Circular No. 15/2019/TT-BTC guiding the financial management mechanism and the assessment of the effectiveness of operations of the Guarantee Fund for Small and Medium Enterprises

CIRCULAR
Guidelines for financial management mechanisms and evaluation of the effectiveness of operations of
The Guarantee Fund for Small and Medium Enterprises Credit

                                   

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

Pursuant to the Law on Credit Institutions on June 16, 2010 and the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions on November 20, 2017;

Pursuant to the Enterprise Law dated November 26, 2014;

Pursuant to the Law on Supporting Small and Medium Enterprises on June 12, 2017;

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

Pursuant to Decree No. 34/2018/ND-CP dated March 8, 2018 of the Government on the establishment, organization, and operation of the Guarantee Fund for Small and Medium Enterprises;

At the proposal of the Director of the Department of Financial Affairs of Banks and Financial Organizations;

The Minister of Finance issues this Circular guiding the financial management mechanism and the evaluation of the effectiveness of operations of the Guarantee Fund for Small and Medium Enterprises.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

2. Applicability:

This Circular stipulates on:

a) The financial management regime for the Guarantee Fund for Small and Medium Enterprises at the local level (hereinafter referred to as the Guarantee Fund or the Fund) established, organized, and operated in accordance with Decree No. 34/2018/ND-CP dated March 8, 2018 of the Government (hereinafter referred to as Decree No. 34/2018/ND-CP of the Government);

b) Evaluation of the effectiveness of the operations of the Guarantee Fund.

2. Applicability:

a) The Guarantee Fund;

b) Credit organizations as stipulated in Clause 5, Article 3 of Decree No. 34/2018/ND-CP of the Government;

c) Small and medium enterprises receiving credit guarantees in accordance with Decree No. 34/2018/ND-CP of the Government;

d) Other organizations and individuals related thereto.

Article 2. Principles of Financial Management

The Guarantee Fund manages its finances independently, bears responsibility for its own activities in accordance with the law; implements the preservation and development of capital, compensation for costs and risks in operations; operates according to principles of transparency, economy, and efficiency as prescribed in Decree No. 34/2018/ND-CP of the Government, this Circular, and relevant laws.

Chapter II

MANAGEMENT OF CAPITAL AND ASSETS OF THE GUARANTEE FUND

Article 3. Sources of Operating Capital of the Guarantee Fund

The sources of operating capital of the Guarantee Fund shall be implemented in accordance with Article 40 of Decree No. 34/2018/ND-CP of the Government.

Article 4. Management and Use of Capital of the Guarantee Fund

The Guarantee Fund manages and uses capital in accordance with Article 41 of Decree No. 34/2018/ND-CP.

Article 5. Safeguarding Capital and Assets

The Guarantee Fund has the responsibility to fully implement all regulations concerning the safeguarding of capital and assets of the Fund, including:

1. Managing and using capital and assets in accordance with their intended purposes and in compliance with Decree No. 34/2018/ND-CP of the Government, this Circular, and relevant laws.

2. Purchasing insurance for assets, insurance for credit guarantee risks, and other insurances as prescribed by law.

3. Establishing risk reserves:

a) Fully establishing credit guarantee risk reserves within the operational expenses of the Fund in accordance with Article 36 of Decree No. 34/2018/ND-CP of the Government, this Circular, and relevant laws;

b) Establishing and utilizing other risk reserves in accordance with regulations applicable to enterprises.

4. Handling asset losses in accordance with Clause 2 of this Article, Point b, Clause 3, Article 43 of Decree No. 34/2018/ND-CP of the Government, and Article 8 of this Circular.

5. Fully complying with all regulations regarding the objects, conditions, scope of guarantees, limits on issuing guarantees, and other contents related to the credit guarantee operations of the Fund as prescribed in Decree No. 34/2018/ND-CP of the Government.

6. Not using operating capital for monetary trading, securities investment, equity investment, purchasing shares of enterprises, real estate business, and other unauthorized business and investment activities (except idle funds of the Fund used in accordance with Clause 3, Article 41 of Decree No. 34/2018/ND-CP of the Government).

7. Not raising capital through deposit-taking from organizations and individuals; issuing promissory notes, bonds, and bills.

