Circular No. 43/2002/TT-BTC guides the management and allocation of state budget capital for the project to plant new forests on five million hectares.

CIRCULAR

Guidelines for managing and allocating state budget capital for the project to plant new forests on 5 million hectares

five million hectares of forest

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Pursuant to Decision No. 661/QĐ-TTg dated July 29, 1998 of the Prime Minister on the objectives, tasks, policies, and implementation organization of the Project to Plant New Forests on 5 Million Hectares; Decision No. 251/QĐ-TTg dated March 22, 2000 of the Prime Minister on supplementing and amending procedures for settling funds for the implementation of the Project to Plant New Forests on 5 Million Hectares; Document No. 301/CP-NN dated April 18, 2001 of the Government on resolving mechanisms to implement Program 661;

Pursuant to Circular Joint No. 28/1999/TT-LT dated February 3, 1999 of the Ministry of Agriculture and Rural Development - Ministry of Planning and Investment - Ministry of Finance guiding the implementation of Decision No. 661/QĐ-TTg of the Prime Minister;

The Ministry of Finance issues guidelines for managing and allocating state budget capital for the Project to Plant New Forests on 5 Million Hectares, replacing Circular No. 28/1999/TT-BTC dated March 13, 1999, as follows:

Part 1:

GENERAL PROVISIONS

1- State budget capital is allocated from investment development funds for projects under the Project to Plant New Forests on 5 Million Hectares that fall within the scope of state budget capital usage as stipulated in Decision No. 661/QĐ-TTg dated July 29, 1998 of the Prime Minister to be used for investment, support for planting production forests, and program management costs included in the annual state budget expenditure plan approved by the National Assembly.

2- The superior authority of the project sponsor (Ministries, agencies at the level of Ministries, government-affiliated agencies for centrally-managed projects, provincial People's Committees for locally-managed projects) shall be responsible for allocating plan indicators for each project within the national plan announcement range; guiding and directing project sponsors to implement plans according to approved plans. The allocation of capital indicators must ensure the proportionate structure of forestry capital, infrastructure capital, and management capital as prescribed by the Government, the Ministry of Planning and Investment, and this Circular.

3- Based on the capital plan assigned by the State to the Project to Plant New Forests on 5 Million Hectares, the Ministry of Finance will allocate to projects approved by competent authorities through the State Treasury system. The State Treasury is responsible for supervising and allocating capital to project sponsors according to established regulations. Project sponsors must open accounts with the State Treasury to receive allocated capital for payment and are responsible for managing and using the capital correctly, effectively, and in accordance with current financial regulations, subject to inspection and supervision by financial authorities and the State Treasury. The State Treasury has the right to refuse allocation to projects that do not meet conditions and to recover capital that has been improperly used.

Part II:

SPECIFIC PROVISIONS

I- SCOPE, OBJECTS, AND CAPITAL EXPENDITURE LEVELS OF STATE BUDGET.

1- Capital investment for protective and special-purpose forest planting projects:

- Protecting special-purpose forests and protective forests in very critical and critical areas with an average investment not exceeding 50,000 VND/ha/year, with a term not exceeding five years.

- Contracting out protection and regeneration combined with supplementary planting of industrial trees, fruit trees, and specialty trees for special-purpose forests and protective forests in critical and very critical areas (considered as forest protection indicators) with an investment not exceeding 50,000 VND/ha/year, with a term not exceeding five years.

- Contracting out protection and regeneration combined with supplementary planting of forestry trees for special-purpose forests and protective forests in very critical and critical areas with an investment not exceeding 1 million VND/ha, with a six-year contract period based on the annual allocation of capital and the forest regeneration and supplementary planting process of the Ministry of Agriculture and Rural Development.

- Planting new protective forests in very critical and critical areas with direct investment to forest growers averaging 2.5 million VND/ha, including new planting and care according to the technical procedures of the Ministry of Agriculture and Rural Development.

- Constructing some essential infrastructure facilities directly serving forestry activities including: forest protection stations, fire prevention facilities, pest control facilities, nurseries,...with total investment for the entire program not exceeding 5% of the total state budget capital allocated for the project annually.

2- Project management expenses:

2.1- Sources of project management capital for protective and special-purpose forests:

The total project management capital for protective and special-purpose forests is extracted at 8% of the total state budget investment allocated for the project, of which central sectors account for 0.7%, provinces, districts, communes account for 1.3%, and grassroots project sponsors account for 6%.

2.2- Activities eligible for project management expense allocation:

- Surveying, designing, reviewing, and approving projects.

- Scientific research, agricultural extension, forestry extension, model construction for technology transfer under the Project to Plant New Forests on 5 Million Hectares.

