Circular No. 344/2016/TT-BTC on the management of commune budgets and other financial activities of communes, towns, and wards

CIRCULAR
Regulations on management of village budgets and other financial activities
of communes, wards, and towns

Pursuant to the State Budget Law dated June 25, 2015,

Pursuant to Decree No. 163/2016/NĐ-CP dated December 21, 2016 of the Government detailing the implementation of certain provisions of the State Budget Law;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013, promulgated by the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the State Budget Department,

The Minister of Finance promulgates this Circular regulating the management of village budgets and other financial activities of communes, wards, and towns.

PART I
GENERAL PROVISIONS

Article 1. Scope of Application

This Circular specifies detailed sources of revenue, expenditure tasks; procedures for managing village budgets of communes, wards, and towns (hereinafter referred to collectively as villages) and organization of managing other financial activities of villages.

Article 2. Applicability

This Circular applies to state agencies, organizations, and individuals related to village budgets and other financial activities of villages.

Article 3. Scope of Revenue and Expenditure of Village Budgets

1. State budget revenues on the territory managed by the village-level authorities, including: Revenues from taxes, fees, and charges; amounts raised through contributions from agencies, organizations, and individuals in accordance with the law; non-reimbursable aid received directly by the village budget from international organizations, other organizations, and individuals abroad.

2. Village budget revenues include revenues allocated to the village budget from the state budget and contributions voluntarily raised from agencies, organizations, and individuals for constructing infrastructure projects as decided by the People's Council of the village and incorporated into the village budget management according to the law:

a) Village budget revenues consist of revenues allocated to the village budget at 100%, revenues shared between the village budget and higher-level budgets based on a percentage ratio (%), and supplementary revenues from higher-level budgets;

b) For revenues from public land funds and other income from public assets, the village shall not lease out these revenues for multiple years through bidding, which would affect the village budget balance in subsequent years; in cases where it is truly necessary to lease out for several years, such leasing can only occur during the term of the People's Council and cannot be done before the term of the next People's Council, except for the sale of land use rights in accordance with the law on land.

3. Expenditures of the village budget, including investment expenditures; regular expenditures to ensure national defense and security, expenditures for the operation of state agencies, the Communist Party of Vietnam, and political-social organizations; support expenditures for political-social-professional organizations and social organizations established under the law when these organizations are assigned tasks by the state; expenditures for economic and social development and other expenditures as prescribed by law.

4. Sources of revenue and expenditure tasks of the village budget stipulated in Clause 2 and Clause 3 of this Article shall be decided by the People's Council of the province or centrally-administered city (collectively referred to as the provincial People's Council).

Article 4. Principles for Allocation and Management of Revenue Sources and Expenditure Tasks for Village Budgets

1. Consistent with the division of responsibilities for socio-economic development, national defense, and security of the state and the functions and responsibilities of village-level state management; while also being consistent with the economic, geographic, demographic, and administrative capacity characteristics of the village-level government.

2. Consistent with the division of revenue sources between the central and local budgets; the division of revenue sources between the provincial and district budgets.

3. For revenues shared between the central and local budgets, if allocated to the village, the percentage ratio (%) allocated to the village budget shall not exceed the percentage ratio (%) allocated to each province or centrally-administered city decided by the National Assembly. Specifically, for taxes and fees as stipulated in Point b, Clause 1, Article 39 of the State Budget Law, the percentage ratio (%) allocated to the village budget shall be decided by the provincial People's Council.

4. When allocating revenue sources to the village budget, it must be based on expenditure tasks and the revenue-raising capacity on the territory; maximize local revenue allocation, ensuring that villages have balanced revenue sources corresponding to their regular and development expenditure tasks as divided by the provincial People's Council, minimizing the need for additional balancing from higher-level budgets.

5. During the period of stabilizing local budgets, stabilize the percentage ratio (%) of revenue distribution among different levels of local budgets. Annually, based on the budget balancing capacity of the district level, the competent authority decides to increase the amount of additional balancing for the village budget compared to the first year of the budget stabilization period.

6. At the end of each period of stabilizing local budgets, based on the revenue sources and expenditure tasks of the local budget, the provincial People's Council will re-determine the percentage ratio (%) of revenue distribution among different levels of local budgets and the amount of additional balancing (if any), including the village budget.

Article 5. Principles of Village Budget Balance

1. The village budget must ensure the principle that expenditures do not exceed the revenue received according to regulations; borrowing or raising funds from organizations and individuals in any form for balancing the village budget is not allowed.

