Joint Circular No. 35/2014/TTLT-BTC-BGTVT guiding the financial management mechanism for the Vietnam Vehicle Inspection Agency

JOINT CIRCULAR

Guidelines on Financial Management Mechanism for the Vietnam Vehicle Inspection Center

Pursuant to Decree No. 130/2013/NĐ-CP dated October 16, 2013 of the Government on production and supply of public goods and services;

Pursuant to Decree No. 57/2002/NĐ-CP dated June 3, 2002 of the Government detailing the implementation of the Ordinance on Fees and Charges; Decree No. 24/2006/NĐ-CP dated March 6, 2006 of the Government amending and supplementing certain articles of Decree No. 57/2002/NĐ-CP dated June 3, 2002 of the Government detailing the implementation of the Ordinance on Fees and Charges;

Pursuant to Decree No. 71/2013/NĐ-CP dated July 11, 2013 of the Government on State Capital Investment in Enterprises and Financial Management of Enterprises Fully Owned by the State;

Pursuant to Decree No. 99/2012/NĐ-CP dated November 15, 2012 of the Government on the Allocation and Delegation of Rights, Responsibilities, and Obligations of State Owners towards Enterprises and State Capital Invested in Enterprises;

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

The Ministers of the Ministry of Public Security, the Ministry of National Defense, and the Ministry of Transportation hereby issue this consolidated joint circular

Pursuant to Decision No. 67/2013/QĐ-TTg dated November 12, 2013 of the Prime Minister on the Financial Mechanism of the Vietnam Vehicle Inspection Center.

The Minister of Finance and the Minister of Transport hereby issue these Joint Circulars guiding the financial management mechanism for the Vietnam Vehicle Inspection Center as follows:

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. These Circulars stipulate the financial management mechanism applicable to the Vietnam Vehicle Inspection Center and its subordinate units.

2. Administrative and public service funds' sources and expenditures allocated to the Vietnam Vehicle Inspection Center from the State Budget shall be managed, accounted for, and settled separately according to the provisions of the State Budget Law, and shall not apply the provisions of these Circulars.

Chapter II

SPECIFIC PROVISIONS

I. MANAGEMENT AND USE OF CAPITAL AND ASSETS

Article 2. Operating capital and preservation of capital at the Vietnam Vehicle Inspection Center

1. The operating capital of the Vietnam Vehicle Inspection Center includes: capital invested by the State at the Vietnam Vehicle Inspection Center and other sources of capital as prescribed by law.

2. The capital invested by the State at the Vietnam Vehicle Inspection Center includes: capital provided by the State when establishing the Vietnam Vehicle Inspection Center and throughout its operational period: capital received from other places transferred according to the decision of the competent authority; value of grants, gifts, and ownerless property; capital supplemented from post-tax profits; value of land use rights and other amounts included in State capital according to the provisions of law.

3. Preservation of capital:

The Vietnam Vehicle Inspection Center is responsible for preserving and developing the State capital invested at the Vietnam Vehicle Inspection Center. Every six months and annually, the Vietnam Vehicle Inspection Center must evaluate the effectiveness of capital usage according to regulations. In case of capital fluctuations, the Vietnam Vehicle Inspection Center has the responsibility to report to the Ministry of Transport and the Ministry of Finance for monitoring and supervision.

a) Preservation of capital:

Based on the profit and loss indicators of the Vietnam Vehicle Inspection Center according to quarterly and annual financial reports to assess the degree of capital preservation.

For cases with profit or no loss, the degree of capital preservation is determined by the coefficient H:

Where:

- The owners' equity to determine the degree of capital preservation includes the owner's investment capital (code 411), development fund (code 417), basic construction capital (code 421) on the Balance Sheet according to the quarterly or annual Financial Report (Form B 01-DN issued along with Decision No. 15/2006/QĐ-BTC dated March 20, 2006 of the Minister of Finance and any subsequent amendments or replacements).

- When determining the capital preservation coefficient as prescribed above, the Vietnam Vehicle Inspection Center must exclude external factors affecting capital changes during the reporting period such as additional State capital investment for the Vietnam Vehicle Inspection Center, State capital transferred from other places.

