Circular No. 32/2016/TT-BNNPTNT on the settlement of completed projects funded by state capital under the management of the Ministry of Agriculture and Rural Development.

CIRCULAR

Regulations on final settlement of completed projects funded by state capital under the management of the Ministry of Agriculture and Rural Development.

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

Pursuant to the Law on Bidding No. 43/2013/QH13 dated November 26, 2013;

Pursuant to the Construction Law No. 50/2014/QH13 dated June 18, 2014;

Pursuant to the Law on Public Investment No. 49/2014/QH13 dated June 18, 2014;

Pursuant to Decree No. 199/2013/NĐ-CP dated November 26, 2013 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Agriculture and Rural Development;

Pursuant to Decree No. 63/2014/NĐ-CP dated June 26, 2014 of the Government detailing implementation of certain provisions of the Law on Bidding regarding selection of contractors;

Pursuant to Government Decree No. 32/2015/NĐ-CP dated 25 the 3 year 2015 of of the Government on the management of construction investment costs;

Pursuant to Government Decree No. 37/2015/NĐ-CP dated December 22 the 4 year 2015 of the Government detailing construction contracts;

Pursuant to Government Decree No. 59/2015/NĐ-CP dated 18 the 6 year 2015 of of the Government on project management for construction investment;

Pursuant to Government Decree No. 136/2015/NĐ-CP dated December 31, 2015 of the Government guiding the implementation of certain provisions of the Public Investment Law;

Pursuant to the proposal of the Director of the Department of Finance;

The Minister of Agriculture and Rural Development issues this Circular regulating the final settlement of completed projects funded by state capital under the management of the Ministry of Agriculture and Rural Development.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates the tasks and responsibilities of relevant agencies and units involved in the preparation, examination, approval of final settlement reports for completed projects or permanently discontinued projects funded by state capital under the management of the Ministry of Agriculture and Rural Development.

Article 2. Applicability

This Circular applies to agencies, units, project sponsors, project managers, and project management boards using state capital under the management of the Ministry of Agriculture and Rural Development related to the final settlement of completed projects.

Article 3. State capital managed by the Ministry of Agriculture and Rural Development includes:

1. State budget capital;

2. Official Development Assistance (ODA) capital, preferential loans from donors; non-governmental foreign aid (NGO);

3. Government bond capital;

4. Capital for public services with investment characteristics;

5. Other state budget capital.

Article 4. Principles and responsibilities in final settlement of completed projects

1. When a project has been completed, accepted, and put into use, the project sponsor must prepare a final settlement report in accordance with the contents and timeframes specified in this Circular and Circular No. 09/2016/TT-BTC dated January 18, 2016 of the Ministry of Finance on the final settlement of completed projects funded by state capital (hereinafter referred to as Circular No. 09/2016/TT-BTC). For independent project components that can be put into operation and utilized upon completion to achieve partial benefits, the project sponsor shall prepare and submit a final settlement report for approval.

2. New investment projects shall not be assigned to sponsors or project management boards with overdue final settlement reports for more than 24 months according to the deadline for submitting final settlement documents as stipulated in Article 6 of this Circular; plans shall not be made to allocate funds to settle outstanding project debts for projects with overdue final settlement reports for more than 12 months.

3. Contractors currently having contracts violating the time limit for preparing final settlement documentation or failing to promptly refund reduced amounts within six months after the final settlement approval decision shall not participate in new tenders managed by the Ministry.

Article 5. Final settlement of projects using Official Development Assistance (ODA) capital, preferential loans from donors, and non-governmental foreign aid (NGO)

1. The final settlement of projects using ODA capital, preferential loans from donors, and NGO capital shall be carried out in accordance with the provisions of Article 5 of Circular No. 09/2016/TT-BTC.

2. Construction projects using ODA capital, preferential loans from donors, which have been approved as Class A projects but consist of multiple component projects or independent sub-projects equivalent to Class B or C projects (with separate project approval decisions), each component or independent sub-project shall prepare, examine, and approve final settlement reports as if they were independent projects. The audit of final settlement reports for completed projects shall be conducted as stipulated in Clause 2, Article 9 of this Circular.

