dated December 19, 1996 of the Government detailing the division of management authority, budget preparation and execution, and final accounts settlement, and Circulars guiding the implementation of these Decrees.

Decree No. 178/CP dated October 28, 1994 of the Government stipulating the tasks, powers, and organizational structure of the Ministry of Finance;

Joint Circular No. 81/1998/TTLT/BTC/NHNN dated June 17, 1998 of the Ministry of Finance and the State Bank of Vietnam guiding the procedures, formalities, and management of withdrawing funds for official development assistance;

Decision No. 693/TTg dated August 27, 1997 of the Prime Minister approving the Forest Protection and Rural Development Project;

After reaching consensus with the Ministry of Agriculture and Rural Development;

The Ministry of Finance guides the management and utilization of project funds as follows:

PART I. GLOSSARY

In this Circular, the following terms shall be understood as follows:

1.1. The Project Owner is the Ministry of Agriculture and Rural Development (Ministry of Agriculture and Rural Development - MOARD). To implement the project and coordinate project activities, the MOARD establishes the Central Project Management Board.

1.2. The Provincial Project Management Board is one of the Provincial Project Management Boards (five provinces) and the protected area (one area) with powers and responsibilities defined in the decisions establishing the Project Management Boards of the MOARD.

1.3. IDA is the International Development Association.

1.4. The Project is the Forest Protection and Rural Development Project according to Decision No. 693/TTg dated August 27, 1997 of the Prime Minister.

1.5. Loan capital is the IDA loan capital provided to the Government of Vietnam under the Development Credit Agreement No. 2996-VN signed on November 8, 1997 for the Project. 1.6. Grant capital is the non-reimbursable grant capital from the Dutch Government to the Government of Vietnam under the Grant Agreement No. TF 021604 signed on November 8, 1997 for the Project. This grant capital is entrusted at IDA and disbursed from IDA.

1.7. The Agreements are the Development Credit Agreement No. 2996-VN and the Non-Reimbursable Grant Agreement No. TF 021604 signed between the Government of Vietnam and IDA on November 8, 1997 for the Project.

1.8. Counterpart capital is the capital contribution of the Government of Vietnam in the Project, allocated in the annual investment plan for construction and development assigned to the MOARD. This capital is provided by the Central Budget to the MOARD to implement the Project.

1.9. Serving bank is the Vietnam Agricultural and Rural Development Bank (Agricultural and Rural Development Bank).

1.10. Special account: Is the project account (Central Project Management Board) opened at the Agricultural and Rural Development Bank to receive loan capital / grant capital transferred from IDA.

1.11. Capital disbursement account: Is the account of the Provincial Project Management Boards opened at the Provincial Investment and Development Bureau to monitor the use of loan capital, grant capital, and counterpart capital disbursed for the Project.

1.12. Currency of the special account: is US Dollar.

1.13. Currency of the capital disbursement account: is Vietnamese Dong.

PART II. GENERAL PROVISIONS

I. SOURCES OF FUNDS

1. The project is funded from the following sources:

1.1. IDA loan capital;

1.2. Non-repayable aid capital entrusted by the Dutch Government through IDA;

1.3. Counterpart capital of the Vietnamese Government.

II. CONTENTS OF EXPENDITURE FROM THE FUNDS FOR THE PROJECT:

2.1. IDA loan capital

- Land allocation

- Social support program

- Agricultural support services

- Buffer zone forest management

- Rural infrastructure development

- Project management and organizational strengthening

2.2. Aid capital

- Protected forest area management

- Community plans

- Project management and organizational strengthening

2.3. Counterpart capital:

- Protected forest area management

- Community plans

- Land allocation

- Social support program

- Agricultural support services

- Buffer zone forest management

- Rural infrastructure development

- Project management and organizational strengthening.

2.4. IDA loan capital and Dutch Government aid capital are part of the State Budget revenue of the Vietnamese Government. The Ministry of Finance is responsible for collecting these revenues into the State Budget and allocating them through the General Department of Investment and Development to the Ministry of Agriculture and Rural Development for implementation of the approved project, and monitoring and managing the loan repayment when due (both principal and interest).

2.5. The General Department of Investment and Development, which allocates funds to the project, is responsible for financial management, inspection, confirmation of work volume, and direct allocation of funds to the project.

