Joint Circular No. 40/2009/TTLT/BTC-BTN guiding the preparation of budgets, management, use, and settlement of economic public expenditure for tasks in the field of geology and mineral resources.

JOINT CIRCULAR

Guidelines for preparing budgets, managing, using, and settling accounts for economic public service funds related to tasks in the field of geology and mineral resources

________________________________

Pursuant to Decree No. 60/2003/NĐ-CP dated June 10, 2003 of the Government detailing and guiding the implementation of the Law on State Budget;

Pursuant to Decree No. 160/2005/NĐ-CP dated December 27, 2005 of the Government detailing and guiding the implementation of the Law on Minerals and the Law Amending and Supplementing Certain Provisions of the Law on Minerals;

Pursuant to Decree No. 123/2008/NĐ-CP dated December 8, 2008 of the Government detailing and guiding the implementation of certain provisions of the Law on Value Added Tax;

The Ministry of Finance and the Ministry of Natural Resources and Environment guide the preparation of budgets, management, use, and settlement of accounts for economic public service funds guaranteed by the state budget to implement tasks in the field of geology and mineral resources as follows:

Article 1. General Provisions

Article 1. This Circular guides the preparation of budgets, management, use, and settlement of accounts for economic public service funds guaranteed by the state budget to implement tasks in the field of geology and mineral resources, including basic geological surveys, basic mineral resource surveys, and other tasks in the field of geology and mineral resources (hereinafter referred to collectively as tasks or projects).

Article 2. Basic geological surveys and mineral resource surveys must be carried out according to approved planning and plans to meet the conditions for budget allocation and implementation.

Article 3. Funds for implementing tasks and projects in the field of geology and mineral resources are guaranteed by the central budget for tasks and projects implemented by the Ministry of Natural Resources and Environment and other ministries, and by local budgets for tasks and projects implemented by provincial People's Committees.

Article 4. Budget estimates for basic geological surveys and mineral resource surveys shall include all cost items necessary to complete work according to procedures, norms, and technical regulations of the Ministry of Natural Resources and Environment.

Article 2. Tasks in the field of geology and mineral resources

Clause 1. Central budget tasks:

- Mineral resource potential exploration, concurrently with the creation of various types of regional geological maps.

- Hydrogeological surveys, engineering geological surveys, urban geological surveys, disaster geological surveys, marine geological surveys, environmental geological surveys; dynamic geological surveys, geothermal surveys; special topics on geology and minerals.

- Evaluation of mineral resource potential by type or group of minerals and for promising geological structures.

- Receiving, storing, and preserving reports on basic geological surveys and mineral resource surveys; geological and mineral samples.

- Compiling and editing procedures, norms, economic-technical standards, and budget unit prices for geological works.

- Counterpart capital for foreign cooperative projects in basic geological and mineral resource surveys.

- Repair, purchase, and installation of machinery and equipment, technology for geological and mineral resource survey work for subordinate public institutions.

- Other expenses in the field of geology and mineral resources (if any).

Clause 2. Local budget tasks:

- Preparing maps of areas prohibited or temporarily prohibited from mineral activities.

- Hydrogeological surveys, engineering geological surveys, urban geological surveys, disaster geological surveys, environmental geological surveys to serve local socio-economic development.

- Reviewing and delineating areas of mineral distribution overlapping with other projects.

- Collecting information and data to establish a geological and mineral resource database according to local management requirements.

- Counterpart capital for foreign cooperative projects in basic geological and mineral resource surveys.

- Repair, purchase, and installation of machinery and equipment, technology for geological and mineral resource survey work for subordinate public institutions.

- Other expenses in the field of geology and mineral resources (if any).

The division of tasks in the field of geology and mineral resources between provincial and district levels shall be decided by the Chairman of the Provincial People's Committee.