3. Construction projects using ODA capital, preferential loans from donors (with central project management board and component project management board arrangements) shall complete final settlement in accordance with donor regulations (if applicable) and this Circular upon completion.

Each completed component (sub-)project, if related to overall project common costs, before preparing the sub-project final settlement report, the central project management board and the sub-project management board must agree on the allocation value of common costs.

4. For projects with multiple component projects or independent sub-projects assigned by the Ministry to provincial People's Committees for project approval, the responsibility for examining and approving final settlements lies with the Provincial People's Committees.

After all projects using ODA capital and preferential loans are completed, the project management agency (central project management board) is responsible for reporting the total final settlement of the entire project (including final settlement approval decisions of provincial People's Committees and common cost final settlement approval decisions) to the Ministry of Agriculture and Rural Development; there is no need to re-audit the final settlement of component projects or sub-projects already approved by provincial People's Committees.

Chapter II

SPECIFIC PROVISIONS

Article 6. Time limit for submitting final settlement documents, auditing, and reviewing for approval

The time limit for submitting final settlement documents for completed projects starts from the date of signing the handover certificate for operation (including the audit period for projects required to undergo auditing); the review and approval period begins from the date when the reviewing agency receives all documents submitted by the Project Owner. The maximum time periods are specified as follows:

Unit: months

Article 7. Approval authority, reviewing agency for final settlement

1. Authority to approve final settlement

a) For national key projects and other important projects decided on investment by the Prime Minister: The Minister approves the final settlement of the project or component project under the Ministry's management;

b) For Group A projects decided on investment by the Minister: The Deputy Minister in charge approves the final settlement of completed projects;

c) For Group B and Group C projects:

- Entrust the Department of Finance to approve the final settlement of Group B and Group C projects decided on investment by the Ministry (excluding projects approved by General Departments);

- General Departments: Water Resources, Forestry, Fisheries (hereinafter referred to as General Departments) shall approve the final settlement of completed Group B and Group C projects that have been reviewed and submitted to the Minister for investment decision-making, and projects where the investment entity is a unit directly under the General Departments.

2. Reviewing agency for final settlement of completed projects.

a) For national key projects, other important projects, and Group A projects, the final settlement review shall be conducted by the Final Settlement Review Board; the Department of Finance is the permanent agency of the Final Settlement Review Board;

b) For Group B and Group C projects: The reviewing agency for final settlement is the Department of Finance and the General Departments as stipulated in point c, Clause 1 of this Article.

Article 8. Requirements for preparing the final settlement report of completed projects

1. The investment costs subject to final settlement include all legitimate expenses incurred during the investment and construction process to put the project into operation and use. Legitimate expenses encompass all expenses within the scope of the project, design, approved budget estimates; contracts signed (for works carried out under contract), including adjustments and supplements approved according to regulations and within the appropriate authority. Investment costs subject to final settlement must fall within the approved total investment ceiling or adjusted approval.

2. The final settlement report of completed projects must accurately determine: Sources of investment funds implemented for the project, detailed by each source of investment funds; total proposed investment costs for final settlement, detailed by structure (compensation, support, and resettlement, construction, equipment, project management, consulting, and other related expenses); losses incurred during the investment process; allowable expenses not included in the value of assets; value of assets formed after investment.

3. Projects using public funds with investment characteristics, upon completion, must prepare a final settlement report, review, and obtain final settlement approval according to the guidelines set forth in this Circular.

4. For projects with multiple components where each component or group of components can be put into operation and use upon completion, the project owner prepares the final settlement report by component. The proposed settlement value includes: Construction costs, equipment procurement and installation costs, and other expenses directly related to that component. After the entire project is completed, the project owner prepares a comprehensive final settlement report for the entire project and determines the allocation of common project costs to each component of the project, submitting it to the Ministry for approval; no re-audit or re-review of final settlement will be conducted for components that have already been approved according to regulations.

5. The implementation of converting investment capital to the price level at the time of handover for operation and use will follow the requirements of the final settlement approval authority for completed projects.

