Circular No. 42/2011/TT-BTC on the financial management regime for the Fund supporting foreign activities serving the economy

CIRCULAR

Regulations on financial management

The Fund for Supporting Diplomatic Activities Serving the Economy

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The Minister of Finance issues this Circular regulating the preparation of budgets, management, use, and settlement of funds supported by the State budget for organizations assigned or authorized by the Ministry of Foreign Affairs to perform tasks of selecting, introducing, and managing Vietnamese workers working for foreign organizations and individuals in Vietnam.

Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 195/2003/QĐ-TTg dated September 18, 2003 of the Government Chairman regarding the establishment of the Fund for Supporting Diplomatic Activities Serving the Economy;

The Ministry of Finance shall stipulate the financial management regime for the Fund for Supporting Diplomatic Activities Serving the Economy as follows:

Article 1: Scope of Application

This Circular stipulates the financial management of the Fund for Supporting Diplomatic Activities Serving the Economy (hereinafter referred to as the Fund), established pursuant to Decision No. 195/2003/QĐ-TTg dated September 18, 2003 of the Government Chairman.

Article 2: Financial Operation Principles of the Fund

1. The Fund operates without profit-making objectives. The Fund has its own legal personality, separate accounts, and seals. The Fund opens domestic currency and foreign currency accounts at the State Treasury or domestic commercial banks to receive and utilize state budget funds and contributions from individuals and organizations both within and outside the country.

2. The Fund supports diplomatic activities serving the economy carried out by Vietnamese representative offices abroad or by agencies and units under the Ministry of Foreign Affairs domestically aimed at supporting Vietnamese representative offices abroad in implementing economic diplomacy activities (hereinafter collectively referred to as the agencies using the Fund).

3. The Fund may only be used to cover expenses related to expanding and promoting foreign economic relations, protecting state interests, and safeguarding the legitimate economic rights and interests of Vietnamese organizations and individuals according to approved economic diplomatic tasks and projects; it shall not be used to cover regular operational expenses of Vietnamese representative offices abroad and domestic agencies and units under the Ministry of Foreign Affairs based on their functions and responsibilities.

Article 3: Sources of the Fund's Financial Resources, including:

1. State Budget Funds:

The initial state budget allocation is sixteen billion (16 billion) Vietnamese dong; annual state budget allocations are made according to approved budgets.

2. Revenue from the Fund's Activities:

a) Money and assets voluntarily contributed or sponsored to the Fund by organizations and individuals both within and outside the country in accordance with legal provisions. Contributions to the Fund through Vietnamese representative offices abroad may be temporarily held at those offices or at the Fund’s office.

b) Contributions from domestic and foreign enterprises for services provided by the agencies using the Fund such as partner verification, contract support, information provision, advisory services, and other services.

c) Interest income from deposits and other lawful revenues (if any).

Article 4: Contents of the Fund's Usage

1. Promotional activities introducing the country, enhancing Vietnam's image and status, creating opportunities for investment promotion, trade, tourism, labor export, and seeking aid.

2. Establishing and expanding relationships with political and business circles, securing foreign partners to promote foreign economic relations.

3. Supporting agencies and enterprises in researching markets and business opportunities, organizing economic promotional events, verifying and assessing foreign partners, providing information, and resolving disputes in foreign economic activities.

4. Collecting information on economics, science, technology, education, and human resource training, supporting research, and advising on policy development for economic growth.

5. Supporting the invitation of experts and scholars from both within and outside the country to participate in training and capacity-building programs for personnel engaged in economic diplomacy.

6. Publishing and distributing materials to serve economic diplomatic information dissemination and propaganda.

7. Awarding individuals and groups with outstanding achievements in economic diplomatic work.

8. Other activities directed by the Prime Minister..

9. Other supportive activities consistent with the Fund's objectives.

10. Expenses for managing the Fund.

The contents of usage from the Fund specified in Clauses 1, 2, 3, 4, 5, 6, 7, 8, and 9 of this Article shall be implemented according to current state financial expenditure regulations; agencies and units undertaking economic diplomatic tasks and projects must prepare detailed budgets for approval by competent authorities before implementation. The content of usage specified in Clause 10 shall be implemented according to the provisions of Article 6 of this Circular.

