Circular No. 28/1999/TT-BTC guides the management and allocation of state budget funds for the project to plant five million hectares of new forests according to Decision No. 661/QD-TTg dated July 29, 1998 of the Government Prime Minister.

CIRCULAR

Guidelines for managing and allocating state budget funds for the Project to plant five million hectares of new forests pursuant to Decision No. 661/QĐ-TTg dated July 29, 1998.

5 million hectares of forest planting project according to Decision No. 661/QĐ-TTg dated July 29, 1998.

of the Prime Minister

_______________

Pursuant to Decision No. 661/QĐ-TTg dated July 29, 1998 of the Prime Minister on the objectives, tasks, policies, and implementation organization of the Project to plant five million hectares of new forests;

Pursuant to Circular Joint No. 28/1999/TT-LT dated February 3, 1999 of the Ministry of Agriculture and Rural Development, the Ministry of Planning and Investment, and the Ministry of Finance guiding the implementation of Decision No. 661/QĐ-TTg of the Prime Minister;

The Ministry of Finance guides the management mechanism and allocation of state budget funds for the Project to plant five million hectares of new forests as follows:

Part 1

GENERAL PROVISIONS

1. The state budget (central budget) shall only allocate funds to projects to plant five million hectares of new forests that fall within the scope of entities entitled to use state budget funds as stipulated in Decision No. 661/QĐ-TTg dated July 29, 1998 of the Prime Minister.

2. State budget funds allocated for the Project to plant five million hectares of new forests include investment allocation funds, public service allocation funds, and production forest planting support funds which are balanced within the annual state budget expenditure plan approved by the National Assembly.

3. Based on the national plan indicators allocated for the Project to plant five million hectares of new forests, the Ministry of Finance shall implement allocations for projects approved by competent authorities through the State Treasury system. The State Treasury directly conducts inspections and controls relevant documentation and proceeds with fund allocations to project owners in accordance with established regulations.

4. The project management agency (Ministries, agencies at the level of ministries, government-affiliated agencies for central-managed projects; provincial People's Committees, centrally-administered city People's Committees for locally-managed projects) is responsible for allocating plan indicators to each project within the announced national plan; guiding and directing project owners to implement according to the approved plan. The allocation of capital indicators must ensure the proportionate structure of forestry capital, infrastructure, and public service management capital as prescribed by the Government and guidelines of the Ministry of Planning and Investment.

5. Project owners shall open accounts at the State Treasury to receive allocated funds for payment and are responsible for managing and using funds correctly, efficiently, and in compliance with current financial regulations, subject to inspection and control by the State Treasury. The State Treasury has the authority to refuse allocations to projects that do not meet conditions and to recover funds misused by project owners.

Part 2

SPECIFIC PROVISIONS

I. SCOPE AND OBJECTS ELIGIBLE FOR STATE BUDGET ALLOCATIONS

1. Investment capital for protective and special-use forest projects

- Protecting special-use forests and protective forests in very critical and critical areas with average investment not exceeding 50,000 VND/ha/year, for a period not exceeding five years;

- Contracting out protection and regeneration combined with supplementary planting of industrial trees, fruit trees, and specialty trees in special-use forests and protective forests in critical and very critical areas with investment not exceeding 50,000 VND/ha/year, for a period not exceeding five years;

- Contracting out protection and regeneration combined with supplementary planting of forestry trees in special-use forests and protective forests in very critical and critical areas with investment not exceeding 1 million VND/ha, for a six-year contract based on annually allocated capital and the forest regeneration and supplementary planting procedures of the Ministry of Agriculture and Rural Development;

- Planting new protective forests in very critical and critical areas with direct investment to forest growers averaging 2.5 million VND/ha, including planting and care according to the technical procedures of the Ministry of Agriculture and Rural Development;

- Constructing some essential infrastructure facilities serving forestry activities directly, including forest protection stations, fire prevention works, pest control works, nurseries, etc., with total investment for the entire program not exceeding 5% of the total state budget allocated for the Project annually.

