JOINT CIRCULAR No. 33/TC-UBKHKTNN ON GUIDELINES FOR THE MANAGEMENT OF EXPENSES FOR SCIENTIFIC RESEARCH AND TECHNOLOGY

CIRCULAR

Joint Circular of the Ministry of Finance - State Science and Technology Commission
No. 33/TC-UBKHKTNN dated October 21, 1975 guiding the management of expenditures for scientific research
technical

In recent times, scientific and technological research activities have made new progress; the number of scientific and technological research topics has increased, investment funds for the scientific and technological cause have grown continuously, and management of expenditures on scientific and technological research has initially become systematic.

To contribute to improving the management of scientific and technological research plans in order to encourage the advancement of scientific and technological research, ensure that scientific and technological research work achieves high efficiency, completes according to plan, and serves the increasingly developing needs of the State, the Ministry of Finance and the State Science and Technology Committee issue this Circular to guide the management of expenditures on scientific and technological research.

PART I
SOURCES OF FUNDS AND EXPENSES FOR
SCIENTIFIC RESEARCH

1. For agencies and basic units whose main activities are scientific and technological research, the state budget allocates funds to cover all aspects of their operations. These units use the allocated operational funds to ensure the completion of the planned research topics as specified, regardless of the level of approval required for each topic. Expenditures allocated to these units are recorded under item 2, sub-item 37, according to the current state budget classification.

2. For state administrative agencies engaged in scientific research, the expenses for scientific research are provided by the state budget in two forms:

- Common allocation within the unit's operational funds, if it is for scientific and technological research topics managed by the basic level; expenditures for these research topics are recorded in a sub-item within item 14 (according to the current state budget classification) of the operational fund budget estimate.

- Funds allocated specifically for research projects managed at the national and ministry levels are provided separately by the state budget according to the procedures specified in Part II of this Circular.

3. For enterprises, the capital reserved for scientific and technological research topics managed at the basic level is drawn from the production development incentive fund as stipulated in Decree No. 236-CP dated December 10, 1970, Circular No. 88-CP dated March 2, 1972 of the Council of Ministers, and Circular No. 14-TC/CNXD dated August 1, 1974 of the Ministry of Finance.

For enterprises not implementing the three-fund system, the capital for scientific and technological research topics managed at the basic level is budgeted according to the regulations applicable to dedicated funds. If the topics are managed at the ministry or state level, they are funded separately by the state budget according to the procedures set out in Part II of this Circular.

PART II
MANAGEMENT REGULATIONS FOR FUNDS AND EXPENSES
SCIENTIFIC RESEARCH

I. Principles of Management

1. State budget funds and capital drawn from the production development incentive fund allocated for scientific and technological research can only be provided and used for topics listed in the unit's work plan after being approved by the competent authority as follows:

a. Each project must have its own research outline. The outline must clearly specify the research content, completion deadline, and estimated expenditure.

Projects managed at the national level must have their research outlines reviewed by the State Science and Technology Commission and submitted to the Government Council for approval.

Projects managed at the ministry level must be reviewed by the responsible ministry (content, deadline, and estimated expenditure), with the participation of the State Science and Technology Commission.

Topics managed at the basic level must be reviewed by the principal department for the research outline (content, duration, and budget estimate); the list and consolidated budget estimate for these outlines, after being approved by the principal department, must be registered with the State Science and Technology Commission.

2. Funds allocated for scientific and technological research must be used for their intended purpose and cannot be diverted to other uses.

Funds and capital provided can only be used for topics approved by the competent authority according to the prescribed regulations and included in the unit's work plan; they cannot be used for researching topics outside the approved plan.

Funds allocated for topics managed at any level can only be used for topics of that level; funds for topics managed at the state level cannot be used for topics managed at the ministry or basic level, and vice versa.

Units using funds have the right to adjust the use of allocated funds within the scope of topics managed at the same level and within the allocated amount, after obtaining the consent of the higher-level managing authority.

Management of expenditures on scientific and technological research must strictly comply with national expenditure standards, conserve materials, labor, and capital, complete research tasks according to the approved plan with maximum efficiency, and adhere to the prescribed budgeting, settlement, and accounting reporting systems.

II. Regulations on the Management of Expenditures for Scientific Research

A. For specialized units engaged in scientific and technological research receiving operating funds for scientific research under category 2, item 37 of the budget classification.

1. Annual Budget Preparation

a. The annual budget of scientific and technological research units must:

- Fully and accurately reflect all expenditures for the unit's activities in all aspects, particularly direct expenditures for scientific and technological research (category 2, item 37, section 14);

- Ensure full compliance with state expenditure standards as prescribed.

b. Regarding the content of the budget, attention should be paid to the following two expenditure items:

Expenditures on salaries and allowances (items I and II): if the unit has an annual staffing quota approved, then the salary is calculated based on the number of employees present at the end of the previous year and must not exceed the approved quota for the planning year.

