JOINT CIRCULAR

Guidelines for financial management of public educational and training institutions with revenue generation

and public education and training institutions operate with revenue generation

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Implementing Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government on financial regulations applicable to units with revenue; the Ministry of Finance issued Circular No. 25/2002/TT-BTC dated March 21, 2002.

To align with the specific characteristics of the education and training sector, the Ministry of Finance, the Ministry of Education and Training, and the Ministry of Home Affairs provide additional guidance on financial management regulations for public educational and training institutions with revenue generation as follows:

I-OBJECTS:

The subjects of this Circular are public educational and training institutions within the national education system that operate with revenue, partially funded by the state budget for regular operational expenses or fully self-financed for regular operational expenses (collectively referred to as revenue-generating educational and training institutions - abbreviated as Revenue-Generating Educational and Training Institutions - RGETIs), including:

- Early childhood education facilities (kindergartens, nursery schools, kindergartens).

- Primary schools, secondary schools, high schools.

- Comprehensive technical centers - vocational training centers, continuing education centers, training centers.

- Vocational colleges, vocational schools.

- Universities, colleges, academies.

The revenue-generating units mentioned above shall be subject to Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government when they meet the following conditions:

- Having a decision on establishment by a competent authority in writing.

- Possessing legal personality, having a seal.

- Having an account at the Treasury or Bank.

- Having a financial and accounting organizational structure.

- Having legitimate sources of income.

Competent authorities have the responsibility to create favorable conditions for educational and training institutions to implement Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government.

Budgetary units directly under RGETIs such as training centers, research and application science and technology centers, research institutes, publishing houses, magazines are subjects implementing Decree No. 10/2002/NĐ-CP dated January 16, 2002, and applying this Circular and other Circulars guiding according to their respective fields of activity (scientific research, cultural information...).

For RGETIs with many subordinate independent accounting units such as National University, Thai Nguyen University, Hue University, Da Nang University..., the competent authority assigns a stable budget to the first-level or second-level budget unit to grant autonomy to subordinate budget units.

Public educational and training institutions without revenue do not fall under the scope of this Circular. Regular operational funding for public educational and training institutions without revenue is provided by the state budget and managed according to the current mechanism.

II- SOURCES OF REVENUE FOR PUBLIC EDUCATIONAL AND TRAINING INSTITUTIONS:

Public educational and training institutions have the following sources of revenue:

1- Current fees and charges as prescribed:

1.1- Tuition fees from students enrolled in regular and non-regular education and training programs (degree-granting systems) within the limits set by the state.

1.2- Fees from training services (certificate-granting systems). The level of fees is determined by the head of the unit in accordance with the ability of the service users.

1.3- Admission fees as stipulated by the Law on Fees and Charges and related guiding documents of the State.

2- Revenues associated with the activities of the institution:

2.1- Revenue from joint training projects with organizations both domestic and foreign.

2.2- Revenue from production and sale of practical products from workshops, experimental products... from service provision activities linked to the institution's operations, exploitation of infrastructure.

2.3- Revenue from scientific and technological contracts with organizations and individuals both domestic and foreign.

2.4- Revenue from external service activities participated in by staff, teachers, lecturers of the institution under a remittance mechanism.

2.5- Other lawful revenues retained for use in accordance with state regulations.

The level of revenue for the above items is agreed upon in contracts between the institution and the requesting party by the principle that educational and training institutions ensure cost recovery, match the ability of learners, and include some accumulation.

3- Revenue from contributions for building secondary schools as prescribed by the competent authority.

4- Revenue from subordinate units to support common activities: Subordinate budget units may retain a portion of their revenue for common support activities, the proportion retained being decided by the head of the unit.

5- Other revenues as prescribed by law such as interest from bank deposits from production and service provision revenues...

In addition to the aforementioned revenue sources, RGETIs are permitted to legally raise funds from organizations and individuals both domestic and foreign to serve production and service provision activities in accordance with current legal provisions.

III- CONTENTS OF REGULAR OPERATIONAL EXPENSES:

RGETIs can use state budget funding and institutional revenue to cover regular operational expenses as follows:

1- Salaries, wages, bonuses, allowances, collective welfare, social insurance, health insurance, trade union fees for staff, teachers, and contractual workers according to current regulations.

2- Expenses for students and trainees:

- Scholarships, social assistance, bonuses.

- Expenses for cultural and sports activities of students and trainees.

3- Administrative management expenses: electricity, water, fuel, environmental sanitation, office supplies, public services, travel expenses, conference fees, communication expenses, telephone and fax charges...

