Circular No. 28/2007/TT-BTC guiding the management, allocation, payment, and settlement of investment capital from government bonds.

CIRCULAR

Guidelines for managing, allocating, settling accounts, and finalizing accounts for investment capital from government bonds

investment capital from government bonds

Pursuant to the State Budget Law No. 01/2002/QH11 dated December 16, 2002;

Pursuant to Decrees No. 52/1999/NĐ-CP dated July 8, 1999 of the Government on the issuance of the Investment Management and Construction Regulation, No. 12/2000/NĐ-CP dated May 5, 2000, and No. 07/2003/NĐ-CP dated January 30, 2003 of the Government on amending and supplementing certain articles of the Investment Management and Construction Regulation, No. 16/2005/NĐ-CP dated February 7, 2005 of the Government on Project Management for Construction Investment, and No. 112/2006/NĐ-CP dated September 29, 2006 of the Government on amending and supplementing certain articles of Decree No. 16/2005/NĐ-CP dated February 7, 2005;

Pursuant to Decision No. 182/2003/QĐ-TTg dated September 5, 2003 of the Prime Minister on issuing government bonds for investing in important transportation and water conservancy projects, and Decision No. 171/2006/QĐ-TTg dated July 24, 2006 of the Prime Minister on issuing and using government bonds during the period 2003-2010.

The Ministry of Finance hereby provides guidelines for managing, allocating, settling accounts, and finalizing accounts for investment capital from government bonds as follows:

Part I
GENERAL PROVISIONS

1. All investment projects funded by government bond capital must be managed in accordance with current State regulations on investment and construction management. Due to the specific nature of the capital source, this Circular only supplements some points regarding the management, allocation, settlement of accounts, and finalization of accounts for investment capital from government bonds. For projects with special mechanisms for management, allocation, settlement of accounts, and finalization of accounts according to decisions of the Prime Minister, the Ministry of Finance will provide separate guidance.

2. Investment capital from government bonds shall only be allocated to investment projects listed in Decision No. 171/2006/QĐ-TTg dated July 24, 2006 of the Prime Minister on issuing and using government bonds during the period 2003-2010 (hereinafter referred to as Decision 171/2006/QĐ-TTg of the Prime Minister), Document No. 1740/TTg-KTTH dated October 30, 2006 of the Prime Minister on investing in water conservancy works in the Mekong Delta (hereinafter referred to as Document 1740/TTg-KTTH of the Prime Minister), other documents (if any) of the Prime Minister, and Notification No. 6037/BKH-TH dated August 16, 2006 of the Ministry of Planning and Investment on government bond capital during the period 2003-2010 (hereinafter referred to as Notification 6037/BKH-TH of the Ministry of Planning and Investment). Such capital shall not be used for projects outside the aforementioned list.

3. The total amount of investment capital from government bonds allocated to projects shall not exceed the total amount announced in Decision No. 171/2006/QĐ-TTg, Document No. 1740/TTg-KTTH of the Prime Minister, other documents (if any) of the Prime Minister on issuing and using government bonds during the period 2003-2010, and Notification No. 6037/BKH-TH of the Ministry of Planning and Investment. The total amount of government bond capital settled for projects by each ministry or province directly under the central government (hereinafter collectively referred to as province) shall not exceed the allocated capital amount by sector and the total amount of government bond capital assigned to that ministry or province.

4. The annual capital allocation for projects is based on the registered capital payment needs according to the project's implementation progress and the ability to issue government bonds. The registered capital payment needs for projects annually serve as the basis for raising funds, allocating capital, and evaluating progress. The registered capital amount for the year is paid up until January 31 of the following year. The total amount of capital settled for a project shall not exceed the total amount of government bond capital allocated for the project for the entire period 2003-2010.

5. Capital settlement agencies:

5.1. State Treasury controls and settles capital for projects managed by ministries and provincial People's Committees.

5.2. Vietnam Development Bank controls and settles capital for resettlement projects of Son La Hydropower Plant according to separate guidance provided by the Ministry of Finance.

Part II
SPECIFIC PROVISIONS

Registration of capital needs and notification of annual capital settlement:

1.1. The registration of annual government bond capital needs is carried out according to the deadline specified for preparing the state budget, but it is prepared separately for investment projects funded by government bond capital. Based on the determined investment progress and the actual implementation of projects, ministries and provincial People's Committees register the annual government bond capital needs for each project, submit them to the Ministry of Finance and the Ministry of Planning and Investment (attached form number 1/TPCP) for consolidation and as the basis for raising and allocating government bond capital, to be submitted to the Prime Minister for decision. The capital plan must ensure compatibility with the implementation situation and should not exceed the disbursement capacity of the project, leading to excess raised capital and wastage for the State.

1.2. Review and notify the project list and investment capital:

Based on the annual government bond capital needs of each project from ministries and provincial People's Committees, the Ministry of Finance reviews the investment and construction procedures and the conditions for capital allocation, and notifies the review results to ministries and localities as follows:

- For projects managed by ministries, the Ministry of Finance notifies the list and capital of projects that have completed investment procedures and meet the conditions for capital allocation to each ministry, simultaneously sending the State Treasury as the basis for controlling capital settlement. In cases where projects do not comply with regulations, the Ministry of Finance issues a document requesting ministries to adjust accordingly.

