Circular No. 22-TC/CN stipulates the system of expenses outside production costs and the handling of certain items related to production costs of state-owned enterprises.

CIRCULAR

OF THE MINISTRY OF FINANCE NO. 22-TC/CN DATED MARCH 19, 1987
REGULATING THE EXPENSES OUTSIDE COST AND HANDLING
CERTAIN ITEMS RELATED TO COST
OF STATE ENTERPRISES

To implement Decision No. 76-HĐBT dated June 26, 1986 of the Council of Ministers regarding the temporary autonomy in financial management for basic economic units, the Ministry of Finance guides the regulations on expenses outside cost and circulation fees (hereinafter referred to collectively as cost), and handling certain items related to cost of state enterprises, including economic service units accounting for business (hereinafter referred to as enterprises) as follows:

1. Training expenses:

a) For newly established enterprises, enterprises expanding construction, modernizing through new equipment installation, the entire training expense for production workers, management staff, vocational skills, etc., accompanying the project shall be covered by the investment capital for basic construction.

b) For enterprises currently in production, the costs for schools and training centers beside the Federation of Enterprises, General Corporation, Company, and enterprise to train new workers, mentor, improve skills, upgrade technical levels, professional qualifications, or provide knowledge enhancement for cadres, employees under the form of work-study programs... according to approved plans must be accounted for in the product cost.

Specifically, for schools directly under the Federation of Enterprises, General Corporation, Company not centralized in economic accounting, the training costs will be mobilized from affiliated enterprises, deducted from the source included in the product cost based on the need to supplement labor indicators of those enterprises, or according to a percentage of the annual wage fund of cadres, employees of each affiliated enterprise. The specific level of mobilization shall be decided by the superior management authority of that enterprise.

In addition, depending on the demand for labor and the ability to secure funds, enterprises may use the production development incentive fund to open classes beside the enterprise to train new workers, or mentor workers beyond the national plan indicators assigned.

The budget only provides funding for regular training schools directly under Ministries, General Departments, People's Committees of provinces, cities, and centrally-administered municipalities authorized by the State with training plan targets.

In cases where some Federations of Enterprises, General Corporations, basic economic units located far from cultural and social centers require opening training schools and are given training plan targets by the State but cannot ensure funding from sources allocated in cost (meaning higher cost than selling price), the budget will provide funding from the education and training fund.

The expenditure levels for training schools and classes beside enterprises, or directly under Ministries, General Departments, People's Committees of provinces, cities, and centrally-administered municipalities must comply with the expenditure standards determined by the relevant ministries (Ministry of Finance, Ministry of Labor, Invalids and Social Affairs, Ministry of Higher Education and Vocational Training).

2. Medical expenses:

Expenses for health stations, infirmaries of enterprises include wages of medical staff and common medical expenses for cadres, employees of the enterprise shall be accounted for in the product cost.

For hospitals, convalescent homes, multi-specialty clinics managed by the Federation of Enterprises, General Corporation, Company, and enterprise, all regular needs including administrative and operational expenses, medical services, management, etc., shall be accounted for in the product cost.

Specifically, for hospitals, convalescent homes directly under the Federation of Enterprises, General Corporation, Company not centralized in economic accounting, the expenses for these institutions Article It is mobilized from enterprises under the management by deducting from the cost price of products according to the percentage of the annual wage fund of cadres, workers, and staff of each enterprise under management. The specific level is decided by the superior management agency of the enterprise.

Units and enterprises may use welfare funds to support additional non-recurring expenses of healthcare facilities managed by the unit such as purchasing additional medical equipment, repairing medical equipment and tools, and supplementing part of the food allowance for patients receiving treatment and convalescence at these facilities.

Costs for cadres, workers, and staff taking vacations at rest houses of Enterprise Associations, Corporations, Companies, and Enterprises shall be covered from the welfare fund of the unit.

The budget only provides funding for hospitals and convalescent centers directly under Ministries, General Departments, People's Committees of provinces, cities, special administrative regions, districts, counties... that are assigned bed quotas for treatment and convalescence by the State. In cases where some Enterprise Associations, Corporations, and Enterprises located far from cultural and social centers and major transportation routes organize hospitals and convalescent centers and are assigned annual bed quotas for treatment and convalescence but the units cannot ensure funding through deductions from production costs or circulation fees (meaning higher product costs than selling prices), then the budget will provide funding from health service capital.

Expenses for beds in hospitals and convalescent centers, outpatient clinic beds regardless of the source of funding, must comply with the general standards set forth in joint Circulars guiding the Ministry of Health and the Ministry of Finance.