4- Teaching and learning expenses:

a- Purchase of books, newspapers, magazines, teaching materials, textbooks, reference books, equipment, experimental and practical materials, costs for teachers and students going on internships... according to the program of RGETIs (including national defense and security education).

b- Costs for hiring domestic and foreign experts and lecturers (compensation for preparation and lectures), payment for overtime teaching by teachers and lecturers of the institution.

c- Teacher training and development expenses.

d- For organizing admissions, final examinations, and excellence student competitions at various levels.

5- Research projects on science and technology at the grassroots level for staff, teachers, and students.

6- Costs to implement labor production contracts, scientific and technological contracts, service supply training contracts, joint training projects, including: salaries, wages, raw materials, depreciation of fixed assets, taxes as prescribed by law.

7- Regular expenses for purchasing and maintaining equipment: purchasing replacement tools, regular maintenance of fixed assets serving professional work, and maintenance of infrastructure facilities.

8- International cooperation costs: outgoing and incoming delegations.

9- Regular expenses related to fee and tax collection as currently regulated.

10- Training and retraining costs for civil servants and employees within the unit (excluding state-funded training quotas).

11- Other expenses: repayment of principal and interest on loans from domestic and foreign organizations and individuals (if any); using income from public services to assist poor but excellent students, maintain order and security...

Non-recurring expenses implemented in accordance with Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government and Circular No. 25/2002/TT-BTC dated March 21, 2002 of the Ministry of Finance.

IV- AUTONOMOUS PUBLIC EDUCATIONAL AND TRAINING INSTITUTIONS SHALL BE SELF-FINANCING, SELF-DECIDING, AND RESPONSIBLE AS FOLLOWS:

1- Regarding the use of budget funds and public service revenue:

1.1- For institutions that fully self-finance their regular operating costs:

The competent authority shall allocate a stable budget for subordinate units over three years as follows:

a) Allocate the budget for fees and taxes collected, including:

- Total amount of fees and taxes collected.

- Amount of fees and taxes retained by the institution for use according to regulations set by the competent government agency for each type of fee and tax.

- Amount of fees and taxes to be remitted to the state budget.

For fees and taxes that are retained and remitted to the state budget at a percentage rate (%), the competent authority shall adjust the annual budget allocation to match the institution's activities.

The supervising agency does not allocate production and service provision revenues to educational and training institutions; the institution develops a revenue plan to manage throughout the year. For institutions with only production and service provision revenues and no fee and tax revenues, the competent authority allocates a production and service provision revenue budget as the basis for managing revenue and expenditure.

b) Allocate the expenditure budget:

- Allocate the total regular operating expenditure from retained fees and taxes according to the regulations of the competent government agency.

- Non-regular expenditures from the state budget: funding for national-level scientific research projects, ministry-level projects, national target programs; procurement funding according to state regulations; funding for streamlining staffing; counterpart funding for foreign projects; construction investment capital; funding for major purchases and repairs of fixed assets and other non-regular expenditures shall be allocated by the central ministry (for centrally-managed revenue-generating public institutions) and local supervising agencies (for locally-managed revenue-generating public institutions) according to current regulations.

c) In cases where the institution exceeds the allocated fees and taxes, the entire surplus can be used to supplement the salary fund and operational funding of the institution according to regulations.

If the institution falls short of the allocated fee and tax revenue, it must correspondingly reduce its expenditures.

For public institutions that are allocated production and service provision revenues by the competent authority, when there is a surplus, the institution may use the entire surplus to increase income, strengthen material foundations, and when revenue decreases, the institution must correspondingly reduce expenditures.

1.2- For institutions that partially self-finance their regular operating costs:

1.2.1- Allocate the budget for fees and taxes collected, including:

- Total amount of fees and taxes collected.

- Amount of fees and taxes retained by the institution for use according to the regulations of the competent government agency.

- Amount of fees and taxes to be remitted to the state budget.

For fees and taxes that are retained and remitted to the state budget at a percentage rate (%), the competent authority shall adjust the annual revenue budget to match the institution's activities.

The supervising agency does not allocate production and service provision revenues to educational and training institutions; the institution develops a revenue plan to manage throughout the year. For institutions with only production and service provision revenues and no fee and tax revenues, the competent authority allocates a production and service provision revenue budget as the basis for managing revenue and expenditure.

1.2.2- Allocate the expenditure budget:

a) Regular operating expenditures:

- Allocate the total regular operating expenditure from retained fees and taxes according to the regulations of the competent government agency.