2.6. The project receives funding from two sources, domestic and foreign. Domestic funding is provided according to current state regulations. Foreign funding is allocated in accordance with this Circular, consistent with domestic regulations and donor requirements.

2.7. The Ministry of Agriculture and Rural Development is responsible for using the funds for their intended purposes and in accordance with the approved project content, consistent with the conditions committed in the Loan Agreement, Aid Agreement, and related documents attached to these agreements.

2.8. The Ministry of Agriculture and Rural Development is responsible for managing and supervising the assets of the project and the Project Management Board according to the current state system.

2.9. The Agricultural Bank of Vietnam is responsible for serving the withdrawal of funds from IDA for payment to the project upon approval by the Ministry of Finance. During the process of withdrawing loan funds, the Agricultural Bank of Vietnam will charge service fees for each withdrawal (including L/C opening fees, document submission fees, telegrams, faxes, etc.) according to the current decision of the Governor of the State Bank of Vietnam on bank service fee collection. These service fees are included in the total project costs.

PART III. SPECIFIC PROVISIONS

I. OPENING ACCOUNTS:

1.1. At the Agricultural Bank of Vietnam, the Central Project Management Board opens two Special Accounts, one for IDA capital and one for Dutch capital (hereinafter referred to collectively as Special Accounts).

1.2. At the Hanoi General Department of Investment and Development, the Central Project Management Board opens a disbursement account to monitor the use of allocated funds for the project.

1.3. At the local General Department of Investment and Development, the Provincial Project Management Board opens a disbursement account to receive counterpart capital and monitor foreign funds allocated to the project at the provincial level.

II. ESTABLISHMENT AND REGISTRATION OF THE PROJECT CAPITAL PLAN

2.1. Annually, based on the provisions in the guiding documents implementing the Law on State Budget, the Law Amending and Supplementing Certain Provisions of the Law on State Budget; and based on the expenditure standards and norms prescribed for the project, the Central Project Management Board prepares the annual budget estimate of the project to be submitted to the Ministry of Agriculture and Rural Development for consolidation into the Ministry's annual budget estimate (Investment and Construction Fund), and sent to the Ministry of Planning and Investment and the Ministry of Finance for consolidation into the State Budget Estimate to be submitted to the Government and the National Assembly for approval.

2.2. The capital plan for the project must detail the works to be carried out, the loan and aid capital, the schedule for withdrawing loan and aid capital, and the necessary counterpart capital for each component of the project.

2.3. Based on the annual budget estimate assigned by the Prime Minister, the Ministry of Agriculture and Rural Development allocates funds to the project and notifies the Central Project Management Board.

After receiving notification from the Ministry of Agriculture and Rural Development, the Central Project Management Board prepares a detailed budget estimate in line with the notification plan and submits it to the Ministry of Agriculture and Rural Development for approval.

Based on the detailed annual budget estimate of the project approved by the Ministry of Agriculture and Rural Development, the Central Project Management Board establishes a plan for withdrawing funds. The content of the fund withdrawal plan is detailed by quarter, by each work item, and by each source of funding including counterpart capital, and must include a separate plan for components paid under the Special Account method. This plan must be registered with the Ministry of Finance (Department of Foreign Finance) and sent to relevant agencies (General Department of Investment, Agricultural Bank of Vietnam).

On the basis of the registered annual fund withdrawal plan, quarterly, the Central Project Management Board prepares a quarterly fund withdrawal plan through the Special Account and sends it to the Ministry of Finance (General Department of Investment and Development) for review and approval. This plan must be detailed by work items and the proportion of funding from each source (loan capital, aid capital).

In the registration plan with the Ministry of Finance, it must clearly specify the activities and capital implemented at the central level and the activities and capital implemented at each local level.

The registration form follows the model specified in Joint Circular No. 81/1998/TC-NH dated June 17, 1998, issued by the Ministry of Finance and the State Bank of Vietnam, guiding procedures, formalities, and management of fund withdrawal for official development assistance funds.

2.4. The approved project budget estimate is notified by the General Department of Investment and Development to the relevant local General Departments of Investment for monitoring the use of funds and disbursement of the project.