2. In cases where the village budget experiences temporary shortfalls, based on the proposal of the Village People's Committee, the District People's Committee decides to temporarily allocate funds from the district budget to the village budget and must repay within the fiscal year. If the district budget cannot meet this requirement, the District People's Committee proposes the Provincial People's Committee to decide on temporarily allocating funds from the provincial financial reserve fund or higher-level budget and must repay within the fiscal year.

Article 6. Principles of Village Budget Management

1. The village budget is constructed and managed by the Village People's Committee, decided upon and supervised by the Village People's Council.

2. All revenues and expenditures of the village budget must be managed through the State Treasury in accordance with the provisions of the State Budget Law.

3. Revenues and expenditures of the village budget must be recorded in accounting ledgers and settled according to the state budget classification and national accounting regulations.

4. The village budget must be disclosed in accordance with the provisions of the State Budget Law and guiding documents.

Article 7. Principles of Managing Budget Funds of State Administrative Agencies Entrusted to the Village People's Committee

1. Withdraw and spend funds like a unit under the upper-level budget and must maintain separate books for tracking.

2. Settle accounts like a subordinate unit with the agency or unit assigning the budget; do not aggregate into the settlement of the village budget.

Article 8. Other Financial Activities of the Village

1. Other financial activities of the village, as prescribed by law, include state financial funds outside the village budget; financial activities of village public services, except for income specified in point b, Clause 1, Article 9 of this Circular; village finance (income and expenditure from contributions voluntarily collected by the village); and other financial activities as prescribed by law.

2. The Village People's Committee organizes unified management of financial activities related to village public assets, state assets, and other assets according to prescribed regulations.

3. The village may open deposit accounts at the State Treasury or commercial banks and credit institutions to deposit funds not within the scope of the village budget.

4. All other financial revenues and expenditures of the village must be recorded in accounting ledgers and settled clearly and transparently, detailing each type of activity.

Chapter II
SPECIFIC PROVISIONS

Section 1
Sources of Revenue and Expenditure Responsibilities of the Village Budget

Article 9. Sources of Revenue for the Village Budget

1. Revenues that the village budget enjoys 100% are those allocated for the village to use entirely to ensure self-sufficiency in budget sources to guarantee regular expenditure and investment development tasks. Based on the principle of分级管理收入和支出的规定，省级人民代表大会审议并决定将以下各项收入划拨给村级预算享受100%：

a) Fees and charges delegated to the village to collect according to regulations;

b) Income from village public service activities, which is remitted to the state budget according to the law;

c) Income from public utility land funds and other public property profits managed by the village according to the law;

d) Fines and penalties from administrative violations handled by the village according to the law;

đ) Income from state-owned assets established by village agencies, units, and organizations according to the law, after deducting costs as stipulated by the law;

e) Contributions from agencies, organizations, and individuals, including contributions made according to the law and voluntary contributions for infrastructure construction decided by the Village People's Council to be included in the village budget management;

g) Non-reimbursable aid from international organizations, other organizations, and foreign individuals directly to the village budget;

h) Surplus income from the village budget of the previous year;

i) Transferred income from the village budget of the previous year;

k) Other income of the village budget as prescribed by law.

2. Revenues divided between the village budget and the upper-level budget according to a percentage:

a) Rent for non-agricultural land use;

b) Rent for agricultural land use from households;

c) Business license fees from individuals and household businesses;

d) Property registration fees for houses and land.

Based on the actual capacity of revenue and expenditure responsibilities of the village, the Provincial People's Congress decides the percentage up to a maximum of 100% of the revenues specified in Clause 2 of this Article for the village budget.

In addition to revenues divided according to the percentages specified in Clause 2 of this Article, the village budget may also be further classified by the Provincial People's Congress to receive revenues from local government budgets enjoying 100% and revenues divided between the central and local government budgets.

3. Supplementary income from the upper-level budget to the village budget:

a) Budget balance supplementary income is the difference greater than the projected expenditure balance according to the classification and projected income from revenues classified to the village budget (100% revenues and revenues divided according to percentages), determined for the first year of the budget stabilization period. During the subsequent years of the local budget stabilization period, based on the county budget's balancing capacity, the County People's Committee submits to the County People's Congress to decide on increasing the supplementary balance income from the county budget to the village budget compared to the first year of the budget stabilization period;

b) Targeted supplementary income is the income for implementing programs and tasks (such as national target programs; central target programs; local programs and tasks) or new systems and policies issued by superiors but assigned to the village to implement and not arranged in the first year of the local budget stabilization period.

