Circular No. 15/2006/TT-BTC guides the financial management mechanism for projects under the List of Projects using ADB Loan Funds of the Agricultural Development Program.

CIRCULAR

Guidelines for financial management mechanisms for projects under the list of projects using ADB loan funds of the Agricultural Development Program

capital loan from the Asian Development Bank for the Agricultural Sector Development Program

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Pursuant to Decree No. 17/2001/NĐ-CP dated May 4, 2001 of the Government promulgating the regulations on management and use of official development assistance;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to the credit agreement for the Agricultural Development Program signed on April 22, 2003 between the Socialist Republic of Vietnam and the Asian Development Bank (ADB);

Implementing Circular No. 668/TTg-QHQT dated June 3, 2005 of the Prime Minister regarding the determination of the project list using ADB loan funds for the Agricultural Development Program;

After reaching consensus with the Ministry of Planning and Investment, the Ministry of Agriculture and Rural Development, and the Ministry of Finance, the Ministry of Finance hereby guides the financial management mechanism applicable to projects under the list of projects using ADB loan funds for the Agricultural Development Program according to the loan agreement marked number 1972-VIE (SF) that has been transferred to the State budget as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1.1. The loan from the Asian Development Bank (ADB) for the Agricultural Development Program under the loan agreement marked 1972-VIE (SF), valued at 60 million USD, is a source of government borrowing revenue. Funds drawn from this loan will be included in the state budget balance and allocated to support targeted programs to enhance agricultural science and technology activities, extension services, and market information according to the project list approved by the Prime Minister in Circular No. 688/TTg-QHQT dated June 3, 2005. The Ministry of Finance is responsible for unified management, monitoring of loan drawdowns, expenditures, and repayment to ADB when due.

1.2. After completing the disbursement conditions for each phase as stipulated in the loan agreement, the Ministry of Agriculture and Rural Development shall submit a request to draw down funds to ADB and transfer the drawn funds into the state budget account as specified by the Ministry of Finance.

1.3. The management and use of these funds shall follow current domestic budget expenditure policies, systems, and procedures.

The Ministry of Finance shall transfer funds to the State Treasury to allocate and pay for sub-projects implemented by the Ministry of Agriculture and Rural Development and supplement the targeted provincial budgets for extension activities according to the project list approved by the Prime Minister in Circular No. 688/TTg-QHQT dated June 3, 2005.

1.4. Project sponsors shall open accounts at the State Treasury where it is convenient for expenditure control to facilitate payment according to current regulations for basic construction funds or administrative and public service funds.

II. ESTABLISHMENT, COMBINATION, AND ALLOCATION OF THE BUDGET PLAN

2.1. Annually, based on the approved project list, the progress of sub-projects, and the withdrawal schedule from ADB, the Ministry of Agriculture and Rural Development shall prepare the capital plan for basic construction and public service funds for projects implemented from ADB loan funds transferred to the state budget and send it to the Ministry of Planning and Investment and the Ministry of Finance for combination and integration into the overall annual budget plan.

The Ministry of Agriculture and Rural Development shall issue a circular to the provinces, the Ministry of Planning and Investment, and the Ministry of Finance to notify the list of provinces participating in Sub-project 1 and Sub-project 2, part of Sub-project 3, under Category 1 projects so that the provinces can prepare plans to request targeted budget subsidies from the ADB loan funds transferred to the state budget during the annual budget preparation period (only for difficult provinces).

Provincial People's Committees participating in sub-projects according to the notification from the Ministry of Agriculture and Rural Development shall prepare the public service fund plan to support the provincial agricultural extension advisory councils, additional extension workers, and send it to the Ministry of Finance for combination and integration into the targeted provincial budget subsidy plan, while also sending it to the Ministry of Agriculture and Rural Development for reporting.

2.3. Based on the implementation plan of the project and the availability of funds, the Ministry of Finance shall allocate funds for public service expenditures, and the Ministry of Planning and Investment shall allocate funds for basic construction investments according to the provisions of the State Budget Law.

2.4. When establishing, combining, approving, and announcing the allocation of the budget plan, relevant agencies must clearly record the sources of funding for sub-projects and activities as ADB loan funds for the Agricultural Development Program under the loan agreement marked 1972-VIE (SF) that have been transferred to the state budget.

The establishment and combination, and balancing of the aforementioned expenditure plan shall be carried out strictly in accordance with the procedures and timeframes for annual budget planning as stipulated by the State Budget Law.

III. SPECIFIC PROVISIONS ON RESPONSIBILITIES FOR PLANNING AND EXPENDITURE CONTENT FOR EACH PROJECT CATEGORY

3.1. Category 1 Projects:Total capital is 164 billion VND, comprising four sub-projects.

Sub-project 1:Support for the operations of 40 provincial agricultural extension advisory councils (HĐTVKN), with a total budget of 10 billion VND (Phase 1 supports 20 provinces according to the list of provinces determined in Circular No. 688/TTg-QHQT. Phase 2, the Ministry of Agriculture and Rural Development will select provinces, notify the selected provinces, and simultaneously send the list to the Ministry of Finance and the Ministry of Planning and Investment).

