Joint Circular No. 21/2003/TTLT/BTC-BGDĐT-BNV guiding the financial management regime for public educational and training institutions operating with revenue.

JOINT CIRCULAR

Guidelines for Financial Management of Public Education and Training Institutions with Revenue

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Pursuant to 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 education and training institutions with revenue as follows:

I-OBJECTS:

The subjects of this Circular are public education and training institutions within the national education system that operate with revenue, which are partially funded by the state budget for regular operating expenses or fully self-funding their regular operating expenses (collectively referred to as revenue-generating educational and training institutions - abbreviated as CSGD-ĐT CT), including:

- Early childhood education facilities (kindergartens, preschools, nurseries).

- Primary schools, secondary schools, high schools.

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

- Vocational schools, vocational training 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 and a separate 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.

Direct budgetary units under CSGD-ĐT CT 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 shall apply this Circular and other Circulars guiding appropriate fields of activity (scientific research, cultural information...).

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

Educational and training institutions without revenue sources are not subject to this Circular. Regular operating funds for educational and training institutions without revenue sources are provided by the state budget and managed according to the current mechanism.

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

Public education 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 amount 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 unit:

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

2.2- Revenues from production and sale of practical products from workshops, experimental products, and provision of services linked to the activities of the unit, exploitation of infrastructure.

2.3- Revenues from scientific and technological contracts with domestic and foreign organizations.

2.4- Revenues from staff and teachers participating in external service activities or under the remittance mechanism.

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

The amount of revenue for the above items is agreed upon in contracts between the institution and the requesting party by the principle that the educational and training institution ensures cost recovery, is suitable for the ability of the learners, and includes some accumulation.

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

4- Revenues from subordinate units to support common activities: Subordinate budget units may retain a portion of their revenue to support common activities, the proportion of which is decided by the head of the unit.

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

In addition to the aforementioned revenue sources, CSGD-ĐT CT are permitted to legally raise capital from domestic and foreign organizations and individuals to serve production and service supply activities in accordance with current laws.

III- CONTENTS OF REGULAR EXPENSES:

CSGD-ĐT CT may use state budget funds and unit revenue to cover regular expenses for the following purposes:

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, and 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, telecommunications, propaganda, 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 CSGD-ĐT CT (including national defense and security education).

b- Costs for hiring experts and lecturers both domestically and internationally (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 student excellence competitions at all 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 contracts for training, joint training projects, practical training, 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 applicable); using income from public welfare contributions for scholarships for poor but excellent students, security and order...

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 ARE RESPONSIBLE FOR THEIR OWN FINANCIAL MANAGEMENT AND DECISION-MAKING AS FOLLOWS:

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

1.1- For educational and training institutions that fully self-fund their regular operating expenses:

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

a) Allocate the budget estimate for fees and taxes under the state budget, including:

- Total revenue from fees and taxes.

- Amounts of fees and taxes retained by the institution for use according to regulations set by the competent state authority for each type of fee and tax.

- Amounts 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 estimate to align with the institution's activities.

The supervising authority 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 solely dependent on production and service provision revenues without fee and tax revenues, the competent authority allocates a production and service provision revenue budget estimate as the basis for managing revenues and expenditures.

b) Allocate the expenditure budget:

- Allocate the total regular operational expenditure from retained fee and tax revenues for the institution to use according to regulations set by the competent state authority.

- Non-regular expenditures from the state budget: Funding for national-level scientific research projects, ministry-level and sectoral projects; National Target Program funding; government procurement funding; personnel reduction funding; matching funds for foreign projects; construction investment capital; funding for major asset purchases and repairs, and other non-regular expenditures shall be allocated by the Ministry in charge (for centrally-managed revenue-generating public institutions) and local supervising authorities (for locally-managed revenue-generating public institutions) according to current regulations.

c) In cases where the institution exceeds the allocated stable fee and tax revenue estimates, the institution may use the entire excess revenue (retained portion) to supplement its salary fund and operational funding according to regulations.