Article 5: Provisions on Approval Authority for Expenditure

1. The Minister of Foreign Affairs shall decide on the annual budget plan for the Fund's expenditure based on the budget plan that has been reviewed by the Ministry of Finance.

2. Based on the approved annual budget plan for the Fund's expenditure, the Director of the Fund shall be responsible for implementing and guiding the relevant agencies to utilize the Fund in a spirit of thrift and efficiency.

The heads of agencies utilizing the Fund's funds shall be responsible for managing and using the allocated Fund's funds to implement activities according to the plans approved by the leadership of the Ministry of Foreign Affairs, in compliance with the Financial Management Regulations of the Fund and current State regulations.

3. In cases where urgent tasks arise outside the planned scope or registered tasks require funding exceeding the allocated limit, the head of the agency utilizing the Fund shall be responsible for reporting to the Fund Director for consideration. The decision-making authority for each case is as follows:

a) For budgets up to 10,000 USD, the Fund Director decides.

b) For budgets over 10,000 USD, the Fund Director reports to the Minister of Foreign Affairs for decision.

4. In cases where the Fund fails to provide funds promptly for economic diplomatic activities already approved by authorized bodies, the head of the agency utilizing the Fund may decide to temporarily allocate funds from the existing financial resources of the unit to implement such activities and shall be responsible for promptly repaying the temporarily allocated amount upon receipt of funds from the Fund.

Article 6: Expenditure for Fund Management Activities, including:

The Fund may use up to 8% of its total annual budget approved by the state budget for management activities. The proportion allocated for management activities will be adjusted to suit actual conditions based on the proposal of the Minister of Foreign Affairs and the approval of the Minister of Finance.

Contents of expenditure for Fund management activities include:

1. Allowance for the position of Fund Director under the concurrent position system stipulated in Circular No. 78/2005/TT-BNV dated August 10, 2005, issued by the Ministry of Home Affairs guiding the implementation of allowances for concurrent positions for officials, civil servants, and employees concurrently holding leadership positions in other agencies and units.

2. Salary, insurance, and allowances as prescribed by law for contractual staff of the Fund (if any).

3. Payment for overtime work (if any) according to the current regulations.

4. Expenditure for promotional activities to solicit contributions to the Fund.

5. Expenditure for outbound and inbound delegations serving fundraising activities for the Fund; management activities (regular inspections, annual reviews) of the Fund's utilization at overseas Vietnamese representative offices.

6. Expenditure for purchasing, repairing, and maintaining fixed assets serving the Fund's operations.

7. Expenditure for reception activities, office supplies purchases, and public service payment expenses serving the Fund's operations.

8. Expenditure for regular and extraordinary rewards to organizations and individuals who have contributed to fundraising or directly contributed to the Fund or achieved outstanding results in the Fund's activities. The establishment, management, and use of the competition and reward fund shall be carried out in accordance with the Circular of the Ministry of Finance guiding Decree No. 42/2010/NĐ-CP dated April 15, 2010, of the Government detailing the implementation of certain provisions of the Law on Competition and Rewards. The source of the competition and reward fund is derived from the Fund's management activity budget and allocated annually by the Ministry of Foreign Affairs.

9. Other lawful expenditures serving the management of the Fund.

The above contents shall be implemented in accordance with the current financial expenditure standards and norms of the State; the Fund Director shall decide on the standard expenditure and bear legal responsibility for their decisions.

Article 7: Budget preparation, budget allocation, finalization, and fund utilization mechanism unions

1. Budget preparation and budget allocation for the Fund:

a) Annually, the Fund bases on the objectives, tasks of economic diplomacy, and specific requirements of agencies using the Fund in implementing economic diplomatic tasks, to compile and prepare the budget estimate to be sent to the Ministry of Foreign Affairs for consolidation and submission to the competent authority in accordance with the State Budget Law and guiding documents thereof.

b) Based on the approved budget, the Minister of Foreign Affairs proposes a plan for allocating the budget estimate to the Fund (accompanied by a detailed explanation of the use of the Fund according to each project, according to specific diplomatic tasks serving the economy), by budgetary unit to be reviewed by the Ministry of Finance in accordance with regulations.

Based on the budget allocated by the Ministry of Foreign Affairs (by budgetary unit), the Fund implements the withdrawal of the budget from the State Treasury for managing the Fund and disbursing funds to agencies using the Fund according to the implementation plan of projects and specific tasks already approved by the competent authority.