8. Implementing other measures to ensure the safety of capital in accordance with the law.

Article 6. Classification of debts, establishment of risk reserve fund for guarantees, and risk management

1. The classification of debts, establishment of risk reserve fund for guarantees, and risk management of the Credit Guarantee Fund shall be carried out in accordance with the provisions of Article 36 and Article 37 of Decree No. 34/2018/ND-CP of the Government and relevant laws.

2. The time for establishing the risk reserve: The Credit Guarantee Fund shall establish the risk reserve fund for guarantees on December 31 of each year.

Article 7. Management of assets

1. The Credit Guarantee Fund shall establish regulations on the management of investment construction, procurement, and fixed asset management, to be submitted for approval by the Chairman of the Fund in accordance with Decree No. 34/2018/ND-CP of the Government, the Charter on Organization and Operation of the Credit Guarantee Fund, and relevant laws.

2. Investment, construction, and procurement of fixed assets by the Credit Guarantee Fund:

a) The authority to decide on investment projects, construction, and procurement of fixed assets of the Credit Guarantee Fund shall be implemented in accordance with the provisions of Decree No. 34/2018/ND-CP of the Government, the Charter on Organization and Operation, the Regulations on Management of Investment Construction, Procurement, and Fixed Asset Management of the Credit Guarantee Fund, and relevant laws;

b)The procedures for investment, construction, procurement, and repair of fixed assets of the Credit Guarantee Fund shall be carried out in accordance with the provisions applicable to a Limited Liability Company wholly owned by the State and the Regulations on Management of Investment Construction, Procurement, and Fixed Asset Management of the Credit Guarantee Fund;

c) The procurement of transportation means for the operation of the Credit Guarantee Fund shall be applied in accordance with the provisions applicable to a Limited Liability Company wholly owned by the State and the Regulations on Management of Investment Construction, Procurement, and Fixed Asset Management of the Credit Guarantee Fund;

d) The Credit Guarantee Fund shall implement investment and construction, procurement of fixed assets serving the activities of the Fund within the scope of the capital stipulated in point b, Clause 1, Article 41 of Decree No. 34/2018/ND-CP of the Government.

3. Principles of depreciation, management, use, and depreciation period of fixed assets: The Credit Guarantee Fund shall implement the provisions on depreciation of fixed assets applicable to a Limited Liability Company wholly owned by the State and the Regulations on Management of Investment Construction, Procurement, and Fixed Asset Management of the Credit Guarantee Fund.

4. Leasing of fixed assets:

a) The Credit Guarantee Fund has the right to lease fixed assets according to the principle of efficiency, preservation, and development of capital in accordance with the provisions of the law applicable to a Limited Liability Company wholly owned by the State;

b) The competent authority approving the investment, construction, and procurement projects of fixed assets of the Credit Guarantee Fund is the authority deciding on leasing, mortgaging, or pledging of fixed assets.

5. Liquidation and sale of fixed assets:

a) The Credit Guarantee Fund has the right to proactively sell or liquidate fixed assets that are damaged, technologically obsolete, or not needed or usable;

b) The competent authority approving the investment, construction, and procurement projects of fixed assets of the Credit Guarantee Fund is the authority deciding on the liquidation and sale of fixed assets;

c) The methods, procedures, and formalities for the liquidation and sale of fixed assets of the Credit Guarantee Fund shall be carried out in accordance with the provisions of the law applicable to a Limited Liability Company wholly owned by the State and the Regulations on Management of Investment Construction, Procurement, and Fixed Asset Management of the Credit Guarantee Fund.

6. Inventory and revaluation of fixed assets:

a) The Credit Guarantee Fund must organize periodic or ad hoc inventory to determine the quantity of fixed assets in the following cases: When closing the books to prepare annual financial reports; after natural disasters, enemy attacks, or other reasons causing changes in the assets of the Credit Guarantee Fund; as prescribed by competent state agencies;

b) For surplus or missing assets, the cause and responsibility of related organizations and individuals must be clearly identified, and material compensation levels must be determined in accordance with Decree No. 34/2018/ND-CP of the Government and Article 8 of this Circular;

c) The Credit Guarantee Fund shall conduct revaluation of fixed assets based on the decision of the competent state agency or other cases as prescribed by law;

d) The revaluation of fixed assets and accounting treatment for increases or decreases in value due to revaluation of assets of the Credit Guarantee Fund shall be carried out in accordance with the provisions applicable to a Limited Liability Company wholly owned by the State.

