Circular Joint No. 32/2000/TTLB-BTC guides the financial management regime for non-state cultural institutions operating in the cultural sector.

 

JOINT CIRCULAR

Guidelines for financial management

for non-state-owned cultural establishments

Pursuant to Resolution No. 90/CP dated August 21, 1997 of the Government on the direction and policy for socializing educational, health, and cultural activities;
Pursuant to Decree No. 73/1999/NĐ-CP dated August 19, 1999 of the Government on policies encouraging socialization in education, health, culture, and sports activities;
To unify the financial management work for non-state-owned units operating in the cultural sector, the Ministry of Finance and the Ministry of Culture and Information issue these guidelines for financial management as follows:

PART I - GENERAL PROVISIONS

1. Non-state-owned cultural establishments are units established and operated according to the policy of socialization aimed at mobilizing the participation and contributions of the whole society to develop the cultural cause.

2. Non-state-owned cultural establishments operate on the principle of not being for commercial purposes, self-financing expenses, and improving product quality. During the course of operation, if there is a surplus of income over expenditure, the establishment may increase investment in infrastructure, set up reward and welfare funds to improve the material and spiritual life of workers.

3. Non-state-owned cultural establishments must organize financial management and accounting in accordance with each type as prescribed by the State, be subject to inspection and supervision by competent state agencies, and open accounts at commercial banks or State Treasury to conduct transactions.

4. Non-state-owned establishments operating in the cultural sector shall apply preferential policies for establishments implementing socialization as stipulated in Circular No. 18/2000/TT-BTC dated March 1, 2000 of the Ministry of Finance "Guidelines for some provisions of Decree No. 73/1999/NĐ-CP of the Government dated August 19, 1999 on financial systems encouraging non-state-owned establishments in the fields of education, health, culture, and sports."

PART II - SPECIFIC PROVISIONS

I. Types of non-state-owned cultural establishments

Non-state-owned cultural establishments can be organized in the following forms:

- Art activity establishments

- Cultural preservation and museum activity establishments

- Library activity establishments

- Community information activity establishments

- Film activity establishments

- Copyright advisory service activity establishments

The above non-state-owned cultural establishments operate in three types:

1. Semi-public cultural establishments:

- Semi-public cultural establishments are established based on the collaboration between state organizations and non-state organizations, individuals from all economic sectors within the country to establish new entities or transfer all public infrastructure to jointly invest in building infrastructure, equipment, and manage all activities of the establishment in accordance with the law.

- Public cultural establishments with semi-public components involve collaboration between state organizations and non-state organizations, individuals from all economic sectors within the country to build and upgrade the infrastructure of a part within a public establishment and manage the operations of the semi-public component in accordance with the law.

2. Privately-established cultural establishments: These are establishments set up by organizations, funded by non-state budget capital (capital from organizations, collectives, individuals), and managed and operated in accordance with the law.

3. Private cultural establishments: These are establishments established and managed by individuals or households in accordance with the law.

Conditions for the establishment of non-state cultural facilities shall be guided by the Ministry of Culture and Information.

II. Financial Management Work for Non-State Cultural Facilities

1/ Sources of Operating Funds

- State Budget: For semi-public facilities, state financial contributions include:

+ The value of initial physical assets and new investments during the course of operation;

+ Amounts due to the state budget that are retained;

- Grants, aid, support, and gifts from organizations and individuals both domestically and internationally;

- Capital contributions from organizations and individuals for new construction, renovation, expansion, and upgrading of physical assets;

- Loans from banks and credit institutions (if applicable);

2/ Revenue and Expenditure Items

a- Revenue Items

- Revenues at the facility:

+ Ticket sales;

+ Rental income from physical assets (if applicable);

+ Income from cooperative and joint venture contracts with other units;

+ Income from cultural public service activities conducted at agreed prices between the service provider and the beneficiary;

+ Bank interest income (if applicable);

+ Proceeds from the liquidation of assets belonging to the facility's capital;

- Other revenue items (if applicable);

Expenditures for students and trainees: scholarships, rewards, and implementation of social policies for students and trainees under policy categories;

- Salaries, wages, bonuses, and contributions according to prescribed regulations such as social insurance, health insurance, and trade union fees for employees;

- Payment for freelance contributors' remuneration (if applicable);

- Payment for royalties and investment in creative works;

- Administrative management expenses (official fees, conference fees, travel expenses...);

- Operational expenses for each type of cultural public service activity;

- Rent payment for physical assets (if applicable);

- Purchase and repair costs for fixed assets and equipment serving the facility's operations;

- Interest payment on borrowed capital (if applicable);

- Expenses to fulfill obligations to the state (if applicable);

- Distribution of dividends on contributed capital;

- Depreciation of fixed assets;

- Other expense items;

3/ Financial Management System

3.1- For Semi-Public Facilities

1- Management and Utilization of Capital and Assets:

The financial management of semi-public cultural facilities follows the principle of clearly distinguishing and publicly disclosing state budget investments and funds raised outside the state budget.

