Joint Circular No. 16-LB/TT guiding the financial management regime for the national rural domestic water supply program funded by the UNICEF organization.

CIRCULAR

OF THE MINISTRY OF FINANCE AND THE MINISTRY OF LABOUR, INVALIDS AND SOCIAL AFFAIRS
Guidelines for financial management

national rural water supply program funded by the UNICEF organization

Pursuant to Decision No. 113/HĐBT dated July 4, 1988 of the Council of Ministers, Decision No. 112-LĐTBXH/QĐ dated April 4, 1991 of the Ministry of Labour - Invalids and Social Affairs stipulating the functions, tasks, and organization of the national rural water supply program, and Circular No. 03/HCVX dated February 16, 1989 of the Ministry of Finance temporarily regulating financial management for administrative and public service agencies; to ensure effective receipt, utilization of equipment, materials, and foreign currency aid under this program in accordance with commitments and actual conditions in the country; the Ministry of Finance and the Ministry of Labour, Invalids and Social Affairs provide guidance on financial management for the national rural water supply program funded by the UNICEF organization as follows:

A. GENERAL PROVISIONS

1. The national rural water supply program (referred to as the water program at all levels) consists of two parts:

- The central program management unit (referred to as the central water program).

- The local program management units (referred to as the local water programs).

2. All equipment, materials, and foreign currency provided by the UNICEF organization for the program must be managed uniformly like other assets within the country according to the current asset management regime.

3. The water program at all levels shall strictly manage all sources of income, use them for their intended purposes, and achieve effectiveness for the program's activities based on the principle of thorough thrift and adherence to the specified purposes.

B. SPECIFIC PROVISIONS

I. THE CENTRAL WATER PROGRAM

Implement financial management of the program with specific tasks as follows:

1. Planning work:

a) Jointly with UNICEF in Hanoi, determine the long-term and annual plans for transferring equipment, materials, and foreign currency aid to have a basis for informing localities to build their plans.

b) Establish and announce plans for receiving and distributing equipment, materials, and foreign currency aid (according to domestic and international orders placed by UNICEF) to localities under the direction of the Ministry of Labour - Invalids and Social Affairs and with the participation of the Ministry of Finance (International Aid Management and Reception Board).

c) Establish and compile annual and quarterly financial revenue and expenditure plans of the program to report to the Ministry of Labour - Invalids and Social Affairs and the Ministry of Finance (International Aid Management and Reception Board) for consolidation into the State Budget plan.

d) The financial revenue and expenditure plan of the program includes:

Revenue plan:

+ Revenue from the value of equipment, materials, and foreign currency aid provided by UNICEF.

+ Revenue corresponding to 2% of the value of equipment, materials, and foreign currency aid received by local water programs during the year.

+ Revenue from activities related to service provision such as overall water supply planning on the territory, construction and implementation of water treatment solutions according to requirements of facilities, conducting scientific research contracts, etc.

+ Revenue from foreign currency funds provided by UNICEF for training, seminars, etc., for the program.

Expenditure plan:

+ Plan for distributing the value of equipment, materials, and foreign currency aid provided by UNICEF to localities.

+ Expenditure for the program management body including salaries and allowances for program managers, other management expenses ensuring the operation of the body.

+ Expenditure for program activities: including expenditure for training, seminars, organizing propaganda, mobilization, application of scientific progress; periodic summary and evaluation meetings.

+ Other expenditures serving the program (reception, working with experts, organizing seminars, etc.)

+ Purchase of equipment and raw materials serving service activities and taxes payable for these activities according to current tax laws.

e) Develop and announce economic and technical indicators, specific revenue rates for each type of service activity, and standards for other expenditures so that localities can base their average cost plans for each type of water source on these indicators and send them to the central water program.

h) With the participation of the joint ministries, review and announce reasonable average costs for each type of water source (based on the locality's submitted plans) to serve as a basis for localities to formulate financial revenue and expenditure plans for the program in their areas.

i) Coordinate with relevant agencies and sectors (Education, Health, etc.) and international organizations to design and establish integrated programs with the water program and inform localities to implement them in their areas.