Article 3. Establishment, Implementation, and Settlement of State Budget

The preparation, implementation, and settlement of funds for tasks and projects in the field of geology and mineral resources shall be carried out in accordance with the provisions of the State Budget Law and current guiding documents issued by the Ministry of Finance. This Circular provides specific guidance on the following matters:

2. In cases where tasks are not implemented according to the plan, or if funds are misused or used contrary to regulations, such tasks shall be suspended, and funds used for improper purposes shall be recovered and remitted to the state treasury as prescribed.

a. For basic investigation tasks and projects related to geology and mineral resources:

The budget includes: (1) Cost of preparing the outline; (2) Cost of implementing the task/project; (3) Value-added tax; (4) Other costs.

- For work items with economic and technical norms and budgeted unit prices: The budget is determined by multiplying the volume of work by (x) the unit price set by the competent state management agency.

- For work items without economic and technical norms and budgeted unit prices: The budget is established based on the content of the work, the volume required to be implemented, the current financial expenditure regulations, and approved by the competent authority.

Each cost item is calculated as follows:

(1) Cost of preparing the outline for the task/project: Includes costs for collecting and analyzing data; surveying; taking, processing, and analyzing samples for preparing the outline and project; selecting technical solutions, designing the volume of work, and preparing the budget until it is approved by the competent authority.

(2) Cost of implementing the task/project: Includes costs for executing work items, comprising direct costs and common costs. Calculated as follows:

- Direct costs: Include components that make up the value of the product, including labor costs, material costs, tool and equipment costs, energy costs, fuel costs, depreciation costs of machinery and equipment (only for enterprises). Among them:

+ Labor costs: Includes technical labor costs and general labor costs (if any) participating in the construction process.

+ Material costs: Is the value of main materials and auxiliary materials directly used in the construction process (the quantity of materials is determined based on usage norms issued by the Ministry of Natural Resources and Environment; unit prices of materials are taken from the average market prices in the construction areas during the year and reviewed by the supervising agency; for local government-funded projects, unit prices are taken from market prices and reviewed by the Department of Finance).

+ Tool and equipment costs: Is the value of tools and equipment allocated during the execution of the task/project (usage hours and service life of tools and equipment according to norms issued by the Ministry of Natural Resources and Environment).

+ Energy costs: Is the cost of electricity used for operating machinery and equipment during the production process.

+ Fuel costs: Is the cost of using gasoline and diesel for machinery and equipment during the production process.

+ Depreciation costs of machinery and equipment: Is the wear and tear of machinery and equipment used during the production process.

- Common costs: Include salary costs and other costs with the nature of salaries (social insurance, health insurance, trade union fees) for the management staff; costs for electricity, water, telephone, fuel, travel expenses, office supplies, tools and equipment for the management staff; minor repair costs for equipment, tools, and equipment for public institutions (or depreciation costs of fixed assets serving the management staff for enterprises); conference costs for deployment, interim review, and final summary of the unit; troop movement costs, temporary housing costs (or rental accommodation costs) for construction forces, inspection, acceptance, and handover costs of products by the construction unit, and other management-related costs associated with the implementation of the task/project. Common costs are determined as a percentage of direct costs, specified for each group of tasks/projects as follows:

External Internal

* Group I 28% 22%

* Group II 25% 20%

* Group III 20% 15%

(Classification of work into Groups I, II, and III according to Appendix No. 03 attached to this Circular).

For local government budget expenditure tasks, the Chairman of the People's Committee of provinces and centrally-administered cities shall base on the actual situation of task/project implementation, construction conditions, and the capacity of the local government budget to stipulate the ratio of common costs (external and internal) for tasks/projects appropriately, but not exceeding the above-mentioned ratio of common costs.

(3) Value-added tax: The tax rate is 10% of the cost of implementing basic investigation tasks and projects related to geology and mineral resources.

(4) Other costs include:

- Costs for reviewing, inspecting, testing, and accepting tasks/projects according to the inspection and acceptance regulations of the competent authority, not exceeding a maximum of 1.5% of the cost of implementing the task/project.

- Transportation costs for labor and equipment from the unit's headquarters to the construction site (transportation outside the region).

- Compensation costs for property and crop damage on land (if any), based on local compensation prices and current national regulations.

- Costs for providing rationed meals and purchasing fresh water when working at sea according to current regulations.

