Circular No. 14/TC-NSNN guiding the management of revenue and expenditure of commune, town, and ward budgets

CIRCULAR

Guidelines for Managing Revenue and Expenditure of Commune, Urban District, and Ward Budgets

Pursuant to the State Budget Law;

Pursuant to Decree No. 87/CP dated December 19, 1996 of the Government on分级管理、编制、执行和决算国家预算的分级管理；

Pursuant to Decree No. 178/CP dated October 28, 1994 of the Government on the tasks, authorities, and organizational structure of the Ministry of Finance.

The Ministry of Finance provides guidelines for managing revenue and expenditure of commune, town, and ward budgets as follows:

PART I
GENERAL PROVISIONS

1. The commune budget (hereinafter referred to as the commune budget) and the ward budget are part of the State Budget established, managed by the People's Committee of the commune, town, or ward (hereinafter collectively referred to as the commune level), and decided and supervised by the People's Council of the commune.

2. The commune and ward budgets are constructed from revenue sources allocated to them and expenditures for implementing tasks within the functions and responsibilities of the commune-level government as stipulated by the State Budget Law.

3. All revenue and expenditure items at the commune and ward levels must be reflected in the commune and ward budgets for discussion, decision-making, and monitoring by the People's Council. The commune and wards shall not arbitrarily establish separate revenue and expenditure systems or retain revenue sources to establish extrabudgetary funds contrary to state regulations.

4. The commune and ward budgets maintain a stable percentage allocation of revenue sources and supplementary funds from higher-level budgets for three to five years; the specific duration of each period of stability is determined by the Prime Minister when allocating the state budget for the first year of the stability period.

5. The commune budget balance generally must ensure that expenditures do not exceed revenues, including supplementary funds from higher-level budgets (if any). Specifically:

5.1. For the commune budget:

- Regular expenditure tasks must be balanced with allocated revenue sources (excluding specific revenue sources such as contributions from residents, public service labor fees, and surplus funds), if insufficient, will be supplemented by higher-level budgets.

- Development investment expenditures are mainly balanced from resident contribution revenues and public service labor fees; additionally, they can be partially supplemented from the provincial budget according to the allocation and from the commune surplus budget (if any).

5.2. For the ward budget:

Allocated revenue sources to ensure regular expenditure tasks, if insufficient, will be supplemented by higher-level budgets, and if excess, can be arranged for supplementary activities in culture, society, and welfare of the ward.

6. Communes and wards have the responsibility to manage all types of communal assets, including state assets and ownerless assets located within their territories without clear management authority.

7. Organization of the Financial Board of Communes and Wards:

- The commune-level People's Committee must organize a Financial Board to assist the commune-level People's Committee in preparing and implementing the budget revenue and expenditure plan, monthly financial reports, annual settlement reports, and managing state assets and finances within their jurisdiction as prescribed.

- The Financial Board consists of:

+ One Board Chair who is a member of the People's Committee responsible for financial work.

+ One accountant with professional qualifications (primary level for mountainous areas or intermediate level for other regions) appointed by the Director of the Provincial Department of Finance and Price Control upon request of the commune-level People's Committee and recommendation of the Chairman of the County, City District, or Urban District People's Committee (collectively referred to as county level). The accountant has the ongoing responsibility to assist the People's Committee in leading financial and budgetary work at the commune and ward levels.

+ One cashier (or possibly兼任村委会办公室工作人员的干部).

- Regulations for Financial Board staff:

The Board Chair receives living allowances according to Decree No. 50/CP dated July 26, 1995 of the Government; the accountant receives living allowances according to their training position; other finance staff receive living allowances according to their contractual labor agreements at the commune level.

