Circular No. 22 TC/VT guides the financial management regime of the State for official development assistance (ODA) sources.

CIRCULAR

MINISTRY OF FINANCE DECREE NO. 22-TC/VT OF MARCH 20, 1995 GUIDING THE MANAGEMENT REGIME OF STATE FINANCES FOR OFFICIAL DEVELOPMENT ASSISTANCE RESOURCES

The Government has issued Decree No. 20-CP dated March 15, 1994 on the Regulation on Management and Use of Official Development Assistance Resources, and Decree No. 177-CP dated October 20, 1994 on the Charter for Investment and Construction Management. Official Development Assistance resources in the form of repayable aid shall be implemented according to the Regulation on Foreign Borrowing and Debt Repayment issued together with Decree No. 58-CP dated August 30, 1993 of the Government, and Circulars guiding Nos. 17-TC/TCĐN and 18-TC/TCĐN dated March 5, 1994 of the Ministry of Finance. As for Official Development Assistance resources provided in the form of non-repayable aid, the Ministry of Finance guides as follows:

I/ GENERAL PRINCIPLES:

1. Official Development Assistance (ODA) resources from foreign countries for our country are state budget revenues, which must be planned, fully reflected in the State Budget, and managed under the current state budget management regime.

2. Non-repayable ODA funds can be utilized in the form of state budget capital disbursement or state credit.

The form of state budget capital disbursement (capital for construction investment or operating expenses) mainly focuses on economic and social programs and projects within the scope of responsibilities of state budget entities.

ODA funds for projects and works that have the potential to generate returns will be re-lent by the State through the Investment and Development General Department under the Ministry of Finance or banks designated by the Government. The financial mechanism for re-lending will be determined specifically by the Ministry of Finance in consultation with relevant agencies to suit the production and business characteristics of each entity.

3. The Ministry of Finance is responsible for uniformly managing state finances for all ODA sources, from participating in opinions on the policy of using ODA and approving projects, allocating investment construction capital for projects, researching and proposing financial management mechanisms, implementing payments through the state budget, and managing the entire process of using funds until checking and settling accounts for projects.

Directors of Provincial Finance and Price Departments directly under the Central Government are responsible for assisting the Minister of Finance and the People's Committees of Provinces and Cities in managing finances for ODA sources directly allocated to localities and distributed by central ministries and sectors to localities.

4. Heads of Ministries and Sectors, Chairmen of People's Committees of Provinces and Cities, Chairmen of associations and mass organizations are responsible under the law for managing finances and using ODA resources effectively for programs and projects under their jurisdiction.

5. Program managers, project directors, and investors using ODA funds must ensure compliance with the objectives, targets, and other commitments recorded in each program and project; they are responsible for fully and timely repaying the state budget for borrowed amounts according to regulations, strictly adhering to financial systems, Accounting and Statistics Ordinance, organizational accounting charters, and current accounting and auditing regimes of the State.

II/ SPECIFIC PROVISIONS

A/ PLANNING:

Annually, based on commitment documents or agreements; based on plans to implement programs and projects; notifications on aid distribution from the competent authority to units; based on the implementation status of projects in the year; units prepare plans for the collection and use of ODA funds together with their economic, financial, and budget plans, and submit them to the project management authority and the same-level finance department (projects under ministries are submitted to the ministry in charge and the Ministry of Finance; projects led by provinces and cities are submitted to the provincial finance and price departments).

Central ministries and sectors and provincial finance and price departments are responsible for consolidating these plans together with their annual financial and state budget plans and reporting them to the Ministry of Finance for consolidation and submission to the Government for approval by the National Assembly. của mình, báo cáo lên Bộ Tài chính, để Bộ Tài chính tổng hợp báo cáo trình Chính phủ phê duyệt trước Quốc hội.

Plans for the collection and use of ODA funds must clearly explain the following contents:

- The plan for the value (foreign currency and converted to Vietnamese dong) to be received and used. Specifically calculated for each type of goods and currency, divided according to purposes and target users.