- Other costs include: Renting ships, boats, machinery, equipment, and construction means (for projects with work items lacking construction means and equipment); road construction and repair costs, drilling foundation costs, hiring guide services; seminars; experts, scientific cooperation (if any), and other related costs for the task/project: the budget is calculated based on the actual volume of work performed and current expenditure regulations.

In cases where the construction unit is a public institution funded by the state for regular operations, the budget for funds to implement basic investigation tasks and projects related to geology and mineral resources must exclude the regular operational budget already allocated to the staff involved in the task/project (including salaries, income contributions according to regulations, and regular expenditures).

The Water Resources Planning and Investigation Center under the Ministry of Natural Resources and Environment has the duty to manage and direct the implementation of projects of subordinate public service units where the state budget does not provide funding for regular operations; such units may be allocated up to a maximum management cost of 5% of the actual costs incurred for tasks and projects; the specific amount shall be decided by the Ministry of Natural Resources and Environment.

For tasks and projects carried out through procurement or assignment: The Ministry of Natural Resources and Environment directs units to develop pricing plans for basic geological and mineral resource investigation products, approves them, and submits written requests to the Ministry of Finance for decisions (for tasks and projects within the central government's budget expenditure); local natural resources and environment agencies develop pricing plans to be submitted to the provincial People's Committee for approval after receiving written opinions from relevant agencies and written reviews from the same-level finance agency (for tasks and projects within the local government's budget expenditure).

Budget estimates for basic geological and mineral resource investigation tasks and projects shall be based on Appendix No. 01, Appendix No. 02, and Appendix No. 03 issued together with this Circular and Clause 1 of Article 3 of this Circular.

b. For other tasks: The preparation of budget estimates shall be carried out in accordance with current State regulations.

2. Procedure for preparing budget estimates:

Annually, based on guidelines for preparing budget estimates issued by competent authorities, the implementation of previous year's budget estimates, the content and volume of work to be carried out in the planned year, economic and technical norms, current financial expenditure regulations, and provisions of this Circular;

- At the central level: Units assigned to implement the budget estimates prepare detailed budget estimates for each task and project along with detailed explanatory notes, report to the competent ministry for review and consolidation into the national budget estimate of the ministry, which is then submitted to the Ministry of Finance for consolidation and presentation to the Government for submission to the National Assembly as prescribed.

- At the local level: Units assigned to implement the budget estimates prepare detailed budget estimates for each task and project along with detailed explanatory notes, report to the superior competent authority for consolidation into the national budget estimate of the competent authority, which is then submitted to the same-level finance agency for reporting to the People's Committee for submission to the People's Council at the same level as prescribed.

3. Allocation and assignment of budget estimates:

- At the central level: Based on the budget estimates assigned by the competent authority, ministries develop allocation plans for funds for directly subordinate units assigned to implement, submit to the Ministry of Finance for review and audit in accordance with current regulations.

After reaching a consensus with the Ministry of Finance, ministries assign budget estimates to directly subordinate units, simultaneously sending them to the Ministry of Finance, the State Treasury at the same level, and the State Treasury where the unit maintains its transaction account for coordination in implementation. Level II budget units assign budget estimates to Level III budget units for implementation, detailing according to tasks and projects.

- At the local level: Based on the budget estimates assigned by the competent authority, the competent authority develops allocation plans for funds for directly subordinate units assigned to implement, submitting to the same-level finance agency for review and audit in accordance with current regulations.

After reaching a consensus with the same-level finance agency, the competent authority assigns budget estimates to directly subordinate units assigned to implement tasks and projects, simultaneously sending them to the same-level finance agency and the State Treasury at the same level.

4. Regarding the execution of budget estimates:

Based on the state budget expenditure estimates assigned by the competent state authority, units execute withdrawals from the State Treasury at the transaction location. The State Treasury at the transaction location implements expenditure control in accordance with current regulations and the provisions of this Circular.

a. Advance payment:

- During the implementation process, units assigned basic geological and mineral resource investigation tasks and projects may temporarily advance up to a maximum of 70% of the value of the budget estimate for the workload assigned in the planned year to carry out the assigned tasks and projects, with the remainder to be paid after completion and acceptance according to regulations. Based on the following documents, the State Treasury implements temporary advances for budget-using units:

+ Decision on assigning the annual state budget estimate by the competent state authority

+ Approval document for tasks and projects by the competent state authority.