2. Direct implementation:

a) When notified of the receipt of equipment, materials, and foreign currency aid (including domestically produced equipment and materials), the central water program shall go to the Ministry of Finance (International Aid Management and Reception Board) to complete confirmation, receipt, and distribution procedures for equipment and materials to localities; simultaneously send the distribution plan to the provincial finance department for monitoring and management in the area.

Article 1 ||| The Central Water Program shall notify and issue orders for the delivery of equipment and materials when localities comply with the regulations on the establishment and examination of the aforementioned plans.

b) To stipulate and inspect the collection of fees (transportation, storage...) from localities near ports that are entrusted to receive and deliver equipment and materials to other localities.

c) To regularly guide and coordinate with foreign experts to instruct and direct localities in applying new technical measures at the site, supervise construction projects to ensure progress and quality of water sources being built.

d) To organize training and instruction for localities on surveying, planning, drilling wells, installing self-flow systems, maintenance work... according to the annual and quarterly budget plans to continuously improve the capacity of localities in implementing the UNICEF assistance program.

e) To regularly organize propaganda and mobilize residents to develop good habits in using clean water, have awareness in utilizing water resources, and voluntarily contribute to building projects. To maintain close relations with relevant state agencies to seek and exploit additional aid sources to supplement project construction and reduce the contributions of the people.

h) To regularly study and select traditional water supply solutions using simple technology, easy to manage, low-cost; to utilize domestic raw materials to reduce project costs and expand water supply areas for rural residents.

i) To regularly summarize and evaluate experiences across all aspects of work to ensure the effectiveness of the program.

3. Reporting, settlement, and inspection:

a) To regularly coordinate with local financial authorities to strictly inspect and monitor the mobilization and management of revenue sources, the proper and effective use of equipment, materials, and approved funds in the local water programs' plans.

b) To provide financial accounting guidance to localities, compile the situation of distribution and use of equipment, materials, foreign aid currency, and report and settle the entire local water program quarterly and annually with the Ministry of Labor, Invalids, and Social Affairs and the Ministry of Finance.

c) Together with UNICEF representatives, implement the payment of materials to localities according to the approved plan and area.

d) To aggregate and settle annually and quarterly with the Ministry of Finance (International Aid Management Board) regarding the value of equipment, materials, and foreign aid currency received and distributed to localities.

II. LOCAL WATER PROGRAM

Implement financial management of the program with specific tasks as follows:

1. Planning work:

a) Annually, based on the notification of the Central Water Program, establish plans for receiving and using equipment, materials, and foreign aid currency.

b) Develop the average cost plan for each type of water source and submit it to the Central Water Program.

The average cost of a water source includes the following items:

- Fuel, materials, and labor tools: this item is assisted by UNICEF. Only additional costs for purchasing domestic materials (sand, gravel, pebbles) are included.

- Costs for receiving and transporting equipment and materials to the construction site.

- Labor costs: wages and other payments for directly involved workers.

- Local Water Program management costs.

- Central Water Program management costs (2% contribution).

Based on the reasonable average cost of a water source approved by the Central Water Program and the Joint Ministries, annually and quarterly prepare and aggregate the financial income and expenditure budget of the program in the locality and submit it to the Central Water Program and the Department of Finance for inclusion in the local budget plan.

d) The financial revenue and expenditure plan of the program includes:

+ Income Plan:

- Revenue from the value of equipment and foreign currency provided by UNICEF in the locality.

- Revenue from the reasonable cost of water sources (mobilizing community contributions) approved by the Central Water Program and the Joint Ministries.

- Revenue from service activities due to the construction and implementation of water treatment solutions and maintenance according to the requirements of each household.

- Revenue from the local budget allocated for initial infrastructure construction (if any).

+ Expenditure Plan:

- Expenditure for the management system including: salaries and allowances for program managers, other management expenses to ensure the operation of the program's system.

- Expenditure for program activities: expenditure for propaganda, mobilization...

- Contribution of 2% to the Central Water Program.

- Expenditure for constructing water sources including raw material and labor tool costs; costs for receiving and transporting equipment and materials; labor costs.

- Expenditure for purchasing equipment, raw materials, serving service activities, and taxes payable for these activities under current tax laws.

- Initial infrastructure construction costs (warehouses) if any.