PART II
CONTENT OF REVENUE AND EXPENDITURE OF COMMUNE AND WARD BUDGETS

I. CONTENT OF REVENUE AND EXPENDITURE OF THE COMMUNE BUDGET.

A/ Sources of Revenue for the Commune Budget:

1. Revenue Items at One Hundred Percent (100%):

- Business license tax from businesses at levels 4 to 6, including fixed payments;

- Livestock slaughter tax collected within the territory;

- Various fees and charges prescribed to be collected into the commune budget;

- Revenues from economic and cultural-social services and other economic services;

- Contributions from organizations and individuals, including contributions as prescribed by law, decisions of the Commune People's Council, and voluntary contributions. In cases where fundraising for infrastructure construction is not clearly defined, a separate budget will be prepared during implementation and must be reflected in the budget during execution;

- Revenue from the use of public land funds at 5% and other public asset profits managed by the commune;

- Non-repayable aid from organizations and individuals outside the country directly to the commune;

- Surplus revenue from the previous year;

- Other revenues as prescribed by law.

2. Revenue Items Divided According to Percentage (%) Between Provincial, County, and Commune/Town Budgets, Including Four Items:

- Agricultural land use tax;

- Land use right transfer tax;

- House and land tax;

- Land use fee.

The division ratio of these revenue items to the commune is determined by the Provincial People's Committee (collectively referred to as provincial level). Depending on the actual situation in each locality, a common ratio may be set for all four items or a different ratio for each item differentiated by region (mountainous, midland, plain) as appropriate.

3. Supplementary Revenue from Higher-Level Budgets Includes Two Types:

- Supplementary revenue for balancing the budget: this revenue is determined based on the difference between the allocated expenditure budget and the allocated revenue sources (100% revenue and percentage-divided revenue), if insufficient, will be supplemented by higher-level budgets. This amount is decided by the County People's Council after reporting to the Provincial People's Committee to ensure overall balance and is allocated stably for three to five years. It increases annually according to the inflation rate specified by the Provincial People's Committee.

- Supplementary revenue according to annual targets (not allocated stably) is considered by the County People's Committee based on the commune's proposals and the targets of the higher-level budget.

B/ Tasks of Expenditure for the Commune Budget.

1. Recurrent expenditure on:

1.1. Social work and cultural, information, physical education, and sports activities managed by the commune or town:

- Pensions and lump-sum severance benefits for communal cadres pursuant to Decision 130/CP, Decision 111/HĐBT, and Decree 50/CP of the Government; expenditures for慰问政策家庭；社会救济和其他社会工作；

- Cultural, information, physical education, sports, and broadcasting activities organized by communes and towns;

1.2. Support for supplementary cultural classes, nursery school and kindergarten subsidies, including subsidies for kindergarten teachers and caregivers;

1.3. Health services:

- Living expenses and allowances for health workers at commune-managed health stations. For commune cadres not on state payroll but within the staffing quota, the level that previously contracted and paid for their management shall continue to manage and pay for them now;

- Purchase and provision of specialized equipment for medical examinations and treatments;

- Disease prevention and other health services;

1.4. Management, maintenance, and repair of welfare facilities and roads under commune and town management, such as repairs and maintenance of schools, health stations, nurseries, kindergartens, cultural houses, memorials; patching and repairing gravel roads and bridges under commune jurisdiction; for towns, this also includes repairing sidewalks, streets, street lighting, parks, and greenery;

1.5. Activities of state agencies at commune and town levels include:

- Living expenses at the current prescribed level;

- Living expenses for commune People's Council representatives;

- Allowances as stipulated by the State;

- Collective welfare, health, and sanitation;

- Travel expenses;

- Office operation costs such as rent, electricity, water, lighting, office supplies, postal fees, telephone charges, conference fees, hospitality, and ceremonial expenses;

- Costs for regular purchase and repair of housing and work equipment;

- Other expenses;

1.6. Allowances and operational funds for the Communist Party of Vietnam's commune and town agencies after deducting party dues collected according to regulations and other payments (if any);

1.7. Allowances and operational funds for the Vietnam Fatherland Front, the Ho Chi Minh Communist Youth Union, the Vietnam Veterans Association, the Vietnam Women's Union, and the Vietnam Farmers' Association at commune and town levels after deducting membership fees;

1.8. Civil defense and social order work:

- Civil defense training convened by communes and towns;

- Allowances for mobilizing civil defense personnel as stipulated by the Civil Defense Law;

- Registration for military service and sending off young people for military service;

- Expenditures for security rations;

- Propaganda, mobilization, and organization of mass movements to protect public security and social order within the commune;

- Other expenses.