- For projects managed by provinces, the Ministry of Finance notifies the list and capital of projects that have completed investment procedures and meet the conditions for capital allocation to provincial People's Committees, simultaneously sending the provincial Department of Finance. The provincial Department of Finance forwards the notification to the provincial State Treasury for control over capital settlement. In cases where projects do not comply with regulations, the Ministry of Finance issues a document requesting provinces to adjust accordingly.

- For the Resettlement Project of Son La Hydropower Plant, the preparation and notification of the capital plan follow separate guidance provided by the Ministry of Finance.

1.3. Documents serving as the basis for reviewing and notifying the project list and investment capital:

The project investor under the management of the Ministries shall submit to the Ministry of Finance, and the provincial project investors shall submit to the Ministry of Finance and the Provincial Finance Departments the foundational documents of the projects for review and notification of the list and capital of investment projects (these documents shall only be submitted once until the completion of the investment project, except in cases where supplementation or adjustment is required), including:

- For preparatory investment projects: the approval document for the budgeted costs for preparatory work.

- For implementation investment projects: the construction investment project (or economic-technical report for projects that only prepare an economic-technical report) along with the investment decision of the competent authority, any adjustment decisions (if applicable); the technical design approval decision (for three-step design projects) or the construction drawing design approval decision (for one-step and two-step design projects) and the total budget approval decision.

2. The State Treasury shall provide capital to the project to repay credit capital according to the following regulations:

2.1. Based on the request of the project investor and the repayment payment documentation (including the loan contract, promissory note, and repayment notice from the lending organization), the State Treasury shall control and provide capital to the project while transferring funds directly to the Vietnam Development Bank.

2.2. The State Treasury shall only control the legality of the repayment payment documentation and the amount of each repayment, without controlling the value of completed basic construction works which have been controlled by the Vietnam Development Bank when disbursing funds. The control of the value of completed basic construction works is carried out and the responsibility lies with the Vietnam Development Bank.

2.3. If the source of capital permits, the project investor may repay loans earlier than the repayment period stipulated in the loan contract signed with the Vietnam Development Bank.

3. Regarding advance funding:

3.1. Construction contracts can receive advance funding after signing the contract, with the advance amount being 20% of the contract value.

3.2. Projects involving large-value materials such as prefabricated components and semi-finished products in construction, or special materials that must be imported, must reserve advance funding according to general regulations.

4. Adjustment of payment capital level:

4.1. If the actual progress and payment capital needs of the projects during the year differ from the registered capital at the beginning of the year, the Ministries and People's Committees of the provinces shall adjust the reduction of capital levels for projects that cannot be implemented, and increase the capital levels for projects that can exceed their progress. The adjustment of capital ensures the principle of not exceeding the capital of each project, not exceeding the capital by sector, and not exceeding the total bond capital allocated by the Prime Minister for the 2003-2010 period. To align with the timing of government bond issuance, the time for adjusting annual investment capital ends on October 31.

The Ministries and People's Committees of the provinces shall submit reports on the adjustment of project capital levels (if any) to the Ministry of Finance as the basis for announcing capital and proactively adjusting the issuance of government bonds.

4.2. For projects currently being invested with state budget capital now being invested with government bond capital or projects being invested with multiple sources of capital, government bond capital shall only be arranged for continued investment within the scope of the government bond capital already decided, and shall not be used to settle the portion of state budget capital and other sources of capital already allocated to the project.

4.3. Projects that have received advance state budget capital shall be allocated government bond capital to complete the advance. The amount of advance completion shall be arranged within the annual investment capital demand from government bond sources and recovered by deducting from the project's investment payment level. For projects managed by localities that have received advance capital from the Ministry of Finance in previous years, the People's Committees of the provinces shall arrange the 2006 and 2007 government bond capital demand to complete the advance. The Ministry of Finance shall transfer capital to the locality, simultaneously recovering the previously advanced capital.

4.4. Projects currently being invested with state credit capital now being switched to government bond capital shall continue to disburse credit capital according to the plan and loan contract already signed and cease disbursement as of October 31, 2003. After this date, the project shall be allocated government bond capital for continued investment and to repay the credit capital already borrowed. Specifically, for the N1 cross-line projects under the Ministry of Transport's management, the government bond capital shall be allocated for continued investment to complete the project according to the conclusion of the Prime Minister at the Conference on Developing Transportation in the Mekong Delta region as reported in Document No. 41/TB-VPCP dated March 9, 2005, and Document No. 4069/VPCP-KTTH dated July 22, 2005, without repaying the credit capital already borrowed.

