JOINT CIRCULAR NO. 39-TT/LB ON THE MANAGEMENT OF MAINTENANCE FUNDS FOR MOTORWAY SYSTEMS UNDER CENTRAL MANAGEMENT

JOINT CIRCULAR

Regarding the management of maintenance funds for automobile roads under central management

________________________

Unit: Equivalent USD: Provincial administrative committees, regions, cities

A. ISSUES REGARDING THE MANAGEMENT OF MAINTENANCE FUNDS FOR AUTOMOBILE ROADS UNDER CENTRAL MANAGEMENT

Previously, Decree No. 214-NĐ dated August 8, 1957 of the Ministry of Transport and Posts provided: "The central road system shall be managed by the central government concerning basic construction; regarding minor maintenance of central roads, the central government will entrust local authorities with responsibility for maintenance with local funding." From 1958 to 1961, local banks, in addition to investing capital for basic construction, major repairs, and maintenance of locally managed road systems, also invested capital for maintenance on automobile roads under central management.

Over the past few years, it has been observed that having local budgets bear the cost of maintaining automobile roads under central management leads to contradictions:

1. Maintenance work for roads, bridges, and ferries includes minor repairs and upkeep aimed at preserving bridges, roads, and ferries in good condition to meet transportation needs and reduce transport costs. On the other hand, it closely integrates with major repair and basic construction work to gradually improve and modernize our automobile road system to meet transportation requirements and strengthen national defense. However, on centrally-managed routes, the central government invests in basic construction and major repairs, while localities invest in maintenance, which hinders the integration of these works.

2. Centrally-managed routes are significant in terms of politics, economy, national defense, and high traffic volume, requiring enhanced maintenance efforts both in organization and investment. Local budgets often fail to meet these demands.

3. Alongside economic and cultural development, locally-managed road systems have expanded (from over 3,000 km in 1955 to 5,300 km now), necessitating increased investment for maintenance. Limited local budgets mean that if localities continue to fund maintenance for centrally-managed roads, it would severely limit their ability to maintain locally-managed roads, which is unreasonable.

To resolve these contradictions and facilitate the enhancement of maintenance for both centrally and locally-managed road systems, the Joint Ministry of Transport and Finance has agreed:Road "Maintenance for automobile roads under central management will be funded by the central budget, including basic construction, major repairs, and maintenance."Local budgets will fund works within locally-managed road systems.

To ensure effective management of maintenance for centrally-managed road systems and efficient use of funds, the Joint Ministry of Transport and Finance authorizes provincial administrative committees to be responsible for managing maintenance of centrally-managed road systems:

a) In terms of management of operations:

Provincial administrative committees are responsible for managing the maintenance operations of Transport Departments according to annual technical standards and organizational structures for maintenance forces as stipulated by the Ministry of Transport for each type of road, bridge, and ferry work.

b) In terms of financial management:

Provincial administrative committees are responsible for managing maintenance funds according to the following procedures:

I. ANNUAL AND QUARTERLY BUDGET PREPARATION AND REVIEW.

1. Annually: Each year, by the end of September, Transport Departments base their annual maintenance plans and budgets, broken down by quarter, on the Ministry of Transport's annual maintenance standards and technical specifications. The format of the budget will be discussed between the Ministry of Transport and the Ministry of Finance to establish.

- Draft plans and annual budget proposals for maintenance must be reviewed by the provincial administrative committee and submitted to the Ministry of Transport no later than October 15, along with necessary comments and forwarded to the Ministry of Finance for review before final approval by the Government.

The Ministry of Transport is responsible for reviewing and approving the budget for central maintenance expenses, to be submitted for Government approval.

After the budget is approved, the Ministry of Finance will inform the Ministry of Transport of the financial indicators, which the Ministry of Transport will notify the provincial administrative committees of the approved plan and budget indicators, and send copies to the Ministry of Finance for monitoring.

2. Quarterly: Each quarter, Transport Departments base their quarterly plans and budgets on the approved annual plans, submitting them for review by the provincial administrative committee and sending them to the Ministry of Transport no later than 20 days before the start of each quarter.

- The Ministry of Transport will review the plans and budgets of the localities, compile a comprehensive plan for each province, and provide explanations to the Ministry of Finance and the Central Construction Bank for disbursement.

II. DISBURSEMENT:

Maintenance funds for centrally-managed road systems, covered by the central maintenance budget, will be disbursed through the Central Construction Bank based on allocated limits.

Each quarter, the Ministry of Transport reviews the quarterly maintenance plans for provinces, compiles a comprehensive industry-wide plan, and submits it to the Ministry of Finance for review and allocation limits. The Ministry of Transport manages the approved limits and distributes quarterly limits to the provinces accordingly.

Monthly, the Central Construction Bank disburses funds to provincial construction branches based on the Ministry of Transport's requests to facilitate disbursement.

Monthly, Transport Departments prepare monthly expenditure plans based on approved quotas to request disbursement.