1.9. Expenditures aimed at encouraging economic undertakings such as agricultural and fishery promotion, and nurturing sources of commune revenue;

1.10. Other expenditures as prescribed;

2. Investment development expenditures.

Investment development expenditures for commune budgets include construction investment in economic and social infrastructure projects as delegated by the provincial level from budget funds and investment from voluntary contributions of organizations and individuals for specific projects and goals;

II. CONTENT OF REVENUE AND EXPENDITURE FOR COMMUNE BUDGETS.

A/ Revenue sources for commune budgets:

- Slaughter tax collected from households engaged in livestock slaughtering, excluding slaughter taxes collected from slaughtering enterprises which are remitted to the city or district budget;

- Various fees and levies;

- Contributions in cash, labor days, or in-kind as prescribed by law or local decisions;

- Contributions from organizations and individuals for the construction and maintenance of infrastructure under commune management as decided by the Commune People's Council;

- Voluntary contributions from organizations and individuals;

- Non-reimbursable aid from foreign organizations and individuals to communes in cash or in-kind converted into cash;

- Surplus from the previous year's commune budget;

- Other revenues as prescribed by law, such as rental income or sales proceeds and other revenue from public services;

- Supplementary revenue from higher-level budgets when commune budget revenues allocated to it cannot meet its expenditure needs as prescribed by the State. The amount of supplementary revenue for commune budgets is determined by the District People's Council after reporting to the Provincial People's Committee and is stabilized for three to five years, with annual additional supplements based on the inflation rate specified by the Provincial People's Committee;

B/ Expenditure responsibilities of commune budgets.

Regular expenditures include:

1. Social work and cultural, information, physical education, sports, and broadcasting activities managed by communes:

- Pensions and lump-sum severance benefits for commune cadres pursuant to Decision 130/CP, Decision 111/HĐBT, and Decree 50/CP; expenditures for慰问政策家庭；社会救济；

- Cultural, information, physical education, sports, and broadcasting activities organized by communes;

2. Activities of state agencies at commune level:

- Living expenses for commune cadres;

- Living expenses for commune People's Council representatives;

- Allowances as stipulated by regulations;

- Collective welfare, health, and sanitation;

- Travel expenses;

- Office operation costs such as rent, electricity, water, office supplies, postal fees, telephone charges, conference fees, hospitality, and ceremonial expenses;

- Costs for regular purchase and repair of housing and work equipment;

- Other expenses;

3. Allowances and operational funds for the Communist Party of Vietnam at commune level after deducting party dues and other revenues;

4. Allowances and operational funds for the Vietnam Fatherland Front, the Ho Chi Minh Communist Youth Union, the Vietnam Women's Union, the Vietnam Veterans Association, and the Vietnam Farmers' Association at commune level after deducting membership fees and other revenues;

5. Civil defense and social order work:

- Civil defense training convened by communes;

- Allowances for mobilizing civil defense personnel as stipulated by the Civil Defense Law;

- Registration for military service and sending off young people for military service;

- Propaganda, mobilization, and organization of mass movements to protect public security and social order and other related expenditures;

6. Other expenditures as prescribed;

III. SETTING COMBINED EXPENDITURE LIMITS FOR COMMUNES.

The budget allocation standard for communes is the expenditure level calculated per commune to ensure that the commune can fulfill its tasks as prescribed by the State. This expenditure level is a comprehensive figure determined based on unified policies and systems of the State, consistent with the overall budget balance of the State and local budgets, serving as the basis for preparing and allocating commune budgets.

The standard consists of two parts:

Part 1 - The basic part is determined based on the State's policies and systems regarding commune officials such as:

- Decree No. 50/CP dated July 26, 1995 of the Government stipulating living expenses for commune, town, and ward officials.

- Decision No. 58/TTg dated February 3, 1994 of the Prime Minister specifying certain issues concerning the organization and policies for grassroots health services. - Decision No. 394/TTg dated June 11, 1996 of the Prime Minister stipulating living expenses for representatives of People's Councils at all levels.