2. Project management expenses

2.1. Activities eligible for project management expense allocations:

- Surveying, designing, reviewing, and approving projects

- Scientific research, agricultural extension, forestry extension, technology transfer model construction under the Project to plant five million hectares of new forests

- Training, inspection, propaganda, commendation, summary meetings

- Supplementing necessary equipment and office supplies for general management and supervision activities

- Expenses for the management and operation of the Central Steering Committee for the Project to plant five million hectares of new forests and project management boards

- Salaries for members of project management boards who have not received salaries from the state budget; allowances, subsidies, travel expenses, etc., according to administrative and public service regulations for board members (including those already receiving salaries from the state budget)

- Support expenses for the management and allocation of funds by the State Treasury system

2.2. Agencies allocated project management expense funds include:

- The Central Steering Committee for the Project to plant five million hectares of new forests

- The management agency of the project owner

- The State Treasury system

- Central and local agencies directly related to the implementation of the Project to plant five million hectares of new forests

- Provincial project management boards and grassroots project management boards (excluding production forest project management boards)

The total amount of public service management capital for protective and special-use forest planting projects is extracted at 8% of the total state budget investment allocated for the project; among which, central sectors account for 0.7%, provinces, districts, and communes account for 1.3%, and grassroots project owners account for 6%.

3. Production forest planting support capital

Organizations, households, and individuals who self-fund the planting of production forests where the forest area consists of rare and precious tree species with a cycle over 30 years, prioritizing species that can be planted belonging to Group IA, IIA as stipulated in Decree No. 18/HĐBT dated January 17, 1992 of the Council of Ministers (now the Government), and have projects and technical procedures approved by competent authorities shall be provided state support capital to implement; the average support capital is 2 million VND/ha.

II. PROCEDURES AND CONTENTS OF PLAN FORMULATION AND FUNDS TRANSFER

1. Annual plan formulation

1.1- The competent authority of the project shall base on the planned volume for the year to prepare the plan (including: the list of projects, volume and total amount of capital allocated for protective forest projects and special-use forest projects; the list of projects, volume and total amount of support capital for production forest planting projects) and submit it to the Ministry of Agriculture and Rural Development, the Ministry of Planning and Investment, and the Ministry of Finance for consolidation and reporting to the Government for approval by the National Assembly.

1.2- Based on the State plan indicators assigned by the Government; the total amount, capital structure, and project list announced by the Ministry of Planning and Investment, the competent authority of the project shall allocate capital investment indicators for each project and unit under its management to the Ministry of Finance (State Treasury Central Office) using form number 01; simultaneously send copies to the Ministry of Planning and Investment and the Ministry of Agriculture and Rural Development for monitoring and management.

1.3- Based on the plan indicators announced by the Ministry of Planning and Investment, allocate capital for each project of the Ministries (for centrally managed projects); the Ministry of Finance (State Treasury Central Office) shall notify the State Treasuries of provinces and cities to serve as the basis for capital allocation.

2- Capital Transfer

2.1- Based on the total capital of the New Forest Planting Project of 5 million hectares recorded in the annual plan; quarterly, the General Department of Investment and Development shall issue a notice approving the budget estimate and transfer capital to the State Treasury Central Office via payment orders.

2.2- Based on the approved annual plan, the situation of capital allocation in localities, the State Treasury Central Office shall transfer capital to the State Treasuries of provinces and centrally-administered cities directly managing and allocating capital to projects according to regulations.

III- CAPITAL DISBURSEMENT AT LOCAL STATE TREASURIES

1- Capital Disbursement for Project Investments

1.1- Conditions for Capital Disbursement

To be eligible for capital disbursement, project sponsors must submit the following documents to the State Treasury where their accounts are opened:

- Decision approving the project by the competent authority

- Decision appointing the project sponsor by the project's competent authority

- Annual capital plan announced by the project's competent authority including all indicators regarding the volume of planting, care, regeneration enclosure, and forest protection assigned.

- Design, budget estimate, and total budget estimate approved by the competent authority

- Economic contracts signed between the project sponsor and households (regarding forestry investment capital) or with units accepting bids (if any) according to regulations

- Completion certificates between the project sponsor and households and units accepting bids, confirmed by the provincial-level Acceptance Committee chaired by the Department of Agriculture and Rural Development; the State Treasury does not participate in the provincial-level Acceptance Committee.

- Other related documentation and vouchers (price lists, payment vouchers, etc.).