- The plan for domestic counterpart funds participating in projects (if any), categorized by goals and types of funds (construction investment, public services...).

- Costs for project establishment and management, including all costs from project establishment to receipt, transportation, storage of goods and equipment, project management costs...and the source of funding for this work. For projects in the production and business sector, the project leader uses self-owned capital or borrowed capital. For projects in the administrative and public service sector or construction investment projects funded by the state budget, the project leader must prepare a plan together with their state budget expenditure plan.

B/ IMPLEMENTATION AND MANAGEMENT:

There are many forms and methods of transferring ODA, each country or organization providing aid has its own rules, procedures, and objectives. Therefore, based on the content of signed documents with countries and organizations providing aid, the Ministry of Finance will submit to the Government for approval of financial mechanisms and provide specific guidance for each type of ODA.

1/ Confirmation of Aid:

- All foreign aid money and goods brought into the country for use (including when the foreign side purchases goods domestically and then transfers them to the user unit) must be confirmed as aid.

- Units and project leaders receiving foreign aid money and goods are required to issue aid confirmation certificates.

In cases where the foreign side purchases goods domestically, the project leader must complete the confirmation procedures no later than 30 days after receiving the goods.

- Upon receipt of notification of aid money and goods, units must immediately go to the International Aid Management and Reception Board under the Ministry of Finance (or the Management and Reception Board of Aid at Ho Chi Minh City and Da Nang) to complete the aid confirmation procedures.

- The aid confirmation certificate for money or goods is the basis for completing the procedures for receiving goods, withdrawing money, and settling accounts with the state budget. The aid confirmation certificate for money and goods is uniformly issued by the Ministry of Finance.

2/ Necessary Documents for Aid Confirmation:

a- For Goods:

- Approval document for programs and projects by the competent authority.

- Project, program, Agreement, Decree, or other signed agreements with foreign partners clearly stating the list and value of goods approved.

- Approval document for commercial contracts according to current regulations.

- Sea waybill (Bill of Lading) or air waybill (Airway Bill).

- Detailed packing list (Packing List).

- Commercial invoice (Invoice).

- Insurance certificate (Insurance Certificate).

b- For grant funds:

- Approval document for programs and projects by the competent authority.

- Project, program, Agreement, Decree, or other signed agreements with attached appendices clearly stating the foreign currency or domestic currency amounts according to the budget items of the program or project.

- Explanation of the plan for using the funding source and notification from the Bank or transfer notice from abroad regarding the amount received.

c- Cases requiring additional documentation:

+ For long-term national programs, there must be annual signed documents with specific provisions on the list and quantity of goods or monetary amounts as mentioned above.

+ In cases where the signed documents do not clearly state the list of goods, the unit must provide a detailed explanation of the quantity, weight, or value of the goods within the total project budget and must be confirmed by the head of the managing agency. For goods prohibited from importation, written approval from the Prime Minister is required.

+ In cases where there is a change in the list or type of goods, or changes in the budget items of the project, there must be an approval document from the Prime Minister or an agency authorized by the Prime Minister to approve such changes.

+ In cases where goods or foreign currency grants are not included in the project, program, or signed documents, there must be permission to use these from the Prime Minister, along with a clear explanation of the source and purpose of this funding.

+ In cases where a unit receives on behalf of others to distribute among multiple units, the receiving unit must have a specific distribution plan for each recipient and must have authorization letters from the units that will use the assistance.

+ In cases where foreign entities purchase goods domestically to deliver to the user unit, the unit must have the original sales invoice and warehouse release form issued uniformly by the Ministry of Finance.

+ In cases where transport documents, invoices, or packing lists are not immediately available upon receipt of goods (documents delayed), the unit must have a notification from the airport or transportation agency. At the latest, within 15 days from the date of confirmation, the unit must submit relevant documents related to the received shipment as specified above to the International Aid Management and Reception Office or the place that issued the confirmation.