III. PRINCIPLES OF ALLOCATION, STANDARDS, AND UNIT PRICES IN THE USE OF LOAN CAPITAL, AID CAPITAL, AND COUNTERPART CAPITAL

3.1. Principles of Allocation:

3.1.1. For forestry investment:

- Forest protection and conservation contracts are allocated monthly

- Reforestation is paid out in stages according to reasonable technical phases, including:

- Preparation of seedlings, fertilizers, and other conditions for reforestation.

- Implementation of reforestation

- First-year care and protection

The allocation is carried out according to Decision No. 661/QD-TTg dated July 29, 1998 of the Prime Minister. The project can advance 30% of the approved budget estimate. When the project owner achieves 50% progress, another 40% can be advanced. At the end of the year, after the acceptance report is approved, the General Department of Investment and Development settles the remaining budget estimate amount.

3.1.2. For infrastructure and public welfare investment, the management and allocation follow the current Investment and Construction Fund management regulations.

3.1.3. For project capital with public service nature:

- Advance payments for the Project Management Board's operating expenses and agricultural and forestry extension activities shall be settled monthly by the unit receiving the advance with the Investment Development Department according to the approved budget and current state regulations. After reviewing the settlement, the Investment Development Department will provide the next month's advance payment.

- Funds allocated for resettlement activities within the project plan shall be disbursed based on the actual number of households relocated to the project area. The Project Management Boards will receive a 50% advance from the Investment Development Department for each relocation phase. Upon completion of the relocation phase, the Project Management Boards must prepare a settlement file confirmed by the provincial resettlement authority to disburse the remaining funds according to the prescribed regulations.

3.2. Budget rates and unit prices for settlement

3.2.1. Domestic training and seminars:

The average expenditure shall not exceed 200 USD per person per week (including documentation, accommodation, speakers, etc.).

3.2.2. Overseas training and instruction:

The expenditure for staff participating in overseas training and instruction shall be applied according to Circular No. 32 TC/TCĐN dated April 21, 1995, and Circular No. 44 TC/TCĐN dated May 21, 1994, issued by the Ministry of Finance.

3.2.3. Expenditure for consulting experts:

The selection of experts must comply with domestic regulations (Decree No. 43/CP, Decree No. 93/CP) and the requirements of the sponsors. The expert consulting files (both domestic and foreign) must be officially approved in writing by the Ministry of Agriculture and Rural Development.

Domestic consulting experts: domestic experts must be carefully selected based on specific project requirements, expertise, and current expert selection regulations. The salary of domestic consulting experts shall not exceed 500 USD per month.

3.2.4. For construction works: apply current construction budget rates and unit prices.

3.2.5. For forest planting and protection works: apply the national standards applicable to projects under the 5 million hectare forest program (according to Decision No. 661/QĐ/TTg dated July 29, 1998 of the Prime Minister), adjusted as necessary at different times.

3.2.6. For other work volumes: follow current regulations.

3.2.7. In cases where there are no established budget rates or unit prices, apply the rates approved by the Ministry of Agriculture and Rural Development for each specific case, based on the opinions of the Ministry of Finance and relevant authorities.

IV. TRANSFER OF FOREIGN FUNDS BETWEEN LEVELS

4.1. Withdrawal of funds from IDA for direct payment and special commitment procedures:

This procedure is carried out at the central level.

Based on the payment request from the supplier or service provider, after verifying that the request meets the conditions for payment, the Central Project Management Board prepares the withdrawal application form and necessary documents to send to the Ministry of Finance (Department of Foreign Finance). The payment file includes:

- Withdrawal application form

- A letter requesting withdrawal of funds

- Copy of the procurement contract for goods and equipment (sent only once)

- Copy of the consulting expert contract (sent only once)

- Copy of other economic contracts (sent only once)

- Documents proving the validity of the contract (government approval of the contract or government agency, IDA opinion or tender results for construction and procurement contracts over 150,000 USD and consultant contracts over 100,000 USD for companies and over 50,000 USD for individuals) (sent only once).

- Bank guarantee (advance payment guarantee and performance bond) in case of advance payment under the contract.

- Copy of the bill of lading (for direct payment of goods value) or acceptance certificate.