4. Apart from the revenues specified in Clauses 1 and 2 of this Article, the village authority shall not establish any revenues contrary to the provisions of the law.

Article 10. Tasks for expenditure from the commune budget

Based on the分级管理经济-社会、国防和安全的国家制度，国家机关活动的政策和制度，越南共产党以及政治-社会组织的政策，以及乡经济社会发展任务，在分配乡预算支出任务时，省人民代表大会应考虑将以下支出任务分配给乡预算执行：

1. Investment development expenditures, including:

a) Expenditure for construction of economic and social infrastructure projects from investment capital within the commune budget balance according to the classification level set by the provincial level as stipulated in Clause 2 of this Article;

b) Expenditure for construction of economic and social infrastructure projects of the commune from funds raised through contributions from agencies, organizations, and individuals in accordance with the law and the Law on Public Investment for specific projects decided by the Commune People's Council to be included in the commune budget management as stipulated in Clause 2 of this Article.

2. Recurrent expenditures, including:

a) Defense expenditure: Expenditure for implementing policies and regulations concerning the self-defense militia force and other expenditures related to the self-defense militia force under the commune budget expenditure as stipulated by the Law on Self-Defense Militia; expenditure for implementing military service registration and other military service tasks under the commune budget expenditure as stipulated by the Law on Military Service; other expenditures as stipulated by the law;

b) Security and social order expenditure: Expenditure for propaganda, mobilization, and organizing movements to protect security and social order in the commune; other expenditures as stipulated by the law;

c) Education expenditure: Support for educational and training activities in the commune;

d) Expenditure for technology application and transfer tasks (excluding research and development tasks);

đ) Health expenditure: Support for health care services for the people in the commune;

e) Cultural and information activity expenditure;

g) Radio and television broadcasting activity expenditure;

h) Physical education and sports activity expenditure;

i) Environmental protection activity expenditure, including waste collection and treatment;

k) Economic activity expenditure, including: Maintenance, repair, improvement of welfare facilities, infrastructure projects, and other projects managed by the commune; support for promoting economic activities such as industrial promotion, agricultural promotion, fishery promotion, forestry promotion according to prescribed regulations; other economic activities;

1) Expenditure for the operation of state administrative agencies, political organizations, and political-social organizations; support for the operation of occupational-political social organizations, social organizations, and occupational-social organizations according to the provisions of the law:

Expenditure for the operation of state agencies: Salaries for cadres and civil servants; remuneration for labor and activity fees for People's Council representatives; other allowances as prescribed by the State; travel expenses; expenditure for office activities, such as electricity, water, office supplies, postal fees, telephone, conference fees, reception and ceremonial expenses; expenditure for regular maintenance and repair of office premises, working equipment, and other fixed assets; social insurance, health insurance, trade union fees for commune cadres and other beneficiaries as prescribed; other expenditures as prescribed;

Operating expenses for the Communist Party of Vietnam organization at the commune level;

Operating expenses for political-social organizations at the commune level (Vietnam Fatherland Front, Ho Chi Minh Youth Union, Vietnam Veterans Association, Vietnam Women's Union, Vietnam Farmers' Union) after deducting income from their charters and other income (if any);

Operating support expenses for occupational-political social organizations, social organizations, and occupational-social organizations at the commune level according to the provisions of the law;

m) Social work expenditure managed by the commune: Monthly allowance for retired commune cadres according to prescribed regulations (excluding monthly allowances for retired commune cadres and one-time termination allowances for retired commune cadres since January 1, 1998 paid by social insurance); expenditure for visiting policy families; social assistance and other social work;

n) Other recurrent expenditures in the commune as stipulated by the law.

3. Based on the State's standards, criteria, and quotas, the Provincial People's Council shall specify detailed quotas for recurrent expenditures for each task in line with local conditions, characteristics, and the financial capacity of the locality.

Section 2

Management process of the commune budget

Article 11. Preparation of the Village Budget Estimate

1. Annually, based on the guidance of the District People's Committee, the Village People's Committee shall prepare the budget estimate for the following year (in accordance with forms 01 to 05 attached to this Circular) for submission to the Village People's Council for decision.