Article 9. Audit of Final Accounts for Completed Projects

1. All national key projects and Group A projects must conduct an audit of the final account report before submitting it to the Ministry for review and approval as prescribed.

2. For Group B and Group C projects, an audit of the final account report shall only be conducted upon request from the Ministry of Agriculture and Rural Development (the reviewing authority).

3. For projects that have been audited by the State Audit Agency

a) In cases where the State Audit Agency conducts an audit and issues an audit report containing all required contents as stipulated in Article 12 of Circular No. 09/2016/TT-BTC, the reviewing authority shall use the results of the State Audit Agency's audit report as the basis for review without hiring an independent auditor to audit the final accounts of the project;

b) In cases where the State Audit Agency's audit does not cover all required contents as stipulated in Article 12 of Circular No. 09/2016/TT-BTC, the project sponsor shall select an independent auditing contractor to conduct supplementary audits as requested by the Ministry. The cost of supplementary audits shall be determined similarly to the determination of audit costs for construction works and tender packages within the project as stipulated in Point c, Clause 1, Article 21 of Circular No. 09/2016/TT-BTC. The reviewing authority shall use the results of the State Audit Agency's audit report and the independent auditor's audit report as the basis for reviewing the final accounts of the project.

Article 10. Forms and Documents for Reporting and Approving Final Accounts

The forms for reporting final accounts and documents for approving final accounts shall be implemented according to Articles 7 and 8 of Circular No. 09/2016/TT-BTC.

During the process of reviewing final accounts, the project sponsor is responsible for presenting to the reviewing authority the documents necessary for the review of final accounts: completion files, construction diaries, tendering files, design estimates, supplementary estimates, and related payment vouchers.

Article 11. Procedures and Contents for Reviewing and Approving Final Accounts of Completed Projects

1. The process of reviewing and approving final accounts includes the following steps:

a) Receiving the project sponsor’s submission;

b) Preparing for review;

c) Conducting the review;

d) Approving the review results;

e) Submitting the final accounts approval file.

2. Receiving final accounts documents

Within five working days from the date of receipt of the final accounts documents from the project sponsor, the staff member will check the content of the report and submission documents against current regulations and the number of submission documents specified in Article 8 of Circular No. 09/2016/TT-BTC. After checking, if the documents are found to be incomplete, a written notice will be issued to the unit to complete and supplement them before planning the final accounts review.

3. Preparing for final accounts review

a) For national key projects, other important projects, and Group A projects, the final accounts review shall be conducted by a Review Committee;

When a completed project meets the conditions for final accounts settlement, the Financial Department drafts a decision to establish the Committee for approval by the Minister. At the same time, specific conditions and work programs are prepared for the Committee.

The Review Committee for final accounts is chaired by a Deputy Minister in charge of the project, with the head of the Financial Department serving as Vice-Chairman; members include leaders of relevant General Departments, Bureaus, and Departments. The Financial Department serves as the permanent body of the Committee. The Task Force for final accounts settlement assists the Committee in its work. The composition and tasks of the Task Force are stipulated in Point c, Clause 3 of this Article.

The Review Committee for final accounts has the responsibility to examine and discuss the results of the Task Force for final accounts settlement. The results of the Committee's work are recorded in the minutes of the meeting.

b) For Group B and Group C projects: If deemed necessary, the final accounts reviewing authority may establish a Task Force for final accounts settlement to conduct the final accounts review;

c) The Task Force for final accounts settlement.

The Task Force for final accounts settlement is established to review the final accounts documents for presentation to the Review Committee for examination for national key projects and Group A projects; directly conducting the final accounts review for Group B and Group C projects.

The final accounts reviewing authority as stipulated in Clause 2 of Article 7 of this Circular decides on the establishment of the Task Force for final accounts settlement. Members of the Task Force include relevant General Departments, Bureaus, and Departments, with their tasks assigned by the Task Force Leader. The Task Force for final accounts settlement conducts the final accounts review of completed projects according to Clause 4 of this Article. The results of each member's review are reflected in the audit form uniformly specified in Form No. 01/QTDA attached as an appendix.

