Joint Circular No. 3-TC/KHKT guiding the establishment and use of funds in scientific research and technological implementation agencies.

CIRCULAR

OF THE MINISTRY OF FINANCE - STATE SCIENCE AND TECHNOLOGY COUNCIL JOINT DECREE NO. 3-TC/KHKT ON 28 JANUARY 1984 GUIDELINES
FOR THE REGIME OF WITHDRAWAL AND USE OF FUNDS IN RESEARCH INSTITUTIONS AND TECHNICAL APPLICATION ORGANIZATIONS

To implement Resolution No. 51-HĐBT dated May 17, 1983 of the Council of Ministers on allowing research institutions and technical application organizations to implement economic accounting systems and economic contracts in research and application, thereby establishing science and technology development funds, welfare funds, and reward funds, the Ministry of Finance and the State Science and Technology Council provide guidelines for the establishment and use of these funds as follows:

I. OBJECTIVES OF ESTABLISHING FUNDS

The establishment and use of science and technology development funds, welfare funds, and reward funds aim at the following objectives:

1. Promote and encourage research institutions and technical application organizations to gradually apply and perfect economic accounting systems suitable for scientific and technological activities, continuously improving the economic efficiency of scientific research and technical application work.

2. Implement material incentives to motivate scientific and technological personnel to strive to complete their scientific research and technical application plans successfully.

II. OBJECTS ELIGIBLE FOR WITHDRAWING DEVELOPMENT FUNDS, WELFARE FUNDS, AND REWARD FUNDS

The regime for withdrawing development funds, welfare funds, and reward funds applies to the following objects:

1. Research institutions and technical application organizations at the institute level or equivalent with legal personality (hereinafter referred to as research and application organizations) implementing economic accounting systems.

2. Research and application organizations not yet implementing economic accounting systems may withdraw the three funds from the following sources:

- Income from the implementation of economic contracts (as stipulated in Part V of Circular No. 1438-KHKT/TC dated November 19, 1983 of the State Science and Technology Council - Finance guiding the implementation of Decision No. 175-CP dated April 29, 1981 of the Council of Ministers on signing and implementing economic contracts in scientific research and technical application).

- Income from selling trial production products, recovered waste materials, and scientific and technological services.

III. CONDITIONS FOR WITHDRAWING FUNDS

1. For organizations implementing economic accounting systems:

a. Having research and technical application plans and financial plans approved by competent authorities.

b. Having statutory capital (fixed assets and working capital).

c. Having economic and technical norms.

d. Organizing the evaluation and acceptance of scientific research and technical application projects according to prescribed regulations.

đ. Product prices approved by competent authorities.

e. Having revenue to cover costs.

g. Having settlement systems consistent with the requirements of economic accounting.

The above conditions are minimum requirements for organizing economic accounting in research and application organizations in the coming years. The State Science and Technology Council and the Ministry of Finance will jointly study and develop a system of economic accounting applicable to scientific research and technical application.

2. For organizations not yet implementing economic accounting systems:

a. Having research and technical application plans and financial plans approved by competent authorities.

b. Preparing budgets based on standard expenditure norms prescribed by the State.

Having plans and measures to save expenses, striving to generate income to increase expenditures and create additional financial resources to withdraw the three funds.

c. Fully implementing regulations on scientific and technological planning, registration of topics, and acceptance of scientific and technological research projects, as well as budget preparation, accounting, statistics, and settlement of revenues and expenditures.

d. Strictly adhering to price discipline and the State pricing system. For products and services not included in the State pricing framework, they must be approved by the management authority after consultation with the price and finance authorities at the same level (as stipulated in Section V, Point 4B of Circular No. 1438-KHKT/TC dated November 19, 1983 of the State Science and Technology Council - Finance).

đ. Paying all required payments (if any) to the State budget.

IV. SOURCES OF FINANCIAL RESOURCES FOR WITHDRAWING THE THREE FUNDS

1. For organizations implementing economic accounting systems, the source of financial resources for withdrawing the three funds is profit after fulfilling State budget obligations.