2. Basis for preparing the village budget estimate:

a) Tasks related to economic and social development, national defense, security, and public order of the village;

b) State budget revenue collection policies, mechanisms for dividing revenue sources, village budget expenditure tasks, and the percentage of revenue division as prescribed by the Provincial People's Council;

c) Standards and norms for state budget expenditures as issued by competent authorities. For the first year of the local budget stabilization period, it is the budget allocation standard decided by the Provincial People's Council;

d) The results of the review of the village budget estimate as announced by the District People's Committee;

d) The implementation status of the current year's and previous year's village budget estimates;

e) Reports on the budget estimates of agencies and units using the village budget.

3. Procedures for preparing and deciding on the village budget estimate:

a) The village finance and accounting department shall cooperate with the tax authority or the village tax collection team (if any) to calculate state budget revenues within the scope of management delegated to the village;

b) Units and organizations under the Village People's Committee shall prepare their own budget estimates based on their assigned functions and responsibilities and the standards and norms for expenditures;

c) The village finance and accounting department shall prepare the budget estimate for income and expenditure and balance the village budget, report to the Village People's Committee for submission to the Standing Body of the Village People's Council for examination and comments before sending to the District People's Committee and the District Finance and Planning Department for consolidation. The time for reporting the village budget estimate is regulated by the Provincial People's Committee;

d) For the first year of the budget stabilization period, the District Finance and Planning Department shall work with the Village People's Committee to balance income and expenditure of the village budget during the new stabilization period according to the overall balancing capacity of the local budget. For subsequent years in the budget stabilization period, the District Finance and Planning Department will only organize meetings with the Village People's Committee regarding the budget estimate upon request from the Village People's Committee;

đ) Decision on the village budget estimate: After receiving the decision on the assignment of revenue and expenditure tasks of the state budget from the District People's Committee, the Village People's Committee shall complete the budget estimate for state budget revenues within its management scope; the village budget income and expenditure estimates and the budget allocation plan shall be reported to the Village Economic-Social Committee for verification, the Standing Body of the Village People's Council for examination and comments, and submitted to the Village People's Council for decision within the time limit set by the Provincial People's Committee. After the village budget estimate is decided by the Village People's Council, the Village People's Committee shall report to the District People's Committee, the District Finance and Planning Department, and the Treasury Office at the transaction location to implement the budget estimate;

e) The District Finance and Planning Department is responsible for reviewing the village budget estimate, and in case of errors, it must report to the District People's Committee to request the Village People's Council to adjust the budget estimate in accordance with regulations, while simultaneously submitting to the Treasury Office at the same level as the basis for implementing the budget estimate according to regulations.

4. The village budget shall allocate an annual reserve fund equivalent to 2% to 4% of the total estimated expenditure to ensure tasks related to prevention, response, and aftermath recovery from natural disasters, catastrophes, epidemics, famine relief; important tasks concerning public order and other necessary tasks within the village budget expenditure that have not been estimated. The Village People's Committee decides on the use of the village budget reserve, reports to the Standing Body of the Village People's Council at the end of each quarter and reports to the Village People's Council at the nearest session.

5. Annual adjustment of the village budget estimate (if necessary) in cases where there is a requirement from the higher-level People's Committee to ensure consistency with the general direction or significant changes in revenue sources and expenditure tasks.

The Village People's Committee shall prepare the adjusted budget estimate, report to the Village Economic-Social Committee and the Standing Body of the Village People's Council for examination and comments before submitting to the Village People's Council for decision and reporting to the District People's Committee.

Article 12. Implementation of the village budget estimate

1. Based on the village budget estimate and the annual budget allocation plan for the village that have been decided by the Village People's Council, the Village People's Committee decides to allocate the detailed budget expenditure estimate of the village budget according to each section (in accordance with form number 06 attached to this Circular) and sends it to the State Treasury where transactions take place for registration and as a basis for monitoring and payment of expenditures; at the same time, send it to the District Finance and Planning Office for reporting.

2. The Chairman of the Village People's Committee (or the authorized person) is the account holder for village budget revenue and expenditure.

3. Villages shall maintain a cash fund at the village level to settle small-value expenditures. For villages far from the State Treasury with difficult travel conditions, unable to promptly deposit village budget revenues directly into the State Treasury, they are allowed to retain funds to proactively spend within the prescribed regulations and within the budget estimate decided by the Village People's Council; monthly, they must process accounting entries for revenue and expenditure into the state budget at the State Treasury in accordance with the provisions.