Within five working days from the date of receipt of complete and valid withdrawal documents, the Ministry of Finance (Department of Foreign Finance) reviews and issues a written opinion to the Central Project Management Board and the Agricultural Bank.

Based on the written approval of the Ministry of Finance, within two working days, the Agricultural Bank will cooperate with the Central Project Management Board to submit the withdrawal application to IDA for payment to the beneficiary (contractor, supplier).

Upon receipt of IDA's notification of payment according to the withdrawal application, the Central Project Management Board is responsible for informing the Ministry of Finance (Department of Foreign Finance) to process the budget accounting (record loan and aid receipts; record expenditures for the Ministry of Agriculture and Rural Development).

The transfer of documents and relationships between agencies in direct payment and special commitments are detailed in Appendix 1 and Appendix 2.

4.2. Withdrawal to Special Account

The initial withdrawal to the Special Account is based on effective agreements, annual budget estimates approved, and the registered withdrawal plan of the project.

Additional withdrawals to the Special Account are based on the approved annual budget estimate, the registered withdrawal plan of the project, and legitimate expenditures already settled from the project's Special Account.

To withdraw to the Special Account, the Project Management Board prepares the following documents to be sent to the Ministry of Finance (Department of Foreign Finance):

- IDA withdrawal application form.

- Request for withdrawal of funds.

For additional withdrawals to the Special Account, the Central Project Management Board sends the following additional documents to the Ministry of Finance (Department of Foreign Finance):

- Detailed expenditure statement prepared by the Central Project Management Board.

- Payment vouchers confirmed by the Ministry of Finance (Investment Development Department providing the funds).

- For withdrawals from the Special Account to repay the Investment Development Departments as stipulated in Section 5.3 below, confirmation from the State Investment Corporation is not required but must include a statement from the Investment Development Department providing the advance (copy).

- Detailed statement of Special Account usage prepared by the Agricultural Bank.

Based on the aid agreement, approved budget estimates, and the registered withdrawal plan of the project, within five working days, the Ministry of Finance will review and issue a written opinion to the Agricultural Bank and the Central Project Management Board.

On the basis of the written approval of the Ministry of Finance, within no more than 2 working days, the Agricultural Bank of Vietnam shall coordinate with the Central Project Management Board to sign a withdrawal form to send to IDA.

Upon receiving the notification that the funds have been transferred into the project's Special Account, the Agricultural Bank of Vietnam shall immediately notify in writing the Ministry of Finance (Department of Foreign Financial Affairs, Investment Development General Department) and the Central Project Management Board.

The process of withdrawing funds to the Special Account is illustrated in the diagram at Appendix 3.

V. IMPLEMENTATION OF FUNDS DISBURSEMENT FROM THE SPECIAL ACCOUNT

Funds disbursement from the Special Account is based on valid expenditures: consistent with the project content, included in the approved budget estimate and withdrawal plan, and in accordance with regulations, appropriate levels of management, and project expenditure review procedures.

The confirmation of payments for the project at the central level (from the Special Account to pay for the Central Project Management Board's expenditures) will be carried out through the Investment Development Department where the Central Project Management Board has opened an account.

The inspection and disbursement of funds (including counterpart funds) for the project at the local level will be carried out through the Provincial Investment Development Department.

5.1. Disbursement at the Central Level.

Each payment from the Special Account must comply with the foreign/local capital ratio stipulated in the Loan Agreements and Aid Agreements. In cases where improper payment ratios are detected, the Ministry of Finance will suspend additional withdrawals for that expenditure.

Based on the approved budget estimate, the registered annual withdrawal plan, the quarterly withdrawal plan through the Special Account approved by the Investment Development General Department, and the project work volume that meets the conditions for payment, the Central Project Management Board requests the Agricultural Bank of Vietnam to make payments from the Special Account (specifically for the final payment accounts of contracts or in cases where contracts are paid in one lump sum, prior confirmation from the Ministry of Finance (Hanoi Investment Development Department) is required).

To supplement the Special Account, the Central Project Management Board sends the following documents to the Hanoi Investment Development Department to confirm the validity of expenditures from the Special Account according to the plan:

- Bid award decision (sent only once).

- Economic contracts signed between the Central Project Management Board and the winning bidders, which have been approved by the competent authority as prescribed (sent only once).