Method of evaluating the degree of capital preservation: if the coefficient H = 1, the Vietnam Vehicle Inspection Center preserves the capital, and if the coefficient H > 1, the Vietnam Vehicle Inspection Center has developed the capital.

b) In the event that the Vietnam Vehicle Inspection Center fails to preserve the capital (total revenue is less than total expenditure), the Director of the Vietnam Vehicle Inspection Center must submit a report explaining the reasons and measures to address the situation in the future to the Ministry of Transport and the Ministry of Finance and bear responsibility for the financial situation of the Vietnam Vehicle Inspection Center.

c) The Vietnam Vehicle Inspection Center is responsible for preserving capital through the following measures:

- Implementing the correct management and utilization of capital and assets, profit distribution, and other financial management systems and accounting systems as prescribed by law.

- Purchasing asset insurance as prescribed by law.

- Promptly handling the value of lost assets, unrecoverable debts, and setting aside risk reserves as prescribed.

- Other measures for preserving capital and state assets as prescribed by law.

Article 3. Management of receivables and payables

1. Management of receivables:

a) Responsibilities of the Vietnam Vehicle Inspection Agency:

- Establishing and promulgating regulations on the management of receivables, assigning and clearly defining the responsibilities of collectives and individuals for tracking, recovering, and settling accounts receivable;

- Maintaining ledgers to track receivables by debtor category; regularly classifying receivables (current receivables, difficult-to-collect receivables, unrecoverable receivables), and urging their recovery.

- Must track in detail according to each type of foreign currency for receivables denominated in foreign currencies; at the end of the period, re-evaluate and handle exchange rate differences in accordance with regulations.

- The Director of the Vietnam Vehicle Inspection Agency and the Directors of subordinate units have the responsibility to promptly handle difficult-to-collect receivables and unrecoverable receivables. If they fail to promptly handle unrecoverable receivables as stipulated in this clause, the Director of the Vietnam Vehicle Inspection Agency or the Director of the relevant subordinate unit will be relieved of their position as if they had reported financial status inaccurately two times or more. If failure to promptly handle leads to loss of state investment capital at the Vietnam Vehicle Inspection Agency, the Director of the Vietnam Vehicle Inspection Agency and the Directors of subordinate units must bear responsibility before the Ministry of Transport and under the law.

- Difficult-to-collect receivables are receivables overdue for payment for over six months (based on the original repayment term, excluding extended repayment periods). The Vietnam Vehicle Inspection Agency has applied measures such as reconciliation and urging payment but still cannot recover them; or receivables not yet due for payment where the debtor is an economic organization that has entered bankruptcy, is undergoing dissolution procedures, the debtor is missing, has fled, is being prosecuted, detained, tried, or has died. The Vietnam Vehicle Inspection Agency is responsible for setting aside provisions for difficult-to-collect receivables in accordance with the regulations of the Ministry of Finance.

- Unrecoverable receivables, the Vietnam Vehicle Inspection Agency is responsible for compensating related individuals and collectives, the remainder is offset by the provision for difficult-to-collect receivables. If there is still a shortfall, it shall be recorded as operating expenses of the Vietnam Vehicle Inspection Agency.

After handling as above, unrecoverable receivables, the Vietnam Vehicle Inspection Agency must continue to monitor outside the balance sheet account and organize recovery. Recovered amounts shall be recorded as income of the Vietnam Vehicle Inspection Agency.

b) Rights of the Vietnam Vehicle Inspection Agency:

The Vietnam Vehicle Inspection Agency has the right to sell overdue receivables, difficult-to-collect receivables, and uncollectible receivables to recover capital. The sale of debts can only be carried out with economic organizations having the function of buying and selling debts, and direct sales to debtors are not allowed. The selling price of debts is agreed upon by the parties involved and they are responsible for the decision to sell receivables. In cases where selling debts leads to losses, capital loss, or loss of solvency leading to financial imbalance, the Director of the Vietnam Vehicle Inspection Agency and those directly related to the occurrence of receivables must compensate according to the law.

2. Management of payables:

a) Maintaining complete records of all payables including interest payable:

b) Settling payables strictly according to the agreed terms. Regularly reviewing, evaluating, and analyzing the ability to settle debts of the agency, identifying early signs of difficulties in debt settlement to take timely measures to prevent the emergence of overdue payables. Payables that do not need to be paid or have no recipient shall be recorded as income of the Vietnam Vehicle Inspection Agency.

Article 4. Investment, Construction, and Procurement of Fixed Assets

Clause 1. The Vietnam Vehicle Inspection Agency must develop plans for investment projects over five years to be submitted to the Ministry of Transport for approval.

