JOINT CIRCULAR No. 16 TT/LB On closing the state budget revenue and expenditure accounts for the year 1976

JOINT CIRCULAR

Regarding the closure of the state budget revenue and expenditure for the year 1976.

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The state budget for 1976 is the first budget in the five-year plan from 1976 to 1980 and is the first unified budget throughout the Socialist Republic of Vietnam under temporary conditions where two different currencies are still circulating between the two regions. The organizational structure implementing the budget has developed but is not yet fully established; alongside units with years of experience managing the budget, there are many units and localities undertaking this for the first time, thus encountering certain difficulties.

Given these characteristics, with the requirement to organize and implement the state budget revenue and expenditure tasks for 1976 beyond the target, the work of closing the state budget revenue and expenditure at the end of the year must be carefully guided and organized nationwide; to contribute to successfully concluding the state budget for 1976, the Ministry of Finance and the State Bank stipulate the procedures and measures for closing the state budget revenue and expenditure at the end of the year as follows:

ISIGNIFICANCE, EFFECTS AND SCOPE OF IMPLEMENTATION.

Closing the state budget revenue and expenditure at the end of the year is a financial system and technique, not merely an administrative accounting procedure, but also has positive effects on completing the state budget revenue and expenditure tasks, promoting production, and improving management. All Ministries, sectors, state agencies, enterprises, and other state organizations, through the closing process, verify their own sources of funds and expenses, review the extent of fulfilling the state budget revenue and expenditure obligations assigned by the state, and must take active measures to complete and exceed the assigned obligations in the remaining days and months of the year.

Performing the closing of the state budget revenue and expenditure well creates conditions for agencies and units to accurately settle the state budget revenue and expenditure figures, truthfully reflect the effectiveness of their capital, and improve management quality in 1977.

The work of closing the state budget revenue and expenditure for 1976, although carried out at all domestic branches and foreign trade banks, requires all sectors, levels, agencies, enterprises, and budgetary units to fulfill all tasks before the bank closes its books: ensuring that all revenues of the 1976 state budget are deposited into the bank by December 31, 1976; organizing the implementation of necessary expenditures before the end of 1976 without "emptying out" or "rushing funds"; and closing the state budget revenue and expenditure books at their own agencies, enterprises, and units matching the figures and timing with the State Bank branch.

II. PREPARATORY WORK BEFORE THE STATE BANK CLOSES ITS BOOKS AT THE END OF THE YEAR.

 A. Collection and Deposit of State Budget Revenues.

All sectors, levels, agencies, and units must ensure their obligation to deposit revenues into the state budget. Therefore, before the State Bank at all levels closes the 1976 state budget revenue and expenditure books, units, agencies, and enterprises must actively prepare to fully implement the following specific tasks:

1. All revenues belonging to the 1976 state budget, including excess profits of state-owned enterprises and joint public-private enterprises, must be deposited in full by December 31, 1976. If deposited after this date, it will be considered as deposited for 1977 and will not be counted towards the accumulation of deposits for the state in 1976 when reviewing the completion of the 1976 plan.

From the beginning of the fourth quarter and no later than the start of December 1976, all Ministries and sectors must proactively calculate and assign specific revenue collection tasks to each enterprise and subordinate unit, take measures to monitor and inspect to complete and exceed the revenue collection targets for the state in 1976. When assigning tasks to subordinate units located in a particular area, they should inform the finance agency and the State Bank branch in that area to coordinate and urge implementation.

Each revenue collection unit must review the amount already deposited into the 1976 state budget and promptly deposit any remaining amounts, including excess profits if any, ensuring it is deposited into the budget by December 31, 1976.

It is essential to avoid situations where overpayment occurs due to inadequate calculation. In cases where excess payment is made intentionally to be recognized as completing the plan and to secure enterprise fund benefits, followed by a request for adjustment, such actions will be considered a violation of financial discipline.

2. Any agency, enterprise, or unit, sector, or locality holding separate or illegal funds must declare them to the finance agency and deposit them entirely into the 1976 state budget regardless of the source of the funds.

3. Tax offices, tax collection commissions, commercial stores in cities, towns, and market towns - given their characteristic of collecting taxes or sales proceeds after the State Bank's closing hours but still within the 1976 state budget, the units must discuss in advance with the State Bank branch regarding the collection and deposit, organizing the receipt of these amounts immediately the next day and recording them as part of the 1976 deposit.

4. The State Bank branch must arrange personnel, mobilize all available forces, and prepare adequately to ensure rapid and complete collection, timely accounting into the budget. Particularly in places with significant revenue sources like Hanoi, Ho Chi Minh City, and other cities and towns, the State Bank must organize thorough collection, absolutely preventing any 1976 revenue from being carried over to the next year. If a unit deposits a large amount of cash that cannot be received during regular business hours on December 31, 1976, the State Bank branch, based on the deposit slip, records the deposit for 1976, while the cash is sealed with signatures from both parties (the depositor and the recipient), and counted subsequently. During the counting process, the State Bank must notify the depositing unit to witness the results..