3 - Receiving procedures:

When dealing with domestic agencies to receive foreign currencies and goods, units must follow the following procedures:

- If receiving foreign currency:

+ Prepare a confirmation of receipt of money

+ Go to the bank to present the confirmation to process withdrawal

+ Report the actual results of receiving money (foreign currency, Vietnamese dong) to the International Aid Management and Reception Board.

- If receiving goods from abroad:

+ Prepare a confirmation of receipt of aid goods

+ Apply for an import permit at the export-import permit department of the Ministry of Trade

+ Process customs formalities and receive goods

+ Report the actual results of receiving goods to the International Aid Management and Reception Board.

4) Payment through State Budget:

a- The confirmation of receipt of goods or money for aid issued by the International Aid Management and Reception Board under the Ministry of Finance to the unit is an important document for implementing payment through the State Budget.

b- The payment value through the State Budget is the value of the foreign currency of the goods or money received by the unit, converted into Vietnamese dong based on the buying rate published by the Foreign Trade Bank at the time of confirmation. In cases where goods are purchased by foreign entities domestically and delivered to the user unit, the payment value is the price stated on the sales invoice and warehouse release form.

In cases where the actual received goods have discrepancies in surplus or shortage, incorrect types, or prices compared to the declared confirmation, or if the actual received money differs from the declared amount, within 45 days from the first confirmation date, the unit must send the inspection report (or report on the actual receipt of money) to the agency issuing the aid confirmation for review and adjustment of the confirmation.

In cases where aid goods do not have a nominal value to convert into Vietnamese dong, the confirmation value will be temporarily calculated by the International Aid Management and Reception Board. Within 45 days from the date of issuance of the aid confirmation, the unit must send the revaluation report to the confirming agency for adjustment of the confirmation. The valuation committee, established by the unit's managing agency with participation from financial and pricing representatives of the same level, will conduct the revaluation. Beyond this period, if the unit does not submit the revaluation report, the Ministry of Finance will consider the initial confirmation with the temporarily calculated value as a valid document for payment through the State Budget.

c- The Ministry of Finance (International Aid Management and Reception Board) will handle payments through the State Budget for the value of goods and money received by units according to the following principles:

+ For amounts stipulated to be provided by the State Budget:

- Record State Budget revenue: Chapter 99A, Type 14, Clause 01,

Item 5 (or 6), Section 42.

- Record State Budget expenditure according to the chapter, type, clause, item, and purpose of the unit.

+ For amounts stipulated to be loans from the State:

- Record State Budget revenue as specified above, while recording expenditures outside the State Budget for separate tracking. Upon recovery of the loan, reduce the principal in the loan account and record interest income in the State Budget.

5) Quản lý và kế toán:

a- During the usage period, units must promptly and fully reflect all received sources of money and goods on accounting documents and ledgers according to current state regulations under the Accounting and Statistics Ordinance and the current accounting system.

In cases where there is an adjustment to the value of goods or aid funds, the basis for such adjustments shall be the formal notification documents issued by the aid confirmation authority or the financial authority. The entity shall then make the necessary journal entries to adjust the received or utilized values of the aid on its books.

b- Financial management for the receipt and utilization of ODA sources (including foreign capital as well as domestic counterpart funds, and project establishment and management costs) must be carried out in accordance with the current financial management regulations of the State.

Management of ODA allocated in the form of basic construction capital from the State Budget must comply with the current regulations governing the use of State Budget construction capital.

Management of ODA allocated in the form of operational capital must be implemented strictly in accordance with the current regulations governing the management of operational funds provided by the State Budget.

In cases where ODA is received and used in the form of loans rescheduled by the State Budget, all investment procedures and loan repayment conditions as prescribed must be fully complied with.

The financial accounting departments of Ministries and sectors have the responsibility to assist the heads of Ministries and sectors in consolidating and managing the financial affairs of all foreign aid sources within their respective jurisdictions in accordance with the current State financial management regulations.

