Joint Circular No. 40/2009/TTLT-BTC-BTN&MT guiding the preparation of budgets, management, use, and settlement of economic public service funds 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 resourcesbudgeting for economic public services for tasks expenses within the field of geology and mineral resources

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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 hereby issue guidelines for preparing budgets, managing, using, and settling 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. Tasks and projects for basic geological 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 shall be guaranteed by the central government budget for tasks and projects implemented by the Ministry of Natural Resources and Environment and other ministries; local government budgets shall guarantee funds for tasks and projects implemented by provincial People's Committees and centrally-administered city People's Committees.

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

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

Clause 1. Central government tasks:

- Conducting surveys to discover mineral resource potential while preparing various types of regional geological maps.

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

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

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

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

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

- Repairing and purchasing machinery and equipment, technology serving geological and mineral resource surveys for subordinate public institutions.

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

Clause 2. Local government tasks:

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

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

- Reviewing and delineating areas where mineral deposits overlap with other projects.

- Collecting data and information 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.

- Repairing and purchasing machinery and equipment, technology serving geological and mineral resource surveys for subordinate public institutions.

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

The division of tasks in the field of geology and mineral resources for localities at the provincial and district levels shall be decided by the Chairperson of the Provincial People's Committee or the centrally-administered city People's Committee.

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

The preparation of budget estimates, 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 detailed guidance on certain matters as follows:

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 estimate 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 estimate 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 estimate 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, sampling and processing samples for 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 the work items, comprising direct costs and common costs. Calculated as follows:

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

+ Labor costs: Comprise technical labor costs and general labor costs (if applicable) involved in the construction process.

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

+ Tool and equipment costs: Are the values of tools and equipment allocated during the execution of the task/project (the number of uses and service life of tools and equipment according to the norms of the Ministry of Natural Resources and Environment).

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

+ Fuel costs: Are the costs of gasoline and diesel used for machinery and equipment during the production process.

+ Depreciation costs of machinery and equipment: Are the costs of machinery and equipment wear and tear 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, mid-term 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:

(The classification of work into Groups I, II, and III is provided in Appendix No. 03 attached to this Circular).

For local government budget tasks, the Chairman of the People's Committee of provinces and centrally-administered cities shall determine the ratio of common costs (non-core, core) for tasks and projects based on the actual situation of task/project implementation, construction conditions, and the capacity of the local government budget, but not exceeding the ratios specified above.

(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 and 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 the compensation prices of the locality and current national regulations.

- Costs for providing rationed meals and fresh water when working at sea, in accordance with current regulations.

- Other costs include: renting vessels, machines, equipment, and construction means (for projects with work items lacking construction means and equipment); road construction and repair costs, drilling platform construction costs, hiring guide services; seminars; experts, scientific cooperation (if any), and other related costs for the task/project: the budget estimate 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 estimate for funds to implement basic investigation tasks and projects related to geology and mineral resources must exclude the regular operation budget already allocated to the staff participating in the task/project (including salaries, payments made 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; specific levels are determined 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 expenditure budget); local natural resources and environment agencies establish 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 financial agency (for tasks and projects within the local government's expenditure budget).

Budget estimates for basic geological and mineral resource investigation tasks and projects shall be prepared based on Appendix No. 01, Appendix No. 02, and Appendix No. 03 issued together with this Circular and in accordance with 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 regulations of the State.c.

2. Procedures for preparing budget estimates:

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

- At the central level: Units under ministries assigned to implement tasks and projects prepare detailed budget estimates for each task and project along with detailed explanatory notes, which are reported to the competent ministry for review and consolidation into the state budget estimate of the ministry, 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 tasks and projects prepare detailed budget estimates for each task and project along with detailed explanatory notes, which are reported to the superior competent authority for consolidation into the state budget estimate of the competent authority, then submitted to the same-level finance agency for reporting to the People's Committee for submission to the People's Council as prescribed.

3. Allocation and assignment of budget estimates:

- At the central level: Based on the budget estimates assigned by the competent authority, ministries prepare allocation plans for funds for directly subordinate units assigned to implement tasks and projects, which are sent to the Ministry of Finance for review and audit according to current regulations.

After reaching a consensus with the Ministry of Finance, ministries assign budget estimates to directly subordinate units, sending copies 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 prepares allocation plans for funds for directly subordinate units assigned to implement tasks and projects, which are sent to the same-level finance agency for review and audit according to current regulations.

After reaching a consensus with the same-level finance agency, the competent authority assigns budget estimates to directly subordinate units for implementation of tasks and projects, sending copies to the same-level finance agency and the State Treasury.

4. On the execution of budget estimates:

Based on the state budget expenditure estimates assigned by the competent state authority, units withdraw budget estimates from the State Treasury where transactions take place. The State Treasury where transactions take place implements expenditure control according to current regulations and provisions of this Circular.

a. Advance payments:

- During the implementation process, units assigned basic geological and mineral resource investigation tasks and projects can receive advance payments of up to a maximum of 70% of the value of the planned workload assigned for the planning 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 advance payments for units using the budget:

+ 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 the tender results or direct award decision by the competent state authority according to 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 units using the budget:

- Progress report on task implementation including workload and budget.

- Decision of the competent state authority regarding the payment unit price for the geological investigation project.

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

- Contract termination or handover record of completed work; final cost settlement report for completed workload.

- Relevant documents as required by law.

In cases where changes in policies or objective factors such as geological conditions or 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 submit a written report to the superior authority and establish all necessary legal bases for settling and finalizing the completed workload, including:

- Decision on suspending construction by the competent state authority.

- Inspection record confirming the completed workload by the competent state authority.

- Final cost settlement report for the completed workload approved by the competent state authority.

- Payment vouchers for the completed volume of work.

For the portion of advance funds that have been temporarily allocated but for which there is no corresponding payment volume or for which there is a payment 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 public service funds 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 the accounting books at the end of the year and preparing and reporting annual final accounts to the state budget.

6. Final settlement work

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

- For tasks or steps of work, projects implemented within the year:

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

+ Relevant payment vouchers.

- For completed tasks and projects:

+ Summary reports of completed tasks and projects that have been inspected and accepted, and approved by the competent state agency according to the inspection and acceptance regulations issued by the competent authority (including quantity and funds), as stipulated: the level that approves the task or project also approves the final settlement of the completed task or project.

+ Confirmation forms indicating the submission of summary reports of completed tasks and projects to national geological archives, and the submission of geological and mineral samples to geological museums (if applicable) as required.

b. Regarding annual final settlement: At the end of the accounting period, budget units must complete the accounting closure process and prepare the final settlement report. The procedures for preparation, formats, submission deadlines, and responsibilities for reviewing the final 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 are responsible for coordinating 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 Circular Joint No. 37/2007/TTLT-BTC-BTN&MT dated April 11, 2007, jointly issued by the Ministry of Finance and the Ministry of Natural Resources and Environment, guiding the preparation of budgets, management, and settlement of economic public service funds for basic geological surveys on mineral resources activities.

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