- Decision No. 164/TCCP dated June 29, 1995 of the Government Organizing Committee on the temporary regulations regarding the organization of village committees in mountainous and highland communes and the functions, duties, and powers of the head of the committee.

- Decree No. 35/CP dated June 14, 1996 of the Government guiding the implementation of the Ordinance on Civil Defense and Self-Defense Militia.

- Other current policy documents...

Basic expenditure average:

- Minimum: 85 million VND

- Maximum: 100 million VND

The above expenditure level will be adjusted when there are supplementary or amended policies and systems.

Part 2 - The expenditure part ensuring activities to perform the commune’s functions and responsibilities. This expenditure level is determined by a coefficient relative to the basic expenditure level mentioned above.

The coefficient ranges from 0.4 to 1.5 times the basic expenditure level. Based on the budget capacity, provinces and centrally governed cities shall specify the specific coefficient applicable to each commune. For communes that effectively exploit revenue sources, the province may decide on higher expenditure levels for surplus funds to be used for infrastructure investment.

Infrastructure construction investment costs are not included in the standard but are based on the mobilized contributions and targeted supplements from upper-level budgets, and the budget balancing capacity to determine specific projects annually.

For wards, the provincial and municipal authorities shall apply the standards accordingly.

PART III
PREPARATION, IMPLEMENTATION, AND SETTLEMENT OF COMMUNE AND WARD BUDGETS

I. PREPARATION OF COMMUNE AND WARD BUDGET PROJECTIONS.

1. Annually, based on the guidance of the Ministry of Finance, the provincial People's Committees, and the directives of the district People's Committees, the commune People's Committees must prepare the next year's budget projection to submit to the same-level People's Council for decision.

2. Requirements for preparing commune and ward budget projections:

2.1. All revenues must be fully and accurately accounted for according to State regulations, including contributions from the public for communal development.

2.2. Appropriations should be reasonably allocated to ensure the fulfillment of commune administrative functions and contribute to rural development.

2.3. Budget projections must be prepared according to the National Budget Structure and forms prescribed by the Ministry of Finance.

3. Basis for preparing budget projections includes:

3.1. Assigned expenditure tasks and requirements for socio-economic development of the commune and ward;

3.2. Legal documents on revenue collection, expenditure standards, and budgetary norms prescribed by competent authorities;

3.3. Revenue sources and revenue potential under the decentralized management of the commune and ward budgets (100% revenues, shared revenues, and additional allocations from upper-level budgets);

3.4. Audit results of the previous year's commune and ward budgets reported by the district People's Committee;

3.5. Implementation status of the previous year's commune and ward budgets.

4. Procedure for preparing commune and ward budget projections:

4.1. Evaluation of the previous year's budget implementation:

Each year, starting from July, communes must base their evaluation on the first six months' budget execution and projected full-year figures. On this basis, they analyze the situation, draw lessons for the preparation and implementation of the next year's budget.

4.2. Determination of revenue potential and expenditure requirements for the planning year:

4.2.1. Commune or ward units base their preliminary expenditure needs on assigned tasks and expenditure regulations; the commune or ward finance office collaborates with the tax collection team (if available) to calculate state budget revenues at the commune and ward levels.

4.2.2. After consulting subordinate units on budget balancing capabilities, the commune or ward finance office prepares the budget projection. The commune or ward budget projection includes a contingency fund of 3% of total expenditures to address unexpected tasks. To ensure the budget projection aligns with overall guidelines, before submitting it to the commune People's Committee for review and submission to the People's Council, the finance office must seek opinions from the district finance department.

4.3. Submitting the commune budget projection to the commune People's Committee for submission to the same-level People's Council for decision.

5. Deadline for deciding the annual budget:

5.1. The initial year's budget projection during the stabilization period is discussed and decided by the commune People's Council after the district People's Council has approved the district budget projection and the district People's Committee has officially assigned the commune budget projection.

5.2. Subsequent years' budget projections during the stabilization period: The commune People's Council discusses and decides before August 15 of the preceding year.