3. Military training costs:

Workers and officials who take time off for regular annual military training still receive their salaries, which the enterprise can allocate to the product cost. Additional allowances (if any) are covered by the welfare fund.

Costs for reserve military personnel who are cadres, workers, and staff when they are concentrated for training or combat readiness checks according to the plan of the Ministry of Defense, including uniform costs, food and accommodation costs, and other related costs, starting from the day the training unit receives the reserve personnel, are covered by the defense training budget. Salaries and regular allowances based on salary, travel expenses, and travel subsidies (including both the trip out and back)... for reserve military personnel who are cadres and workers of the enterprise are allocated to the product cost.

In special cases where the enterprise's self-defense forces need to be mobilized due to war requirements, the expenditure will be handled according to the separate regulations of the Ministry of National Defense and the Ministry of Finance.

4. Costs for collective dining services:

Costs for collective dining services, third-shift dining, hazardous work dining, and mid-shift dining include wages and allowances for cadres, workers, and staff serving and managing the dining halls, and electricity and water costs, all of which are allocated to the product cost.

Enterprises may collect from cadres, workers, and staff eating daily at collective dining halls a fee equal to 5% of the meal cost (excluding third-shift, hazardous work, and mid-shift meals) to reduce the dining service costs included in the product cost.

Enterprises may use welfare funds to cover the costs of purchasing equipment and utensils for dining services.

5. Costs for experts:

For expert costs associated with basic construction projects, they are covered by the basic construction investment capital.

Expert costs for production, business, and economic service units include wages and other expenses, which are allocated to the product cost or circulation fees.

Common experts of Ministries or sectors and experts of non-economic service units are covered by service capital.

Wages and other expenses for cadres, workers, and staff serving experts, including interpreters, are covered by the same sources of capital as for experts.

6. Bank interest on working capital loans and payment loans:

The bank interest on working capital loans and payment loans, after deducting income from bank deposits, must be allocated to the product cost.

Any fines or compensation received for credit matters are allocated to the profit and loss account of the enterprise (retained earnings of the enterprise).

If the enterprise has taken out a bank loan for basic construction investment or fixed asset purchases, the source of repayment for the principal loan is the basic depreciation of the purchased fixed assets.

Additionally, if the enterprise needs to repay the principal loan quickly and the basic depreciation is insufficient, additional capital from its own basic construction investment can be used for repayment.

The source of repayment for bank interest on basic construction investment and fixed asset purchases is taken from the enterprise's total profits (before distribution between the State and the enterprise) to repay.

7. Allowances for surplus labor awaiting employment and termination benefits:

Enterprises have the responsibility to arrange production and utilize surplus labor capacity to produce additional products for society. In cases where cadres, workers, and staff of the enterprise are surplus and cannot be reassigned to other jobs or transferred elsewhere, the enterprise may temporarily allow them to stop work to seek employment or wait for termination procedures. During this temporary stoppage period, workers and staff receive unemployment allowance, which the enterprise can allocate to the product cost.

Cadres, workers, and staff who are terminated due to organizational streamlining, inability to work due to poor health, voluntary resignation, or termination due to disciplinary action do not receive work disability benefits or retirement benefits but instead receive termination benefits. The enterprise can allocate the cost of termination benefits to the product cost.

The duration and amount of temporary unemployment allowance and termination benefits are stipulated in the current guiding circulars of the Ministry of Labor.

8. Regular hardship allowances and emergency hardship allowances:

The regular hardship allowance and emergency hardship allowance for the staff of the enterprise shall be disbursed from the social assistance fund according to Directive No. 331-CT dated November 8, 1985 of the Chairman of the Council of Ministers and Circular No. 21-TT/LB dated November 16, 1985 of the Joint Ministry of Labor - Finance - Vietnam General Confederation of Labor.

9. Relocation Allowance:

The expenditure on relocation allowance for officials, workers, and employees who are transferred and newly recruited workers hired for long-term employment at state-owned enterprises, construction sites, farms, and forestry farms located in mountainous areas, islands, and new economic zones shall be implemented according to Decision No. 150-CT dated April 26, 1985 of the Chairman of the Council of Ministers and Circular No. 9-LĐ/TT dated August 5, 1985 of the Ministry of Labor. The unit employing officials, workers, and employees shall account for the relocation allowance in the cost of production or in the investment budget for basic construction projects (if it belongs to a basic construction project).

This Circular takes effect from January 1, 1987, and all previous regulations contrary to this Circular are abolished.

In the course of implementation, if any difficulties arise, they should be promptly reported to the Ministry of Finance for study and resolution.