The allocation will be based on the standard cost rate for each kilometer of road to implement the assignment of road sections, but currently it cannot be done this way due to the new organizational circumstances. Therefore, the Joint Ministry has decided to allocate funds according to the items in the budget and prepare to allocate funds based on the standard cost rate according to volume and unit price in the shortest time possible. To ensure traffic flow and safety, a special reserve fee will be set aside in the budget as determined by the Ministry of Transport. The reserve fee can only be used for urgent and extraordinary tasks that would otherwise cause traffic congestion or fail to ensure safety, such as fallen trees, landslides, collapsed culverts, broken roads, floating bridges, etc., and not for regular tasks.

III. SETTLEMENT AND REPORTING:

Each month, the Regions, Departments, and Bureaus of Transportation shall report on the use of maintenance funds as follows:

1. Summary Report: By the end of the 20th day of each month, the Regions, Departments, and Bureaus shall report the actual expenditure up to the 20th day and the estimated expenditure for the end of the month to determine the remaining funds.

2. Revised Report: At the beginning of the following month, the Regions, Departments, and Bureaus shall revise the above summary report based on the actual expenditure of the previous month. The Ministry of Transport shall compile these reports monthly and submit them to the Ministry of Finance to monitor the allocation and expenditure.

3. Settlement:

- The settlement report shall be prepared according to the regulations applicable to basic construction allocations.

- Settlement reports for March, June, September, and December must include an additional explanatory statement detailing the number of personnel involved in maintenance work and reflecting comprehensively the completion results of all aspects of the work.

- Regarding workload and quality of work, specific details about the completion of the planned workload and quality of work must be provided. It must be assessed whether the required workload and quality have been met. Specific conclusions must be drawn regarding savings, losses, and waste.

- Regarding financial management: highlight the strengths and weaknesses in the planning and management of revenue and expenditure.

The summary report, revised report, and settlement report shall be sent to the Local Construction Office, while the Regions, Departments, and Bureaus of Transportation shall also send a copy directly to the Ministry of Transport. Quarterly and annual settlement reports must be approved by the local administrative committee before submission to the Ministry.

Time for submitting settlement reports:

- The summary report must be submitted to the Local Construction Office and the Ministry before the 22nd of the month.

- The revised report must be submitted by the 10th of the following month.

- The settlement report must be submitted before the 20th of the following month.

The format of the report and accounting system shall be stipulated by the Ministry of Transport after consultation with the Ministry of Finance. The accounting system shall follow the principles of the basic construction accounting system, simplified to suit maintenance work.

IV. RIGHTS AND RESPONSIBILITIES OF LOCAL ADMINISTRATIVE COMMITTEES AND LOCAL FINANCIAL AUTHORITIES AUTHORIZED TO MANAGE THE OPERATING FUNDS OF CENTRAL GOVERNMENT ENTITIES FOR MAINTENANCE OF MOTORWAY SYSTEMS UNDER CENTRAL MANAGEMENT.

Local administrative committees are responsible to the Joint Ministry for ensuring the full implementation of the maintenance work targets recorded in the annual plan approved by the State, and must absolutely not use maintenance funds for other works. Local administrative committees have the right:

- To supervise organizations implementing the plan.

- To oversee all expenditures of the Transportation Departments and Bureaus at the same level.

- To halt works outside the plan.

- To reallocate funds between months within a quarter from one central-managed road to another within the approved quarterly budget limit and must report to the Joint Ministry.

In case of exceeding the quarterly budget, the local administrative committee must promptly submit a supplementary budget to the Ministry of Transport for review and can only spend after the Ministry of Finance approves the funding. If there is a need to exceed the annual budget, a revised budget must be prepared and submitted to the Ministry of Transport for review and approval by the Government, and spending can only occur after the revised budget is approved.

Financial agencies (including Construction Offices) at all levels have the responsibility to assist the local administrative committees:

- To review the settlement budgets and expenditure plans of the Transportation Departments and Bureaus before submitting them to the local administrative committee for approval.

- To manage monthly allocations and regularly monitor fund usage.

- To monitor compliance with accounting and financial regulations and identify deficiencies or violations of economic and technical indicators and current productivity standards, propose corrective measures or conduct inspections when necessary, with the consent of the local administrative committee.

Any disagreements between financial agencies and transportation agencies shall be resolved by the local administrative committee. If satisfactory resolution is needed, the relevant agency shall report directly to the Joint Ministry for resolution. This report must be sent through the local administrative committee to the Joint Ministry with the committee's comments.

B. REVENUE ISSUES

The issue of road maintenance fees, bus station fees, and ferry fares, until a new decree amending the Prime Minister's decision is issued, localities will continue to collect at the old rates but with the following changes in collection procedures:

a) The Transportation Departments and Bureaus are responsible for organizing the collection of road maintenance fees, ferry fares, and bus station fees.

b) At the beginning of the year, the Ministry of Transport will allocate a proportionate share of the collected funds to localities for their use in maintaining roads under local management.

c) Road maintenance fees, ferry fares, and bus station fees collected shall be deposited into the central budget after localities have deducted the allocated proportion for local road maintenance.

This Circular takes effect from January 1, 1962.