- Completion acceptance records between the project owner and contractors and other related documents.

Within 5 working days, the Hanoi Investment Development Department reviews and verifies the validity of each expenditure and issues a confirmation letter to the Central Project Management Board.

The process of transferring funds for payment to the Central Project Management Board is described in Appendix 4.

5.2. Disbursement at the Local Level

Counterpart funds in the annually approved plan, announced by the Investment Development General Department, may be used (i) to provide counterpart funding for projects according to progress and (ii) as a source of advance funding to pay or temporarily advance for valid payment or temporary advance requests made by provincial Project Management Boards.

Valid payment or temporary advance requests of the project are those requests for payments or temporary advances for project activities conducted in accordance with the stipulated ratios in the Agreements, current IDA procedures, and the Vietnamese Government, meeting the conditions for payment or temporary advance while applying the principles and allocation rates specified in Part III of this Circular.

The Provincial Investment Development Department, based on the annual counterpart fund limit announced for the project in the province, implements payments or temporary advances for valid payment requests made by the Provincial Project Management Board.

After making payments or temporary advances to the project, the Provincial Investment Development Department carries out the procedures to recover the advanced funds on behalf of the foreign funds as provided in Section 5.3 below.

To obtain funds, the Provincial Project Management Board sends the following documents to the Provincial Investment Development Department:

- Payment or temporary advance request divided according to the proportion of each source of financing.

- Annual project capital plan announced by the superior agency including planting, care, and protection indicators (sent only once).

- Budget estimate, total budget estimate (including supplements) approved by the competent authority (sent once).

- Bid award decision (sent once).

- Economic contracts signed between the Project Management Board and households (regarding forest investment funds), and units awarded contracts, which have been approved by the competent authority as prescribed.

- Completion acceptance records between the project owner and households, contractors, and other related documents.

Within 5 working days from the date of receipt of complete and valid documents, the Provincial Investment Development Department is responsible for reviewing and inspecting the work volume or construction completion volume that meets the conditions for funding or temporary advance, and implementing payments or temporary advances to the Provincial Project Management Board in accordance with the prescribed regulations.

The disbursement process at the local level is illustrated in the diagram at Appendix 5.

5.3. Recovery of Funds for Provincial Investment Development Departments

5.3.1. After disbursing counterpart funds and foreign advance funds to the Provincial Project Management Board (or a maximum of one month in the case of monthly expenditures), the Provincial Investment Development Department prepares a recovery request to send to the Provincial Project Management Board, simultaneously sending it to the Investment Development General Department.

The recovery request sent to the Provincial Project Management Board is accompanied by a detailed statement of advances made by the Provincial Investment Development Department, itemized by each advance period, category, amount advanced, and financing ratio.

Within a maximum of 2 working days from the date of receipt of the recovery request and the statement of advances made by the Provincial Investment Development Department, the Provincial Project Management Board reviews and confirms the payments or temporary advances received and forwards the recovery request to the Central Project Management Board for the Provincial Investment Development Department.

Within a maximum of two working days from the receipt of the capital refund request from the Provincial Project Management Board, the Central Project Management Board shall prepare a request to withdraw funds from the project's Special Account and send it to the Agricultural Bank. Upon receiving the withdrawal request from the Central Project Management Board, within a maximum of two working days, the Agricultural Bank shall transfer the refunded capital to the Provincial Investment Development Office, while simultaneously notifying the Central Project Management Board and the General Department of Investment Development. The notification must clearly state the date of the transfer, the amount transferred, and the exchange rate at the time of the transfer.

After receiving the notification from the Agricultural Bank, the Central Project Management Board shall inform the Provincial Project Management Board to monitor the use of the funds.

The refunded capital for the Provincial Investment Development Office shall be used as one of the sources to advance funds for subsequent phases.

In cases where the Investment Development Office does not have sufficient sources to advance funds (for foreign capital) to the Provincial Project Management Board, the Provincial Investment Development Office has the responsibility to report to the General Department of Investment Development. For such cases, after verifying the work volume that meets the conditions for payment or provisional advance, the Investment Development Office shall issue a confirmation document for a valid payment request and return it to the Provincial Project Management Board. The Provincial Project Management Board shall submit the payment request with the confirmation of the Investment Development Office to the Central Project Management Board to withdraw funds for payment from the project's Special Account.