Financial authorities at all levels are responsible for inspecting and supervising the entire process of receiving and utilizing all foreign aid sources for projects under their financial management jurisdiction.

During the financial inspection and supervision process, it is imperative to take decisive action or promptly recommend to the Ministry of Finance and relevant legal authorities to handle any violations of financial management regulations.

C- REPORTING, SETTLEMENT, AND HANDOVER:

1. Each year, project leaders using ODA must prepare reports on the receipt and use of ODA and submit them to the project's supervisory authority and the financial management authority overseeing the project (for central-level projects, these reports should be sent to the Ministry of Finance (International Aid Reception and Management Department); for local-level projects, they should be sent to the Provincial Finance and Price Bureau).

The supervisory authority of the project has the responsibility to compile the overall situation of receipt and use of all projects under its management and report this to the corresponding level financial management authority (at the Ministry of Finance, this would be the department responsible for financial management of the sector).

Reports on the management and use of aid must include the following main contents:

+ Results of receiving ODA (quantity, foreign currency value, and converted Vietnamese dong value for each type).

+ Usage situation for each target and task according to the project's objectives.

+ Usage of funds for project establishment, reception, and management.

+ Compliance with financial management regulations.

+ Effectiveness and results of ODA usage; related recommendations for handling.

2. Upon completion of the project:

- Project leaders are responsible for preparing final settlement reports on the receipt and use of ODA (including in the form of State Budget allocation or rescheduled loans), settling all project capital and funds for establishment, reception, and management. These reports should be submitted to the project's supervisory authority and the corresponding level financial management authority.

- The procedures and requirements for preparing final settlements, and the content of the final settlement reports must follow the current guidelines of the Ministry of Finance.

- If the project is funded by multiple sources, the final settlement report must clearly analyze the receipt and use of each source of funding.

- For projects that span multiple years, when finalizing the settlement, the project leader must base the conversion of invested capital according to the price level at the time of handover and operation commencement, as guided by the Ministry of Construction, to determine the asset transfer value.

- If surplus funds remain after the project's completion, the project leader must immediately report to the supervisory authority and the project's financial management authority. The financial authority is responsible for reviewing and determining the use of these funds. Any use of these funds without approval from the financial authority is a violation of State Budget fund management regulations and will be handled according to the law.

- Prior to approving the final settlement of completed projects, auditing authorities must review and provide formal written opinions or conduct audits according to current regulations: The Ministry of Finance (International Aid Reception and Management Department leading, with participation from the financial management department) is responsible for reviewing and providing written opinions before the competent authority approves final settlements for central-level projects. The Provincial Finance and Price Bureau is responsible for reviewing and providing written opinions for local-level projects.

Final settlement approval of completed projects must ensure compliance with the current regulations of the Ministry of Finance.

3. The basis for the financial handover of completed projects put into use is the final settlement report of the project.

- For projects implemented in the form of State Budget operational funding, the handover and acceptance for use shall be carried out according to the regulations on the use of funds and assets provided by the State Budget to administrative and operational agencies.

- For projects implemented in the form of State Budget construction capital: The handover and acceptance for use shall be carried out according to the current regulations on the handover of construction capital provided by the State Budget.

- For projects implemented in the form of State Budget loans: The borrowing entity is responsible for arranging the funds to repay the principal and interest to the State Budget in accordance with the debt agreement.

III. IMPLEMENTATION PROVISIONS:

1. This Circular takes effect from the date of issuance. Circular No. 45TC/VT dated August 15, 1991, issued by the Ministry of Finance, is hereby repealed.

2. Ministries, sectors, and localities are responsible for guiding and inspecting project leaders under their management to implement this Circular.

3. During implementation, if any issues arise, Ministries, sectors, localities, units, and project leaders must promptly reflect these issues to the Ministry of Finance (International Aid Reception and Management Department) for research and resolution.