Clause 2. The Director of the Vietnam Vehicle Inspection Agency decides on procurement of assets and investment and construction projects with values not exceeding 30% of the owner's equity (codes 411 + 417 + 421) recorded in the most recent published Financial Report of the Agency, but not exceeding the highest limit of Project Group B as stipulated by laws governing project management and construction.

Clause 3. For procurement of assets or investment and construction projects exceeding the limits set forth in Clause 2 of this Article, the Vietnam Vehicle Inspection Agency shall have the responsibility to submit such matters for approval in writing by the Ministry of Transport or competent authority.

Clause 4. Procedures for investment implementation shall be carried out in accordance with the provisions of laws governing project management and construction.

Clause 5. The Director of the Vietnam Vehicle Inspection Agency may decide on the internal reallocation of assets within subordinate units of the Vietnam Vehicle Inspection Agency. However, for assets that are office premises, prior written approval from the Ministry of Transport is required before reallocation can take place.

Article 5. Depreciation of Fixed Assets

Current fixed assets of the Vietnam Vehicle Inspection Agency shall be managed, utilized, and depreciated in accordance with regulations issued by the Ministry of Finance.

Article 6. Liquidation and Sale of Fixed Assets

Clause 1. The Vietnam Vehicle Inspection Agency may sell or liquidate fixed assets that are damaged, obsolete, unnecessary, or unusable to recover capital based on principles of transparency and preservation of capital.

Clause 2. Authority to Decide on Liquidation and Sale of Fixed Assets:

Point a. Fixed assets directly serving the provision of public services by the Vietnam Vehicle Inspection Agency (workshops, inspection and testing equipment, certification lines, etc.) when sold or liquidated must obtain written consent from the Ministry of Transport. The Ministry of Transport will consider delegating authority to the Vietnam Vehicle Inspection Agency to independently liquidate certain assets in specific cases.

Point b. For other assets, the Director of the Vietnam Vehicle Inspection Agency may decide on liquidation and sale plans for fixed assets with remaining values under 50% of the owner's equity recorded in the most recent published Financial Report of the Vietnam Vehicle Inspection Agency. For fixed asset liquidation and sale plans with values exceeding the aforementioned classification level, the Director of the Vietnam Vehicle Inspection Agency must report to the Ministry of Transport for decision.

Clause 3. In cases where the plan for selling fixed assets of the Vietnam Vehicle Inspection Agency cannot fully recover capital, the Vietnam Vehicle Inspection Agency must clearly explain the reasons and report to the Ministry of Transport and the Ministry of Finance before selling the fixed assets to ensure supervision.

Clause 4. In cases where newly invested fixed assets fail to generate economic benefits as initially approved, and the Vietnam Vehicle Inspection Agency has no need to continue using them, and the sale of these assets cannot fully recover the investment capital leading to the inability to repay loans according to loan agreements, the responsibility of those involved must be clarified and reported to the Ministry of Transport for handling in accordance with the law.

Clause 5. Methods of Liquidation and Sale of Fixed Assets: The sale of fixed assets shall be conducted through public auction via an organization authorized to conduct asset auctions or organized publicly by the unit itself in accordance with the prescribed procedures and formalities under laws governing asset auctions. If the remaining value of the fixed assets to be liquidated or sold, as recorded in accounting records, is less than 100 million VND, the Director of the Vietnam Vehicle Inspection Agency may decide to choose between auction or negotiation sales, but not below market price. In cases where there are no transactions for the fixed assets on the market, the Vietnam Vehicle Inspection Agency may hire an organization authorized to appraise prices to determine the basis for selling the assets through the above methods.

Clause 6. Procedures for Liquidation of Fixed Assets shall be implemented in accordance with regulations issued by the Ministry of Finance.

Article 7. Inventory of Assets

1. The Vietnam Vehicle Inspection Agency must organize regular or spot inventory checks to determine the quantity of assets (fixed assets and long-term investments, current assets and short-term investments), reconcile accounts receivable and payable when closing the accounting books to prepare the annual financial report; when implementing decisions on division, separation, merger, consolidation, ownership transfer; after natural disasters or enemy attacks; or for any other reasons causing asset fluctuations within the unit; or according to the State's policy. For excess or missing assets, uncollectible debts, overdue debts, the causes, responsibilities of those involved, and the level of material compensation must be clearly determined in accordance with regulations.

