Circular No. 28/2012/TT-BTC on the management of investment capital from the budget of communes, wards, and towns.

CIRCULAR

Regulations on management of investment capital

from communal budget of villages, towns, and wards

___________________

 

Pursuant to the State Budget Law No. 01/2002/QH11 dated December 16, 2002; Government Decree No. 60/2003/NĐ-CP dated June 6, 2003 detailing and guiding the implementation of the State Budget Law;

Pursuant to the Construction Law No. 16/2003/QH11 dated November 26, 2003; Government Decree No. 12/2009/NĐ-CP dated February 12, 2009 on project management for construction works and Government Decree No. 83/2009/NĐ-CP dated October 15, 2009 amending and supplementing certain articles of Government Decree No. 12/2009/NĐ-CP dated February 12, 2009 on project management for construction works;

Implementing Decision No. 293/QD-TTg dated February 5, 2013 on providing targeted support from the central budget for twenty-three districts with high poverty rates applying investment mechanisms and policies for infrastructure development according to the provisions of Resolution No. 30a/2008/NQ-CP dated December 27, 2008 of the Government on the Program to rapidly reduce poverty in 62 poor districts;

Pursuant to Government Decree No. 85/2009/NĐ-CP dated October 15, 2009 guiding the implementation of the Bidding Law and selection of contractors under the Construction Law; Government Decree No. 48/2010/NĐ-CP dated May 7, 2010 on contracts in construction activities;

Pursuant to Government Decree No. 52/1999/NĐ-CP dated July 8, 1999 on the Regulation on Investment Management and Construction, Government Decree No. 12/2000/NĐ-CP dated May 5, 2000, and Government Decree No. 07/2003/NĐ-CP dated January 30, 2003 amending and supplementing certain articles of the Regulation on Investment Management and Construction issued together with Government Decree No. 52/1999/NĐ-CP dated July 8, 1999;

The Minister of Finance promulgates this Circular amending and supplementing Clause 1, Article 15 and the attached forms of Circular No. 86/2013/TT-BTC dated June 27, 2013 of the Ministry of Finance concerning the application of preferential treatment regimes in customs administration for enterprises meeting the required conditions as follows:

The Ministry of Finance hereby stipulates regulations on management of investment capital from the communal budget of villages, towns, and wards as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

Article 1. These Circular applies to projects for construction works (feasibility study reports) or economic-technical reports for construction works (hereinafter referred to collectively as investment projects) funded by the communal budget of villages, towns, and wards (hereinafter referred to collectively as the communal budget) and within the approval authority of the People's Committee of villages, towns, and wards (hereinafter referred to collectively as the People's Committee at the commune level).

Article 2. These Circular does not apply to projects and works managed by the People's Committee at the commune level that are guided by other documents of the competent authority.

For investment projects managed by the People's Committee at the commune level and funded by sources other than state budget funds (not included in state budget funds), it is encouraged to follow these Circulars.

Article 2. Principles of investment capital management

Clause 1. Before approving an investment project, the investor decision-maker must clearly define the source of funds for implementing the investment project; only decide to invest when the source of funds and the ability to balance funds have been clearly defined and ensure sufficient funding to implement the project within three years. In cases where the investment project uses support funds from higher-level budgets, before approving the investment project, there must be a written agreement on the funding source of the supporting level. Strictly prohibit the commencement of an investment project without guaranteed funding. If an investment project is decided upon without clearly defining the funding source and the amount of state budget funds, causing the project to be extended and resulting in waste, the person signing the investment decision shall bear responsibility for the losses caused by this extension.

In special and urgent cases (due to natural disasters, fires) requiring immediate commencement, the investment project must obtain written consent from the Standing Committee of the People's Council of villages, towns, and wards or the Standing Committee of the People's Committee for pilot areas without People's Councils (hereinafter referred to collectively as the People's Council at the commune level) and written approval from the People's Committee of districts, towns, and cities directly under provinces (hereinafter referred to as the People's Committee at the district level). Investment projects in such cases must have a plan to ensure funding; they must be prioritized for funding allocation as soon as funding becomes available; avoid arrears in funding.

Clause 2. For projects funded from higher-level budget support, the Chairman of the People's Committee of provinces and centrally-administered cities (hereinafter referred to as the People's Committee at the provincial level) shall base on actual conditions and capabilities, and the management capacity regarding investment and construction works of the People's Committee at the commune level, to delegate appropriate approval authority for investment project decisions in accordance with current national regulations and specific local conditions.