4. Contents of the final accounts review for completed projects

a) Reviewing the final accounts for projects that have undergone an audit of the final account report as stipulated in Article 11 of Circular No. 09/2016/TT-BTC;

b) Reviewing the final accounts for projects and construction works completed without an audit of the final account report: The reviewing authority shall conduct the review according to Articles 13 to 18 of Circular No. 09/2016/TT-BTC and prepare a report on the results of the final accounts review of completed projects including the following contents:

- Legal document review

- Investment capital source review

- Investment cost review

- Investment cost not included in asset value review

- Asset value formed through investment review

- Review of outstanding debts, materials, and equipment inventory

- Considering the compliance of the project sponsor and related units with the conclusions of supervisory, inspection, and state audit agencies; investigation results of legal authorities in cases where supervisory, inspection, state audit agencies, and investigative bodies conduct inspections, audits, and investigations of the project

- Comments, evaluations, and recommendations

5. Contents of the final accounts review for projects using development investment funds, permanently halted projects without construction or installation acceptance

a) Legal document review of the project;

b) Investment capital source implementation review;

c) Detailed review of incurred investment costs compared to approved estimates, state regulations, standards, and norms;

d) Project debt situation review;

d) Review canceled expense items and expenses that do not create assets to submit to the competent authority for approval to exclude from the asset value;

e) Review the quantity and value of assets formed after investment (if any).

6. Results of the final account review

a) Final account review minutes: Upon completion of the final account review, the reviewing agency shall prepare the final account review minutes for completed projects. The contents of the minutes must fully reflect all reviewed matters as stipulated in Clauses 4 and 5 of this Article;

All participants in the final account review must sign the minutes. In case of differing opinions, such participant has the right to reserve their position with a written explanation and accompanying evidence to present to the approver.

b) Report on the final account review by the settlement team: For Group A and above projects where there are multiple differing opinions exceeding the authority of the Settlement Team, the Team must prepare a report on the final account review to submit to the final account review committee. The contents of the final account review report by the Settlement Team are specified in Clauses 4 and 5 of this Article.

7. Submitting the final account approval dossier

a) The investor's final account report;

b) Audit result report (if any);

c) Minutes of the final account review (as prescribed in Form No. 02/QTDA in the attached appendix); Minutes of the Settlement Team's final account review (if any); Minutes of the meeting approving the final account review committee of the Ministry;

d) Draft decision (as prescribed in Form No. 03/QTDA in the attached appendix) and appendices accompanying the decision approving the final account.

Article 12. Costs of final account review and approval; independent audit costs

1. Costs of final account review and approval; independent audit costs are determined according to Clause 1 of Article 21 of Circular No. 09/2016/TT-BTC.

2. In cases where the project has conducted an audit of the final account report (including independent audit and State Audit) covering all contents stipulated in Article 12 of Circular No. 09/2016/TT-BTC, the standard cost for final account review and approval will be calculated at 50% of the standard cost prescribed in Clause 1 of this Article.

Article 13. Consolidation of final account reports

1. Departments shall consolidate final account reports of completed projects on a semi-annual and annual basis for projects where the investors are units under the Departments and projects approved by the Minister for final account approval, using Form No. 11/QTDA of Circular No. 09/2016/TT-BTC and send them to the Ministry (Finance Department) for consolidation before July 10 for the first half-year report and January 15 for the annual report;

2. The Finance Department shall consolidate final account reports of completed projects directly approved by the Ministry and projects approved by the Departments for final account approval, and submit them to the Ministry of Finance using Form No. 11/QTDA of Circular No. 09/2016/TT-BTC.

Article 14. Responsibilities in finalizing project accounts

1. Responsibilities of the Investor.

a) Urging and requiring contractors to complete the finalization of contract accounts in accordance with regulations;

b) Preparing and managing the final account dossier of completed projects in compliance with regulations, submitting it to the competent authority for final account approval within the time limit stipulated in Article 6 of this Circular; providing all relevant documents related to the finalization of project accounts as required by the final account review agency;

c) Bearing legal responsibility for the legality of the final account dossier and the accuracy of the figures proposed for finalization; the correctness of the quantities accepted by the investor and contractor for inclusion in the final account report; the appropriateness of unit prices agreed upon and recorded in the contract by the investor and contractor;

d) When the completed project is approved for finalization, if the amount finalized is lower than the amount already paid to the project, the investor is responsible for recovering from the contractor or supplier the excess amount paid to be remitted to the state budget.