2. Handling of inventory:

a) Handling asset losses after inventory:

Asset loss refers to lost, missing, damaged, deteriorated, outdated, technologically obsolete, and surplus inventory identified in regular and spot inventory checks. The Vietnam Vehicle Inspection Agency must determine the value of the loss, the cause, responsibility, and handle it as follows:

- If due to subjective reasons, the person responsible for the loss must compensate according to the law. The Director of the Vietnam Vehicle Inspection Agency decides on the level of compensation according to the law and bears responsibility for their decision;

- If insured assets suffer losses, they shall be handled according to the insurance contract;

- The value of the lost assets, after compensating with personal or collective compensation money and insurance organization compensation if insufficient, the shortfall will be recorded as production and business expenses for the period;

- In special cases caused by natural disasters or force majeure resulting in serious damage that the Vietnam Vehicle Inspection Agency cannot resolve on its own, the Director of the Vietnam Vehicle Inspection Agency shall develop a plan to handle the loss and submit it to the Ministry of Transport and the Ministry of Finance. After receiving the opinion of the Ministry of Finance, the Ministry of Transport will decide on handling the loss within its authority;

- The Vietnam Vehicle Inspection Agency is responsible for promptly handling asset losses. If asset losses are not handled, the Director of the Vietnam Vehicle Inspection Agency will bear responsibility before the Ministry of Transport as if the financial situation of the enterprise was reported inaccurately;

b) Excess assets after inventory are the differences between the actual inventory amount and the recorded amount in the accounting books, the value of excess assets from inventory is recorded as income of the enterprise;

Article 8. Revaluation of Assets

1. The Vietnam Vehicle Inspection Agency implements revaluation of assets according to the decision of the competent state agency;

2. Revaluation of assets must comply with the relevant provisions of the State. Any increases or decreases in value due to revaluation of assets shall be handled according to the current regulations of the State for each specific case;

II. REVENUE, EXPENSES AND OPERATING RESULTS

Article 9. Revenue and Other Income

1. The revenue of the Vietnam Vehicle Inspection Agency includes service provision revenue and financial activity revenue, including:

a) Service provision revenue is the total amount of money receivable during the period from providing services by the Vietnam Vehicle Inspection Agency, including:

- Inspection and testing revenue, including: Reviewing and assessing designs of vehicles and equipment in the transportation sector before new construction or modification; inspecting and testing safety technology and environmental protection for vehicles and equipment in the transportation sector; evaluating management systems for safety, security, and maritime security plans according to international conventions on safety management (ISM Code) and international conventions on port facility security (ISPS); inspecting and evaluating seafarers according to the Maritime Labour Convention 2006 (MLC 2006); evaluating and issuing quality management system certificates and environmental protection certificates according to the requirements of organizations and enterprises under the law; technical condition appraisal of transportation vehicles and equipment and offshore oil exploration, extraction, and transportation equipment according to the requirements of state agencies or owners; cooperating with foreign inspection agencies in mutual inspections according to agreements and other inspection activities as prescribed by the state;

- Other revenues related to inspection activities such as: Training inspectors, publishing the Inspection Magazine, issuing uniform stamp blanks for inspection units throughout the industry; collecting fees for certificate issuance and road usage fees based on vehicle types according to the law;

- Revenue from non-public welfare inspection service activities, including: acting as agents for selling insurance for motor vehicles, consulting, scientific and technological services related to the safety technology of transportation vehicles and equipment, and other revenues as prescribed by law;

b) Financial activity revenue: interest from bank deposits, exchange rate differential gains according to current regulations;

2. Other income includes revenues from the liquidation and sale of fixed assets, insurance compensation payments, increased income from debts owed but now lost, fines from customers for breach of contract, and other revenues as prescribed by law;

Article 10. Costs

Expenses of the Vietnam Vehicle Inspection Agency include costs incurred in connection with the activities of the Vietnam Vehicle Inspection Agency in the fiscal year, including: costs for service provision activities, financial activity costs, and other costs;

1. Costs for service provision activities:

a) Inspection activity costs, including:

- Raw material, fuel, power, semi-finished product, and external service purchase costs (based on actual consumption and original cost), tool and equipment depreciation costs, fixed asset repair costs, and pre-provisioned large-scale fixed asset repair costs;

- Fixed asset depreciation costs calculated according to Article 5 of this Circular;