Clause 3. Investment projects approved for investment by the Chairman of the People's Committee at the commune level must be within the approved planning framework and comply with the current national procedures and regulations for investment and construction works. In cases where the investment project is not included in the approved planning framework, prior to approval, the investment project must obtain written approval from the People's Committee at the district level regarding the planning.

Clause 4. The Chairman of the People's Committee at the commune level must ensure the proper, economical, efficient, transparent, and open use of investment capital; strictly adhere to the financial management system, investment, and construction regulations of the State, and the specific provisions of this Circular.

Clause 5. The investor or the Project Management Board established by the investor or the consulting firm hired by the investor to manage the project (hereinafter referred to collectively as the investor) must manage the investment project for construction works according to current national regulations and the specific provisions of this Circular.

Clause 6. Financial agencies at all levels and upper-level agencies responsible for investment and construction work management according to their assigned functions and tasks have the responsibility to guide investors in organizing the implementation of investment projects. The State Treasury has the responsibility to monitor and promptly, fully, and correctly settle investment capital according to current national regulations and the specific provisions of this Circular when the conditions for settling investment capital are met.

Chapter II

SPECIFIC PROVISIONS

Article 3. Sources of Investment Capital

1. Budget capital allocated to communes for investment projects.

2. Support capital from higher-level state budgets for investment projects within the authority of commune People's Committees to approve project investment decisions.

3. Contributions on a voluntary basis from residents in the commune for specific investment projects, approved by the Commune People's Council and included in the commune budget revenue.

4. Voluntary contributions and non-repayable aid from organizations and individuals (domestic and foreign) for investment in projects managed by the commune shall be implemented as follows:

a) In the case of monetary contributions: The Commune People's Committee collects and deposits the funds into the commune-managed investment capital account at the State Treasury (if the contribution is in foreign currency, it will be converted into Vietnamese dong according to the monthly exchange rate published by the State Treasury).

b) In the case of in-kind contributions:

- For contributions in materials and voluntary labor from commune residents: Based on the quantity of materials and labor contributed by residents, the prices of materials, and the daily wage rates in the locality at the time of contribution, the Commune People's Committee determines the value (in Vietnamese dong) for recording income and expenditure as prescribed.

- For contributions in kind from other organizations and individuals for commune investment: The Commune People's Committee establishes a committee to determine the value of in-kind contributions (in Vietnamese dong) to be managed by the Project Investor; simultaneously, it records income and expenditure as prescribed. The committee to determine the value of in-kind contributions is established by the Chairman of the Commune People's Committee, with members including representatives from local authorities, mass organizations, and the community investment oversight board.

Article 4. Preparation of Plans, Notification of Plan Allocation, and Adjustment of Annual Investment Capital Plans

1. Preparation of Investment Capital Plans:

a) The preparation of investment capital plans by Commune People's Committees is carried out in accordance with regulations of the Ministry of Finance (as stipulated in Circulars No. 60/2003/TT-BTC dated June 23, 2003 on commune budget management and other financial activities of communes, wards, and towns, and Circular No. 63/2009/TT-BTC dated March 27, 2009 on the preparation of budget estimates, implementation, and settlement of district, town, and ward budgets where there is no People's Council) and any subsequent amendments and supplements (if applicable). Specifically: based on the commune's socio-economic development plan, the Project Investor prepares the investment capital plan, which is submitted together with the commune budget estimate to the Commune People's Committee. Based on the anticipated sources of investment capital, the Commune People's Committee compiles and submits the investment capital plan for the commune to the Commune People's Council for review and approval (using Form No. 01/BC-KHĐT issued with this Circular). The investment capital plan must include the following contents:

- Total investment capital for the year, divided by each investment project and each source of capital (commune budget capital; higher-level budget support capital; capital contributions from organizations and individuals within the commune; capital contributions from other organizations and individuals).

- Any recommendations (if applicable).

- After being approved by the Commune People's Council, the commune's investment capital plan is sent to the District, County, City, or Provincial Town Financial Planning Office (hereinafter referred to as the District Financial Planning Office). The District Financial Planning Office compiles and reports to the District People's Committee, Department of Finance, and Department of Planning and Investment (using Form No. 02/BC-KHĐT issued with this Circular).