Article 8. Handling Losses of the Credit Guarantee Fund's Assets

When suffering asset losses, the Credit Guarantee Fund must establish a Board to determine the extent of the loss, causes, responsibilities, and handle as follows:

1. Clearly identify objective and force majeure causes (natural disasters, epidemics, fires, unexpected accidents, political risks) and subjective causes.

2. If the cause is subjective, individuals or groups causing the loss must compensate for damages according to the law. The Credit Guarantee Fund shall specify the compensation procedures and decide on appropriate compensation levels in accordance with the law and be responsible for its decisions.

3. If the assets have been insured, they shall be handled according to the laws on insurance.

4. Utilize reserve funds established within expenses to offset losses in accordance with Decree No. 34/2018/NĐ-CP of the Government, this Circular, and related laws.

5. The value of the loss, after being offset by compensation from individuals, groups, and insurance organizations, and utilizing reserve funds established within expenses, if insufficient, shall be recorded as expenses in the period of the Credit Guarantee Fund.

Chapter III

MANAGEMENT OF INCOME, EXPENSES AND DISTRIBUTION OF FINANCIAL RESULTS

Article 9. Income of the Credit Guarantee Fund

The income of the Credit Guarantee Fund consists of receivables generated during the period, determined in accordance with Vietnamese accounting standards and relevant laws, with valid invoices or supporting documents, and must be fully recorded as revenue, including:

1. Income from credit guarantee business activities:

a) Fees for reviewing loan guarantee application files;

b) Guarantee fees;

c) Mandatory interest received from customers.

2. Revenue from financial activities:

a) Interest from deposits;

b) Interest income from government bond investments, treasury bills, treasury bonds, national construction bonds, and government-guaranteed bonds;

c) Management fees for managing sources of assistance, support, sponsorship, and contributions (if any);

d) Fees for accepting mandates from local authorities, local financial funds, domestic and foreign organizations and individuals (mandators) to fulfill their requests in accordance with the law.

3. Other income:

a) Income from the liquidation and sale of assets;

b) Insurance compensation money (the remaining amount after offsetting losses);

c) Penalties for breach of economic contracts;

d) Income from service activities and rental income from the Credit Guarantee Fund's assets;

đ) Exchange rate differences (if any);

e) Other lawful revenues as prescribed by law.

4. The Credit Guarantee Fund is responsible for collecting all revenues accurately, completely, and promptly as prescribed.

Article 10. Expenses of the Credit Guarantee Fund

The expenses of the Credit Guarantee Fund consist of necessary costs incurred during the period for the operation of the Credit Guarantee Fund, complying with the principle of matching income and expenses, with valid invoices and supporting documents as required by law, including:

1. Expenses for credit guarantee business activities:

a) Payment of interest on loans and other funding mobilization costs as prescribed by law;

b) Establishment of risk reserve funds for guarantees as stipulated in Clause 6 of this Circular;

c) Insurance premiums for business risk and other types of insurance as prescribed in Decree No. 34/2018/NĐ-CP of the Government and related laws;

d) Exchange rate differences (if any);

đ) Taxes and fees payable for activities as prescribed by current laws;

e) Other expenses for business activities: Expenses for recovering written-off debts, bad debts, payment of service fees for debt recovery services provided by authorized organizations as prescribed by law; expenses for purchasing and selling debts; expenses for seizing, preserving, and exploiting collateral assets during the process of handling bad debts; expenses for handling capital and asset losses and substitute payments after offsetting with prescribed sources; legal fees, consulting fees, court fees, and expenses for paying off debts that were previously determined not to have a debtor and recorded as income but later identified; expenses for income items that were actually not collected and not reduced from income; agency fees, outsourcing service fees serving business activities, and other expenses as prescribed by law.

2. Financial activity expenses: Expenses related to depositing funds at commercial banks and other financial activity expenses as prescribed in this Circular.