- Wages, salaries, and wage-like costs payable to employees according to current state regulations;

- Social insurance premiums, trade union fees, health insurance premiums, unemployment insurance premiums for employees that the Vietnam Vehicle Inspection Agency must pay according to regulations:

- Transaction costs, brokerage fees, hospitality expenses, marketing expenses, trade promotion expenses, advertising expenses, meeting expenses calculated based on actual incurred costs and the provisions of the Enterprise Income Tax Law;

- Other monetary expenses as prescribed, including: mineral resource taxes, land taxes, business license taxes, and other types of taxes (if applicable); land rental payments; severance pay, unemployment benefits for employees: training to enhance management capabilities and skills of employees; expenses for medical work as prescribed; bonuses for innovation improvements, productivity increases, material savings, and expenses. The bonus amount is decided by the Director of the Vietnam Vehicle Inspection Agency based on the effectiveness of the work performed but shall not exceed the cost savings generated by such work within one year; expenses for female workers; environmental protection expenses; meal expenses for employees; expenses for Party and mass organization activities at the Vietnam Vehicle Inspection Agency (expenses outside the budget of the Party and mass organizations funded from the specified source) and other monetary expenses;

- Actual value of lost assets, unrecoverable receivables as stipulated in Article 3 and Article 7 of this Circular;

- Value of inventory write-down reserves, doubtful debt reserves, and other reserves established as prescribed in Clause 1, Article 3 of this Circular, exchange rate differences based on long-term foreign currency loan balances, pre-funded warranty expense, and other reserves required by law for businesses operating in special sectors;

b) Expenses related to other activities associated with vehicle inspection operations:

- Lecturer rental fees as prescribed and expenses related to organizing training activities, editing, royalties, printing expenses related to magazine publication, printing of forms, stamps, and serial numbers for distribution to inspection units as prescribed;

- Expenses related to collecting inspection certification fees and road usage fees based on vehicle type;

c) Expenses for non-public service activities, including:

- Wages paid according to regulations for individuals directly involved in service activities;

- Raw materials, supplies, office supplies, tools, and equipment expenses;

- Depreciation expenses for fixed assets as prescribed;

- Travel expenses according to regulations;

- Fixed asset rental expenses (if any);

- Other expenses allocated to non-public service activities, including: rent for premises and working locations, electricity, water, telephone, fax, internet, books, magazines, public services expenses;

- Other monetary expenses as prescribed;

2. Financial activity expenses, including interest expenses, exchange rate differences, discounting expenses, and other financial expenses as prescribed;

3. Other expenses, including: expenses for selling off, liquidating fixed assets (including residual values of fixed assets when sold off or liquidated); shortages discovered during inventory counts (after deducting the responsibility of relevant collectives and individuals); expenses for recovering written-off debts; penalty expenses due to breach of contract; other expenses as prescribed by law;

4. Not included in production and business expenses are those items already covered by other sources or unrelated to production and business activities, including:

a) Expenses for purchasing, constructing, and installing tangible and intangible fixed assets;

b) Interest expenses on borrowed funds included in investment and construction costs;

c) Other expenses unrelated to the activities of the Vietnam Vehicle Inspection Agency; expenses without valid supporting documents;

d) Penalties for violations of laws not attributed to the Vietnam Vehicle Inspection Agency but caused by individuals.

Article 11. Management of Costs

The Vietnam Vehicle Inspection Agency must strictly manage all cost items to reduce costs and increase profits through the following management measures:

1. Establishing, promulgating, and implementing economic and technical norms that are suitable for the economic and technical characteristics, organizational management models, and equipment levels of the Vietnam Vehicle Inspection Agency. These norms must be disseminated down to the implementers and publicly announced to all staff members of the Vietnam Vehicle Inspection Agency for implementation and supervision.

In cases where the norms cannot be implemented, leading to increased costs, the reasons and responsibilities must be clearly analyzed and handled according to the provisions of the law. If the cause is subjective, compensation for losses must be provided. The authority to decide on the amount of compensation is stipulated in Clause 2, Article 7 of this Circular.

2. Regularly organize cost analysis to identify weak and poor management stages, factors increasing costs, and timely solutions to address them.

3. In cases where the volume of work increases, leading to costs exceeding the financial plan by more than 15%, the Vietnam Vehicle Inspection Agency must report to the Ministry of Transport for review and seek opinions from the Ministry of Finance before adjusting the budget plan.