2. Notification of Plan Allocation:

Based on the annual investment capital plan approved by the Commune People's Council, and considering the commune budget revenue, higher-level budget support, raised contributions, and the volume of work completed in investment projects, the Chairman of the Commune People's Committee allocates and decides to assign the investment capital plan to each project, and sends it to the State Treasury (where the account is opened) as the basis for controlling and settling investment project funds (using Form No. 03/TB-KHĐT issued with this Circular).

The Commune People's Committee details the allocation of development investment capital to each project according to the project code and economic sector (type, item) as specified in Appendix No. 02 issued with Decision No. 33/2008/QĐ-BTC dated June 2, 2008 of the Minister of Finance on the National Budget Classification System and any subsequent amendments and supplements (if applicable).

3. Annual Adjustment of Investment Capital Plans:

- Periodically, the Commune People's Committee reviews the progress and investment objectives of the year's investment projects to adjust the plan within its authority, transferring capital from projects that cannot be implemented to those that have exceeded their schedule, still owe work volumes, or have the potential to complete ahead of schedule. The adjustment must ensure that the adjusted plan for each project does not fall below the amount already settled by the State Treasury for that project.

- The deadline for annual plan adjustments ends no later than December 25 of the planning year.

Article 5. Capital Investment Settlement

1. Account Opening:

a) The investor is entitled to open a capital investment settlement account at the State Treasury (at the location where the commune budget transaction account is opened) in accordance with the regulations of the Ministry of Finance on the establishment and use of accounts at the State Treasury.

b) The State Treasury shall guide the investor in opening an account.

2. Initial Documents and Materials for the Investment Project:

To serve management and control over capital investment settlement, the investor must submit to the State Treasury (where the settlement account is opened) the initial documents and materials of the investment project (these documents can be original or certified true copies provided by the investor; these documents are only sent once until the completion of the project, except in cases of supplementation or adjustment), including:

a) For preparatory investment projects:

- Approved budget estimate for investment preparation work;

- The document approving the results of the tender selection according to the Bidding Law;

- Contract between the investor and the contractor.

b) For implementation investment projects:

- Construction investment project (or economic-technical report for projects that only prepare an economic-technical report) and the investment decision of the competent authority;

- Approval document for the selection results of contractors according to the provisions of the Bidding Law (including bidding, direct assignment, direct purchase, competitive tendering, self-execution, and contractor selection in special cases, consultant design selection for construction works);

- Contract between the investor and the contractor and other documents attached to the contract as prescribed by law (excluding technical documents);

- Budget estimate and the approval decision of the competent authority for each work, sub-project, and project in the case of direct assignment or self-execution and works carried out without a contract (except for projects that only prepare an economic-technical report).

3. Advance Payment of Capital:

The State Treasury shall settle payments to the investor to provide advance capital to the contractor according to the contract or to carry out necessary tasks requiring advance payment before and must be specifically stipulated in the contract; advance capital payment shall be made after the contract becomes effective. The amount of advance capital, the time of advance payment, and the recovery of advance payment must comply with the regulations of the State for specific types of contracts as follows:

a) Amount of advance capital: implemented according to Circular No. 86/2011/TT-BTC dated June 17, 2011, issued by the Ministry of Finance on the management and settlement of capital investment and operational funds with investment characteristics from state budget sources; Circular No. 16989/BTC-DT dated December 13, 2011, issued by the Ministry of Finance on guiding the settlement of capital investment from the plan starting from 2012 and any amendments or supplements (if any).

b) Application for advance capital payment: based on the documents and materials specified in Clause 2, Article 5 of this Circular and the amount of advance capital stipulated above; the investor shall prepare an application for advance capital payment to send to the State Treasury including:

- Application for capital investment settlement (according to Appendix No. 03 issued together with this Circular).

- Transfer voucher (in accordance with the accounting document system of the Ministry of Finance).

- Guarantee for the advance payment amount of the contractor (if the investor and the contractor agree on guaranteeing advance payment in the contract; a certified true copy provided by the investor).

c) Recovery of Advance Capital:

- Advance capital will be recovered through each payment of completed contract volume, starting from the first payment and fully recovered when the cumulative completed volume reaches 80% of the contract value. The amount recovered each time is agreed upon by the investor and the contractor and clearly stipulated in the contract.

- For compensation and support work when the State recovers land:

+ For compensation and support work: after paying to the beneficiary, the investor collects evidence, processes the settlement procedures, and recovers the advance payment within the latest period of 30 working days from the date of payment to the beneficiary.