2. For organizations not yet implementing economic accounting systems, the sources of financial resources for withdrawing the three funds are:

a. Income from economic contracts with production and business establishments for research and application, technical implementation, according to Joint Circular No. 1438-KHKT/TC dated October 19, 1983.

b. Income from a portion of the value after fulfilling State budget obligations (if any) of trial production products, recovered waste materials.

V. BASIS FOR WITHDRAWING THE THREE FUNDS AND WITHDRAWAL RATES
TO ESTABLISH FUNDS

A. Basis for withdrawal:

1. Completing annual scientific research and technical application plans directly assigned by competent authorities, including:

a. Research topics, design, trial production, and application to production under national or ministry-level key science and technology programs, conducted by the leading organization or in collaboration with other units.

b. Research topics, design, trial production, and application to production self-initiated by the organization based on economic contracts with customers, approved by higher-level management.

c. Scientific and technological services utilizing existing equipment and labor within the unit such as repair, maintenance, installation, operation of equipment, processing raw materials for research purposes, data processing, completing designs, experiments, prototype manufacturing...

The review and approval of completion of scientific research and technical application plans must be based on registered topics, research result reports, evaluations, and acceptance of scientific and technological projects (as stipulated in Decision No. 282-QĐ dated June 20, 1980 of the State Science and Technology Council).

The principle is that only when the state plan is completed can funds be set aside for various reserves. If the state plan is not completed without a legitimate reason, especially for research and development projects under the national key science and technology program, there shall be no awards.

2. Implement the budget preparation and settlement system for income and expenditure on each project, each research contract, design, trial production, and scientific and technological services. Use the approved budget for its intended purpose, spend economically, and align with the progress of the scientific research and technical implementation plan.

3. Fully and timely collect and remit to the state budget all amounts due according to the state regulations.

B. Levels of setting aside funds.

1. Profits from implementing contracts with customers and surplus revenues from auxiliary production units (if any), which exceed expenses, shall be distributed as follows:

a. 20% to the state budget,

b. 30% to the science and technology development fund,

c. 30% to the award fund,

d. 20% to the welfare fund.

2. Revenues from selling trial products, scrap materials, and by-products during research and development (excluding unused raw materials that must be recovered according to regulations) shall be distributed as follows:

a. 20% to the state budget,

b. 30% to the centralized science and technology development fund of the Ministry or General Department.

c. 50% to supplement the three funds at the following rates:

40% to the science and technology development fund,

40% to the award fund,

20% to the welfare fund.

3. For scientific research and technical implementation agencies carrying out national and ministry key projects without revenue or insufficient revenue to allocate 18% for awards, they shall be provided with 18% of the total annual salary fund to serve as the award fund.

4. Relative limits for the award fund and welfare fund.

To ensure reasonable state reward system, the relative limits for the award fund and welfare fund are stipulated as follows:

If the total amount of the award fund and welfare fund allocated throughout the year exceeds six months' average salary of employees in the unit's roster, the excess over six months' salary (from the seventh month onwards) shall be distributed as follows:

a. 50% to the state budget.

b. 20% to the centralized science and technology development fund of the Ministry or General Department.

c. 30% to supplement the three funds at the following rates:

60% to the award fund,

20% to the welfare fund,

20% to the science and technology development fund.

5. The above funds shall be deposited into a separate account at the bank, and the annual surplus shall be carried forward to the next year.

VI. PURPOSES OF THE FUNDS

1. The science and technology development fund shall be used for the following purposes:

- Manufacturing, modernizing, and constructing additional equipment or facilities directly serving scientific research and technical implementation work and enhancing management.

- Purchasing additional machinery and equipment, repairing experimental facilities, building trial production and auxiliary production facilities, improving working conditions, ensuring environmental hygiene, and protecting labor safety.

The science and technology development fund belongs to the authority of research and implementation agencies and may be used to implement economic contracts in scientific research and technical implementation. Each year, these agencies must prepare plans and budgets for using the fund to increase material resources for their scientific research and technical implementation work.

2. The award fund shall be used to reward staff who have achieved results in completing the scientific research and technical implementation plan. The principle of distributing bonuses is based on the final labor results of each employee contributing to the agency's overall achievements in the planning year.