2. Implementation:

a) Upon notification from the Central Water Program, proceed with the receipt of equipment, materials, and foreign aid (including domestically produced equipment and materials) and manage them according to Circular No. 45-TC/VT dated August 18, 1991, issued by the Ministry of Finance.

b) Based on the approved average cost of a water source, implement the mobilization of community contributions for items outside fuel, materials, and labor tools assisted by UNICEF to build water sources according to the plan.

c) Supervise and direct teams, companies, and enterprises to carry out drilling, well installation, and water construction projects according to the plan, ensuring progress and quality of projects in approved areas.

d) Upon completion of the project, establish a committee (with participation of the same-level financial agency representative) to inventory, assess, and transfer management to the local authority according to the current financial management system.

e) Carry out service activities according to community requests for water treatment and maintenance, regularly guide maintenance for facilities.

h) Maintain regular propaganda and mobilization efforts widely among residents in districts and communes to raise awareness about water usage and voluntary contributions to local construction projects.

In addition, coordinate with relevant departments on the local territory to implement integrated programs according to the central program's plan.

3. Reporting and settlement:

a) Establish a dedicated accounting organization to record and reflect all actual revenues and expenditures of the program fully, accurately, and promptly. Implement regular reporting systems to the central program (progress reports, financial status, and other related matters to the program).

Quarterly and annually, compile the entire situation regarding the receipt and use of equipment, materials, foreign currency aid, and submit final settlement reports to the central program and the Department of Finance.

b) Report and settle construction costs for initial facilities (if any) upon completion with the Department of Finance.

c) Assist and facilitate the financial authority and the central program's inspection of the implementation of their plans.

III. PROVISIONS ON REVENUES AND EXPENDITURES

1. Revenues within the cost of a water source:

The determination of the average cost of a water source must consider the water demand and economic and social conditions of each region reasonably to ensure appropriate contributions based on the actual capacity of the people.

Local water programs can only mobilize contributions from the people based on the reasonable average cost of a water source approved by the central program and the Joint Ministry.

Strictly prohibit the mobilization of contributions exceeding the prescribed quota in any form.

2. Revenues from service activities:

The central water program must specify and unify the revenue levels for each type of service activity in various regions for localities to implement. Prohibit unauthorized collection and misuse.

For service activities with revenue exceeding expenditure (after implementing current tax regulations), the levels of water programs may be used as follows:

- 60% shall be allocated to the unit's fund for rewards and welfare.

- 40% to supplement the operating budget of the State Budget (Central and Local) which does not compensate for losses from service activities of water programs at various levels.

3. Management costs and other expenses:

- Costs for purchasing materials used in water (sand, gravel, pebbles) must be calculated strictly, utilizing surplus materials from completed projects to the fullest extent, ensuring volume standards and technical specifications.

- Costs for receiving and transporting materials and equipment to project sites must comply with established standards to ensure timely and full delivery of materials and equipment for project construction.

- Labor costs: wages and payments for direct construction workers must adhere to the current wage scales set by the state, while also considering regional differences based on annual reviews by the Ministry of Labor, Invalids, and Social Affairs.

- Initial facility construction costs (warehouses): Local budgets will only cover these costs for regions implementing the program for the first time according to Decree No. 385/HĐBT dated November 7, 1990 of the Council of Ministers.

- Management costs of programs at various levels must comply with current regulations and standards.

Wages and payments for program management staff must be based on the approved staffing quotas of water programs at various levels.

Expenditures for conferences, inspections, and evaluations of program effectiveness must comply with Circulars No. 43-TC/HCVX dated November 8, 1991, No. 09-TC/HCVX, and No. 10-TC/HCVX dated February 26, 1991 of the Ministry of Finance; while also taking into account the specific nature of the aid program and commitments made with aid organizations to ensure compliance.

If revenues are insufficient to cover expenditures, water programs at various levels must adjust or supplement from retained service activity profits (40%). The State Budget will not provide compensation.

Conversely, if there is excess funding, water programs at various levels may use it to supplement the management budget for the following year. At the end of the fiscal year, any remaining management funds must be fully remitted to the State Budget.

C\. IMPLEMENTATION PROVISIONS

This Circular takes effect from the date of signature.

During implementation, any issues encountered should be reported back to the Joint Ministry for timely supplementation and amendment.

Previous documents conflicting with this Circular have no enforcement value.