5.3. After the commune People's Council decides on the budget projection, the commune People's Committee is responsible for sending it to the district People's Committee and the district finance department for review and consolidation. The submission deadline is no later than five days after the commune People's Council's decision.

6. Annual adjustment of commune budget projections (if necessary).

Commune budget projections may be adjusted in the following cases:

- At the request of higher-level People's Committees to ensure alignment with overall guidelines.

- Significant fluctuations in revenue sources and expenditure tasks due to natural disasters or enemy attacks necessitating adjustments to revenue and expenditure tasks.

When adjustments are required, the commune People's Committee shall prepare an adjusted budget projection, submit it to the commune People's Council for decision, and report to the district People's Committee. The approved adjusted budget projection becomes the official commune and ward budget for the planning year.

7. The budget estimate forms for commune and ward include:

- A summary table of income and expenditure balance for commune and ward for the year (form number 1)

- Budget estimate of income for commune and ward by type (form number 2)

- Budget estimate of expenditure for commune and ward by field (form number 3)

- Budget estimate of income for commune and ward according to the State budget classification (form number 4)

- Budget estimate of expenditure for commune and ward according to the State budget classification (form number 5)

- Budget estimate of development investment expenditure (form number 6)

In addition to the basic forms above, the Department of Finance and Prices may prescribe additional annexes to meet local management requirements.

II. IMPLEMENTATION OF THE COMMUNE BUDGET ESTIMATE.

1. Quarterly income and expenditure budget estimate:

The requirement for implementing the commune budget is:

- Ensuring collection according to the national policy and regulations, collecting all recorded revenues fully and promptly, striving to exceed the budget estimate.

- Ensuring sufficient funding according to the progress of work or actual needs.

The Commune Finance Board must prepare quarterly income and expenditure estimates for management purposes.

1.1. Quarterly estimates (divided by month) must be based on the annual budget estimate and the actual revenue potential and expenditure needs of that quarter.

1.2. Quarterly estimates must be reported to the Chairman of the People's Committee at the commune level, concurrently sent to the County Finance Office and the Treasury where the commune conducts transactions before the first day of each quarter.

2. To reflect the activities of income and expenditure of the commune budget, a separate account for commune income and expenditure should be opened at the state treasury where the commune conducts transactions. The Chairman of the commune or the authorized person is the account holder. Additionally, depending on the commune's requirements, a deposit account for the budget unit can be opened to deposit collective funds. For communes with many difficulties and unable to manage income and expenditure directly through the Treasury, they temporarily continue their current practices, but the provinces must have specific plans to submit to the Provincial People's Council for decision and report to the Ministry of Finance.

3. In addition to the managed income and expenditure at the transaction Treasury, the commune has a cash fund at the commune level to record revenues that the commune enjoys 100% (one hundred percent) from its own collection but has not yet the conditions to directly deposit into the Treasury and to use for small value or unexpected expenditures. The limit of the cash fund at the commune level is determined by the State Treasury at the transaction location for each type of commune appropriately.

4. Collection organization.

The organization of collection at the commune level is divided as follows:

- The tax authority (the Tax Collection Teams at the commune if available) or organizations and individuals entrusted to collect state taxes and pay them into the State Treasury; the State Treasury implements the distribution of revenues according to the ratio prescribed by the State Budget Law and the People's Committee at the provincial level.

- The Commune Finance Board organizes the collection of revenues that the commune enjoys 100% (one hundred percent), such as fees and charges, land revenue from public welfare, profits from public assets, contributions, fines, and other revenues. These revenues are handled as follows:

+ For communes near the State Treasury at the transaction location, they deposit into the State Treasury and the State Treasury records 100% for the commune budget.

+ For remote communes with difficult travel conditions, they retain the funds for expenditure. Periodically (every 10 days, 20 days, or monthly), they process the recording of income and expenditure into the commune budget at the State Treasury. In cases of large unexpected income exceeding the cash fund limit (due to seasonal factors or bidding), it must be deposited into the commune's budget account at the State Treasury.

- All revenues must be collected using receipts or payment vouchers uniformly issued by the Ministry of Finance. It is strictly prohibited to collect without receipts or outside the budget.