a) The portion of state capital includes monetary funds, materials, goods, fixed assets (buildings, land, machinery, transportation means, other assets...) initially provided and transferred during the operation process. Semi-public cultural facilities organize an inventory and revaluation of all state capital components, submit them to the supervising authority for review, and then transfer them to the financial authority at the same level for asset and capital transfer procedures. The inventory, revaluation, and transfer of assets and capital must comply with current legal regulations. Annually, semi-public facilities conduct an inventory and revaluation of asset values, report to the supervising authority and the financial authority at the same level, detailing assets supplemented from state capital contributions left for the unit.

b) Operating funds allocated by the state budget for programs, goals, topics, and projects are managed and utilized according to the approval of the competent authority. Quarterly progress reports on fund usage and expenditures are submitted to higher-level managing authorities.

c) Capital contributions from non-state organizations, individuals from all economic sectors; and borrowed capital are managed and utilized for their intended purposes according to approved projects by the competent authority.

d) The transfer, liquidation, mortgage, or pledge of assets funded by state capital must be decided by the higher-level managing authority after receiving written opinions from the financial authority at the same level. Unneeded or obsolete assets can be sold to recover capital and supplement the operating funds of the facility. Prior to sale, a valuation committee must be established and auctions organized according to legal provisions.

e) Semi-public facilities have the right to independently and legally manage the transfer, liquidation, mortgage, or pledge of assets not funded by state capital.

g) Depreciation of fixed assets left over to strengthen the facility's infrastructure. In special cases, the head of the semi-public facility may determine accelerated depreciation rates suitable for the service recipient's payment capacity.

2- Semi-public cultural facilities may apply the revenue and expenditure system of public facilities and agreements with cultural service users. Each year, semi-public cultural facilities prepare revenue and expenditure budgets based on their sources of formation; after approval by the Board of Directors, they submit these to higher-level managing authorities for consolidation and submission to the financial authority at the same level.

3- Semi-public cultural facilities must organize accounting work, prepare budgets, comply with, and report final accounts according to current financial accounting regulations.

4- Semi-public cultural facilities implement regular financial inspection and audit systems for the use of funds; they disclose all revenue and expenditure items and income distribution to employees within the facility, as well as changes in assets funded by state capital and those raised outside the budget.

5- The head of the facility is the account holder and is responsible before the Board of Directors and the direct supervisory authority for the entire financial management and asset management of the facility.

6- The annual financial results of semi-public facilities operating in the cultural sector are determined by the total revenue minus total expenditures of the unit in the fiscal year.

Any surplus revenue over expenditures of semi-public cultural facilities is decided by the Board of Directors to allocate to the following items:

- Supplementing the operational capital of the facility;

- Strengthening the facility's infrastructure;

- Rewards and benefits for employees and direct partners of the unit;

- Distribution of income from state, collective, and individual capital contributions; For the portion of state capital contribution profits, the facility retains it for infrastructure strengthening and records an increase in state capital contribution.

3.2- For Private Facilities

Private cultural facilities apply the financial management mechanism of semi-public facilities to organize their own financial management.

Annually, the Board of Directors approves the revenue and expenditure budget and sets the ratio between regular and investment expenses; it also sets the ratio of personnel expenses to operational expenses and determines the dividend payout ratio for organizations and individuals contributing capital based on their contribution percentage.

Private cultural foundations shall independently organize their activities, bear responsibility for their financial operations and other activities under the law.

3.3- For private entities

Private cultural foundations shall independently organize their activities, bear responsibility for their financial operations and other activities under the law.

3.4. Financial settlement when the foundation is dissolved or declared bankrupt

When a non-state-owned cultural foundation declares bankruptcy or dissolution, the financial settlement shall be carried out in the following priority order:

- Expenses as prescribed by law for the dissolution and bankruptcy resolution of the foundation.

- Debts for salaries, severance pay, social insurance according to the law and other benefits stipulated in collective labor agreements and signed labor contracts.

- Tax debts.

- Debts to creditors listed in the creditor list:

+ If the remaining value of the foundation's assets is sufficient to settle all debts of the creditors, each creditor will be fully paid their debt.

+ If the remaining value of the foundation's assets is insufficient to settle all debts of the creditors, each creditor will only be partially paid their debt according to the corresponding ratio.

- If there is any surplus remaining from the foundation's assets after fully settling the debts of the creditors, this surplus belongs to:

+ The owner of the foundation if it is a private entity.

+ Members of the foundation (including the State budget) if it is a semi-private or privately established foundation.

PART III- IMPLEMENTATION ORGANIZATION

This Circular takes effect fifteen days from the date of issuance.

During implementation, if there are any difficulties, they should be reported promptly to the Joint Ministry for review, amendment, and supplementation to ensure compliance./.

 

Place of Receipt:

- National Assembly Office

- Office of the President

- Government Office

- Central Party Committee Office and Party Committees

- Ministries, agencies equivalent to ministries, and agencies directly under the Government

- Supreme People's Court

- Supreme People's Procuracy

- Central agencies of associations and mass organizations

- Provincial People's Councils, People's Committees of centrally governed cities

- Provincial Departments of Culture, Sports and Tourism, Tax Collection Agencies, State Treasury, Investment Promotion Agency, Provincial Departments of Culture, Sports and Tourism

- File: Office, Accounting System Department, General Tax Department

ANNEXED TO THIS CIRCULAR (Circular No. 209/2016/TT-BTC dated October 10, 2016 of the Minister of Finance)

- To be filed with the Ministry of Finance, Ministry of Culture, Sports and Tourism