+ For other works: the advance payment capital is recovered in each payment period based on completed volume and is fully recovered upon completion of the compensation and support work.

d) The investor is responsible for calculating reasonable advance amounts, managing the use of advance capital for its intended purpose, for the correct beneficiaries, effectively, and is responsible for repaying the full amount of advance capital according to regulations.

- In cases where the advance capital has not been recovered but is unused, if it exceeds the six-month period stipulated in the contract due to reasons beyond the contractor's control or misuse of the advance capital after receiving it, then the investor is responsible for recovering and returning the advance capital to the state budget together with the State Treasury. Strictly prohibit advance capital payment without use or misuse.

- In cases where the advance capital has not been fully recovered by the end of the plan year due to the contract not reaching the specified settlement ratio, recovery will continue in the following year's plan and will not be deducted from the next year's capital investment settlement plan.

e) The State provides capital to the investor to make advance payments during the plan year, the latest being December 31 (except for advance payments for land clearance which can be extended to January 31 of the following year). The investor may make advance payments in one or multiple installments for a contract based on the need for advance capital settlement but not exceeding the stipulated advance capital amount; if the planned capital allocation is insufficient for the advance capital amount, the investor may apply for additional advance capital in the following year's plan.

4. Settlement of Completed Volume:

a) For work carried out through a contract: contract settlement must be consistent with the type of contract, contract price, and conditions in the contract. The number of settlements, settlement stages, settlement time, settlement deadline, settlement documents, and settlement conditions must be clearly stipulated in the contract; specifically:

- For lump-sum contracts: settlement is based on a percentage of the contract price or the project price, sub-project price, or work volume corresponding to the settlement stages recorded in the contract.

- For fixed unit price contracts: settlement is based on the actual completed volume (including approved increases or decreases, if any) accepted and the unit price in the contract.

- For adjustable unit price contracts: settlement is based on the actual completed volume (including approved increases or decreases, if any) accepted and the adjusted unit price due to inflation as agreed in the contract.

- For time-based contracts:

+ The costs for experts shall be determined based on the salary level for experts and related expenses agreed upon by the parties in the contract (multiplied by the actual working time accepted for verification (by month, week, day, hour)).

+ Other costs outside the expert remuneration are paid according to the method stipulated in the contract.

- For contracts based on a percentage rate (%): payment shall be made according to the percentage (%) of the contract price. The percentage (%) for each payment shall be agreed upon by the parties in the contract. When the contractor fulfills all obligations under the contract, the tenderer shall pay the contractor an amount equal to the percentage (%) value of the completed works or work volume as stipulated in the contract.

- For contracts combining various types of contract prices: payment shall be carried out corresponding to the types of contracts as prescribed above.

- For additional work volumes outside the contract: payment for additional work volumes (outside the contract) without unit prices in the contract shall be implemented according to supplementary agreements to the contract that the parties have agreed upon before implementation and must comply with relevant legal provisions. In cases where additional work is supplemented, the Investor and the Contractor must sign supplementary appendices to the contract according to the following principles:

+ In cases where the additional work volume exceeds 20% of the work volume recorded in the contract or the additional work volume does not have a unit price in the contract, it shall be paid based on the new unit price agreed upon by the parties according to the principle of agreement in the contract regarding the unit price for additional work volumes.

+ In cases where the additional work volume is less than or equal to 20% of the work volume recorded in the contract, the unit price in the contract, including the adjusted unit price according to the contract agreement (if any), shall be applied for payment.

+ For fixed-price contracts and time-based contracts, when fuel, materials, and equipment prices regulated by the State for stabilization measures under the Price Ordinance fluctuate abnormally or when the State changes tax policies affecting the contract price directly, adjustment of the unit price for payment shall be made if permitted by the investment decision-making authority and agreed upon by the parties in the contract.

+ For adjustable unit price contracts, the unit price in the contract shall be adjusted for work volumes for which, at the time of signing the contract, the tenderer and the contractor committed to readjust the unit price due to inflation after a certain period from the date the contract becomes effective.