3. Administrative expenses:

Expenses for personnel and management of the Credit Guarantee Fund as prescribed by the State for wholly state-owned limited liability companies:

a) Personnel expenses: Salary, wage supplements, labor remuneration, social security contributions, health insurance, unemployment insurance, work injury and occupational disease insurance, trade union fees as prescribed by law; meal allowances, female worker allowances, labor protection expenses, transaction attire expenses as prescribed by law; annual leave and medical expenses; severance pay, job loss support for workers and expenses related to staff reduction when the Credit Guarantee Fund implements restructuring according to approved plans; other expenses for employees as prescribed by law;

b) For management activities and public services: Travel expenses for employees and managers of the Guarantee Fund when traveling domestically and abroad; expenses for purchasing office supplies, office equipment, paper, ink, documentation materials, books, newspapers, and other materials; postal, telephone, and telecommunication fees; rental expenses for assets and equipment serving the operations of the Fund; conference, seminar, training, and staff development expenses; publicity, printing, reception, ceremonial, transaction, external relations, and group entry and exit expenses; hospitality, promotional, and advertising expenses as prescribed by law; expenses for inspection, supervision, and accounting activities related to the Fund's operations; support expenses for the activities of the Party organization and youth union of the Fund; electricity, water, office sanitation, environmental protection, and health care expenses; other expenses in accordance with the provisions of law.

c) Asset-related expenses: Depreciation expenses for fixed assets according to the general regulations applicable to enterprises; expenses for purchasing tools and equipment; rental expenses for assets; maintenance, repair, operation, and preservation expenses for assets; sale and liquidation expenses for assets excluding the residual value of liquidated or transferred fixed assets (if any).

4. The expense standards stipulated in Clauses 1, 2, and 3 of this Article shall be implemented in accordance with the laws applicable to state-owned sole member limited liability companies holding 100% of the charter capital. In cases where the law has not provided specific regulations or does not control the expense standards, the Credit Guarantee Fund shall base its financial capacity to establish expense standards and make decisions on expenditures that ensure appropriateness, efficiency, and legal responsibility.

5. The determination of revenue and expenses for corporate income tax purposes of the Credit Guarantee Fund shall be carried out in accordance with the tax laws.

Article 11. Expenses Not Included in the Operating Costs of the Credit Guarantee Fund

1. Losses compensated by the State or insurance agencies, or by the party causing the loss.

2. Penalties for administrative violations, including traffic law violations, accounting and statistical law violations, and other administrative penalties as prescribed by law.

3. Expenses without invoices or invalid receipts.

4. Expenses from other funding sources.

5. Expenses supporting localities, social organizations, and other agencies.

6. Expenses exceeding the limits set forth in this Circular and other relevant legal regulations.

Article 12. Financial Results and Distribution of Financial Results

1. The financial results and distribution of financial results of the Credit Guarantee Fund shall be implemented in accordance with Article 43 of Decree No. 34/2018/NĐ-CP of the Government.

2. Establishment of incentive and welfare funds:

a) Credit Guarantee Funds classified as Class A may allocate three months' salary for the establishment of incentive and welfare funds.

b) Credit Guarantee Funds classified as Class B may allocate one and a half months' salary for the establishment of incentive and welfare funds.

c) Credit Guarantee Funds classified as Class C may allocate one month's salary for the establishment of incentive and welfare funds.

3. Establishment of management bonus funds (including the Chairman, Supervisor, Director, Deputy Directors, and Chief Accountant of the Credit Guarantee Fund):

a) Credit Guarantee Funds classified as Class A may allocate one and a half months' salary for the management bonus fund.

b) Credit Guarantee Funds classified as Class B may allocate one month's salary for the management bonus fund.

c) Credit Guarantee Funds classified as Class C may not establish a management bonus fund.

4. In cases where the remaining surplus after setting aside investment and financial reserve funds is insufficient to allocate to incentive and welfare funds and management bonus funds at the prescribed levels, the Credit Guarantee Fund may reduce the allocation to the investment and development fund to supplement the sources for establishing sufficient incentive and welfare and management bonus funds, but must ensure the minimum allocation to the investment and development fund as stipulated in Article 43 of Decree No. 34/2018/NĐ-CP of the Government.

Article 13. Management and use of funds

The management and use of funds of the Credit Guarantee Fund shall be carried out in accordance with the provisions of Article 43 of Decree No. 34/2018/NĐ-CP of the Government.

Chapter IV

ASSESSMENT OF EFFICIENCY AND RATING
CREDIT GUARANTEE FUND

Article 14. Indicators for assessing efficiency of operations

1. Annual indicators for assessing the efficiency of operations of the Credit Guarantee Fund include:

a) Indicator 1: Growth in credit guarantee issuance volume;

b) Indicator 2: Ratio of debt repaid on behalf of enterprises;

c) Indicator 3: Ratio of compulsory debt recovery for annual credit guarantee activities;

d) Indicator 4: Total income minus total expenses;

e) Indicator 5: Compliance with laws on investment, management, and use of capital, assets, and obligations to the state budget, financial reporting system of the Credit Guarantee Fund.