1.2- Procedure for Capital Disbursement

1.2.1- For forest protection capital:

- Quarterly, based on the announced capital plan, the approved budget estimate by the competent authority, and the protection contract between the project sponsor and households, the State Treasury shall provide advance payments to the project sponsor. After receiving funds from the State Treasury, the project sponsor is responsible for promptly providing full advance payments to participating units and individuals involved in forest protection assignments.

- At the end of each quarter, the project sponsor must conduct a quantity acceptance of forests handed over to households for protection (confirmed by the provincial-level Acceptance Committee chaired by the Department of Agriculture and Rural Development), along with a list of households and units receiving payment, to be submitted to the State Treasury that provided the capital. The State Treasury will base on the completion certificate to check and control related documents and procedures to convert from advance payment to final disbursement.

- Where conditions permit, the State Treasury may directly disburse funds to households and units receiving assignments based on the project sponsor's proposal.

1.2.2- For new forest planting and regeneration enclosure combined with supplementary planting capital:

- Based on the annual plan, design, and budget estimate approved by the competent authority, and the new planting, regeneration enclosure combined with supplementary planting contract between the project sponsor and households and units accepting bids, the State Treasury shall provide an advance payment up to a maximum of 30% of the project's annual capital plan.

- When the project reaches 50% of the annual plan progress, the project sponsor must conduct a quantity acceptance of completed work (confirmed by the provincial-level Acceptance Committee chaired by the Department of Agriculture and Rural Development). The State Treasury will check the completion documents, process the conversion from advance payment to final disbursement, and make additional payments if the accepted completion volume exceeds the advance payment. Subsequently, the State Treasury will process further advances up to a maximum of 40% of the remaining annual capital plan for the project sponsor to continue implementation.

- At the end of the year, when the project completes assigned volumes, the project sponsor must conduct a quantity acceptance of completed work (confirmed by the provincial-level Acceptance Committee chaired by the Department of Agriculture and Rural Development) and submit it to the State Treasury for processing the conversion from advance payment to final disbursement and supplementary issuance of the remaining planned capital.

- The total amount of advance payments and final disbursements shall not exceed the announced plan indicators and the capital transferred by the higher-level State Treasury.

1.2.3- For infrastructure investment capital

- For works with investment capital under 150 million dong:

+ The project sponsor is permitted to use standard designs or pre-approved designs issued by the competent authority or prepare a design and detailed budget estimate for submission to the competent authority for approval.

+ Based on the annual plan, approved budget estimate, and construction contract between the project sponsor and the contractor and households (if any), the State Treasury shall provide an advance payment up to a maximum of 30% of the annual capital plan for the project sponsor to implement. Upon completion of construction work, the project sponsor must settle the advance payment with the State Treasury. Subsequent capital disbursements will be made according to the progress of basic construction completion.

- Works with investment capital of 150 million dong or more shall be managed and disbursed according to current investment and construction management regulations.

2- Project Management Fee Disbursement

2.1- Conditions for Disbursement

- There is an annual capital plan announced by the project's competent authority.

- Detailed budget estimates for expenditures approved by the competent authority.

- In accordance with the current expenditure regulations and standards

- Possessing all valid expenditure vouchers relevant to the transaction

2.2- Procedure for disbursement

- The operating funds of the Provincial Project Management Board and related central and local units shall provide monthly advances. At the end of each month, the unit must settle accounts with the State Treasury Office for the advance amount according to the approved budget and the current state expenditure regulations. After settlement, the State Treasury Office will provide the next month's expenses.

- Operating management funds of the grassroots Project Management Boards shall provide monthly advances and settlements according to the progress of investment capital implementation; the State Treasury Office will not fully disburse the operating management funds to project owners until they complete the assigned volume plan.

- The operating funds of the State Treasury System, managed uniformly by the Central State Treasury and allocated to provincial and municipal treasuries for use in accordance with the financial management system stipulated in Point 2, Section II, Circular No. 123/1998/TT-BTC dated September 4, 1998, issued by the Ministry of Finance.

3- Disbursement of support capital for production forest planting

3.1- Conditions for disbursement

- To be eligible for the disbursement of support capital for production forest planting, organizations, households, and individuals must develop a forest planting project, clearly stating the volume, species, density of planted forests, and the requested support capital, and submit it to the People's Committee of provinces and cities, ministries, and sectors for approval in accordance with the established procedures for approving new forest planting projects.