- For supplementary budget revenues of the commune, the County Finance Office bases on the supplementary budget estimate of each commune and the county budget balance to announce monthly supplements to the commune for proactive budget management. To ensure the commune has funding, especially for administrative expenses, these supplements must be provided monthly. The county shall not divert these funds for other uses, hindering the commune's budget management.

- Revenue from public welfare land (5%) and profits from public assets managed by the commune is an important source of annual commune budget revenue. Therefore, the commune may implement under various forms such as bidding, seasonal revenue contracting, or organizing production to collect profits itself. The commune shall not bid or contract once for multiple years.

5. Implementation of Expenditure.

5.1. The Chairman of the People's Committee of the commune, town, or ward or the authorized person is responsible for deciding on the implementation of income and expenditure from the commune budget.

- Expenditure implementation must adhere to the following principles:

+ Funds recorded in the budget estimate, except for two cases:

* Unofficially approved budget estimates. In this case, temporary living expenses and regular operational costs of the state machinery are allowed.

* Expenditure from reserve funds according to the decision of the People's Committee of the commune.

+ According to established standards, norms, and limits;

+ Approved by the Chairman of the People's Committee or the authorized person;

+ Additionally, expenditure must be based on the commune budget cash fund balance and prioritize monthly living expense payments. There should be no prolonged arrears in living expenses or allowances for commune staff. If the commune's cash fund at the State Treasury does not have a surplus due to uncollected revenues but there is an urgent need to spend, the commune may request the county finance office to increase the supplementary funding allocation or borrow from the provincial financial reserve fund, but repayment must be timely according to the specified period.

+ Entrusted funds from higher levels must be managed, accounted for, and settled separately with the higher-level finance authority.

5.2. Commune and ward budget disbursement is carried out by payment orders and in two forms:

- Cash for paying living expenses, allowances, social welfare, and purchasing small-value items. The State Treasury bases on the quarterly expenditure budget, the payment order of the Commune Finance Board accompanied by necessary certification documents signed by the Chairman of the People's Committee of the commune or the authorized person, to issue cash to the commune for direct payment to the recipients.

In cases where communes disburse from retained revenue: This form should be gradually restricted, only implemented for remote communes from the State Treasury in small procurement purchases, hospitality, conferences,慰问、杂务和其他突发事项。乡人民委员会主席或被授权人根据会计负责人建议决定支出。定期在国家金库办理记收入和支出到乡预算的手续（附上收入和支出明细表）。

- By transfer to settle procurement payments for assets, materials, freight charges, and services provided by supplying units. This payment is made through the State Treasury system to directly pay the supplying unit. The Chairman of the Commune People's Committee or the authorized person approves the payment proposal. The Finance Board issues the expenditure order and the State Treasury conducts verification and settlement.

5.4. Expenditure on basic construction investment: The management of investment capital follows the分级管理 of the province and must implement bidding mechanisms as prescribed by the state. Commune budget investment capital is appraised and disbursed by the Finance Board through the county-level State Treasury.

For construction projects funded by contributions from the public, in principle, the decision is made by the Commune People's Committee and the Commune People's Council; except for large-scale projects related to overall planning, which must report to the competent authority before making a decision.

Mobilizing labor days and materials under voluntary forms at communes, towns, and wards must maintain ledgers for each project.

6. Inspection of commune budgets.

Inspecting the implementation of budgets at communes, towns, and wards is a regular activity conducted in various forms.

6.1. The Chairman of the People's Committee or the authorized person must carefully review receipts, the nature of income, and expenditure vouchers before approving income or expenditure to prevent improper income and expenditure beyond standards. The accountant and cashier must verify the validity of the vouchers before depositing or withdrawing funds; if incorrect, they must report and seek opinions from the Chairman of the Commune People's Committee or the authorized person.

6.2. The People's Council, in addition to deciding on annual budget estimates, has the right to supervise and inspect the implementation of income and expenditure at communes and wards during the budget execution process to make necessary requirements for budget implementation.

6.3. Higher financial agencies need to regularly inspect and guide the management of commune budgets.

III. ACCOUNTING AND SETTLEMENT OF COMMUNE BUDGETS.

A/ Organization of accounting work for commune budgets.