The process of refunding capital back to the Provincial Investment Development Office is shown in Appendix 5.

The statement format is shown in Appendix 6.

VI. ISSUANCE AND PAYMENT OF CONTRIBUTED CAPITAL:

6.1. Based on the approved annual contributed capital plan (allocated to central and local levels) of the project, the General Department of Investment Development system shall manage and issue the contributed capital according to the project implementation progress, in compliance with current regulations on management and issuance of construction investment capital.

VII. STATEMENT OF THE AGRICULTURAL BANK, INTEREST ON DEPOSITS:

7.1. Monthly, the Agricultural Bank must send a statement of the project's Special Account at the bank to the Ministry of Finance (Department of Foreign Financial Affairs), showing the amount withdrawn during the month; detailed usage according to each usage and exchange rate; end-of-month balance.

7.2. For withdrawals from the Special Account to refund capital to provincial Investment Development Offices as stipulated in Section 5.3, the Agricultural Bank must clearly indicate in the statement the number and date of the refund request letter from the local Investment Development Office accompanying the withdrawal request letter from the Central Project Management Board.

7.3. While unused loan funds on the Special Account generate interest (interest rate for non-term deposits), on the 5th day of each month, the Agricultural Bank must remit all accrued interest from the Special Account into the State Budget (the State's foreign currency reserve account at the State Bank (Trading Center)). Account number 331.213.020.1.

VIII. ACCOUNTING RECORDS, AUDIT, REPORTING, AND FINAL ACCOUNTING:

8.1. Accounting Records:

Project Management Boards shall implement accounting records and statistics in accordance with current State regulations.

Local Investment Development Offices shall implement accounting and statistics in accordance with the guidance of the General Department of Investment Development.

8.2. Audit:

The supervisory bodies of the project, central and local functional management agencies, and the General Department of Investment Development have the responsibility to inspect the implementation of plans, financial management systems, and actual project deployment, and promptly reflect any issues and difficulties in the management process to the Ministry of Finance and the Ministry of Planning and Investment for appropriate resolution.

Any violations discovered during inspections and audits shall be handled in accordance with current regulations.

Funds allocated for projects that are misused or improperly utilized, as detected through inspections and audits, shall be recovered and deposited into the State Budget.

Annually, the Special Account, books, and accounting files of the project must be audited by an independent auditing agency in accordance with State regulations, loan agreements, and aid agreements. The audit documents will be sent to the Ministry of Finance and serve as one of the bases for considering additional fund withdrawals for the Special Account or withdrawals from the Special Account for payments, as well as for evaluating the project's implementation.

8.3. Reporting:

Monthly, the Provincial Project Management Board is responsible for preparing and submitting reports on implementation to the Provincial Investment Development Office providing the funds, and also to the Central Project Management Board.

The Provincial Investment Development Offices providing the funds are responsible for compiling reports to the General Department of Investment Development on the allocation and advance of funds in their respective areas. Quarterly, based on the reports from the Provincial Investment Development Offices, the General Department of Investment Development compiles reports to the Ministry of Finance.

Quarterly, the Central Project Management Board is responsible for reporting in detail about expenditures from the Special Account according to the amounts approved by the Ministry of Finance to the Ministry of Agriculture and Rural Development and the Ministry of Finance (Department of Foreign Financial Affairs, General Department of Investment Development).

Every six months, the Ministry of Agriculture and Rural Development is responsible for compiling reports to the Ministry of Finance (Department of Foreign Financial Affairs, General Department of Investment Development), the Ministry of Planning and Investment, and the State Bank on the implementation of projects including forest protection and rural development projects, the use of loan funds, government aid funds, and contributed capital.

Monthly, the Agricultural Bank is responsible for informing the Ministry of Finance (Department of Foreign Financial Affairs) and the State Bank (Trading Center) about the expenditure statement of the Special Account. The statement must clearly state the interest generated during the month and the date of interest repayment to the Ministry of Finance.

The Central Project Management Board provides detailed guidelines on the reporting formats of the project.