Article 12. Realized Profit

The realized profit of the Vietnam Vehicle Inspection Agency in a year is the difference between the total revenue realized in the year as stated in Article 9 and the total costs realized in the year as stated in Article 10 of this Circular.

III. DISTRIBUTION OF PROFITS

Article 13. Distribution of Profits

After covering previous year losses according to the Enterprise Income Tax Law, setting aside funds for science and technology development as required by law, and paying enterprise income tax, the remaining profit of the Vietnam Vehicle Inspection Agency shall be distributed as follows:

1. Covering the losses of previous years that have exceeded the period allowed for deduction from pre-tax profit.

2. The remaining profit after deducting the contents specified in Clause 1 of this Article shall be distributed as follows:

a) Allocating 30% to the Development Investment Fund.

b) Establishing two reward and welfare funds based on criteria evaluating the unit's performance in the year, specifically as follows:

- Allocating the two reward and welfare funds up to three months' actual salary when the following conditions are met:

+ Revenue and other income exceed the plan set by the Ministry of Transport, with vehicle inspection activity revenue surpassing the target by at least 3%;

+ The realized profit margin on equity exceeds the planned target;

+ There is no overdue debt and the ability to pay maturing debts is greater than 1;

+ No violation of current laws;

+ Ensuring the quality of public service provision.

In cases where the Vietnam Vehicle Inspection Agency fails to meet one of the above criteria, the maximum allocation to the reward and welfare fund is 1.5 months' actual salary.

- Allocating the two reward and welfare funds up to 1.5 months' actual salary when the following conditions are met:

+ Revenue and other income exceed the plan set by the Ministry of Transport, with vehicle inspection activity revenue surpassing the target by at least 3%;

+ The realized profit margin on equity is at least equal to the planned target;

+ There is no overdue debt and the ability to pay maturing debts ranges from 0.5 to 1;

+ There is a conclusion from the competent authority regarding violations of current laws but not severe enough for administrative penalties;

+ Ensuring the quality of public service provision.

c) Allocating up to one month's actual salary for the remaining cases. If the realized profit is insufficient to allocate to the reward and welfare funds as stipulated in Clause 2 of this Article, the portion allocated to the development investment fund may be reduced to supplement the reward and welfare fund, but not exceeding the amount allocated to the development investment fund in the fiscal year.

d) The remaining profit after allocating the funds as specified in Sub-clause a and b of Clause 2 of this Article shall be added to the Development Investment Fund of the Vietnam Vehicle Inspection Agency to support investment in projects related to inspection activities approved by competent authorities.

Article 14. Purposes of using funds

1. Science and Technology Development Fund: The establishment, management, and settlement of fund usage shall be carried out in accordance with the current regulations of the State.

2. Investment and Development Fund: This fund is used for investment to form fixed assets and to supplement state capital at the Vietnam Vehicle Inspection Agency and shall be managed, used, and settled according to the current regulations of the State.

3. The incentive fund shall be used for:

a) Year-end or regular bonuses based on the labor productivity and work achievements of each staff member within the Vietnam Vehicle Inspection Agency;

b) Special bonuses for individuals and groups within the unit;

c) Bonuses for individuals and units outside the Vietnam Vehicle Inspection Agency that have made significant contributions to the unit's business activities and management work;

The bonus levels specified in points a, b, and c of this clause shall be decided by the Director of the Vietnam Vehicle Inspection Agency. For point a, the opinion of the Trade Union of the unit must be obtained before making the decision.

4. The welfare fund shall be used for:

a) Investment in constructing or repairing welfare facilities of the Vietnam Vehicle Inspection Agency;

b) Expenditure for welfare activities of the workforce within the unit;

c) Contributing part of the capital to invest in building common welfare facilities within the industry or with other units according to contracts;

d) Additionally, a portion of the welfare fund may be used to provide emergency assistance to workers, including retirees, those who have lost their health, fallen into difficult circumstances without support, or engaged in charitable social work.

The use of the welfare fund shall be decided by the Director of the Vietnam Vehicle Inspection Agency after consulting the opinion of the unit's trade union.

5. The surplus of the Financial Reserve Fund up to December 31, 2013, shall be supplemented into the Investment and Development Fund of the Vietnam Vehicle Inspection Agency.