+ For lump-sum contracts and percentage-based contracts: in cases where reasonable additional work outside the scope of the signed contract arises (for construction contracts, this refers to work volumes outside the scope of work required to be performed according to the design; for consulting contracts, this refers to work volumes outside the scope of consulting tasks required to be performed). In such cases, when adjusting the volume of work without changing the investment objectives or exceeding the approved total investment ceiling, the Investor and the Contractor shall calculate, agree upon, and sign supplementary appendices to the contract; if exceeding the approved total investment ceiling, it must be reviewed and decided by the authorized investment decision-maker; if the agreement fails, the additional work volumes will form a new tender package, and the selection of contractors to implement this tender package shall be conducted according to current regulations.

- Payment files: when there is a completed volume of work accepted for payment phases and conditions stipulated in the contract (or supplementary contract), the Investor shall prepare a payment request file to send to the State Treasury, including:

+ A table determining the value of the completed work volume proposed for payment (as per Appendix No. 04 issued together with this Circular).

+ A payment request for investment capital (as per Appendix No. 03 issued together with this Circular).

+ Bank transfer vouchers (in accordance with the accounting voucher system of the Ministry of Finance);

b) For work carried out without a contract:

- For self-performed work, project management tasks directly executed by the Investor, etc.: payment shall be appropriate for each type of work based on reports of completed work volumes and approved budgets for each work. Payment files include: a list of completed work volumes and approved budgets for each work; a payment request for investment capital or advance payment (if any) and transfer vouchers.

- For compensation and support costs when the State reclaims land, payment files include: a list confirming the volume of compensation and support work completed (as per Appendix No. 05 issued together with this Circular); a payment request for investment capital or advance payment (if any) and transfer vouchers.

5. For tenders implemented through the form of villagers performing work themselves within the commune:

- For tenders with simple technical requirements, mainly using manual labor, which villagers can perform themselves, the Investor shall report to the authorized investment decision-maker to approve the project investment and assign the villagers to organize construction and bear responsibility for their actions under the law. Implementing this form, the Investor shall directly sign a contract with the villagers through a Representative (a person elected by the villagers participating in construction; the Representative may be a construction team or a group of people with one person taking responsibility). When applying this form, supervision by the Community Investment Oversight Board is required.

- Initial documents and materials for this form: in addition to the contents prescribed in Clause 2, Article 5 of this Circular, the Investor shall supplement the approval document from the investment decision-maker allowing villagers to perform work themselves.

- Advance capital and payment for completed work volume files shall be similar to the provisions in Clause 3, Clause 4, Article 5 of this Circular.

- Tenders performed by villagers themselves shall be advanced up to a maximum of 50% of the contract value and shall not exceed the investment capital allocated for the tender in the year. The advance capital shall be recovered from the first payment for completed work volume and fully recovered when the payment for completed work volume reaches 80% of the contract value.

- On the basis of the contract and the completed construction volume that has been accepted for inspection, the Project Owner shall prepare a request for advance payment (or settlement) and submit it to the State Treasury to request an advance payment (or settlement) for the Representative.

In case the Representative does not have an account, the Project Owner requests the State Treasury to make payment in cash; the Representative shall directly pay the people participating in the construction work; the Project Owner and the Community Investment Supervision Board shall closely monitor the payment of labor costs to the people.

- When settling the contract package carried out by the villagers themselves, the settlement agency shall not settle the value of the costs for tasks not performed by the villagers and the VAT portion within the project budget.

6. The annual capital plan of the project shall only settle the completed volume that has been inspected up to December 31 of the planning year; the settlement deadline for the completed volume is until January 31 of the following year (including settlement to recover previously advanced funds), except for projects permitted by competent authorities to extend implementation and settlement time.

The total amount settled for the investment project in a year (including both advance payments and settlement of completed volumes) shall not exceed the annual capital plan allocated for the investment project.

The amount settled for each item of work or sub-project shall not exceed the approved estimate or tender price; the total amount settled for the investment project shall not exceed the approved total investment ceiling.

7. Deadlines for preparing settlement requests and settlement:

a) Deadline for preparing settlement requests: within three working days from the date of receipt of complete and valid settlement (or advance payment) requests from the contractor; the Project Owner must complete the settlement request procedures (or advance payment) and transfer the settlement (or advance payment) documents to the State Treasury (where the account is opened).

b) Settlement deadline: based on the settlement (or advance payment) request documents submitted by the Project Owner (as stipulated in Clauses 2, 3, 4, and 5 of Article 5 of this Circular); within seven working days for the "pre-control, post-settlement" case and within three working days for the "post-settlement, pre-control" case (from the date of receiving all documents), based on the contract (or approved budget for works carried out without a contract); the State Treasury shall perform the settlement (or advance payment) control for the Project Owner and, upon the Project Owner's request, settle (or advance payment) for contractors and related units; simultaneously recovering any advanced funds (if applicable).