5. Regarding capital transfer, accounting, and settlement:

5.1. Capital Transfer: based on the availability of capital, the Ministry of Finance shall transfer government bond capital to pay for the projects as follows:

- For projects under the management of the Ministries, based on the Ministry of Finance's notification of the project list and investment capital and the payment capital needs of the projects, the State Treasury shall develop a quarterly payment plan sent to the Ministry of Finance for the Ministry of Finance to transfer capital to the State Treasury, which then transfers the capital to the State Treasury where the project has its account opened for payment.

- For projects under the management of the provinces, based on the Ministry of Finance's notification of the project list and investment capital and the payment capital needs of the projects proposed by the provincial State Treasury, the Provincial Finance Department shall develop a quarterly payment plan sent to the Ministry of Finance for the Ministry of Finance to transfer capital to the Provincial Finance Department, which then transfers the capital to the provincial State Treasury. The Provincial Finance Department shall open a separate account at the provincial State Treasury to receive the government bond capital transferred by the Ministry of Finance.

- For the Son La Hydropower Plant Resettlement Project, based on the payment capital needs of the projects, the Development Bank shall develop a quarterly payment plan sent to the Ministry of Finance for the Ministry of Finance to transfer capital to the Development Bank.

- At the end of each annual payment period as prescribed, any remaining capital transferred by the financial authority shall be carried over to the next year for continued settlement.

5.2. Settlement and accounting of capital:

- The project sponsors shall conduct annual capital settlement according to the current regulations on state budget capital but separately for government bond capital.

- Ministries and provincial People's Committees responsible for managing and implementing projects funded by government bonds shall consolidate and settle separately the capital investment from government bond sources with the Ministry of Finance (not included in the state budget capital).

- State Treasury shall organize separate accounting and monitoring of government bond capital, conducting annual settlements with the financial authorities as prescribed. For projects managed by localities, the provincial State Treasuries shall settle with the Provincial Departments of Finance, which in turn shall settle with the Ministry of Finance separately for this source of capital (not included in the local budget).

- The Development Bank shall settle with the Ministry of Finance regarding the government bond capital it has paid out to the projects under its supervision and payment control.

- The settlement of capital investment for completed projects shall be conducted according to the current regulations on capital settlement procedures for projects funded by state budget capital.

6. On reporting, management, and inspection systems:

6.1. Establishing tracking files:

- Project sponsors, ministries, and provincial authorities managing projects shall establish and complete all project files necessary for tracking implementation status, reporting, inspection, and final capital settlement of completed projects.

- Separate files shall be established for each component project, consolidated by clusters or groups of projects, or by overall projects (according to the list in Prime Minister's Decisions). The file contents shall include all issues related to the project from the start of implementation and shall be regularly and fully updated according to the project progress and any adjustments or supplements.

- Ministries and provincial authorities managing projects shall submit one set of files to the Ministry of Finance, the Ministry of Planning and Investment, including:

+ Legal documents related to investment policies: Investment construction reports and project approval decisions; technical design and total budget (budget) approval decisions; other relevant documents concerning investment policies (including supplementary, amended, and adjusted documents).

+ Documents related to project implementation: Bid award decisions, tender designation decisions; credit loan contracts and their liquidation; (for loan projects); documents confirming and verifying loan capital.

6.2. Regular Reporting System:

- Every quarter, six months, and annually, central project sponsors report to the respective managing ministries; local project sponsors report to the provincial People's Committees; ministries, provincial People's Committees, and the Development Bank report to the Ministry of Finance, the Ministry of Planning and Investment on the implementation of government bond capital (in accordance with Form 2/TPCP attached) - Monthly, quarterly, every six months, and annually, the State Treasury reports to the Ministry of Finance on the payment status of projects funded by government bond capital (details by sector, field, and project) of ministries, sectors, and provinces; the Development Bank reports to the Ministry of Finance on the payment status of projects under its tiered management and payment control; provincial State Treasuries report to the provincial People's Committees, Provincial Departments of Finance on the payment status of projects managed by localities (in accordance with Form 3/TPCP attached).

- Every quarter, annually, or at any time, the Ministry of Finance and the Ministry of Planning and Investment shall compile and report to the Prime Minister according to Decision No. 171/2006/QĐ-TTg dated July 24, 2006 of the Prime Minister. 6.3. Inspection System:.

- The Ministry of Finance and the Ministry of Planning and Investment shall periodically or at any time inspect projects on the implementation of investment plans, payment status, use of capital, and compliance with national financial development policies and regulations.

- Ministries, provincial People's Committees, and project sponsors responsible for managing and implementing projects funded by government bonds shall enhance management and inspection work on project progress, volume, quality, and capital usage; shall not use this capital for tasks or projects outside the approved project list; shall prevent overruns of approved project capital and wastage, loss, and corruption.

This Circular takes effect fifteen days after its publication in the Official Gazette and replaces Circular No. 100/2003/TT-BTC dated October 24, 2003 of the Ministry of Finance guiding the management, allocation, payment, and settlement of capital investment from government bond sources. Relevant agencies, organizations managing projects, sponsors, and related agencies shall implement in accordance with this Circular./.

- Ministries, ministerial-level agencies, central agencies

Part III
IMPLEMENTING PROVISIONS

of mass organizations;