2. Methods for determining annual indicators for assessing the efficiency of operations of the Credit Guarantee Fund:

a) The growth indicator in credit guarantee issuance volume is determined based on the actual credit guarantee issuance volume reported in the annual business activity report approved by the Chairman of the Fund and the annual plan assigned by the Chairman of the Credit Guarantee Fund;

b) The ratio indicator of debt repaid on behalf of enterprises is determined based on the actual ratio of debt repaid on behalf of enterprises reported in the annual business activity report approved by the Chairman of the Fund and the annual plan assigned by the Chairman of the Credit Guarantee Fund;

c) The ratio indicator of compulsory debt recovery is determined by the ratio of actual principal recovered over the total principal due for overdue debt repayment on behalf of the guaranteed party, and this indicator is based on the actual performance reported in the annual business activity report approved by the Chairman of the Fund and the annual plan assigned by the Chairman of the Credit Guarantee Fund;

d) The total income minus total expenses indicator is determined based on the actual figures reported in the annual financial audit report and the annual plan assigned by the Chairman of the Credit Guarantee Fund;

e) Compliance with regulations and policies: Based on compliance with and implementation of state regulations in the field of finance, including accounting systems, auditing systems, financial reporting systems for the Credit Guarantee Fund, expenditure systems, procurement and asset management systems to determine this indicator. Compliance with regulations and policies means adhering to the stipulated rules without any acts of non-compliance, omission, incomplete implementation, untimely implementation, or failure to implement.

3. The indicators specified in points a, b, c, and d of Clause 2 of this Article shall not be adjusted throughout the implementation period when evaluating the efficiency of operations of the Fund. In cases where adjustments to the indicators for assessing the efficiency of operations of the Fund at Clause 1 and Clause 2 of this Article are due to objective and irresistible reasons (natural disasters, epidemics, fires, unexpected accidents, political risks), the Chairman of the Fund shall consider and decide after obtaining approval from the Chairman of the People's Committee of the province.

4. The Chairman of the Credit Guarantee Fund shall establish indicators for growth in credit guarantee issuance volume, ratio of debt repaid on behalf of enterprises, ratio of compulsory debt recovery, total income minus total expenses in the annual financial plan and other indicators (if any), report to the Chairman of the People's Committee of the province for review and approval before issuing the decision. The time for reporting these indicators to the Chairman of the People's Committee of the province shall be before March 15 of the planning year to serve as a basis for assessing the efficiency of operations of the Credit Guarantee Fund.

5. The indicators for assessing the efficiency of operations of the Credit Guarantee Fund specified in points a, b, and c of Clause 2 of this Article shall apply to all guarantee transactions and compulsory debt recoveries from the date of effectiveness of Decree No. 34/2018/NĐ-CP of the Government.

Article 15. Method for Evaluating Effectiveness and Classification Results of Credit Guarantee Funds

1. Indicator 1: Growth Rate of Credit Guarantee Volume

a) The credit guarantee fund is classified as Class A when the growth rate of credit guarantee volume achieved is at least 90% of the assigned plan for the year;

b) The credit guarantee fund is classified as Class B when the growth rate of credit guarantee volume achieved is from 75% to less than 90% of the assigned plan;

c) The credit guarantee fund is classified as Class C when the growth rate of credit guarantee volume achieved is below 75% of the assigned plan.

2. Indicator 2: Ratio of Debt Repaid on Behalf of Small and Medium Enterprises

a) The credit guarantee fund is classified as Class A when the ratio of debt repaid on behalf of small and medium enterprises to the total outstanding guarantee balance achieved is equal to or lower than the assigned plan;

b) The credit guarantee fund is classified as Class B when the ratio of debt repaid on behalf of small and medium enterprises to the total outstanding guarantee balance achieved is from over 100% to 110% of the assigned plan;

c) The credit guarantee fund is classified as Class C when the ratio of debt repaid on behalf of small and medium enterprises to the total outstanding guarantee balance achieved exceeds 110% of the assigned plan.

3. Indicator 3: Ratio of Compulsory Debt Recovery

a) The credit guarantee fund is classified as Class A when the ratio of compulsory debt recovery achieved is at least 90% of the assigned plan for the year;

b) The credit guarantee fund is classified as Class B when the ratio of compulsory debt recovery achieved is from 75% to less than 90% of the assigned plan;

c) The credit guarantee fund is classified as Class C when the ratio of compulsory debt recovery achieved is below 75% of the assigned plan.