8. The State Treasury shall implement settlement control as follows:

Based on the settlement request documents of the Project Owner, the State Treasury shall refer to the payment terms stipulated in the contract (number of payments, payment stages, payment dates, and payment conditions) and the value of each payment to settle for the Project Owner. The Project Owner shall be responsible for the accuracy and legality of the executed volume, rates, unit prices, various types of work budgets, and the quality of the works; the State Treasury shall not be responsible for these issues. The State Treasury shall base its settlement on the settlement documents and settle according to the contract.

The State Treasury shall implement settlement control under the principle of "post-payment, pre-control" for each payment and "pre-control, post-payment" for the final payment of the contract. Based on this principle, the State Treasury shall provide specific guidance on the settlement control method within the State Treasury system, ensuring favorable conditions for the Project Owner, contractors, and compliance with state regulations.

Article 6. Settlement

1. Annual capital investment settlement:

Shall be carried out in accordance with the provisions of the State Budget Law and the guidance of the Ministry of Finance (as stipulated in Circular No. 210/2010/TT-BTC dated December 20, 2010 on the settlement of capital investment for basic construction projects funded by the state budget according to the annual budget cycle and Circular No. 108/2008/TT-BTC dated November 18, 2008 on year-end budget processing and preparation of annual state budget settlement reports) and any subsequent amendments, supplements, or replacements (if applicable).

2. Settlement of completed projects.

a) All investment projects under the investment decision-making authority of the People's Committee at the commune level and those assigned to the People's Committee at the commune level as the Project Owner upon completion and handover for use must prepare a settlement report and have it reviewed and approved for the completed project's capital investment settlement in accordance with the current financial management regulations and specific provisions set forth in this Circular.

b) The settlement dossier for completed construction investment projects includes the settlement report forms for completed project capital investment along with related legal documents according to Form 01/QTDA and Form 02/QTDA (the method of preparing the settlement report forms is guided in Appendix I attached to this Circular).

c) Review of completed project settlement:

- When a construction investment project is completed and handed over for use, the Project Owner must complete the settlement report for the completed project's capital investment within three months at the latest. Within two months at the latest, the competent unit under the management of the Investment Decision Maker must complete the review of the settlement report for the completed project's capital investment and submit it to the Investment Decision Maker for approval of the completed project's capital investment settlement.

- In cases where the competent unit under the management of the Investment Decision Maker lacks the capacity to review the settlement report for the completed project's capital investment, the Project Owner shall report to the Investment Decision Maker to select one of the following options:

+ Engage an independent auditing organization to audit the settlement report for the completed project's capital investment.

+ Request the District Financial Planning Office to review the settlement report for the completed project's capital investment.

If necessary, the authorized person approving the settlement may establish a Settlement Audit Team to conduct the review before approval; the team members include representatives from relevant units.

- The content of the review of the settlement report for the completed project's capital investment (audit) and the content of the report on the results of the settlement review for the completed project's capital investment (audit report) are detailed in Appendix II attached to this Circular.

d) Standards for costs of reviewing and approving settlement reports and auditing completed investment projects:

- Organizations and units responsible for reviewing, approving, and auditing the settlement report for the completed project's capital investment shall be entitled to the costs of reviewing and approving the settlement report for the completed project's capital investment according to the following standards:

+ Standard for auditing costs for the settlement report for the completed project's capital investment: calculated at 0.64% of the total investment value of the project plus VAT (minimum 1,000,000 VND). The auditing contractor is responsible for the content and value of the audit of the project they undertake.

+ Standard for reviewing and approving costs for the settlement report for the completed project's capital investment: calculated at 0.38% of the total investment value of the project (minimum 500,000 VND).

- For projects with an approved total investment amount (or adjusted) exceeding 5 billion VND, the time frame for preparing, approving, and the standard for auditing costs and reviewing and approving costs for the settlement report for the completed project's capital investment shall be implemented in accordance with Circular No. 19/2011/TT-BTC dated February 14, 2011 issued by the Ministry of Finance on the settlement of completed projects funded by the state and any subsequent amendments or supplements (if applicable).

- In cases where the equipment investment ratio accounts for 51% or more of the total investment value, the standard for reviewing costs and auditing costs shall be calculated at 70% of the aforementioned standards.