8.4. Annual Final Accounting and Final Accounting upon Completion of the Project:

The Project Management Boards at local levels shall prepare final accounting reports for expenses incurred locally, confirmed by the Provincial Investment Development Office providing the funds, and report them to the Central Project Management Board.

The Central Project Management Unit shall prepare the central expenditure settlement report with confirmation from the funding agency, and simultaneously compile the entire project settlement report for submission to the Ministry of Agriculture and Rural Development for examination and approval. The Ministry of Agriculture and Rural Development is responsible for settling the implementation costs and final settlement with the Ministry of Finance upon completion of the project.

PART IV. IMPLEMENTATION PROVISIONS

This Circular takes effect fifteen days from the date of signature. During its implementation, if there are any difficulties, the Central Project Management Unit, the Ministry of Agriculture and Rural Development, the Agricultural Bank of Vietnam, and other relevant agencies must promptly reflect them to the Ministry of Finance for study, amendment, and supplementation.

ANNEX 1
DIRECT PAYMENT

1. The Central Project Management Unit signs a contract with the contractor. The contractor implements the contract and requests payment.

2. The Central Project Management Unit examines and approves payment to the contractor and prepares withdrawal forms and supporting documents for submission to the Ministry of Finance for review.

3. The Ministry of Finance reviews and provides comments for the Agricultural Bank of Vietnam to sign the withdrawal form and send it to the World Bank.

4. The World Bank examines the withdrawal form and pays the contractor.

ANNEX 2
SPECIAL GUARANTEE PROCEDURE PAYMENT

(1) The Project Management Unit signs a contract with the contractor.

(2) The Project Management Unit compiles the dossier and sends it to the Ministry of Finance.

(3) The Ministry of Finance reviews and provides comments to the Project Management Unit and the serving bank. Based on the Ministry of Finance's approval, the Project Management Unit requests the serving bank to open a Letter of Credit and issue a special guarantee request form.

(4) Based on the Ministry of Finance's comments, the serving bank opens a Letter of Credit and issues a special guarantee request form to be sent to the World Bank.

(5) The World Bank examines and issues the special guarantee and notifies the Project Management Unit and the seller's bank.

(6) The World Bank pays the seller (or the seller's bank) according to the contract conditions.

ANNEX 3
WITHDRAWAL OF INITIAL FUNDS AND SUPPLEMENTATION OF THE SPECIAL ACCOUNT

1. The Central Project Management Unit compiles the documents requesting withdrawal of funds into the Special Account and sends them to the Ministry of Finance (Department of Foreign Financial Affairs).

2. The Ministry of Finance reviews and provides comments for the Agricultural Bank of Vietnam to sign the withdrawal form and send it to the World Bank.

3. The World Bank examines and transfers money into the Special Account (at the Agricultural Bank of Vietnam).

ANNEX 4
WITHDRAWAL FROM THE SPECIAL ACCOUNT

1. Registration of annual withdrawal plan (foreign capital, counterpart capital) (Ministry of Finance - Department of Foreign Financial Affairs)

2. Request for quarterly withdrawal plan approval (Financial Coordination Department)

3. Contractor requests payment

4. Provincial Project Management Unit examines based on the approved withdrawal plan and requests the Agricultural Bank of Vietnam to make payment

5. The Agricultural Bank of Vietnam transfers payment to the contractor.

ANNEX 5
DISBURSEMENT AT LOCAL LEVEL AND REFUND
FOR THE PROVINCE INVESTMENT AGENCY

1. Contractor requests payment

2. Provincial Project Management Unit examines and requests the Provincial Investment Agency to make payment. 3. The Provincial Investment Agency makes payment according to the Provincial Project Management Unit's request

4. The Provincial Investment Agency requests the Provincial Project Management Unit to refund

5. The Provincial Project Management Unit submits the refund request to the Central Project Management Unit

6. The Central Project Management Unit requests the Agricultural Bank of Vietnam to transfer refund funds to the Provincial Investment Agency

7. The Agricultural Bank of Vietnam transfers funds to the Provincial Investment Agency.

ANNEX 6

REFUND RECORD FOR FUNDS ALREADY ADVANCED FOR TEMPORARY PROJECT PAYMENTS

Forest Protection and Rural Development Project

Provincial Investment Development Bureau:

Period: from...to...