- Allocate the total regular operating expenditure from the state budget for the first year of the stable period, which increases annually according to the rate determined by the competent authority.

b) Non-regular expenditures from the state budget: funding for national-level scientific research projects, ministry-level projects, national target programs; procurement funding according to state regulations; funding for streamlining staffing; counterpart funding for foreign projects; construction investment capital; funding for major purchases and repairs of fixed assets and other non-regular expenditures shall be allocated by the central ministry (for centrally-managed revenue-generating public institutions) and local supervising agencies (for locally-managed revenue-generating public institutions) according to current regulations.

1.2.3- In cases where the institution saves on regular operating expenses or increases retained fees and taxes compared to the allocated budget, the institution may use the entire savings and additional revenue to supplement the salary fund and operational funding of the institution. If the revenue falls short of the allocated budget, the institution must correspondingly reduce its expenditures.

For units that are entrusted by competent authorities to collect revenues from production and service provision, when revenue exceeds the planned amount, the unit may use the entire excess revenue to increase income and strengthen material infrastructure, and when revenue decreases, the unit must correspondingly reduce expenditures.

After a three-year period of stable funding, units with revenue shall report their summary results for review and decision by competent authorities on the allocation of stable funding for the subsequent period.

2- The number of staff positions serving as the basis for constructing the budget for salary funds is the number of staff positions assigned by competent authorities up to December 31 of the preceding year.

During the course of operation, the head of the CSGD-ĐT CT may decide on the plan for labor utilization as follows:

2.1- Reorganize cadres, civil servants, and employees who have been assigned (including those who have signed labor contracts within the staffing quota) to enhance the efficiency and quality of the unit's operations. Those individuals subject to reduction in staffing quotas shall enjoy policies and benefits according to current regulations;

2.2- For CSGD-ĐT CTs that self-fund all regular operational expenses, based on job requirements and financial capacity of the unit, the head may sign labor contracts in accordance with labor laws; those individuals signed under indefinite-term contracts must meet the required standards, structure of job titles, and expertise as stipulated by sectoral management agencies, and be classified according to the administrative-subsidiary salary scale prescribed in Decree No. 25/CP dated May 23, 1993 of the Government and related guiding documents, and enjoy rights and obligations as prescribed by law;

2.3- For CSGD-ĐT CTs that self-fund part of regular operational expenses, based on job requirements and financial capacity of the unit, the head may sign labor contracts in accordance with labor laws but must comply with staffing quotas issued by competent authorities; those individuals signed under indefinite-term contracts must meet the required standards, structure of job titles, and expertise as stipulated by sectoral management agencies, and be classified according to the administrative-subsidiary salary scale prescribed in Decree No. 25/CP dated May 23, 1993 of the Government and related guiding documents, and enjoy rights and obligations as prescribed by law;

2.4- The head of the unit may terminate labor contracts with individuals hired by the unit through labor contracts. Procedures and formalities for terminating labor contracts follow the provisions of labor laws.

2.5- Implement democratic and transparent practices as prescribed by law.

3- Salary Fund and Income: The salary fund and income of CSGD-ĐT CTs are sourced from two origins:

3.1- State budget funds allocated for salaries, wages, and allowances linked to salaries for cadres, civil servants, and employees within the staffing quota and contractual workers (for CSGD-ĐT CTs that self-fund part of regular operational expenses) are implemented according to the provisions of Decree No. 25/NĐ-CP dated May 23, 1993 of the Government and current guiding documents on salaries and allowances.

3.2- Based on financial performance (revenue from public services and savings in regular operational costs) and professional implementation status, the salary fund and income of CSGD-ĐT CTs are determined according to Point 1, Section IV of Circular No. 25/2002/TT-BTC dated March 21, 2002 of the Ministry of Finance guiding the implementation of Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government on financial systems applicable to public service units with revenue. The unit establishes rules for salary and wage payments and discusses them openly and unanimously at the staff meeting.

Based on the unit's rules for salary and wage payments and the determined salary fund, the head of the unit decides on the monthly payment levels for salaries and wages for cadres, civil servants, employees, and contractual workers according to each individual's work performance.

3.3- Any remaining salary funds of CSGD-ĐT CTs at the end of the year that are not fully utilized can be transferred into a reserve fund for stabilizing income and carried over to the next year for continued use.

4- Establishing internal expenditure regulations:

- Within the scope of the unit's financial resources (including state budget allocations and revenue from public services), the head of the CSGD-ĐT CT proactively establishes higher or lower standards, norms, and internal expenditure regulations for management and professional activities than those prescribed by the state, in line with the unit's specific characteristics.

