Circular No. 136/1999/TT-BTC guiding final settlement of investment capital

CIRCULAR

Guidelines for finalizing investment capital

Pursuant to the State Budget Law issued on March 20, 1996;

Pursuant to the Law Amending and Supplementing Certain Provisions of the State Budget Law dated May 20, 1998;

Pursuant to Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government on the issuance of the Investment Management and Construction Regulation;

Pursuant to Decree No. 145/1999/NĐ-CP dated September 20, 1999 of the Government on restructuring the Investment Development General Department under the Ministry of Finance;

The Ministry of Finance issues guidelines for finalizing investment capital as follows:

Part 1
GENERAL PROVISIONS

1. All state-owned agencies and state-owned enterprises must finalize their investment capital after completing and putting the project into operation. The investor is responsible for finalizing the investment capital. Finalizing the investment capital must ensure the content, time frame for preparation, review, and approval as stipulated in this Circular.

2. The finalized investment capital includes all legitimate expenses incurred during the investment process to put the project into operation. Legitimate expenses are those in accordance with signed contracts and approved budget estimates, ensuring compliance with standards, norms, unit prices, financial-accounting regulations, and current state regulations related to the matter. The finalized investment capital is limited within the approved total investment ceiling or adjusted ceiling (if applicable).

3. For projects funded from multiple sources, the finalized investment capital must clearly analyze each source of funding.

4. The report on finalizing investment capital must accurately determine the annual investment capital implemented; the total investment capital for the project including costs for investment preparation, implementation preparation, actual implementation, production preparation, interest on loans of the investor during the implementation period, insurance costs, and other legitimate costs according to current regulations. Losses are not included in the value of the project or the value of assets handed over for operation. For multi-year investment projects, when finalizing the investment capital, the investor must convert the implemented investment capital to the price level at the time of handover for operation to determine the new fixed asset value increase and the value of assets handed over.

5. Through the work of finalizing investment capital, the results of the investment process are evaluated, lessons learned are drawn to enhance investment capital management.

Part 2
SPECIFIC PROVISIONS

I. CONTENT OF THE REPORT ON FINALIZING INVESTMENT CAPITAL

The content of the report on finalizing investment capital must be appropriate for each type of project: completed investment projects, completed planning projects, completed investment preparation projects, group A projects with multiple component projects or sub-projects, and projects using foreign capital.

1. For completed investment projects:

1.1 Investment capital implemented through the years:

- Total investment capital implemented from the investment preparation phase to the completion and operation of the project.

- Clearly identify each source of investment capital implemented: state budget capital, state investment credit, state-guaranteed investment credit, state enterprise development capital, and other sources.

- Project investment capital structure: construction and installation capital, equipment capital, and other expense capital.

1.2 Loss value not included in the value of assets handed over:

- Losses due to natural disasters, enemy actions, and other unforeseeable causes not covered by insurance.

- Value of quantities canceled according to the decision of the competent authority.

1.3 Handover asset value:

- New fixed asset (Tangible Fixed Asset - TFA) and turnover asset (Current Asset - CA) values created and handed over for production and use are the total investment capital implemented through the years minus non-included project asset value costs and reflected in actual value and converted value to the price level at the time of handover for operation.

The method of converting to the price level at the time of handover is carried out according to the guidance of the Ministry of Construction after coordination with the Ministry of Finance and the Ministry of Planning and Investment.

In cases where the report on finalizing investment capital is prepared without guidance on the conversion method, the investor must request the Ministry of Construction to provide guidance on the conversion method to serve as the basis for preparing the report on finalizing investment capital.

- New fixed assets are classified and valued according to the principle that direct costs related to which TFA are allocated to that TFA; common costs related to multiple TFAs are allocated based on the ratio of direct costs of each TFA to the total direct costs of all TFAs.

- When assets are handed over to multiple units for use, the complete list and value of TFAs and CAs handed over to each unit must be determined.

2. For completed planning projects, the investor must prepare a report on finalizing planning capital. The report on finalizing planning capital reflects the received and utilized capital according to the approved budget estimate and a description of the project's implementation results.