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

For public institutions allocated production and service provision revenues by the competent authority, when there is excess revenue, 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 educational and training institutions that partially self-fund their regular operating expenses:

1.2.1- Allocate the budget estimate for fees and taxes under the state budget, including:

- Total revenue from fees and taxes.

- Amounts of fees and taxes retained by the institution for use according to regulations set by the competent state authority.

- Amounts 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 estimate to align with the institution's activities.

The supervising authority 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 solely dependent on production and service provision revenues without fee and tax revenues, the competent authority allocates a production and service provision revenue budget estimate as the basis for managing revenues and expenditures.

1.2.2- Allocate the expenditure budget:

a) Regular expenditures:

- Allocate the total regular operational expenditure from retained fee and tax revenues for the institution to use according to regulations set by the competent state authority.

- Allocate the total regular operational expenditure from the state budget for the first year of the stable period, annually increased 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 and sectoral projects; National Target Program funding; government procurement funding; personnel reduction funding; matching funds for foreign projects; construction investment capital; funding for major asset purchases and repairs, and other non-regular expenditures shall be allocated by the Ministry in charge (for centrally-managed revenue-generating public institutions) and local supervising authorities (for locally-managed revenue-generating public institutions) according to current regulations.

1.2.3- In cases where the institution saves on regular expenditure or increases retained fee and tax revenue compared to the allocated estimate, the institution may use the entire saved funding and additional revenue to supplement its salary fund and operational funding. If the institution falls short of the allocated revenue estimate, it 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 to the competent authorities for review and decision on the allocation of stable funding for the subsequent period.

2- The number of personnel positions serving as the basis for constructing the budget for the salary fund is the number of positions assigned by the competent authority 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 quota of personnel positions) to enhance the efficiency and quality of the unit's operations. Those individuals subject to reduction in personnel positions shall enjoy policies and benefits according to current regulations;

2.2- For CSGD-ĐT CTs that self-fund all regular operational expenses, based on work 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 standards and structure of job titles and specialties as stipulated by the sectoral management agency and be classified according to the administrative-servant 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 work requirements and financial capacity of the unit, the head may sign labor contracts in accordance with labor laws but must comply with staffing norms issued by the competent authority; those individuals signed under indefinite-term contracts must meet the standards and structure of job titles and specialties as stipulated by the sectoral management agency and be classified according to the administrative-servant 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 whom the unit has signed labor contracts with. 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 of cadres, civil servants, and employees within the quota and contractual labor (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 internal rules for salary and wage payments and discusses them openly and unanimously at the staff meeting.

Based on the unit's internal 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 laborers based on individual work performance.

3.3- Any remaining salary of CSGD-ĐT CTs at the end of the year that is not fully utilized can be transferred into the 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 public service revenue), 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 characteristics.

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

- The above standards, regulations, and norms for expenditures 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 state budget funds:

Based on the allocated state budget estimate, the finance department 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 item list.

In cases where allocations have already been made according to items in the state budget item list, the head of the unit granted autonomous rights may adjust the expenditure items within the total regular operational expense allocation.

For non-regular operational expenses, the finance department implements allocations according to the current state budget item list.

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 prescribed 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 the need to liquidate assets: 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 the disposal of state assets at administrative and public institutions. The proceeds from asset liquidation formed from state budget sources or derived from the state budget, after deducting liquidation costs (weighing, measuring, transporting, determining technical parameters, 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- Fees and charges belonging to the state budget (tuition fees, service charges) shall be implemented in accordance with the Ordinance on Fees and Service Charges and Decree No. 57/2002/NĐ-CP dated June 3, 2002 of the Government detailing the implementation of the Ordinance on Fees and Service Charges. Pending guidance 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 receipts and expenditures.

Quarterly and annually, educational and training institutions that generate income 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 income generated by 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 by 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 maintain accounting records in accordance with Circular No. 121/2002/TT-BTC dated December 31, 2002 of the Ministry of Finance, which provides guidelines for accounting in 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 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 there are any difficulties, relevant ministries, ministerial-level agencies, localities, and educational and training institutions generating income shall report to the Joint Ministries for necessary amendments and supplements to ensure compliance.