4. Indicator 4: Total Income Minus Total Expenses

a) The credit guarantee fund is classified as Class A when the total income minus total expenses achieved is at least 90% of the assigned plan for the year;

b) The credit guarantee fund is classified as Class B when the total income minus total expenses achieved is from 75% to less than 90% of the assigned plan;

c) The credit guarantee fund is classified as Class C when the total income minus total expenses achieved is below 75% of the assigned plan.

5. Indicator 5: Compliance with Regulations and Policies

a) The credit guarantee fund is classified as Class A if it has not been notified or concluded by competent authorities regarding violations of mechanisms and policies as stipulated in Clause 2, Point d of this Circular;

b) The credit guarantee fund is classified as Class B if it violates any of the following: It is reminded in writing by the Ministry of Finance or other competent authority about the submission of operational reports, financial statements, and other reports not in accordance with regulations or deadlines, from the second time onwards for each type of report; It is administratively penalized with fines, where the amount of each fine does not exceed VND 50,000,000 (excluding the amount required to be paid to rectify the consequences) arising during the fiscal year of evaluation and classification of the Fund;

c) The credit guarantee fund is classified as Class C if it violates any of the following: It fails to submit operational reports, financial statements, and other reports as prescribed or submits them not in accordance with regulations or deadlines, and is reminded in writing by the Ministry of Finance or other competent authority three times or more for each type of report; It is administratively penalized with fines, where the amount of each fine is VND 50,000,000 or more (excluding the amount required to be paid to rectify the consequences) arising during the fiscal year of evaluation and classification of the Fund; The management and operation personnel of the credit guarantee fund commit acts of violation of laws during the performance of their duties to the extent that they are criminally prosecuted.

6. The evaluation of effectiveness and classification of credit guarantee funds is based on comparing the assigned plans, targets, and tasks with the results achieved and the results of monitoring the activities of credit guarantee funds.

Article 16. Classification of Credit Guarantee Funds

1. A Credit Guarantee Fund shall be classified as type A if it does not have classification criterion c, and at least two (2) of the following criteria are reclassified as A: criterion 1, criterion 2, criterion 3, criterion 4, and criterion 5.

2. A Credit Guarantee Fund shall be classified as type C if two (2) or more of the five (5) criteria are classified as C.

3. A Credit Guarantee Fund shall be classified as type B in cases where it is not classified as type A or type C.

4. Annually, based on the evaluation criteria for operational effectiveness set forth in this Circular, the Credit Guarantee Fund shall report its operational results and classification to the Chairman of the Provincial People's Committee for the purpose of classifying the Credit Guarantee Fund.

Article 17. Classification of Credit Guarantee Fund Managers

1. A Credit Guarantee Fund Manager shall be deemed to have satisfactorily fulfilled their duties when:

a) They effectively implement the assessment criteria for managerial performance as prescribed by the Government regarding management of officials in state-owned joint stock companies with 100% state capital and according to the guidelines of the Ministry of Home Affairs;

b) They achieve or exceed the targets set by the Chairman of the Credit Guarantee Fund for credit guarantee business growth rate and compulsory debt recovery ratio. They complete or exceed the approved financial plan before March 1st of the assessment year;

c) The Credit Guarantee Fund is classified as type A under the provisions of this Circular.

2. A Credit Guarantee Fund Manager shall be deemed to have failed to fulfill their duties when:

a) They fail to effectively implement the assessment criteria for managerial performance as prescribed by the Ministry of Home Affairs;

b) They achieve less than eighty-five percent (85%) of the targets set by the Chairman of the Credit Guarantee Fund for credit guarantee business growth rate and compulsory debt recovery ratio. They achieve less than ninety percent (90%) of the approved financial plan before March 1st of the assessment year;

c) The Credit Guarantee Fund is classified as type C under the provisions of this Circular.

3. A Credit Guarantee Fund Manager shall be deemed to have fulfilled their duties in other cases not covered by Clause 1 and Clause 2 of this Article.