2. Responsibilities of the Contractor.

a) Implementing the preparation of the contract final account dossier and the finalization of the actual value of the executed contract signed with the investor in accordance with the laws on construction contracts immediately after completing the work stipulated in the contract; bearing responsibility for the accuracy of the figures and the legality of the documents in the contract final account dossier as prescribed;

b) Jointly with the investor to resolve remaining issues in accordance with the signed contract; promptly and fully refund any funds improperly paid by the investor;

c) Being responsible for implementing the final account approval decision of the Ministry of Agriculture and Rural Development.

3. Responsibilities of the auditing contractor:

a) The auditing contractor conducting the audit of the final accounts of completed projects must comply with the principles of independent auditing, having rights, obligations, and responsibilities as prescribed by the laws on independent auditing;

b) Bearing legal responsibility for the results of the audit of the final account report of completed projects.

4. Final account review agency

a) Guiding, inspecting, and urging the investor to timely and fully complete the final account work of completed projects in accordance with the prescribed forms. The final account review agency is not responsible for the accuracy of the quantities accepted by the investor and contractor for inclusion in the final account report; is not responsible for the approved budget unit prices and bid-winning unit prices decided by the tender decision-maker and agreed upon and recorded in the contract by the investor and contractor;

b) Organizing a comprehensive review of the final account report of completed projects in accordance with the prescribed requirements; guiding the investor to resolve any issues arising during the finalization of project accounts; consolidating the situation of finalizing project accounts in accordance with the Ministry of Finance's regulations, urging units to implement and reporting the results of financial handling recommendations from the Inspectorate and Audit.

5. Planning Department

The Planning Department is responsible for reviewing the content, purpose, and scale of the project before terminating investment; allocating sufficient funds for the investor to complete the acceptance, handover, and settlement procedures; dispatching representatives to participate in the Settlement Working Group regarding the content, scale, and effectiveness of completed projects, the allocation of funds, and the disbursement results from the start of construction to the end date, settlement.

6. The Organization and Cadres Department

The Organization and Cadres Department advises and proposes the examination of the responsibility of organizations and individuals involved in violations concerning the settlement of completed projects according to the provisions of the law.

7. The Science, Technology, and Environment Department

Is responsible for guiding the acceptance and evaluation of the effectiveness of science and technology projects implemented with construction investment capital and operational funds with investment characteristics when these projects are completed and report settlement.

8. The specialized agency on construction

Based on the assigned project, it is responsible for monitoring, inspecting, and guiding investors to properly follow the acceptance and completion procedures; handling and correcting investors who do not strictly comply with the acceptance and completion regulations leading to discrepancies with the design and reality when detected by the Inspectorate, Audit, and settlement.

Compile a list of contractors currently violating the regulations on the time to prepare settlement contract files; failing to promptly refund the reduced amount according to the approved settlement decision as stipulated in Clause 3, Article 4 of this Circular.

Dispatch professionals and experienced staff to participate in the Settlement Working Group. Representatives of specialized management agencies participating in the Settlement Working Group are responsible for verifying the procedures and processes of investment construction, bidding procedures, approval of estimates, contracts, acceptance and completion, quantity and quality of works carried out by the investor for settlement as assigned by the Settlement Working Group Leader.

Chapter III

IMPLEMENTING PROVISIONS

Article 15. Effective Date

1. This Circular takes effect from December 15, 2016.

2. Repeal Decision No. 1195/QD-BNN-TC dated June 6, 2011 of the Ministry of Agriculture and Rural Development on the establishment, verification, and approval of the settlement of state-funded completed projects managed by the Ministry of Agriculture and Rural Development.

3. During implementation, if the regulatory legal documents cited for application in this Circular are amended, supplemented, or replaced by new documents, they will be applied according to the new documents; in case of any difficulties, units shall promptly report to the Ministry of Agriculture and Rural Development for study and appropriate amendments and supplements./.