4. Organization of budget revenue collection:

a) The Chairman of the Village People's Committee directs the village finance and accounting department to cooperate with tax authorities to ensure timely and full collection in accordance with the law;

b) Organizations, units, and individuals obligated to pay into the budget, based on the revenue notification from the collection agency or the Village People's Committee, shall make direct payments into the State Treasury or deposit into the State Treasury account (in cash or by transfer) at commercial banks designated by the State Treasury for collection or joint collection. For village budget revenues collected directly by the Village People's Committee, they must be deposited into the State Treasury periodically in accordance with the provisions or follow the procedures stipulated in Clause 3 of this Article. The declaration and payment of taxes and other state budget revenues shall be carried out in accordance with the laws on tax management;

c) In cases where the competent authority decides to refund budget revenues of the village, the procedures and decisions for refunds shall be implemented in accordance with current laws;

d) The circulation of receipts shall be carried out as follows:

For village budget revenues received at 100% or shared with higher-level budgets, the State Treasury where transactions take place shall prepare a list of village budget revenues, sent to the Village People's Committee monthly;

For additional revenues transferred from the district budget to the village budget:

Monthly, the Village People's Committee shall proactively withdraw the budget estimate from the State Treasury where transactions take place to ensure balance in their own budget; the maximum withdrawal monthly in principle should not exceed 1/12 of the total annual supplementary balance adjustment; specifically, for months in the first quarter, based on the requirements and expenditure tasks of the village budget, the withdrawal amount may be higher, but the monthly withdrawal amount should not exceed 12% of the annual budget and ensure that the total first-quarter withdrawal does not exceed 30% of the annual budget. In special cases requiring increased budget estimate withdrawal progress, the Village People's Committee shall submit a written request to the District Finance and Planning Office for consideration and resolution.

For targeted supplementary funds from the district budget to the village budget (including supplementary funds outside the initial annual budget allocation), based on revenue capacity and expenditure task requirements, the district-level People's Committee shall stipulate the withdrawal of the village budget estimate to suit local realities.

Based on the budget estimate withdrawal request form of the Village People's Committee (according to the attached model); the State Treasury where transactions take place shall check the conditions: included in the allocated budget, within the monthly withdrawal limit, then record the higher-level budget expenditure and lower-level budget revenue in accordance with the content of the supplementary item and the state budget classification.

5. Organization of implementation of budget assignment tasks:

a) When implementing budget expenditure decisions, the Chairman of the Village People's Committee or the authorized person deciding on expenditure must check and ensure that the expenditure meets the following conditions:

Within the allocated budget estimate, except for the beginning-of-year budget, budget estimates, and allocations which have not yet been decided by the competent authority and expenditures from surplus revenues, reserve funds, and previous year's budget balances as decided by the competent authority;

For development investment expenditures, they must meet the conditions stipulated by laws on public investment and construction;

For regular expenditures, they must comply with established standards and norms;

Payment vouchers and documents must be valid and legal; for large purchases and repairs, bidding procedures must be followed as required;

b) Organizations and units under the village:

Prepare quarterly budget usage estimates (divided by month) and submit them to the Village People's Committee. When there is a need for expenditure, units and organizations must complete the necessary procedures to request the Village People's Committee to withdraw funds from the State Treasury or the village fund for payment;

Adhere to the regulations on budget expenditure settlement and finalization with the Village People's Committee;

c) The village finance and accounting department:

Review the need for budget usage by units and organizations;

Allocate resources according to the annual budget to meet expenditure needs. If the expenditure requirement exceeds income at a certain point in time, priority should be given to allocating funds to ensure salary payments, salary-like expenditures, social welfare expenditures, and timely full support for social assistance recipients. If the source remains insufficient, the village finance and accounting department should report to the Chairman of the Village People's Committee to request the District Finance and Planning Office to increase the supplementary balance distribution progress or temporarily rearrange expenditure needs to match revenue sources;

Monitor and supervise the implementation of budget expenditures and the use of assets by budget-using units, identify and promptly report to the Chairman of the Village People's Committee any violations of regulations, standards, and norms for appropriate action.

d) The Chairman of the People's Committee of the commune or the person authorized to decide on expenditures by signing off on budget withdrawal forms or payment orders (referred to as expenditure vouchers) or advance payments through advance request forms in accordance with regulations and shall be responsible for their decisions; if expenditures are incorrect, they must compensate the public treasury and may also face disciplinary action, administrative penalties, or criminal liability depending on the nature and severity of the violation;

đ) Budget disbursement process for commune budgets:

Based on the approved commune budget expenditure plan by the People's Council, progress of work, the financial and accounting department of the commune shall prepare the disbursement procedures to submit to the Chairman of the People's Committee of the commune or the authorized person to decide and send to the State Treasury at the transaction location along with necessary documents as prescribed by law. On the expenditure voucher, it must clearly and fully record chapters, types, clauses, items, sub-items according to the state budget classification, accompanied by a list of expenditure vouchers (according to Form 14 attached to this Circular), supporting documents. In cases of one-time payments involving multiple chapters, additional detailed expenditure lists according to the state budget classification (according to Form 15 attached to this Circular) must be prepared, indicating the voucher number, date, and month on the list, while the expenditure voucher must clearly indicate the list number and total amount;

In cases of cash payments, use cash expenditure vouchers. The State Treasury will check, and if conditions are met, proceed with payment to the customer or user;

In urgent cases such as advance travel expenses, advance payments to customers, contractors according to contracts, conference preparation, reception, small purchases, and other necessary tasks that require advance payments, only the total amount needed for the advance should be recorded on the expenditure voucher. When making advance payments, valid supporting documents must be provided, and the commune's financial and accounting department must prepare a list of expenditure vouchers (according to Form 14 attached to this Circular) and an Advance Payment Request Form (according to Form 16 attached to this Circular) to be sent to the State Treasury at the transaction location to process the advance payment conversion to actual budget expenditure;

Commune budget payments to beneficiaries must be made through bank transfers (except where permitted to make cash payments according to the Ministry of Finance's regulations on managing cash receipts and payments through the State Treasury system);

For expenditures from retained revenue sources at the commune level, the commune's financial and accounting department must cooperate with the State Treasury to regularly process revenue and expenditure accounting entries into the commune budget; when processing revenue and expenditure entries, a revenue voucher list and an expenditure voucher list must be attached in accordance with established regulations;

e) Regular expenditures:

Prioritize salary payments, allowances, and contributions for commune cadres and civil servants, social welfare expenditures, and social assistance payments;

Other regular expenditures must be based on the annual budget estimate, the volume of work completed, and the commune budget's capacity at the time of expenditure to ensure appropriate spending;

g) Investment and development expenditures:

Management of commune budget construction investment capital must be carried out in full accordance with laws on public investment and provincial People's Councils' decentralization regulations; settlement and final accounts of commune budget construction investment capital must follow specific regulations set by the Ministry of Finance;

For projects funded by voluntary contributions, in addition to general regulations, it is necessary to ensure: Maintaining accounting records to promptly reflect all monetary, labor day, and material contributions from the people; during construction, acceptance, and payment, there must be community investment supervision committee oversight according to established regulations;

Construction investment expenditures must comply with public investment, construction laws, and financial regulations as stipulated; all forms of construction arrears and capital misappropriation are strictly prohibited;

6. Adjustments to the commune budget estimates shall be implemented in accordance with Articles 52 and 53 of the State Budget Law.

Article 13. Accounting and Settlement of Commune Budget

1. The People's Committee of the commune shall be responsible for organizing and implementing accounting work and settlement of the commune budget according to the state budget classification and current commune budget accounting regulations; implementing accounting reporting and settlement systems as prescribed. The State Treasury at the transaction location shall carry out accounting work for income and expenditure of the commune budget as prescribed; periodically reporting monthly and quarterly on the implementation of income and expenditure of the commune budget, remaining balance of the commune budget to the People's Committee of the commune as prescribed, and submitting other ad hoc reports upon request of the People's Committee of the commune.

2. The period for adjusting the settlement of the commune budget ends on January 31 of the following year.

3. In order to implement annual closing and settlement work, the People's Committee of the commune shall perform the following tasks:

a) By the end of December, review all income and expenditure items according to the budget estimate, take measures to collect all receivables due to the budget and promptly address expenditure needs according to the budget estimate. In cases where there is a possibility of revenue shortfall, actively arrange reallocation of expenditure items, utilize reserve funds, and other lawful self-financing sources to ensure balance of the commune budget;

b) Coordinate with the State Treasury at the transaction location to reconcile all income and expenditure items of the commune budget for the year, ensuring full and accurate accounting of income and expenditure according to the state budget classification, rechecking the amount of revenue allocated between budget levels according to the prescribed ratio;

c) For temporary receipts and retained amounts (if any), consider processing or refunding; if not resolved, procedures must be made to transfer them to the next year;

d) Income and expenditure items occurring at the end of the year shall be implemented according to the principle that income must be submitted no later than the end of working hours on December 31. If submitted after this deadline, it must be accounted for as income in the following year's budget. Expenditure tasks arranged in the current year's budget can only be spent within the fiscal year; any unspent items in the budget up to January 31 of the following year cannot be carried over to the next year for further spending, except for certain expenditure items allowed to be transferred to the next year under Clause 1, 2 of Article 43 of Decree No. 163/2016/NĐ-CP dated December 21, 2016 of the Government detailing the implementation of certain provisions of the State Budget Law for execution and accounting, and settlement into the following year's budget;

e) Any remaining balance in the commune budget deposit account as of December 31 (if any) shall be transferred to the following year's budget for use according to the prescribed regime.