- Projects receiving support capital for production forest planting must submit the following documents to the State Treasury Office where their transaction account is opened:

+ Decision approving the production forest planting project by the competent authority.

+ Decision appointing the project owner by the project’s supervising agency.

+ Decision granting support capital for production forest planting by the competent authority.

+ Annual support capital plan announced by the project’s supervising agency.

+ Design and budget approved by the competent authority.

+ Completion acceptance record of the planted forest volume confirmed by the provincial-level Acceptance Committee chaired by the Department of Agriculture and Rural Development.

3.2- Procedure for disbursement of capital

- When the project completes the first year's planting and care activities and subsequent years' care activities, the project owner must conduct a completion acceptance of the planted forest volume (confirmed by the provincial-level Acceptance Committee chaired by the Department of Agriculture and Rural Development) and send it to the State Treasury Office as the basis for capital disbursement. The State Treasury Office will review the completed work records and vouchers according to the prescribed regulations and proceed with the disbursement of support capital for the projects. The average support capital is 2 million VND per hectare and is distributed as follows:

+ For the first year's planting and caring for the forest, an average support of 1 million dong/hectare.

+ Subsequent years' forest care, providing an average of 1 million VND per hectare; the time and amount of support capital for each year are carried out according to the technical procedures of the Ministry of Agriculture and Rural Development and the annual state plan. The recipients of subsequent years' support capital must be areas that have already received support capital for the first year's planting and care activities and comply with the species and planting density regulations approved by the project’s supervising agency.

IV- ACCOUNTING RECORDS, INSPECTION, REPORTING, AND SETTLEMENT

1- Accounting Records

- Project owners and units using state budget capital under the New Forest Planting Program of 5 million hectares must maintain accounting records and statistics in accordance with the current state regulations; ensuring management according to each source of program funding (forest production, infrastructure, management operations, support for production forest planting) and the state budget classification.

- State Treasury Offices shall maintain accounting records in accordance with the regulations of the Ministry of Finance and the guidelines of the Central State Treasury.

2- Inspection

- The supervising agencies of the projects, central and local functional management agencies, and State Treasury Offices shall inspect the implementation of plans, financial management systems, and actual project deployment by project owners, promptly reflecting any issues and difficulties in management to the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Agriculture and Rural Development; the National Steering Committee, and the National Project Management Board for the New Forest Planting Program of 5 million hectares to take appropriate measures.

- Any capital disbursed to project owners that is misused or improperly used, discovered through audits and inspections, shall be recovered and deposited into the central government budget.

3- Reporting

- Monthly, project owners and responsible units must prepare and submit reports on the use of capital to the project’s supervising agency and simultaneously send them to the State Treasury Office where the capital was disbursed (Form No. 02) by the 5th day of the following month.

- State Treasury Offices where capital was disbursed are responsible for compiling and reporting to higher-level State Treasury Offices (district and county treasuries report to provincial treasuries by the 10th day of the following month; provincial treasuries compile and report to the Central State Treasury by the 15th day of the following month).

- Quarterly, based on reports from provincial State Treasury Offices, the Central State Treasury compiles the situation of capital disbursement across the country and reports to the Ministry of Finance, the National Steering Committee, and the National Project Management Board for the New Forest Planting Program of 5 million hectares by the 20th day of the following quarter.

4- Annual Capital Settlement and Final Project Settlement

4.1- Annual Capital Settlement

- The capital allocated for the New Forest Planting Program of 5 million hectares in any given year shall be disbursed for completed work volumes up to December 31 of that year (based on the completion acceptance record); the State Treasury Office will accept settlement documents until January 15 and conclude capital disbursement for projects by January 31 of the following year.

- The annual capital settlement process is as follows:

+ The project sponsors and responsible units shall prepare and submit the final expenditure report on the use of allocated funds to the State Treasury where the funds were allocated, simultaneously reporting to the project management authority. Advance payments must be processed to convert to final disbursement before the last capital allocation date of the State Treasury (January 31 of the following year); in special cases, if not yet meeting the conditions for settlement, they may be deducted from the next year's capital allocation plan and settled in the following year. The latest time for submitting the final expenditure report by project sponsors is February 28 of the following year.