- In cases where an audit of the settlement report has already been conducted, the standard for reviewing costs shall be calculated at 50% of the aforementioned standards.

e) Management and use of review and approval settlement costs:

When conducting reviews, the leading review agency shall issue a document requesting the Project Owner to pay the review and approval settlement costs according to the above-mentioned ratios; the use of these funds shall be decided and the responsibility for their use shall lie with the leading review agency. The contents covered by the review and approval settlement costs include:

- Payment of remuneration to direct reviewers and approvers of the settlement report according to the quota or time stipulated by the review agency.

- Payment to experts or consulting organizations engaged in project settlement reviews according to the quota or time stipulated by the review agency (if required).

- Travel expenses, office supplies, translation services, printing, conferences, seminars, purchase of computers or equipment serving the review and approval of settlement, and other expenses.

Unspent review and approval settlement costs in a given year may be carried forward to the next year for implementation in accordance with regulations.

f) Costs of reviewing and approving settlements and auditing settlement reports for completed investment projects are included in other costs in the value of the completed project's capital investment settlement.

g) Approval of the completed project's capital investment settlement:

Based on the review results report (audit report) of the completed project's capital investment by the reviewing organizations and units; the Project Owner shall check and submit to the Investment Decision Maker for approval of the completed project's capital investment settlement.

The decision approving the completed project's capital investment settlement must be publicly posted at the People's Committee office at the commune level and sent to the following agencies and units:

- The Project Owner.

- State Treasury (where the account is opened).

- District Financial Planning Office.

- Community Investment Oversight Board.

The final account settlement dossier for completed investment projects shall be established and stored according to the file retention system.

Article 7. Supervision Costs of the Community Investment Oversight Board

Investment projects under the management and investment decision-making authority of the People's Commune Council shall be subject to investment supervision during their implementation. The community investment oversight board shall carry out investment supervision in accordance with the provisions of Decision No. 80/2005/QĐ-TTg dated April 18, 2005, of the Government on the issuance of the Community Investment Oversight Regulations.

The community investment oversight board is established and performs its functions and tasks in accordance with Decision No. 80/2005/QĐ-TTg dated April 18, 2005, of the Government and Circular Joint Circular No. 04/2006/TTLT-KH&ĐTUBTƯMTTQVN-TC dated December 4, 2006, of the Ministry of Planning and Investment, the Standing Committee of the Vietnam Fatherland Front Central Committee, and the Ministry of Finance guiding the implementation of the Community Investment Oversight Regulations.

The operating expenses of the community investment oversight board are implemented in accordance with Part IV of the aforementioned Joint Circular No. 04/2006/TTLT-KH&ĐTUBTƯMTTQVN-TC.

In cases where small investment projects (with a value below VND 500 million) have simple technical designs and the investor lacks the capacity to self-supervise construction or cannot hire a construction supervision consultant, the investor shall submit a request to the investment decision-maker to entrust the community investment oversight board to organize construction supervision. In such cases, the community investment oversight board shall be entitled to the construction supervision cost rate, not exceeding the maximum rate set by the provincial People's Council for construction supervision costs; if the provincial People's Council has not set such a rate, it shall apply the rate published by the Ministry of Construction.

Article 8. Reporting and Inspection System

1. Reporting System:

- Every six months and annually, the People's Commune Council shall prepare reports on the implementation of work volume and paid investment capital (in accordance with Form No. 04/BC-THKH issued together with this Circular) and reports on the final settlement of investment capital for completed projects within its management scope (in accordance with Form No. 03/THQT issued together with this Circular). These reports shall be submitted to the People's Council at the commune level (if applicable), the community investment oversight board, and the Department of Finance and Planning at the district level. The six-month report shall be submitted before July 10, and the annual report shall be submitted before January 15 of the following year.

The report content must analyze and evaluate the implementation situation, investment results during the period, capital usage, existing issues, and propose measures to address these issues.

- Based on the reports on the implementation of investments by the People's Commune Council, the Department of Finance and Planning at the district level is responsible for preparing consolidated reports to be submitted to the People's Council at the district level and proposing solutions to address existing issues (in accordance with Form No. 05/BC-THKH issued together with this Circular).

2. Inspection: periodically or unexpectedly, the Department of Finance and Planning at the district level directly organizes inspections or requests the community investment oversight board to inspect, supervise, and evaluate investment projects managed by the People's Commune Council regarding capital usage, project progress, and compliance with state financial investment construction policies and regulations.