+ Contract or document assigning work.

+ Decision approving bidding results or direct awarding by the competent state authority in accordance with current regulations for asset procurement and major repairs.

+ Decision on expenditure by the head of the unit or authorized person.

b. Payment:

Based on the following documents, the State Treasury implements payments for budget-using units:

- Progress report on task implementation including volume and budget estimate.

- Decision of the competent state authority regarding the settlement price for the basic geological investigation project on mineral resources.

- Table determining the value of completed work volume according to the competent state authority's regulations for each stage or project.

- Contract termination or handover record of assigned work results; final report on settled costs for completed work volume.

- Relevant documents as stipulated by law.

In cases where changes in policies or objective factors such as geological conditions and construction conditions alter the task and project budget estimates and stages, there must be a budget adjustment document from the competent state authority as the basis for withdrawing the budget estimate.

For tasks and projects that cannot continue due to objective reasons and are suspended according to the decision of the competent state authority, the implementing unit must report in writing to the superior authority and establish all necessary legal bases for settling and finalizing the costs of completed work volume, including:

- Decision on suspending construction by the competent state authority.

- Inspection record confirming the volume of completed work by the competent state authority.

- Final report on settled costs for completed work volume approved by the competent state authority.

- Payment vouchers for the completed volume.

For the portion of advance payment that has not been settled with a corresponding volume or has a settled volume but not approved by the competent authority, the unit must return the funds to the state budget according to the prescribed regulations.

5. Funds carried over to the next year:

The handling of the end-of-year balance of economic business expenses for tasks and projects related to basic geological surveys and mineral resources shall be implemented in accordance with the provisions of the State Budget Law and the guidelines of the Ministry of Finance on closing accounting books at the end of the year and preparing and reporting annual final accounts to the state budget.

6. Settlement work

a. Basis for preparing the settlement report for the expenses of tasks and projects related to basic geological surveys and mineral resources:

- For tasks or works, projects implemented within the year:

+ Inspection and acceptance records of the tasks, products, or project stages issued by the competent state agency according to the inspection and acceptance regulations promulgated by the competent authority (including quantity and value).

+ Relevant payment vouchers.

- For completed tasks or projects:

+ Final reports of completed tasks or projects that have been inspected and accepted, and approved by the competent state agency according to the inspection and acceptance regulations promulgated by the competent authority (including quantity and expenses), as stipulated: the approving authority for the task or project shall approve the final settlement of the completed task or project.

+ Confirmation forms for submitting the final report of the task or project to the national geological archives, and submitting geological and mineral samples to the geological museum (if applicable) as prescribed.

b. Annual settlement: At the end of the accounting period, budget units must complete the accounting closure and prepare the settlement report. The procedures for preparation, formats, submission deadlines, and responsibilities for reviewing the settlement report shall be carried out in accordance with current regulations.

Article 4. Inspection Work

Ministries and local natural resources and environment agencies assigned state budget plans to carry out tasks in the field of geology and mineral resources shall cooperate with the financial authorities at the same level to regularly and urgently inspect the implementation of assigned tasks; the use and settlement of funds at units to ensure proper and effective use of funds.

State-owned enterprises that have been assigned by the Ministry of Agriculture and Rural Development to conduct offshore wind power project surveys before the effective date of this Circular shall continue to implement according to the assigned documents; any new matters arising after the effective date of this Circular shall be implemented in accordance with the provisions of this Circular.

1. This Circular takes effect 45 days from the date of issuance, replacing Joint Circular No. 37/2007/TTLT-BTC-BTN&MT dated April 11, 2007, of the Ministry of Finance and the Ministry of Natural Resources and Environment guiding the preparation of budgets, management, and settlement of economic business expenses for basic geological surveys on mineral resources activities.

2. During implementation, if there are difficulties, units are requested to reflect them to the Ministry of Finance and the Ministry of Natural Resources and Environment for appropriate amendments.