5. For temporary receipts, unanalyzed receipts, receipts outside the State Budget, the branches of the State Bank must coordinate with the financial authorities at the same level and the units that collect such receipts to adjust them entirely into the official categories belonging to the State Budget for the year 1976 before the closing time of the year.

By the closing deadline, if there remains any amount not adjusted, the branch of the State Bank in the province or city must coordinate with the Department of Finance to issue adjustment vouchers for the category "other receipts" belonging to the State Budget for the year 1976.

B. Payment of State Budget Expenditures.

The payment of end-of-year expenditures in 1976 must aim to prevent the situation of "rushing to exhaust the budget", "running capital" at the end of the year, while for necessary expenditures, timely arrangements should be made so that the expenditure can be implemented and settled in the State Budget for the year 1976.

To achieve this requirement, the following preparations must be made early:

1. The financial authority determines the date to suspend the approval of limits, review of budgets, and the State Bank suspends the distribution of limits and transfer of funds for the year 1976:

a/ Suspension period: The suspension period for the above matters is determined based on the time it takes for documents to circulate from the place of limit approval to the place of fund receipt, ensuring that the limit or funds transferred back to the unit can still be used in a timely manner. Therefore, the units receiving funds for expenditure located further away must plan early to avoid delays in work. Absolutely, the suspension of limit approval, budget review, or the suspension of limit distribution and fund transfer shall not hinder the production and business activities of economic units and the expenditures of administrative and service units. ensure that the transferred funds reach the units in time for immediate use within the limit or budget allocated. Therefore, units receiving funds for expenditure should make early preparations to avoid delays in their work, especially those located further away. Absolutely, the suspension of approval of limits, review of budgets, or cessation of distribution of limits and transfer of funds must not hinder the production and business activities of economic units and the expenditures of administrative and service units.

b/For the Central State Budget:

- The Ministry of Finance suspends the approval of limits and the Central State Bank suspends the distribution of limits and transfer of funds for the State Budget as follows:

+ From 14:00 on December 10, 1976, suspend the issuance of limits for 1976 for the Ministry of Finance's agencies in the South and central units in the South;

+ From 14:00 on December 16, 1976, for units located in Binh Tri Thien, Nghe Tinh, Ha Tuyen, Son La, Lai Chau;

+ From 14:00 on December 20, 1976, for units located in other provinces in the North (excluding Hanoi);

+ From 14:00 on December 27, 1976, for units located in Hanoi.

- The Ministry of Finance and the Central State Bank's agencies in the South suspend the approval, distribution, and transfer of limits and funds for the State Budget as follows:

+ From 14:00 on December 16, 1976, for units located in Quang Nam-Da Nang, Nghia Binh, Phu Khanh, Gia Lai, Kon Tum, Dak Lak;

+ From 14:00 on December 20, 1976, for units located in other southern provinces (excluding Ho Chi Minh City);

+ From 14:00 on December 16, 1976, for units located in Ho Chi Minh City.

c/For Local State Budgets: The Departments of Finance and the Branches of the State Bank in cities and provinces shall determine the time to suspend the approval, distribution of limits, and transfer of funds for local budget units to align with the aforementioned deadlines and suit the specific circumstances of the units within their jurisdiction.

d/Direct spending units, regardless of whether they belong to the Central State Budget or Local State Budget, must cease issuing "guaranteed payment checks" from 14:00 on December 24, 1976to ensure that issued checks have sufficient time to return to the State Bank before December 31, 1976.If there is a genuine need to issue after this time, the unit must negotiate with the State Bank where the limit is deposited to resolve the matter.Settlement of loans, borrowings, advances, and provisional allocations:

2. a/ All loans provided by higher-level State Budgets to lower-level State Budgets must be settled by December 10, 1976. If there are difficulties preventing timely settlement, the borrowing agency must report specifically to the lending agency to resolve the matter promptly before the cessation of money transfers and fund allocations as stated in Article 1 above.

b/ Agencies and units that have been temporarily allocated funds must settle all such allocations by December 10, 1976. If there are valid reasons preventing immediate settlement, they must discuss with the financial authority to request a provisional allocation for the next year, using that to repay the provisional allocation in the current year's final accounts, while ensuring consistent record-keeping to match the unit's accounting, State Budget accounting, and Treasury accounting.

c/ Within budgetary units, on one hand, carefully consider and limit advance payments in December 1976, while on the other hand, actively settle or recover previous advance payments,

paying special attention to resolving advances made by Southern management agencies for Northern staff working in the South or vice versa, ensuring that by December 31, 1976, there are no outstanding advance payments, both in the South and the North. In exceptional cases with valid reasons confirmed by the financial authority, the advance may be carried over to the next year by withdrawing funds for the next year, treating it as a new advance under the fiscal year 1977, and using that to repay the advance in 1976. Settlement of deposits at the State Bank: Currently, at domestic and foreign trade branches of the State Bank, there are many deposit accounts of agencies, enterprises, construction sites, etc. Within each account, the sources of deposits vary widely, including funds from the State Budget, unsubmitted State Budget receipts, undistributed State Budget funds, or partially spent State Budget funds. At the end of 1976, when closing the State Budget's income and expenditure records, particular emphasis must be placed on settling these deposit accounts.