6. The establishment and use of the aforementioned funds must be approved by the Ministry of Transport and implemented publicly in accordance with financial transparency regulations, grassroots democracy regulations, and State provisions.

7. The Vietnam Vehicle Inspection Agency can only allocate funds for awards and welfare after settling all due debts and other financial obligations.

IV. FINANCIAL PLAN, ACCOUNTING REGIME, STATISTICS AND AUDIT

Article 15. Financial Plan, Accounting System

1. Financial Plan:

a) Based on the implementation of the financial plan in the year and the plan to carry out tasks in the following year, the Vietnam Vehicle Inspection Agency is responsible for developing the financial plan for the following year in line with the actual situation of the unit and submitting it to the Ministry of Transport and the Ministry of Finance before November 15th each year (the Financial Plan Form of the Vietnam Vehicle Inspection Agency is attached as Appendix 01 of this Circular).

b) Within seven working days from the date of receipt of the financial plan, the Ministry of Transport will send its comments to the Ministry of Finance. Within seven working days from the date of receipt of the request letter from the Ministry of Transport, the Ministry of Finance will provide its comments in writing to the Ministry of Transport.

c) After receiving the comments from the Ministry of Finance, within seven working days, the Ministry of Transport will assign the financial plan to the Vietnam Vehicle Inspection Agency according to Appendix 02 of this Circular. The financial plan will be sent simultaneously to the Ministry of Finance for monitoring and supervision.

d) After being assigned the financial plan, within seven working days, the Vietnam Vehicle Inspection Agency will organize the annual financial plan assignment to subordinate units.

The financial plan above shall be sent directly or through postal service. The Ministry of Transport and the Vietnam Vehicle Inspection Agency must complete the assignment of the next year's financial plan before December 31st each year.

2. Accounting System:

The Vietnam Vehicle Inspection Agency shall apply the accounting system of enterprises, accounting standards, and other current legal documents on accounting.

The Vietnam Vehicle Inspection Agency is an independent accounting entity; it centrally manages all sources of capital and funds at the agency level. Subordinate units of the Vietnam Vehicle Inspection Agency are dependent accounting entities.

Article 16. Financial Reports

1. At the end of each accounting quarter and year, the Vietnam Vehicle Inspection Agency must prepare, present, and submit financial reports and statistical reports in accordance with the provisions of the law. The Director of the Vietnam Vehicle Inspection Agency shall be responsible for the accuracy and truthfulness of these reports.

The annual financial report of the Vietnam Vehicle Inspection Agency must be audited by an independent auditing organization legally operating in Vietnam that has auditing functions.

2. The Vietnam Vehicle Inspection Agency is responsible for preparing and submitting the following reports:

a) Preparing the following reports:

- Quarterly and annual financial reports (as stipulated in Decision No. 15/2006/QĐ-BTC dated March 20, 2006 of the Minister of Finance) and supplemented with Model Form 2b-DN "Payments to the State Budget" as provided in Appendix 03 of this Circular;

- Report on the implementation of the financial plan as provided in Appendix 04 of this Circular;

- Public financial situation report in accordance with the regulations of the Ministry of Finance;

- Report on profit distribution after tax as provided in Appendix 05 of this Circular;

- Year-end payroll settlement report as provided in Appendix 06 of this Circular.

b) Time and place of submission of reports:

The reports mentioned in point a, Clause 2 of this Article must be submitted by the Vietnam Vehicle Inspection Agency to the Ministry of Transport, the Ministry of Finance, and the Ha Noi Tax Department.

The time limit for submitting the above reports is once a year at the same time as the settlement report as prescribed. The quarterly report submission period follows the current regulations.

3. The Vietnam Vehicle Inspection Agency must organize the accounting and statistical work in accordance with the provisions of the law.

4. The Vietnam Vehicle Inspection Agency is subject to inspection, audit, and supervision by authorized financial agencies regarding its financial operations in accordance with the provisions of the law.

Article 17. Accounting Inspection, Audit, and Review of Financial Reports

1. Monthly, quarterly, and annually, the Vietnam Vehicle Inspection Agency and subordinate units are responsible for self-inspection of accounting and financial reports.

2. The Vietnam Vehicle Inspection Agency is responsible for organizing the audit of annual financial reports of subordinate units (excluding the Agency's Office) and is accountable for the results of such audits. Based on the Audit Report of the annual financial report at subordinate units and after receiving the Notification of the review of the financial report from the Ministry of Transport, the Vietnam Vehicle Inspection Agency is responsible for notifying the approval of the annual settlement for subordinate units.