3. For completed investment preparation projects, the investor must prepare a report on finalizing investment preparation capital similar to the completed planning project.

4. For group A projects consisting of multiple component projects (or sub-projects), when a component project (or sub-project) is completed, the investor must prepare a report on finalizing investment capital as for a group A project.

5. For projects using foreign capital, in addition to the report on finalizing investment capital prepared, reviewed, and approved according to this Circular, the investor must also prepare a separate report on finalizing investment capital according to the requirements of international organizations specified in the loan agreement (if applicable).

II. DOCUMENTS FOR THE REPORT ON FINALIZING INVESTMENT CAPITAL:

1. Documents The report on finalizing investment capital for completed projects includes:

- Legal documents (Form No. 01/QTĐT): reflecting legal bases for the project investment.

- Summary report on finalizing completed investment capital (Form No. 02/QTĐT): reflecting the general situation and results of the project investment as well as remaining issues and recommendations for resolution by the investor.

- Report on investment implementation status through the years (Form No. 03/QTĐT): reflecting the use of investment capital from the preparation stage to the completion and operation stage.

- Report on investment capital implementation by completed works (Form No. 04/QTĐT): reflecting the investment capital implemented by each work in cases where the project has two or more works.

- Report on the quantity and value of new fixed assets increased (Form No. 05/QTĐT): reflects the quantity and value of each new fixed asset increased according to the converted price classified by the user.

- Report on the quantity and value of transferred current assets (Form No. 06/QTĐT): reflects the quantity and value according to the converted price of each type of raw materials, materials, fuel, spare parts, labor tools not meeting the standards of fixed assets and other costs belonging to transferred current assets for the using unit.

- Status of receivables and payables (Form No. 07/QTĐT): reflects outstanding receivables and payables up to the time of finalizing investment capital and proposes measures for handling.

- Reconciliation table confirming the payment data of the State Treasury and lending agencies (Form No. 08/QTĐT): In cases where the project is paid by multiple State Treasury agencies, there must be a reconciliation confirmation from each agency.

- Explanation report on the finalization of investment capital (Form No. 09/QTĐT): reflects the main changes of the project; difficulties and advantages during the implementation process and proposed solutions.

- Final acceptance handover record of the project or acceptance handover record between the investor and the contractor (copy).

- Handover record of assets between the investor and another using unit (if any).

During the review of the finalization of investment capital, when necessary, the reviewing authority may request the investor to provide additional relevant documents related to the finalization of investment capital of the project.

2. Documents for reporting the finalization of investment capital for planning projects and preparatory investment projects include:

- Legal documents - Form No. 01/QTĐT

- Comprehensive report on the finalization of investment capital completed (Form No. 02/QTĐT)

- Report on the implementation of investment over the years (Form No. 03/QTĐT)

- Report on the status of receivables and payables (Form No. 07/QTĐT)

- Reconciliation table confirming the payment data of the State Treasury or lending agencies (Form No. 08/QTĐT)

3. For projects that only prepare an investment report, upon completion, the investor shall only prepare: Report on the finalization of investment capital completed (Form No. 10/QTĐT) accompanied by the acceptance handover record between the investor and the contractor.

4. Requirements for documents for reporting the finalization of investment capital.

The report on the finalization of investment capital must be fully prepared and correctly according to the appropriate report forms as stipulated in points 1, 2, and 3 of this section. Data in the report forms must be clear, recommendations must be specific, concise, and easy to understand.

All documents for reporting the finalization of investment capital must have full signatures of the Chief Accountant, Project Management Board Director (for projects with a Project Management Board established); Project Manager (for projects implemented under the Project Manager management model), and the signature of the investor.

III. REVIEW OF THE FINALIZATION OF INVESTMENT CAPITAL

1. Contents of the review of the finalization of investment capital.

1.1 Review of the legality of construction investment projects:

- Review and compare the list and content of legal documents in the project dossier to ensure compliance with current regulations of the State.