Annual settlement process of the commune budget:

a) The People's Committee of the commune shall prepare the annual income and expenditure settlement report of the commune budget (according to forms 07 to 12 attached to this Circular) for review by the Economic-Social Committee of the commune, then report to the Standing Committee of the People's Council of the commune for comments before reporting to the People's Council of the commune for approval, while simultaneously sending to the District Finance-Planning Office for consolidation. The time for submitting the annual settlement report to the District Finance-Planning Office is determined by the Provincial People's Council;

b) The settlement of expenditure of the commune budget shall not exceed the settlement of income of the commune budget. The surplus of the commune budget is the difference greater than the actual income and actual expenditure of the commune budget. The entire surplus of the previous year (if any) shall be transferred to the income of the following year's budget;

c) After the People's Council of the commune approves, the settlement report shall be prepared in five copies to be sent to the People's Council of the commune, the People's Committee of the commune, the District Finance-Planning Office, the State Treasury at the transaction location (to process recording of surplus budget income), kept by the commune finance and accounting department;

d) The District Finance-Planning Office shall be responsible for reviewing the settlement report of income and expenditure of the commune budget, and in case of errors, report to the People's Committee of the district to request the People's Council of the commune to adjust.

Article 14. Inspection, Supervision, and Public Disclosure of Commune Budget Activities

1. The Commune People's Council shall supervise the implementation of commune budget revenue and expenditure.

2. The higher financial authority shall be responsible for inspecting, guiding, and managing the commune budget work.

3. The supervision of community budgets shall be carried out in accordance with the provisions of Article 52 of Decree No. 163/2016/NĐ-CP dated December 21, 2016, of the Government detailing certain provisions of the State Budget Law.

4. Financial and budget disclosure of the commune and other financial activities of the commune shall be implemented in accordance with the Circulars of the Ministry of Finance guiding the public disclosure of state budgets.

Section 3

Organization of Management of Other Financial Activities of the Commune

Article 15. National Financial Funds Outside the Commune Budget

1. The national financial funds outside the commune budget specified in this Circular are funds established by authorized bodies and voluntary contributions from the people mobilized by villages and recognized by the Commune People's Council but not included in the commune budget according to prescribed regulations. The content, level, and methods of fund revenue and expenditure management shall comply with state regulations applicable to each fund and the regulations of the Commune People's Council.

2. The commune finance and accounting department shall assist the Commune People's Committee in managing these funds (implementing revenue and expenditure, maintaining separate records; organizing accounting and settlement for each fund separately; implementing reporting systems as prescribed,...). Unspent funds at the end of the year shall be carried over to the next year.

3. The Commune People's Committee shall report annually on the operation results of each fund to the Commune People's Council and the District Finance and Planning Office.

Article 16. Financial Management of Social and Cultural Activities of the Commune

1. The financial management of social and cultural activities of the commune includes revenues and expenditures arising from the operations of community learning centers, cultural information, sports, management of boats, markets, ponds, lakes, wells, land, natural resources, wharfs, and other social and cultural activities directly organized and managed by the Commune People's Committee according to prescribed regulations.

2. The financial management of social and cultural activities of the commune shall be uniformly organized based on the following principles:

a) The Commune People's Committee shall entrust various units, organizations, individuals, and households within the commune to directly implement specific social and cultural activities. These entrusted units, organizations, individuals, and households must prepare annual financial plans, calculate all revenues and expenditures; the amount to be remitted to the commune budget or support from the commune budget (if applicable) and submit them for approval by the Commune People's Committee. The Commune People's Committee shall compile and report annually on the financial plans and outcomes of each social and cultural activity to the Commune People's Council. The Commune People's Council shall supervise these activities.

b) The commune finance and accounting department shall assist the Commune People's Committee in managing the financial affairs of social and cultural activities, guide units, organizations, individuals, and households entrusted with implementing social and cultural activities in organizing accounting and settlement of revenues and expenditures; implementing appropriate financial reporting systems for each activity, conducting regular and spot checks on the financial situation of these activities.