+ The State Treasuries shall be responsible for consolidating and settling the allocated capital for the 5 million hectare forest planting projects with higher-level State Treasuries; district and county State Treasuries shall submit to provincial and municipal State Treasuries no later than March 15 of the following year; provincial and municipal State Treasuries shall submit to the Central State Treasury and report to the project management authority no later than March 31 of the following year (for projects under local management, provincial and municipal State Treasuries shall also report to the People's Committee of the province or city).

+ The Central State Treasury shall be responsible for consolidating and settling the allocated capital for projects under the 5 million hectare forest planting program and the operating capital of the entire State Treasury system, and report to the Ministry of Finance for approval no later than April 30 of the following year.

- Remaining funds after settlement shall be transferred by provincial and municipal State Treasuries to the Central State Treasury for settlement with the state budget (central budget).

4.2- The settlement of completed works and project completion settlement shall be regulated as follows:

- For centrally-managed projects: project sponsors shall prepare and submit the final expenditure report (with confirmation from the State Treasury where the funds were allocated) to the superior authority of the project sponsor. The superior authority of the project sponsor shall be responsible for reviewing and approving the project sponsor's final expenditure report, and consolidating and reporting to the Ministry of Finance (Central State Treasury), the Ministry of Agriculture and Rural Development (Central Steering Board for the 5 million hectare forest planting program).

- For locally-managed projects: project sponsors shall prepare and submit the final expenditure report (with confirmation from the State Treasury where the funds were allocated) to the Department of Agriculture and Rural Development, provincial and municipal State Treasuries. The Department of Agriculture and Rural Development shall coordinate with the State Treasury and members of the provincial and municipal steering boards for the 5 million hectare forest planting program to review the project sponsors' final expenditure reports and submit them for approval by the Chairman of the People's Committee of the province or city, and report to the Ministry of Finance (Central State Treasury), the Ministry of Agriculture and Rural Development (Central Steering Board for the 5 million hectare forest planting program).

V- RESPONSIBILITIES OF THE RELATED AUTHORITIES

1- Project sponsors shall be responsible for:

- Implementing projects according to assigned tasks, ensuring progress and quality as prescribed.

- Providing relevant documents, materials, and payment vouchers to the State Treasury as the basis for capital allocation; being responsible for the accuracy and honesty of the provided materials.

- Receiving and using capital for its intended purpose, for the designated recipients, economically and effectively.

- Reporting and settling capital according to prescribed regulations.

2- The project management authority shall be responsible for:

- Being fully responsible for the results of projects within its management scope; guiding, inspecting, and urging project sponsors to implement assigned plans, receiving and using investment capital for the intended purposes in accordance with regulations.

- Allocating the capital plan for projects according to the total amount, capital structure, and project list arranged by the State.

- Approving annual expenditure budgets, final expenditure reports, and program completion settlements for projects.

3- The Department of Agriculture and Rural Development shall be responsible for:

- Advising and assisting the People's Committees of provinces and cities in directing and managing project sponsors to implement assigned plans.

- Taking the lead in coordinating with members of the local steering board for the project to inspect the planted forest volume and completed work volumes of project sponsors (including central projects located within their jurisdiction) as the basis for State Treasury allocations and being responsible for the accuracy of the confirmed data.

- Coordinating with the State Treasury and members of the steering board to audit annual final expenditure reports and program completion settlements of project sponsors for approval by the People's Committees of provinces and cities.

4- The State Treasury shall be responsible for:

- Based on the allocated capital and regulations, conducting inspections and controls over the documents and vouchers of completed work volumes and promptly allocating capital to project sponsors.

- Having the right to request project sponsors to provide documents, materials, and information for management and capital allocation purposes.

- The State Treasury has the right to refuse capital allocation to projects that do not meet the conditions, recover capital misused by project sponsors, and bear responsibility for refusing allocation and cases of improper payment settlement.

- Taking the lead in coordinating with the Department of Agriculture and Rural Development and related agencies in the local steering board for the 5 million hectare forest planting program to inspect project settlement data for approval by the People's Committees of provinces and cities.

- Implementing capital reporting and settlement in accordance with regulations.

Part 3

IMPLEMENTING PROVISIONS

This Circular takes effect from January 1, 1999.

Ministries, ministerial-level agencies, People's Committees of provinces and centrally-administered cities, project sponsors, Departments and Bureaus under the Ministry of Finance, and units under the State Treasury system shall be responsible for implementing this Circular.