- Review the legality of economic contracts signed by the investor with contractors (consultants, construction, supply of materials and equipment).

1.2 Review of annual investment capital expenditure:

- Review each source of capital participating in annual project implementation compared to the capital structure determined in the investment decision and the annual investment plan.

- Analyze and compare the actual investment capital structure (construction, equipment, other expenses) with the investment capital structure recorded in the investment decision and approved total budget estimate.

1.3 Review of the value of completed construction works:

- Compare the value of the proposed construction work volume for finalization with the approved budget estimate and determine the reasons for increases or decreases.

- Application of national norms and unit prices for each type of expense in different periods.

- Examine the acceptance records to determine the construction cost proposed for finalization.

1.4 Review of the value of completed equipment:

- Review the suitability of the list, type, quantity, technical standards, and prices of equipment compared to the investment decision and signed economic contracts.

- Check the purchase price, processing, and manufacturing costs of equipment.

- Review related costs for equipment: transportation and storage costs.

1.5 Review of other expenses by comparing the proposed finalization amount of each type of expense already incurred with the approved budget estimate and current regulations on the management of other expenses in construction investment.

1.6 Review of non-included loss values:

- Loss values due to natural disasters, enemy actions, and other unforeseen causes not covered by insurance.

- Volume value canceled according to the investment decision.

1.7 Review of the determination of the value of assets handed over for use by operating units:

Review the determination of the actual annual investment value and the converted value at the transfer time based on the price level, including newly added fixed assets and transferred current assets put into operation.

1.8 Review of the status of receivables and payables, remaining materials, and equipment:

- Outstanding receivables and payables.

- Value of remaining materials and equipment.

- Value of assets of the Project Management Board.

1.9 For projects where part of the work is carried out through bidding, the review of the finalization focuses on the following contents:

- Review of legal documents related to the investment project, tender organization, results, and approval of tender results.

- Review of the proposed finalization value compared to the winning bid price.

- Review of additional quantities and values outside the tender package, determining the reasons for increases or decreases.

After reviewing the report on the finalization of investment capital, the reviewing authority must submit a written report to the competent authority for approval of the finalization.

2. Authority for reviewing the finalization of investment capital:

Before approving the finalization of investment capital for completed projects, the review of the finalization report must be conducted according to the following分级制度：

- For Class A projects: The Ministry of Finance shall organize the review.

- For the remaining projects:

Central management projects shall be subject to review organized by the competent agency assisting the Minister (head of a ministry-level agency, government agency, central agency of mass organizations, Central Financial Management Board, Chairman of the Board of Directors of State-owned Corporations) who will take the lead in organizing the review.

Local management projects shall be subject to review organized by the Department of Finance and Prices which will take the lead in organizing the review.

In cases where necessary, the Ministry of Finance and agencies authorized to approve final accounts may establish an advisory team to assist in the review before approving the final accounts:

- The advisory team reviewing the final accounts of capital investment for group A projects shall be established by the Minister of Finance, including representatives from the following ministries: Ministry of Planning and Investment, Ministry of Construction, industry management ministry, relevant ministries, provincial People's Committees (for projects managed by localities).

- For the remaining projects, the establishment of the advisory team to review the final accounts of capital investment shall be decided by the agency authorized to approve the final accounts of capital investment.

3. Forms of organization for the review of final accounts of capital investment:

The authority approved to approve final accounts (as stipulated in point 1, Section IV of this Circular) shall decide on the form of review of final accounts of capital investment. The agency authorized to approve final accounts must issue a written decision assigning the task of reviewing final accounts to the competent agency responsible for conducting the review of final accounts of capital investment.

- In cases where the agency authorized to approve final accounts decides to hire an independent auditing organization to conduct an audit of the final accounts report of capital investment, the project owner shall enter into an audit contract with a legally operating independent auditing organization in Vietnam to perform the audit according to the content and audit fee allowed by the agency authorized to approve final accounts. The auditing organization shall bear legal responsibility for the audit results.