Chapter V

ACCOUNTING SYSTEM, FINANCIAL PLANNING, INFORMATION DISCLOSURE,
REPORTING AND AUDITING

Article 18. Accounting and Statistics of Credit Guarantee Funds

1. Credit Guarantee Funds shall comply with the legal regulations on accounting systems and statistics, maintain complete original vouchers, update accounting ledgers, and accurately, timely, truthfully, and objectively reflect all activities of the Fund.

2. The fiscal year of Credit Guarantee Funds runs from January 1st to December 31st each year.

Article 19. Annual Financial Plan of Credit Guarantee Funds

1. Credit Guarantee Funds shall be responsible for developing the annual financial plan to be decided upon by the Chairman of the Fund after obtaining approval from the provincial people's committee, including:

a) Capital sources and usage plans; total income and expenses; fixed asset acquisition plans as detailed in Appendices 1, 2, 3, 4, and 5 attached to this Circular;

b) Debt repayment ratio for enterprises, compulsory debt recovery ratio.

2. Timeframe for planning:

a) Before November 1st of each year, the Credit Guarantee Fund shall prepare the annual financial plan for submission to the Chairman of the Fund for review and comments;

b) Before December 31st of each year, the Chairman of the Fund shall report to the provincial people's committee on the annual financial plan of the Credit Guarantee Fund;

c) Before March 30th of the planning year, the provincial people's committee shall review and approve the annual financial plan of the Credit Guarantee Fund;

d) Within three working days from the date of approval of the annual financial plan by the provincial people's committee, the Chairman of the Fund shall issue a Decision approving the annual financial plan of the Credit Guarantee Fund for implementation by the Fund and send it to the Chairman of the provincial people's committee and relevant agencies as required for management and supervision.

The information, reporting, auditing, and public disclosure of financial statements of the Credit Guarantee Fund shall be implemented in accordance with the provisions set forth in Article 44 and Article 45 of Decree No. 34/2018/ND-CP of the Government.

Chapter VI

RESPONSIBILITIES OF THE AUTHORITIES

Article 21. Responsibilities of the Ministry of Finance

1. Implement the responsibilities prescribed in Article 58 of Decree No. 34/2018/ND-CP of the Government.

2. Amend and supplement the financial management mechanism and assess the effectiveness of operations for the Credit Guarantee Fund (when necessary).

Article 22. Responsibilities of the Credit Guarantee Fund

1. The Credit Guarantee Fund is responsible for complying with the provisions stipulated in Decree No. 34/2018/ND-CP of the Government, detailed guidance provided in this Circular, and other relevant legal normative documents.

2. Adhere to the financial management regime as prescribed in this Circular and other relevant legal normative documents.

3. Based on the provisions of this Circular and related regulations, the Fund has the responsibility to issue business rules and financial management regulations to ensure the safe and effective management and utilization of state capital and assets under its administration.

Chapter VII
IMPLEMENTATION

Article 23. Transitional Provisions

For Credit Guarantee Funds that have been established, are currently operating, and are implementing financial mechanisms according to Circular No. 147/2014/TT-BTC dated October 8, 2014, issued by the Ministry of Finance, guiding certain provisions of Decision No. 58/2013/QĐ-TTg dated October 15, 2013, issued by the Prime Minister, regarding the establishment, organization, and operation of Credit Guarantee Funds for small and medium-sized enterprises, the handling of balances of these funds as of December 31, 2018 (supplementary capital reserve fund, financial risk reserve fund, business development investment fund, incentive fund, and welfare fund) established according to Circular No. 147/2014/TT-BTC shall be as follows:

1. Balances of the supplementary capital reserve fund and the business development investment fund shall be transferred to the development investment fund prescribed in Decree No. 34/2018/ND-CP of the Government and this Circular.

2. Balances of the funds established after profit distribution, including the financial risk reserve fund, incentive fund, and welfare fund, shall be transferred to funds with the same purpose of use as prescribed in Article 43 of Decree No. 34/2018/ND-CP of the Government and this Circular.

Article 24. Effective Date

1. This Circular takes effect from June 1, 2019, and applies from the fiscal year 2019. This Circular replaces Circular No. 147/2014/TT-BTC dated October 8, 2014, guiding certain provisions of Decision No. 58/2013/QĐ-TTg dated October 15, 2013, issued by the Prime Minister, regarding the establishment, organization, and operation of Credit Guarantee Funds for small and medium-sized enterprises.

2. During implementation, if there are difficulties or obstacles, relevant agencies and units are advised to report to the Ministry of Finance for guidance in accordance with the law./.