Based on the annual activity plan, the provincial agricultural extension advisory councils shall prepare an expenditure plan requesting support from the ADB loan for the Agricultural Development Program under the loan agreement marked 1972-VIE (SF) and submit it to the provincial Department of Agriculture and Rural Development for review and approval, and then propose to the provincial People's Committee to include it in the provincial budget plan requesting targeted subsidies from the ADB loan for the Agricultural Development Program under the loan agreement marked 1972-VIE (SF) that has been transferred to the state budget.

Expenditure items for the operations of provincial agricultural extension advisory councils include:

- Regular coordination meetings, seminars, mid-term and final reviews.

- Travel expenses, fuel costs for inspections and evaluations by council members.

- Printing and distribution of agricultural extension materials.

- Office equipment purchases, office supplies, electricity, water, telephone charges, internet fees, newspaper subscriptions, and regular maintenance of office equipment and tools.

The allowance for兼任职务补贴适用于按照2005年8月10日由内务部发布的第78/2005/TT-BNV号通函规定的兼职制度，兼职津贴为现行工资的10％。上述津贴不作为社会保险和医疗保险的基础。

The quota-based expenditure system shall be implemented in accordance with current regulations on administrative and public service expenditures.

Sub-project 2: Increase the budget for localities, especially poor provinces, to hire an additional 6,000 agricultural extension officers to supplement the shortage in communes during the first two years (subsequent years will see the provinces arrange their own funding for agricultural extension officers) with a total cost of 43 billion VND.

Annually, in accordance with the budget planning schedule, the provincial agricultural extension center shall prepare the budget estimate for submission to the provincial Department of Agriculture and Rural Development for review and recommendation to the provincial government to include in the provincial budget plan for requesting targeted budget support from the ADB loan program funds under the Agreement No. 1972-VIE(SF) already allocated to the State Budget to hire additional agricultural extension officers to supplement the shortage in communes. This plan shall also be submitted to the Ministry of Agriculture and Rural Development and the Ministry of Finance. The expenses for supporting this include:

- Payment for the hired commune-level agricultural extension staff to supplement the shortage in commune-level agricultural extension officers. The specific number of additional agricultural extension officers to be hired shall be determined by the provincial People's Committee in accordance with current regulations applicable to each region.

The payment for the additional hired agricultural extension officers shall be decided by the Chairman of the Provincial People's Committee according to the current national regulations and shall not exceed the total amount of support provided to the province. Agricultural extension officers who have received remuneration from the ADB loan fund shall not receive remuneration from the local budget.

Sub-project 3:Strengthening the agricultural extension system, with a total cost of 74 billion VND, including (i) construction of the headquarters of the National Agricultural Extension Center at 14 billion VND, and (ii) strengthening the capacity of central and some difficult provinces' agricultural extension work at 60 billion VND.

- The construction funds for the headquarters of the National Agricultural Extension Center shall be allocated into the annual basic construction investment plan and managed according to the current regulations on basic construction investment management.

- The funds for strengthening the capacity of central agricultural extension work shall be included in the annual budget estimate for economic public service expenditures within the agricultural extension program of the Ministry of Agriculture and Rural Development.

- The funds for strengthening the capacity of agricultural extension work in some difficult provinces shall be implemented through targeted budget support from the central budget to the local budget.

The National Agricultural Extension Center shall prepare the basic construction investment plan, the plan for strengthening the capacity of agricultural extension work, and the budget estimate for submission to the Ministry of Agriculture and Rural Development for review and inclusion in the Ministry's budget estimate. These plans shall be sent to the Ministry of Planning and Investment and the Ministry of Finance for coordination in the state budget using the funds from the ADB loan program under Agreement No. 1972-VIE(SF) already allocated to the State Budget following the annual budget planning process.

The provincial agricultural extension centers shall prepare the plan for strengthening the capacity of agricultural extension work and the budget estimate for submission to the provincial Department of Agriculture and Rural Development for review and recommendation to the provincial government to include in the provincial budget plan for requesting targeted budget support from the ADB loan program funds under Agreement No. 1972-VIE(SF) already allocated to the State Budget following the annual budget planning process. This plan of the provinces shall also be sent to the Ministry of Agriculture and Rural Development and the Ministry of Finance for monitoring during the allocation of targeted budget support to the provinces.

Sub-project 4:Strengthening agricultural information and market activities in 20 provinces (100 districts), with a budget of 37 billion VND, annually allocated into the annual budget estimate for economic public service expenditures of the Ministry of Agriculture and Rural Development, managed under the mechanism for managing administrative and public service expenditures.