Clause 14 on direct expenditures for scientific research and technology (Item 14) shall only account for the following expenditures:

- Expenditures for paying wages to external labor forces hired to participate in research projects within the plan;

- Expenditures for raw materials, fuels, materials, chemicals, plant seeds, livestock breeds, experimental animals, etc., directly serving the research of projects according to the plan;

- Expenditures on purchasing a small number of machines and equipment directly serving planned research topics; it is prohibited to use these funds to supplement construction capital for unit equipment outside the plan. The agency reviewing equipment proposals and budgets should carefully consider requests for purchasing many machines and equipment; generally, for units without suitable technical facilities, research topics requiring many pieces of equipment should not be assigned, except in special cases.

c. Direct expenditures for scientific research and technology (Item 14) must clearly specify each expenditure for each project and differentiate according to the management level of the project.

d. The annual budget estimate must be divided into quarters according to the progress of the research plan; accompanying this consolidated budget estimate must be research outlines for each topic; each topic has a detailed outline explaining the research content, duration, and direct expenditures for that topic.

The budget is prepared according to the form prescribed by the Ministry of Finance and within the time frame for preparing the annual state budget as stipulated by regulations. For topics requiring extended research over multiple years, the total necessary funds, the funds needed for the planning year, must be clearly stated. For ongoing research topics, the total approved funds, the settled funds from previous years, and the funds needed for the planning year must be clearly stated.

e. When submitting the Scientific and Technological Council of the agency to review the content of research projects, the head of the budget unit requests the council to approve the direct expenditures for each project.

g. The annual budget of the second-level unit must be sent to the first-level budget unit along with the outlines of each project.

The first-level budget unit must:

- Reviewing topics managed at the ministry and basic levels, both in terms of content and individual topic budgets, then compiling two lists: one list of topics managed at the basic level sent to the State Science and Technology Commission for registration, and one list of topics managed at the ministry level accompanied by research outlines sent to the State Science and Technology Commission for consultation. These documents are also sent to the Ministry of Finance, one copy each.

- Review topics under state management, provide comments on each topic, both in terms of content and each item in the budget estimate, and submit a consolidated list along with research outlines for each topic to the State Science and Technology Committee and the Ministry of Finance, one copy to each.

2. Approval of the annual budget

The State Science and Technology Committee:

- Review the consolidated list of topics managed by institutions and each topic managed by ministries regarding both the content of the topics and the budget estimates, and provide comments to the managing agencies and inform the financial authorities of the results.

- Coordinate with the Ministry of Finance to review each topic under state management in terms of the content to be carried out in the annual plan as well as the budget estimates, examine the content of each expenditure item to determine if it is appropriate, then compile a consolidated list to submit to the Government Council for approval.

Based on the opinions from the State Science and Technology Committee and the Ministry of Finance, review the consolidated budget estimate for category 2, subcategory 37 of the managing agency, incorporate it into the annual state budget estimate, and submit it to the Government Council for approval according to the prescribed regulations.

3. Notification of budgeted funding levels

After the list of topics under state management has been reviewed and approved by the Government Council, the State Science and Technology Committee prepares a notification for each managing agency. Topics under state management that have been approved by the Government Council are also sent to the financial authority together with the list of topics managed by ministries and institutions that have been approved. This notification must clearly specify the approved budget estimate for each topic, in addition to the content of the approved topics.

The Ministry of Finance, based on the approved state budget estimate and the notification from the State Science and Technology Committee regarding the review results of each topic, prepares a notification of the budget estimate for scientific and technological research expenses (category 2 - subcategory 37) for each managing agency.

The managing agency notifies the approved funding level for scientific research and technological activities (category 2 - item 37) to each subordinate unit.

4. Funding allocation follows the current limit-based distribution system

Quarterly, the financial authority organizes the allocation of funds based on the comprehensive expense plan of the managing agency so that this agency can distribute the funds to its subordinate units within the total amount of funds approved for the year.

The financial authority will only allocate funds for the next quarter after receiving the report on the estimated implementation of the previous quarter's expense plan (with detailed explanations) and the final settlement report of the previous quarter's expenses according to the prescribed regulations.

5. Management of expenditures for scientific research at grassroots units

Expense management must be strict, respecting established standards, promoting savings in materials, labor, and capital, and implementing the research plan schedule for each approved topic.

If additional funding is needed or if there is a need to adjust the use of funds: using funds allocated for one topic for another topic under the same level of management (state, ministry, or institution), the managing unit must report to the higher level along with a detailed explanation of the reasons for the adjustment for the higher level to decide.

In cases where research topics are not proceeding smoothly and do not show promising results, the managing unit must promptly seek the opinion of the Scientific Council; suspend the research, summarize the research work done and the funds already used (mainly from item 14), and report to the higher-level managing unit to inform the financial authority to stop fund allocation and notify the State Science and Technology Committee for monitoring.