3. The Ministry of Transport leads and coordinates with the Ministry of Finance:

a) To inspect the annual financial report of the Vietnam Vehicle Inspection Agency's Office;

b) To review the annual financial report of the entire Vietnam Vehicle Inspection Agency.

4. Content of financial report inspection and review:

a) Content of annual financial report inspection:

- The inspection content includes: Management and use of capital and assets (increase or decrease in fixed assets, sources of equity capital and other fund sources); business operation results (revenue, expenses, profit); relationship with the state budget;

- The inspection will be based on the documents and materials provided by the unit, including: Financial reports, Audit Report of financial reports, original documents and vouchers related to financial revenue and expenditure activities at the unit, other vouchers related to accounting entries, and other schedules and reports related to the figures in the Financial Report;

- Review and inspect the implementation of recommendations from authorized state agencies through auditing, inspection, and review of financial reports (if any).

b) Content of annual financial report review of the Vietnam Vehicle Inspection Agency:

- The review content includes: Management and use of capital and assets (increase or decrease in fixed assets, sources of equity capital and other fund sources); business operation results (revenue, expenses, profit); relationship with the state budget and profit distribution in accordance with the law.

- Review, inspect, and evaluate the implementation of recommendations from authorized state agencies through auditing, inspection, and review of financial reports (if any);

- The review is conducted based on the Audit Report of financial reports of subordinate units and the Vietnam Vehicle Inspection Agency's Office; reviewing, comparing, and consolidating data from the Audit Reports of subordinate units and the Vietnam Vehicle Inspection Agency's Office with the consolidated figures in the Annual Financial Report of the Vietnam Vehicle Inspection Agency;

Upon completion of the annual financial report review, the Ministry of Transport leads and coordinates with the Ministry of Finance to prepare the Review Report as the basis for the Ministry of Transport to notify the review of the annual financial report of the Vietnam Vehicle Inspection Agency.

5. In addition, depending on the nature of work in each year, the Ministry of Transport leads and coordinates with the Ministry of Finance to conduct specialized inspections of the Vietnam Vehicle Inspection Agency: Inspecting investment procurement of assets, basic construction investment, and other inspection contents (if any). These inspection rounds will be carried out according to the Decision of the competent authority and ensure the principle of not overlapping with inspection rounds of other functional agencies such as: State Audit Office, Government Inspectorate, Ministry of Finance Inspectorate. The inspection decision will be notified to the Vietnam Vehicle Inspection Agency at least three days before the inspection.

6. When conducting annual financial report inspections, the Ministry of Transport and the Ministry of Finance have the right to require the Vietnam Vehicle Inspection Agency:

a) To explain or provide necessary information and data for the inspection;

b) To adjust the settlement figures if there are errors and to revise the settlement report according to the inspection results;

c) To request subordinate units to recover and pay to the state budget any expenditures not in accordance with regulations and other amounts payable according to the law.

Article 18. Public Financial Reports

Based on the annual financial report that has been approved by the competent authority, the Vietnam Vehicle Inspection Agency and its subordinate units shall publicly announce the report according to the regulations stipulated in Circular No. 171/2013/TT-BTC dated November 20, 2013, issued by the Ministry of Finance guiding the public disclosure of financial information as prescribed in Decree No. 61/2013/NĐ-CP dated June 25, 2013, of the Government.

Chapter III

IMPLEMENTATION

Article 19. Implementation

This Circular takes effect from June 16, 2014, and applies from the fiscal year 2014, replacing Joint Circular No. 68/2011/TTLT-BGTVT-BTC dated December 30, 2011, of the Ministry of Transport and the Ministry of Finance guiding the financial management mechanism for the Vietnam Vehicle Inspection Agency.

Matters not specified in this Joint Circular shall be implemented in accordance with the provisions of Decree No. 71/2013/NĐ-CP dated July 11, 2013, of the Government on state capital investment in enterprises and financial management of enterprises wholly owned by the state, and Circular No. 220/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance guiding the implementation of certain provisions of Decree No. 71/2013/NĐ-CP of the Government.

During the process of implementation, if there are difficulties or obstacles, the Vietnam Vehicle Inspection Agency is requested to promptly report to the Ministry of Finance and the Ministry of Transport for guidance.