The competent agency under (or subordinate to) the level authorized to approve final accounts shall re-examine the audit results; the content of the re-examination includes:

- Checking whether the audit results are consistent with the audit contract and the content of the final accounts review of capital investment as prescribed in this Circular.

- Checking the legal bases for investment and construction management issued by the competent state management agencies that the auditing organization uses for auditing such as standards, regulations; construction norms; design procedures; quality management regulations; system of unit prices; funding management mechanisms.

- Re-checking the results that differ between the audit report and the final accounts report of capital investment prepared by the project owner.

- Checking the recommendations of the project owner and those of the independent auditing organization.

If the value of capital investment proposed for final settlement in audited projects is found to be incorrect by more than 1.5% (for group A projects), 2% (for group B projects), or 3% (for group C projects) by the agency authorized to approve final accounts or the legal authority, then the auditing agency must bear material responsibility for the losses caused by erroneous audit results; in serious cases, they shall be dealt with according to current laws.

IV. APPROVAL OF FINAL ACCOUNTS OF CAPITAL INVESTMENT:

1. Authority to approve final accounts of capital investment.

- Final accounts of capital investment for group A projects shall be approved by the Minister of Finance pursuant to the delegation of the Prime Minister.

- For the remaining projects, the person authorized to decide on investment is also the person authorized to approve final accounts of capital investment.

2. Agencies receiving approved final accounts of capital investment:

After being approved, the final accounts of capital investment for completed projects must be sent one copy of the approval decision for final accounts of capital investment to the following agencies.

2.1 For group A projects:

- Ministry of Finance

- The superior agency of the project owner

- Industry management ministry

- Agency responsible for capital disbursement and investment loans

2.2 For the remaining projects:

- Projects managed centrally

+ Investment decision-making agency

+ Ministry of Finance

+ Agency responsible for capital disbursement and investment loans

- Projects managed locally

+ Investment decision-making agency

+ Financial agency at the same level as the investment decision-making agency

+ Agency responsible for capital disbursement and investment loans.

V. TIME FOR PREPARATION, REVIEW AND APPROVAL OF FINAL ACCOUNTS OF CAPITAL INVESTMENT

1. For group A projects:

- The time to complete the final accounts report of capital investment shall not exceed six months after the completion and commissioning of the investment project.

- The time for reviewing the final accounts shall not exceed four months after receiving all valid final accounts reports of capital investment in accordance with Article II of this Circular.

- The time for approving the final accounts of capital investment shall not exceed one month after receiving the reviewed final accounts report.

2. For the remaining projects:

- The time to complete the final accounts report of capital investment shall not exceed three months after the completion and commissioning of the project.

- The time for reviewing the final accounts shall not exceed two months for group B projects and one month for group C projects after receiving all valid final accounts reports of capital investment.

- The time for approving the final accounts of capital investment shall not exceed fifteen days.

3. Special cases: Extension of time for preparation, review and approval of final accounts of capital investment shall be decided by the authority approved to approve final accounts.

VI. COSTS FOR REVIEW AND APPROVAL OF FINAL ACCOUNTS OF CAPITAL INVESTMENT

1. Costs for review and approval of final accounts of completed capital investment projects shall be included in other costs in the total approved budget of the project and managed and used by the agency leading the review of final accounts.

2. Ratio and amount of costs for review and approval of final accounts of capital investment.

2.1 Based on the total investment amount and characteristics of the project, the costs for review and approval of final accounts of completed capital investment projects shall be calculated as a percentage (%) of the total investment amount of the project as follows:

Deduction amount for component project (sub-project)

2.3 For projects where the capital structure of equipment accounts for 51% to 75% of the total investment amount, the level of expenses for auditing and approving the final settlement shall be 75% of the corresponding expense level or ratio stipulated in Point 2, Section VI of this Circular.

2.4 For projects where the capital structure of equipment accounts for more than 75% of the total investment amount, the level of expenses for auditing and approving the final settlement shall be 50% of the corresponding expense level or ratio stipulated in Point 2, Section VI of this Circular.