Annually, the Information Technology Center shall prepare the plan for strengthening agricultural information and market activities and the budget estimate for submission to the Ministry of Agriculture and Rural Development for review and inclusion in the Ministry's budget plan. These plans shall be sent to the Ministry of Finance for coordination in the state budget according to the annual budget planning process.

3.2. Type 2, 3, 4 Projects:

The total capital is 76 billion VND, including:

Type 2 has three sub-projects for constructing and upgrading the technical infrastructure of regional agricultural and forestry research institutes, with a budget of 9 billion VND;

Type 3 has three sub-projects for building and completing three key laboratories, with a budget of 10 billion VND;

Type 4 has thirteen sub-projects for enhancing the capacity of agricultural research work to develop advanced scientific and technological solutions by Institutes, Schools, and Centers, with a budget of 57 billion VND.

Annually, based on the project list approved by the competent authority, the progress of the projects, the research institutes and units participating in the Program under the Ministry of Agriculture and Rural Development shall prepare the basic construction investment plan according to the project list in Document No. 688/TTg-QHQT for submission to the Ministry of Agriculture and Rural Development for review and inclusion in the Ministry's budget estimate. These plans shall be sent to the Ministry of Planning and Investment and the Ministry of Finance for coordination in the basic construction investment plan according to the target program using the funds from the ADB loan program already allocated to the State Budget.

The preparation and distribution of the ADB loan program funds under Agreement No. 1972-VIE(SF) already allocated to the State Budget shall be carried out strictly in accordance with the domestic management mechanism for investment in basic construction.

IV. OPERATING EXPENSES OF THE CENTRAL PROGRAM MANAGEMENT BOARD

The Central Investment Program Management Board is the permanent agency assisting the Investment Program Steering Committee and directly organizing the implementation of the goals and contents approved by the Government and the signed Agreement, the operating budget of the Board is established and balanced within the annual state budget estimate of the Ministry of Agriculture and Rural Development.

V. EXPENSE CONTROL

The State Treasury System is responsible for controlling expenses and making payments according to the provisions of Circular No. 79/2003/TT-BTC dated August 13, 2003 of the Ministry of Finance guiding the management, allocation, and payment of state budget expenditures through the State Treasury, and Circular No. 44/2003/TT-BTC dated May 15, 2003 guiding the management and payment of investment capital and public service capital with investment characteristics from the state budget funds, and any subsequent amendments, supplements, or replacements (if any).

VI. REPORTING, INSPECTION, AND SETTLEMENT REGIME

6.1. Quarterly, annually, and upon completion of sub-projects, implementing agencies must report on the implementation of the project, disbursement, and use of funds in accordance with current regulations on the management of construction investment and administrative public service expenditures.

The Ministry of Agriculture and Rural Development is responsible for urging, inspecting, and directing sub-projects to submit reports in a timely manner; compiling the final settlement report of the entire Project Portfolio and reporting to the Prime Minister.

6.2. Capital Settlement

- For administrative and public service expenditures: At the end of each quarter and year, units using project funds prepare a capital expenditure settlement report at the same time as preparing their administrative and public service expenditure report, to be submitted to the Ministry of Agriculture and Rural Development (for units under the ministry) or to the Provincial Department of Agriculture and Rural Development (for units under the province). The review and approval of the project fund settlement will be carried out according to the current regulations of the State Budget Law.

Remaining funds may be transferred to the next year for use and settled within the timeframe specified for the sub-project, without extending the implementation period.

- For construction investment expenditures:

Annual settlement reports of projects shall be prepared in accordance with Circular No. 53/2005/TT-BTC dated June 23, 2005 of the Ministry of Finance guiding the preparation and review of settlement reports for construction investment capital from the state budget on an annual basis.

Capital investment settlement shall be conducted in accordance with Circular No. 45/2003/TT-BTC dated May 15, 2003 of the Ministry of Finance guiding capital investment settlement.

6.3. Inspection Regime:

The Ministries of Agriculture and Rural Development, Planning and Investment, Finance, and People's Committees of provinces shall organize inspections of compliance with financial management regulations, progress of sub-project implementation, management, payment, and settlement of capital, based on their respective functions and responsibilities.

VII. IMPLEMENTATION ORGANIZATION

This Circular takes effect fifteen days after its publication in the Official Gazette.

The Ministry of Agriculture and Rural Development and the People's Committees of provinces are responsible for directing and managing the use of funds for the intended purposes effectively, based on selecting sub-projects, determining appropriate scale and equipment as stipulated in Point 2 of Circular No. 688/TTg/QHQT dated June 3, 2005 of the Prime Minister. During the implementation process, if there are any difficulties, agencies are requested to promptly reflect them to the Ministry of Finance for research, guidance, supplementation, and amendment./.