6. Final settlement report

1. Quarterly and annual final settlement reports must be prepared in accordance with regulations. The final settlement report must include a detailed explanation stating:

- Achievements made in the research topic (extracted from the Scientific Council's evaluation of the research results);

- The effectiveness of the research;

- Costs incurred for the research topic.

Final settlement reports must be prepared according to the prescribed format and deadline in the accounting regulations for budgetary units: Circular No. 3-TC/TDT dated March 30, 1972, form number 9-BC (quarterly final settlement report) and form number 32-BC (annual final settlement report).

2. The final settlement report of the basic unit must be submitted to the higher-level managing agency. The higher-level managing agency (first-level budgetary unit) must submit a consolidated final settlement report to the financial authority at the same level (and send a copy to the State Science and Technology Committee for information).

7. Inventory of assets and year-end settlement

At year-end, the basic unit must organize an inventory of assets in accordance with the prescribed regulations.

Fixed assets, machinery, and equipment purchased during the annual plan period using research funds (item 14) must be inventoried, their current status and remaining value determined, and transferred to become fixed assets of the unit and managed according to regulations. Assets no longer needed should be reported to the financial authority and the State Science and Technology Committee for reallocation to other units.

Raw materials in stock at the end of the year, if they are needed for continued use in the following year, should be carried over to the next year; those no longer needed should be reported to the financial authority for reallocation to other units according to regulations.

At the end of the year, any unspent funds from the annual plan must be returned to the state budget; if they are unused cash, they should be recorded as restored limits to reduce allocations. If they are advance payments for ongoing research topics that need to continue in the next year to complete the topic, procedures should be followed to transfer them to the next year for use. Advance payments for completed topics must be settled promptly; any excess funds must be returned to the state budget (recorded as restored limits).

8. Revenue from selling research products, trial products, or experimental animals

The annual budget must estimate revenue from selling research products, trial products, and experimental animals for each research topic.

During the course of work, any revenue obtained must be immediately deposited into the state budget (reducing expenses); the unit may not retain it for expenditure.

B. For state administrative agencies engaged in scientific research

1. Basic units under state administrative agencies engaged in scientific research can use two sources of funds for this purpose:

- Allocate research funds (item 14) according to the approved budget to meet the needs of topics managed by basic institutions; these research funds are settled together with the unit's operational funds.

- Funds allocated specifically for topics managed by the state and ministries: these funds are distributed by the managing agency (higher-level managing unit) according to the financial authority's plan based on the State Science and Technology Committee's proposal. These funds are outside the unit's operational budget; the basic unit must settle separately on these funds with the higher-level managing unit, which will consolidate and settle with the financial authority.

2. State management agencies when preparing operational budgets, must include funds for scientific and technological research for topics managed by basic institutions. This budget must be accompanied by a detailed description of each topic (content and budget estimate) in accordance with the provisions in Part II, Point 2 of this Circular.

For topics under the management of the Ministry and the State, units must prepare a separate description for each topic; in the description, it must clearly state the research content, implementation organization, and budget estimate as prescribed in Part II, Point 2 of this Circular.

The operating budget and list of research topics managed by the Ministry and state levels, along with their explanations, must be submitted to the higher-level managing unit within the prescribed timeframe.

3. Regarding the management and use of funds, state administrative agencies must strictly adhere to the principles that funds allocated for research topics under the management of the Ministry and the State shall not be used for research topics under local management; funds for scientific research must be used for their intended purpose and shall not be used for other purposes as stipulated in Point 3, Section I, Part II of this Circular.

C. For enterprises using funds drawn from the production development incentive fund for scientific research

Enterprises must comply with the provisions of this Circular regarding the management of research funds:

- Must establish a scientific research plan for the unit, detailing each topic, with a separate description for each topic, approved by the competent authority as prescribed in Part II of this Circular (topics under State management must be approved by the State Science and Technology Commission);

- Funds drawn from the production development fund can be used for research topics managed at the grassroots level;

- For topics managed by the State and the Ministry, a separate budget estimate must be prepared along with the description, reported to the managing agency for separate funding allocation and settlement according to the regulations set forth in Part II of this Circular.

If there is a need to sell trial products, the proceeds will be credited to the enterprise's production development incentive fund.

D. In the case of signing a scientific and technological research contract with an external unit

Funds from the State budget or extracted from the production development incentive fund (money, materials, raw materials) shall not be used to cover research costs for topics contracted externally.

Shall maintain separate ledgers, recording each item of income and expenditure clearly.

After completing the research, if there is a surplus due to the difference between income and expenditure, it shall be handled according to the provisions of Circular No. 1-TT/LB dated April 2, 1975, guiding financial management for production labor in universities and vocational schools.

This Circular takes effect from October 1, 1975, for all units engaged in scientific research under the management of central and local sectors.

Any previous regulations contrary to this Circular are hereby abolished.