Article 17. Financial activities of villages and hamlets

1. Contributions on a voluntary basis from the people to be used for specific purposes serving the common interests of the village community shall be directly mobilized by the village and not included in the commune budget.

2. Mobilization shall only be carried out after reaching a consensus and voluntary agreement among the people regarding the policy, level of mobilization, and must report to the Commune People's Committee. The Commune People's Committee must guide the village to maintain books recording all revenues and expenditures in detail and publicly disclose the results of mobilization and utilization of financial resources to the people. The mobilized funds can only be used for specific tasks agreed upon by the people. In cases where the collected funds have not been used, the village may request the commune to deposit them into the commune's savings account at the State Treasury, commercial banks, or legitimate credit organizations. With the consent of the villagers, the village may deposit unused collected funds into its own savings account opened at a commercial bank or credit organization. The commune's finance and accounting department has the responsibility to assist the Commune People's Committee in guiding and inspecting (if necessary) the financial aspects of village financial activities.

Article 18. Other financial activities of communes

1. Financial activities outside the budget of Party organizations and mass organizations shall be managed according to their respective charters, not included in the commune budget, and not part of other financial activities of the Commune People's Committee. Party organizations and mass organizations at the commune level must appoint personnel to maintain detailed records of each revenue and expenditure item; organize their own collection and disbursement, and implement financial reporting and disclosure systems as prescribed by their respective organizations.

2. Entrusted collections and payments include revenues and expenditures entrusted by other organizations and agencies for the commune to collect and pay on their behalf. The commune's finance and accounting department assists the Commune People's Committee in implementing entrusted collections and payments according to the prescribed regulations, maintaining separate records for each item, and not conducting any transactions beyond the scope of the entrustment.

Chapter III
IMPLEMENTATION

Article 19. Responsibilities of People's Committees at various levels

1. Based on the provisions of this Circular, the People's Committees of provinces and centrally-administered cities are responsible for providing detailed guidance suitable to the specific circumstances of each locality, while directing provincial financial authorities, local governments, and county-level financial authorities to strengthen supervision, inspection, and monitoring of budget management and other financial activities of communes; promptly resolving and addressing any issues arising during implementation.

2. County-level People's Committees must allocate sufficient staff trained to the required standards to manage commune finances and budgets, and regularly organize training and capacity building for commune staff to ensure they meet the financial management requirements stipulated by the State Budget Law. The selection and replacement of staff for the commune's finance and accounting department shall be carried out in accordance with state regulations.

3. People's Committees at all levels must develop specific plans to gradually strengthen the commune's finance and accounting departments to effectively assist the Commune People's Committee in managing the commune budget and other financial activities according to prescribed regulations. The positions and number of staff in the commune's finance and accounting department shall be based on the volume of work, scale of revenues and expenditures, and staffing norms prescribed by the Government.

Article 20. Financial and accounting department of the commune and responsibilities of the financial and accounting department of the commune

1. The accountant must be a person with professional qualifications, at least a college level in finance and accounting. The accountant has the duty to assist the Chairman of the People's Committee of the commune in managing the commune's budget revenue and expenditure activities and other financial activities; implementing tasks of preparing budgets, allocating, executing, accounting for, and settling accounts of the commune's budget and communal funds.

2. The cashier is responsible for managing the commune's cash fund (for communes with small-scale revenue and expenditure, a part-time staff member may be used, but the commune's accountant shall not concurrently hold the position of cashier).

Article 21. Transitional Provisions

For the settlement of the 2016 budget, apply according to the provisions of the State Budget Law on December 16, 2002, Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the State Budget Law, Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance guiding the implementation of Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government, and Circular No. 108/2008/TT-BTC dated February 18, 2008 of the Ministry of Finance guiding the handling of the end-of-year state budget and the preparation and reporting of annual state budget settlements.

Article 22. Effectiveness

1. This Circular takes effect from February 13, 2017, and applies from the 2017 fiscal year.

2. Repeal Circular No. 60/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance on the management of the commune's budget and other financial activities in communes, wards, and towns.

3. During the implementation process:

a) In cases where the regulatory legal documents cited for application in this Circular are amended, supplemented, or replaced, they will be applied according to the new document.

b) In case of difficulties, it is requested that agencies and units report to the Ministry of Finance for study and resolution./.