3. Except for deposit accounts related to production and business capital of state-owned enterprises and joint-stock enterprises,

all other deposit accounts of all agencies, enterprises, and construction sites opened at domestic and foreign trade branches of the State Bank must be settled thoroughly according to the principle of strictly preventing the misuse and unauthorized use of State Budget funds

as stipulated in the attached appendix. Submission of surplus funds and cancellation of end-of-year limits in accordance with the plan specified in the attached annex.

4. Return excess funds and cancel the final limit..

All remaining payments and cash balances in the funds at units must be fully remitted and returned to the State Budget before the closing time of the State Bank at the end of the year.

If units subsequently recover excess funds from the year 1976, they shall continue to deposit them with the State Bank until March 31, 1977; the State Bank will record these amounts in the account "revenue outside the State Budget" on its books and report this in the accounting for the year 1977. On April 1, 1977, the Finance Departments and the State Bank will reconcile the actual revenue in this account and process the transfer to reduce allocations or recover advances for the fiscal year 1976. Any recoveries made from April 1, 1977 onwards shall not be considered as excess funds of the 1976 settlement year but must be recorded in the account "recovery of previous year's expenditures" under the 1977 State Budget.

The remaining budgetary funds limit of 1976 at the State Bank up to the closing time shall be automatically cancelled: No unit shall withdraw them for expenditure anymore nor need to go through the procedure to return them to higher authorities.

5. Prepare funds for initial spending in 1977.

All Ministries, sectors, managing Departments, in December 1976, have the responsibility to coordinate with financial agencies and the State Bank at the same level to arrange funds for 1977 to ensure timely notification of the allocation limits or expenditure orders for the first quarter of 1977, ensuring that activities such as production, business operations, and work of their own units and subordinate budgetary units can proceed smoothly and continuously without encountering difficulties or obstacles due to the closure of the previous year's budgetary receipts and payments.

III. TIME LIMIT FOR CLOSING THE BOOKS.

The closing of the State Budget receipts and payments for the year 1976 at all branches of the State Bank within the domestic and foreign trade sectors shall be uniformly carried out at the end of working hours on the last day of the year, specifically at 16:00 on December 31, 1976.

 IV. WORK TO BE PERFORMED AFTER THE STATE BANK CLOSES THE BOOKS.

1. After closing the State Budget receipts and payments, all levels of the State Bank must ensure the following telegraph deadlines:

a/ From Branches of the State Bank at the county, district, and urban area level to Branches of the State Bank at the provincial and city level: within the morning of January 1, 1977.

b/ From Branches of the State Bank at the northern provincial and city level to the Central State Bank, and from Branches at the southern provincial and city level to the Central Bank agency in Ho Chi Minh City: within the morning of January 2, 1977.

c/ From the Central Bank agency in Ho Chi Minh City to the State Bank of Vietnam in Hanoi: within the morning of January 3, 1977.

The contents of the telegrams include:

- The central budget receipts and expenditures on December 31, 1976 (and also the receipts and expenditures of previous days not yet reported if any), separately analyzing the receipts and expenditures of 1976 and those for 1977; the balance of funds up to December 31, 1976 of the budget, separately analyzing the receipts and expenditures of 1976 and those for 1977, the balance of local budgets for 1976 and the balance of local budgets for 1977.

2. For the remaining balances of deposit accounts of agencies and budgetary units transferred by the State Bank branch to the budget, detailed lists of each amount for each agency and unit must be prepared and sent to:

- Departments of Finance (for the portion transferred to the local budget);

b/ - The Central State Bank or the Central Bank agency in the South (for the portion transferred to the central budget).

These detailed lists must be attached to the accounting reports on the date when the transfers were recorded.

The Central Bank agency in the South must consolidate the detailed amounts transferred in the South into four copies, one copy retained, one copy sent to the Southern Ministry of Finance before January 31, 1977, two copies sent to the Central State Bank for retention by that agency, and one copy sent to the Ministry of Finance before February 15, 1977 together with detailed lists of amounts deducted in the North.