3. The welfare fund shall be used to pay bonuses for staff dining halls, kindergartens, clinics according to general regulations, improve living conditions, care for staff health, and meet other needs as guided by the Vietnam General Confederation of Labor regarding the use of the welfare fund.

The distribution and use of the award fund and welfare fund shall be implemented according to the current system applicable to production and business units with economic accounting.

VII. ORGANIZATION AND GUIDANCE FOR IMPLEMENTATION

1. Annually, based on the guidance of the State General Statistics Office and the State Science and Technology Commission on reviewing the completion of plans for research and technical implementation agencies, the superior supervisory bodies shall establish review boards for the completion of research and technical implementation plans of subordinate agencies. The board members include representatives from science and technology management, statistics, planning, finance, and banking at the same level. Based on the degree of plan completion, the level of setting aside funds shall be decided; if the unit completes the plan, it shall be allowed to set aside funds according to the basic levels prescribed; if the plan is not completed due to objective reasons, the funds shall only be set aside according to the extent of plan completion.

2. At the end of the planning year, research and technical implementation agencies must prepare reports on the implementation of the annual plan according to the prescribed indicators. On the basis of the reports from the research and implementation agencies, the superior supervisory bodies shall formulate review plans for the completion of science and technology plans and temporarily approve the agencies to set aside funds (with agreement from financial, statistical, and science and technology management bodies at the same level).

After temporary approval of the funds, the supervisory body shall notify the research and implementation agencies to temporarily withdraw 75% of the approved amount for awards.

At the beginning of the following year, upon having the final settlement, the superior supervisory body (after obtaining written agreement from the same-level financial body) shall officially approve the use of the funds together with the settlement of the research and implementation agencies.

Based on the approved fund deduction levels, proceed with the payment of the temporarily deducted amount; if there is a shortage, additional deductions will be made, and if there is an excess, it must be refunded to the State budget or deducted from next year's deductions.

3. During the implementation of the plan, if the research and deployment agencies violate the management policies and regulations for science and technology, and the economic and financial management systems of the State as stipulated below, for each violation, depending on the severity, they shall be reduced by 2 to 3% of the amount allocated to the reward and welfare funds:

- Violation of the management systems for science and technology (planning system for science and technology, management of scientific and technological progress programs, state registration...).

- Causing damage to state property, materials, and capital.

- Violation of disciplinary rules and financial expenditure regulations.

- Violation of reporting systems for plans, statistical accounting, and budget revenue.

- Occurrence of fatal accidents due to subjective shortcomings of the unit.

Universities and vocational schools that meet the conditions to implement this Circular shall not apply the Joint Circular on universities and vocational schools - finance No. 24-TT/LB dated December 16, 1980.

Provincial People's Committees and municipalities directly under the Central Government may allow local research and deployment agencies to apply the provisions of this Circular. Any implementing documents must be agreed upon by the State Committee for Science and Technology and the Ministry of Finance before issuance.

5. This Circular takes effect from the date of signature and applies to the establishment of funds in research and deployment agencies in 1983. Research and deployment agencies that have implemented the three-fund allocation system according to this Circular shall not apply the end-of-year performance bonus system (10% of salary fund) as per Decision No. 198-HĐBT dated December 15, 1985 of the Council of Ministers. For the year 1983, agencies that have already allocated 10% as a bonus according to Decision No. 198-HĐBT shall be allowed to supplement an additional 8% to reach 18% of the salary fund for state and ministry project plans. Agencies that have allocated more than six months' salary must return the excess amount calculated according to Point 4, Section B, Part V of this Circular. All previous regulations by sectors and levels regarding bonus systems and fund distribution in science and technology agencies that conflict with this Circular are hereby abolished.

Annually, when guiding the review of the completion of scientific and technological research plans, if necessary, the Joint Ministries will provide supplementary guidance to adjust the system to suit the operational situation of scientific and technological work. In the course of implementation, any difficulties should be reported by sectors and scientific and technological agencies to the Joint Ministries for study and resolution.