2.5 The expenses for auditing and approving the final settlement of completed project investments as specified in Points 2.1, 2.2, 2.3, and 2.4 of Section VI include both the expenses for auditing and approving the final settlement and the audit fees (if applicable).

The expenses for auditing and approving the final settlement are allocated to various tasks as follows:

- Up to 10% for approving the final settlement of the investment capital.

- At least 90% for auditing the final settlement of the investment capital.

In cases where an independent auditing organization is hired to audit the final settlement report, the maximum audit fee is 75%.

3. Management and utilization of expenses for auditing and approving the final settlement.

3.1 Based on the approved budget for auditing and approving the final settlement of completed project investments, the investor pays to the leading auditing agency. If an auditing agency is hired to audit the final settlement report, the investor pays according to the signed contract; the remaining portion is paid to the leading auditing agency.

3.2 The leading auditing agency for the final settlement of investment capital prepares a budget for auditing and approving the final settlement, which is submitted for approval by the authorized person to serve as the basis for utilization. The leading auditing agency for the final settlement of investment capital is responsible for managing, utilizing, and settling the auditing and final settlement approval expenses according to the approved budget and current financial and accounting regulations.

3.3 The expenses for auditing and approving the final settlement of completed project investments are used as follows:

- Payment to the auditing agency according to the signed contract (if applicable).

- Payment of remuneration to members of the advisory team for auditing the final settlement of investment capital.

- Payment to organizations and individuals, both domestic and foreign, who perform the auditing of the final settlement upon the request of the leading auditing and final settlement approval agency (if applicable).

- Expenses for work-related travel, office supplies, translation, printing, conferences, seminars, and other expenses serving the auditing and final settlement approval process.

VII. RESPONSIBILITIES OF THE INVESTOR AND RELATED AGENCIES

1. Project Proponents:

- Cooperate with the contracting units to resolve outstanding issues regarding received materials and equipment, payment of debts, and other issues arising under the signed contracts.

- Audit the final value of completed contract agreements (construction, material supply, consulting) of the contracting units.

- Inventory and assess the remaining asset value of the Project Management Board to transfer to production and usage units or liquidate for recovery of funds.

- Close accounting books, organize, and classify documents to support the final settlement of investment capital.

- Verify and confirm the amount of capital already paid or borrowed, debts, assets, and transfers with related agencies.

- Prepare the final settlement report for completed project investments within the prescribed time and content as stipulated in this Circular, and bear responsibility for the accuracy of the data and documents in the final settlement report.

- Provide all relevant documents for the final settlement of investment capital as required by the auditing agency.

- Sign an auditing contract with legitimate auditing agencies after receiving the decision from the authorized person to approve the final settlement.

2. Contracting Units (consulting, construction, equipment supply):

Cooperate with the investor to resolve remaining issues under the contract, provide and take legal responsibility for the data and documents related to the preparation of the investor's final settlement report.

3. State Treasury, lending agencies, credit guarantee agencies:

Verify and confirm the investment capital already paid out for loans and guarantees for completed projects within the scope of managed, paid, loaned, and guaranteed funds.

4. Auditing and final settlement approval agencies:

- Guide, inspect, and urge the investor to implement the final settlement of investment capital according to the content, requirements, and timeframes stipulated in this Circular.

- Guide and instruct the investor to resolve any issues arising during the preparation of the final settlement report.

- Organize the auditing of the final settlement report according to the content, requirements, and timeframe stipulated in this Circular.

- Request the investor to provide relevant documents for the final settlement of the project investment.

- Bear responsibility for the results of the final settlement audit or the content of the re-examination results (for projects that hire auditing organizations to conduct audits).

- Approve the final settlement of completed project investments within their authority.

Part 3
IMPLEMENTING PROVISIONS

This Circular takes effect from the date of signing and replaces previous guiding documents on the final settlement of investment capital. The state encourages non-state enterprises and economic organizations to prepare final settlement reports in accordance with this Circular.

During implementation, if there are any difficulties, please promptly reflect them to the Ministry of Finance for research and supplementation or amendment.