During the fiscal year, if there is a need to adjust the budget between budgetary units, the Fund is responsible for compiling the demand for budget adjustment, reporting to the Ministry of Foreign Affairs, and sending it to the Ministry of Finance for review in accordance with regulations.

2. Finalization of the Fund:

a) Annually, the Fund is responsible for finalizing the expenditure in accordance with the State Budget Law and other national regulations related to the finalization of expenditure concerning the activities of the Fund. Agencies using the Fund are responsible for reporting the finalized expenditure and simultaneously submitting original expense vouchers to the Fund's Office for verification, approval, and consolidation of the final report to be submitted to the Ministry of Foreign Affairs.

b) The Ministry of Foreign Affairs is responsible for reviewing the finalization of income and expenditure of the Fund and consolidating them in the annual final report of the Ministry of Foreign Affairs to be submitted to the Ministry of Finance for assessment in accordance with the State Budget Law and guiding documents.

Unspent funds of the Fund at the end of the year may be carried over to the next year for use in accordance with the intended purpose and content of the Fund as prescribed. Based on the reconciliation result, the State Treasury branch where transactions take place is responsible for transferring the surplus budget from the previous year to the next year in accordance with current regulations.

3. Fund Utilization Mechanism:

a) On the basis of the annual expenditure plan that has been allocated, the Director of the Fund is responsible for and guides agencies using the Fund to manage and use funds in accordance with the intended purpose, in line with the approved diplomatic tasks serving the economy by the Minister of Foreign Affairs; in compliance with Vietnamese laws, adhering to current financial management regulations, regulations on financial management of the Fund, and rules on organization and operation of the Fund.

b) The head of the agency using the Fund is responsible under the law for the management and use of funds and the legality of expense vouchers. Due to the special nature of expenditures for economic diplomacy such as mobilizing partners, purchasing valuable information, or other special expenditures where expense vouchers (receipts, invoices) cannot be obtained, when issuing payment vouchers from the Fund, signatures of the head or persons authorized by the head of the agency using the Fund to receive money and the accountant must be complete. Persons authorized to carry out the above activities must bear personal responsibility under the law.

Agencies using the Fund shall not expend Fund resources on activities not in accordance with this Circular.

Article 8: Accounting Work and Management of the Fund

Clause 1. The Fund must organize accounting work and bookkeeping in accordance with Decision No. 19/2006/QĐ-BTC dated March 30, 2006, issued by the Minister of Finance on "Accounting Regulations for Administrative and Public Services."

2. The Fund conducts separate bookkeeping for operational activities funded by the Fund for management purposes.

Clause 3. The Fund shall organize separate bookkeeping to monitor contributions from individuals and organizations both within and outside the country to the Fund through the Vietnam Representative Office abroad or at the Fund's Office.

Clause 4. Currency for Fund Bookkeeping: Bookkeeping and settlement shall be conducted in Vietnamese Dong.

Clause 5. In cases where foreign currency is used: If directly provided by the Ministry of Finance, the exchange rate for bookkeeping-accounting published monthly by the Ministry of Finance shall apply; if foreign currency is purchased from a bank, the conversion rate according to the bank's documentation at the time of purchase shall be implemented.

Clause 6. The Director of the Fund and the Heads of agencies using the Fund are responsible under the law for expenditures in accordance with policies, regulations, and provisions set forth in this Circular.

The Fund is responsible for checking disbursement vouchers of agencies using the Fund to ensure that expenditures are consistent with the approved economic diplomatic objectives and activities.

Clause 7. The Fund shall comply with current state regulations regarding inspection and audit of its financial activities. Accounting records and documents shall be stored in accordance with current regulations and confidentiality rules.

Article 9: Implementation Organization       

This Circular takes effect from May 1, 2011, replacing Decision No. 1009/QĐ-BTC dated March 30, 2004, issued by the Minister of Finance on the Financial Management Regulation of the Fund for Diplomatic Activities Serving the Economy. The Ministry of Foreign Affairs is responsible for guiding agencies using the Fund to implement the provisions of this Circular.

During implementation, if any difficulties arise, the Ministry of Foreign Affairs shall promptly report to the Ministry of Finance for guidance on resolution./.