3. The remaining balances of deposit accounts of construction units transferring to the Construction Bank branch of the province or city, as well as the remaining balances of deposit accounts of military and police units transferring to the account of the Financial Department of the Ministry of Defense or the Logistics Department of the People's Armed Police Command shall be summarized, monitored, and processed by the respective management agencies.

4. On the part of budgetary agencies and units, they must reconcile figures with the State Bank branch where the unit conducts transactionsregarding the amounts deposited into the budget, the allocation limits approved by the Finance Department or distributed by higher-level units (if applicable), the funds actually withdrawn, refunded to restore allocation limits, and the remaining allocation limits at the State Bank at the end of the year to be canceled.

Units allocated funds via expenditure orders and units managed under the revenue offsetting expenditure method must also reconcile the amounts allocated or received and used.

 Reconciliation of figures is a strict requirement that must be adhered to to determine accurate figures as a basis for checking compliance with the State Budget from grassroots units to consolidating agencies. Therefore, monthly reconciliations by units must be conducted, and at the end of the year, they must be reconciled again to ensure the accuracy and consistency of budgetary receipts and payments: ensuring agreement both in total receipts and payments and in detail according to each type, item, and category in the State Budget.

To meet these requirements, first, reconciliations must be made between the books and accounting reports of each unit and subordinate units (if any) and then reconciled with the State Bank based on verified figures. If there are discrepancies, they must be traced back thoroughly, errors identified and corrected according to regulations and reality, while informing relevant agencies to make consistent adjustments.

When preparing the final settlement report for 1976, each unit must attach a cumulative reconciliation table for twelve months in 1976signed and stamped by the State Bank branch to prove the accuracy and completeness of the 1976 final settlement.

5. The Departments and Offices of Finance, as budgetary management bodies at the first level, in addition to actively urging local units to implement the system of data reconciliation as mentioned above, must also directly reconcile the consolidated figures on local budgets with the central budget.

Specifically, they must verify:

- Data on borrowing and repayment to the central budget;

- Revenue from the central budget subsidies for localities including:

+ Concentrated basic construction grants,

+ Budget balancing grants,

+ Emergency grants and other grants (listed separately for each specific item).

For southern provinces and cities, if there are cases where staff are sent to purchase or receive aid goods in the North and are subsidized by the Ministry of Finance with Northern currency to pay for goods immediately in Hanoi or another northern province, then these cases must be verified, reconciled separately, and reported with a detailed analysis of the Northern currency subsidy converted to Southern currency to be deducted from the approved subsidy according to the approved budget estimate.

- Total local budget revenue (after deducting refunds and analyzed by type, item, category, and subcategory);

- Total actual disbursements (after deducting reduced disbursements and analyzed by type, item, category, and subcategory);

- Local budget surplus for 1976, analyzed clearly:

+ The portion held as cash reserves deposited with the State Bank provincial branch;

+ The portion without cash reserves due to disbursements made to units but not yet settled and returned to the budget (due to unsold inventory and according to accounting regulations, not allowed to settle accounts);

- The amount of local budget cash reserves deposited with the State Bank provincial branch at the end of 1976 (total), analyzed:

+ The portion belonging to the 1976 budget

+ The portion belonging to the 1977 budget, due to advance receipts and expenditures for the following year.

All reconciled figures must be confirmed by the State Bank provincial branch and attached to the final settlement statement of local budget revenues and expenditures for 1976, submitted to the Ministry of Finance within the prescribed deadline.

As for the Northern currency that the Ministry of Finance has subsidized to southern provinces for payment of goods in the North, the Ministry of Finance (Local Budget Department) will issue specific notifications to the Departments and Offices of Finance and State Bank provincial branches to send to the financial authorities in the South, the Central Bank, and the Central Bank in the South for reconciliation purposes and preparation of the final settlement statement of the local budget for 1976.

V. IMPLEMENTATION ORGANIZATION.

The closing system for state budget revenues and expenditures in 1976 at all levels of the State Bank (domestic and foreign trade), stipulated in this joint circular, must be strictly organized and implemented to positively complete the state budget for 1976 and bring the financial accounting activities of all levels and units into a regular pattern.

During implementation, if any points need supplementation or modification, relevant sectors, levels, and units should report to the Ministry of Finance and the Central Bank for review and study to resolve.

Financial agencies, the Central Bank, and all provinces and cities nationwide are responsible for organizing training and research within their sectors and disseminating to all units within the scope of implementation mentioned in the sections above. (Attached is an appendix on the plan for settling bank deposit accounts at the State Bank).

During implementation, if any points need supplementation or modification, relevant sectors, levels, and units should report to the Ministry of Finance and the Central Bank for review and study to resolve.

Financial agencies, the Central Bank, and all provinces and cities nationwide are responsible for organizing training and research within their sectors and disseminating to all units within the scope of implementation mentioned in the sections above.

(Attached is an appendix on the plan for settling bank deposit accounts at the State Bank).