- In internal expenditure regulations, CSGD-ĐT CT prioritizes spending on professional activities to ensure the quantity and quality of teaching, learning, research, and service activities of the unit.

- The above standards, regulations, and expenditure norms are discussed openly within the unit, and internal expenditure regulations serve as the basis for the head of the unit to manage and settle accounts for state budget and public service revenue funds, providing a legal foundation for the State Treasury to control expenditures.

5- Allocation of funds from the state budget:

Based on the allocated state budget estimates, the finance agency allocates regular operational expenses covered by the state budget (for units that partially self-fund) through the State Treasury into Item 134 "Other Expenditures" according to corresponding types and sub-items in the state budget schedule.

In cases where allocations have already been made according to items in the state budget schedule, the head of the unit granted autonomy may adjust the expenditure items within the total amount of regular operational expenses allocated.

For non-regular operational expense items, the finance agency implements allocations according to the current state budget schedule.

6- CSGD-ĐT CTs engaged in production and service activities using fixed assets shall implement depreciation of fixed assets. The rate of depreciation of fixed assets is regulated in Decision No. 166/1999/QĐ-BTC dated December 30, 1999 of the Minister of Finance on the management, use, and depreciation of fixed assets and current guiding documents of the state.

In special cases, the head of the unit may decide to apply a higher depreciation rate than prescribed to recover capital promptly, but it must be consistent with the asset's lifespan and technological renewal, and the ability to pay for services.

The entire amount of depreciation of fixed assets shall be recorded in the cost of products and services in contracts between the Educational and Training Institutions (CSGD-ĐT CT) and the requesting parties for production and service provision.

7- Educational and Training Institutions (CSGD-ĐT CT) with asset liquidation needs: Establish an Asset Liquidation Committee pursuant to Decision No. 55/2000/QĐ-BTC dated April 19, 2000 of the Minister of Finance on the issuance of regulations on the management of state asset disposal at administrative and public institutions. The proceeds from asset liquidation formed from state budget sources or having their origin from the state budget, after deducting liquidation costs (weighing, measuring, transporting, technical parameter determination, overtime pay (if any)...), shall be transferred to the development fund of the unit. In cases where assets are formed from borrowed funds, the unit shall use the proceeds from liquidation, after deducting liquidation costs, to repay the loans; once the loans are fully repaid, the remaining proceeds shall be transferred to the development fund for public services.

8- Public service fees included in the state budget (tuition fees, registration fees) shall be implemented according to the provisions of the Ordinance on Fees and Registration Fees and Decree No. 57/2002/NĐ-CP dated June 3, 2002 of the Government detailing the implementation of the Ordinance on Fees and Registration Fees. Until there are guiding documents, educational and training institutions shall collect tuition fees according to Decision No. 70/1998/QĐ-TTg dated March 31, 1998 of the Prime Minister and current guiding documents until new ones are issued. Educational and training institutions are allowed to open dedicated accounts at State Treasury offices for managing income and expenditure.

Quarterly and annually, educational and training institutions that generate revenue shall prepare reports on income and expenditure, confirmed by the State Treasury, and submit them to the supervising authority for consolidation and submission to the corresponding financial authority.

9- At year-end, any regular operating expenses from the state budget allocated to and public service revenues of Educational and Training Institutions (CSGD-ĐT CT) that are not fully expended shall be carried over to the next year for continued expenditure and settlement in the accounting period of the following year. Based on reconciliation between the State Treasury and the unit up to December 31, the State Treasury shall process the transfer of unspent funds to the next year for the Educational and Training Institutions (CSGD-ĐT CT) in accordance with Circular No. 81/2002/TT-BTC dated September 16, 2002 of the Ministry of Finance, and simultaneously notify the corresponding financial authority in writing for management purposes.

10- Educational and Training Institutions (CSGD-ĐT CT) shall conduct accounting in accordance with Circular No. 121/2002/TT-BTC dated December 31, 2002 of the Ministry of Finance, which provides guidance on accounting for revenue-generating public institutions.

V- IMPLEMENTATION PROVISIONS:

This Circular takes effect from January 1, 2003.

Other financial management matters shall be implemented in accordance with the provisions of Circular No. 25/2002/TT-BTC dated March 21, 2002 of the Ministry of Finance, providing guidance on the implementation of Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government on the financial mechanism applicable to revenue-generating public institutions.

During implementation, if any difficulties arise, relevant ministries, ministerial-level agencies, localities, and educational and training institutions generating revenue shall report to the Joint Ministries for necessary amendments and supplements to ensure compliance.