1. All income and expenditure activities of commune budgets must be recorded according to the current state budget accounting regulations. For assets and materials, communes must maintain separate ledgers for management. The Finance Board is responsible for directing accounting operations, including settlements, for dependent organizations and units, and implementing accounting and preparing budget settlements at their level.

2. The State Treasury where transactions take place performs accounting work and prepares accounting reports on income and expenditure for each commune.

3. The head of the commune budget accounting must organize accounting work and be responsible for their duties. When changing heads of accounting, approval from the Director of the Department of Finance and Price Control is required, and proper handover procedures must be followed.

B/ Accounting reports and budget settlements for communes.

1. Closing accounting books.

At the end of the accounting period (month, quarter, year), the accounting head must close the books as the basis for preparing accounting reports and annual settlements.

1.1. At the end of the month, all monthly generated data must be summed up and added to previous months' cumulative figures.

1.2. The sum of the last month of the quarter represents the quarterly income and expenditure results.

1.3. Closing the December books marks the end-of-year closure; therefore, the following actions must be taken:

- All revenues and payments must be completed by December 31; any remaining amounts will be paid into the next year's budget.

- Unspent expenditures must be carried forward to the next year's reserve fund with the approval of the competent authority if necessary.

- Any advances or loans (if any) must be settled.

2. The time frame for adjusting budget settlements for communes is 20 days after the end of the fiscal year (from January 1 to January 20). During this period, mainly handle the following matters:

- Record any income and expenditure transactions that occurred before December 31 but whose vouchers are still in transit.

- Record any expenditures from the previous year's tasks approved by the competent authority to continue in the previous fiscal year.

- Review and address any errors in accounting records.

3. Accounting reports on income and expenditure for communes.

3.1. The commune Finance Board must submit accounting reports on income and expenditure to the Commune People's Committee and the County Finance Office within five days after the end of the month.

3.2. The State Treasury office handling the commune's transactions must submit reports on the commune's cash inflows and outflows to the higher State Treasury, the County Finance Office, and inform the commune Finance Board.

4. Budget settlements for communes.

4.1. Settlements must be complete, accurate, truthful, consistent with the contents of the budget estimate, and submitted within the prescribed timeframe. The commune Finance Board is responsible for preparing the income and expenditure budget settlements.

4.2. Authority to approve budget settlements for communes:

- Quarterly settlements are reviewed by the Chairman of the Commune People's Committee.

- Annual settlements must be submitted to the Commune People's Committee for approval by the Commune People's Council.

- After being approved by the Commune People's Council, the budget settlements for communes are prepared in four copies:

+ One copy sent to the Commune People's Council.

+ One copy sent to the Commune People's Committee.

+ One copy sent to the County Finance Office.

+ One copy kept at the commune Finance Board.

4.3. Timeframe for submitting quarterly and annual settlement reports to higher financial authorities:

- Quarterly settlement reports must be submitted by the commune Finance Board to the County Finance Office within 15 days after the end of the quarter.

- Annual settlement reports must be submitted by the commune Finance Board to the County Finance Office no later than January 31 of the following year.

4.4. Any surplus in the commune budget is transferred entirely to the next year's revenue.

5. Reports on delegated funding settlements (if applicable).

Where a commune has delegated funds from a higher level, it must prepare a final account report on the delegated funds according to the form prescribed by the Ministry of Finance and submit it to the directly superior financial authority that granted the delegation.

PART IV
IMPLEMENTATION

1. This Circular takes effect from January 1, 1997. Previous regulations and systems concerning the management of commune budget revenues and expenditures that conflict with this Circular shall cease to be effective. Specifically, the management of commune budget revenues and expenditures through the State Treasury is a new and challenging task, so localities must actively prepare conditions for implementation starting from 1998 to achieve results.

2. The Ministries, ministerial-level agencies, government agencies, central agencies of the Party, mass organizations, People's Committees at all levels, higher-level management agencies, and budget-using units are responsible for implementing this Circular. Any difficulties encountered during implementation should be promptly reported to the Ministry of Finance for appropriate resolution.