Article 9. Responsibilities and Authorities of Relevant Agencies

1. Provincial People's Committees:

- Based on current regulations and specific conditions of the locality, implement the delegation (or authorization) to the Chairman of the Commune People's Committee to decide on approving investment projects.

- Direct the County People's Committees, functional agencies under their management to guide the Commune People's Committees in organizing the management of investment projects in accordance with state regulations and this Circular.

2. District People's Committee:

Implement state management over project management; direct functional agencies under their management to coordinate and assist the Commune People's Committees in managing construction investment projects in accordance with current state regulations and this Circular.

3. County Finance and Planning Departments:

- Report on the implementation of investment plans as prescribed.

- Coordinate with functional agencies to guide and inspect investors, State Treasury, contractors on compliance with financial development policies and the management and use of investment capital, payment situations for solutions to handle violations.

- Have the right to request the State Treasury and investors to provide necessary documents and information for state management of financial development, including annual investment capital planning documents, reports on plan implementation and investment execution according to reporting regulations, documents for audit of final accounts as prescribed.

- Audit final account reports of completed projects within the authority of the Commune People's Committee to decide on investment (upon written request).

4. Commune People's Committees:

- Manage construction investment projects in accordance with project management regulations and guidance documents from competent state agencies.

- Approve investment projects and final accounts of completed projects for delegated projects in accordance with construction investment project management regulations.

- Organize the receipt and use of investment funds in accordance with purposes and targets as prescribed.

- Implement reporting and final accounting of investment projects as prescribed.

5. Investors:

- Perform rights and obligations in accordance with current state regulations on investment management and construction assigned by regulations. Comply with legal provisions on financial development management systems.

- Conduct quantity acceptance, prepare payment files, and request payment from contractors according to the time stipulated in the contract.

- Bear responsibility for the accuracy and legality of executed quantities, rates, unit prices, budgets, quality of works, and proposed payment values; ensure the accuracy, truthfulness, and legality of data and documents in provided files for the State Treasury and state agencies.

- Timely and fully report to the investment decision-making agency and related state agencies; provide complete files, documents, and situations as required for the State Treasury and finance department to serve management and payment of capital; be subject to inspection by the finance department and investment decision-making agency regarding capital usage and compliance with state financial development policies.

- Be entitled to request payment when all conditions are met and request explanations from the State Treasury regarding unsatisfactory aspects in capital control and payment.

- Bear responsibility for preparing final account reports of completed construction projects to submit to the Investment Decision Maker for approval of final project accounts. Within six months from the date of final account approval, the investor must settle debts and complete final settlement procedures for the project account at the capital payment agency.

6. Community Investment Supervisory Board:

- Request investors and contractors to report, explain, and provide information to clarify issues of community concern.

- Compile community opinions, related state management agencies' opinions, reports from investors and contractors, propose solutions to community concerns, and recommend authorities to consider and decide.

- Inform the community and relevant agencies about decisions made by competent authorities regarding community concerns.

7. For Contractors:

- Contractors are responsible for implementing activities in accordance with signed contracts and legal regulations.

- Together with investors, resolve remaining issues according to signed contracts. Fully and promptly refund excess payments made by investors beyond approved final values.

8. State Treasury:

- Implement capital control and payment in accordance with state regulations and this Circular; confirm paid amounts, assess payment and final account situations annually for each project according to state final account regulations.

- Provide monthly foreign exchange conversion rates published by the State Treasury to investors for foreign currency accounting.

- Summarize and prepare final account reports of state budget and other controlled capital sources, send to County Finance and Planning Departments and Commune People's Committees (for commune management).

- Have the right to request investors to provide related documents and information for capital control and payment work.

- Cooperate with investors to recover excess payments made to individuals and units beyond approved final values; urge, guide, and cooperate with investors to resolve debts to complete final settlement of approved projects.

Chapter III

IMPLEMENTING PROVISIONS

Article 10. Effective Date

This Circular takes effect from April 10, 2012, and replaces Circular No. 75/2008/TT-BTC dated August 28, 2008, of the Ministry of Finance guiding the management of investment capital from the budget of communes, wards, and towns.

2. During implementation, if there are difficulties or obstacles, units are requested to promptly reflect them to the Ministry of Finance for research and appropriate amendments and supplements./.