- Training, inspection, propaganda, commendation, preliminary and final summary meetings.

- Supplementing necessary equipment and office supplies for management guidance activities.

- Expenses for the management and operation of the Central Steering Committee for the Project to Plant New Forests on 5 Million Hectares and project management boards.

- Salaries for members of project management boards who have not received salaries from the state budget; allowances, subsidies, travel expenses,...according to administrative service regulations for project management board members (including those already receiving salaries from the state budget).

- Expenses supporting the management and settlement of capital by the State Treasury system.

2.3- Agencies allocated project management capital include:

- The Central Steering Committee for the Project to Plant New Forests on 5 Million Hectares.

- The main investment management agency.

- The State Treasury system.

- Central and local agencies directly related to the implementation of the Project to Plant New Forests on 5 Million Hectares.

- Provincial project management boards and grassroots project management boards (excluding project management boards for production forest planting).

3- Support capital for production forest planting:

Organizations, households, and individuals who self-fund the planting of production forests where the forest area consists of rare and precious timber species with a cycle over 30 years, prioritizing species that can be planted belonging to Group IA, IIA as stipulated in Decree No. 18/HĐBT dated January 17, 1992 of the Council of Ministers (now the Government), with approved project and technical procedures, the State will provide support capital for implementation. The average support capital is 2 million VND/ha.

II- ESTABLISHING PLANS AND TRANSFERRING FUNDS FOR DISTRIBUTION.

1- Establishing annual plans:

1.1- The managing agency for investment bases on the progress of implementation of the annual plan to establish a plan (including: project list, volume and total amount of funds for distribution for protective and special-purpose forest planting projects; project list, volume and total amount of support funds for production forest planting) to send to the Ministry of Agriculture and Rural Development, the Ministry of Planning and Investment, and the Ministry of Finance for coordination, consolidation, and reporting to the Government for submission to the National Assembly for approval.

1.2- Based on the state plan indicators assigned, the managing agency for investment allocates capital investment indicators for each project and unit under its management to the Ministry of Finance (Investment Department) according to form number 01 attached, and simultaneously sends to the Ministry of Planning and Investment and the Ministry of Agriculture and Rural Development for monitoring and management.

1.3- Based on the state plan indicators and the project funding allocation plan of five million hectares of forests by the Ministry and localities:

- For projects managed by central ministries and sectors, the Ministry of Finance (Investment Department) notifies the State Treasury Central about the funding plan; the State Treasury Central then notifies the State Treasury of provinces and cities to serve as the basis for distributing and settling funds.

- For projects managed by localities, the Provincial Department of Finance and Prices notifies the State Treasury of provinces about the funding plan to serve as the basis for distributing and settling funds.

2- Transferring funds for distribution:

2.1- For projects managed by central ministries and sectors:

- Based on the total project funding for the new five million hectares of forests recorded in the annual budget estimate, every quarter, the State Treasury Central compiles the demand for fund settlement and sends it to the Ministry of Finance (Investment Department). The Ministry of Finance transfers the basic construction investment limit to the State Treasury Central. The State Treasury Central distributes the limit to the State Treasuries of provinces and centrally-administered cities for distribution and settlement of funds for projects according to current mechanisms.

2.2- For projects managed by localities:

The Ministry of Finance implements the transfer of funds to localities through supplementary targeted grants to local budgets. The Provincial Departments of Finance and Prices transfer the basic construction limit to the State Treasuries of provinces and cities for settlement of funds for projects.

- The Provincial Departments of Finance and Prices promptly and fully transfer the financial limits to the State Treasury system. The State Treasury settles funds for the volumes of projects in full, timely, and in accordance with prescribed regulations.

III- SETTING UP FUND DISTRIBUTION AND SETTLEMENT AT THE STATE TREASURY

A- DISTRIBUTING PROJECT INVESTMENT FUNDS:

1- Conditions for fund settlement:

To be eligible for fund distribution and settlement for completed volumes, the project sponsor must submit the following documents to the State Treasury where the account is opened:

- Decision approving the project by the competent authority.

- Decision assigning the project sponsor, establishing the Project Management Board, appointing the Board Director and Chief Accountant (if applicable).

- Annual funding plan announced by the managing agency for investment, including indicators on planting, nurturing, regeneration enclosure, and forest protection volumes assigned and supported.

- Technical design and general budget estimate, budget estimate approved by the competent authority.

- Economic contracts signed between the project sponsor and households or individuals (regarding forestry investment capital) or with contracting units (if any) according to prescribed regulations.

- Completion acceptance records between the project sponsor and households or contracting units receiving assignments.

- Decision supporting production forest planting by the competent authority.

- Decision on direct assignment or self-execution by the competent authority.

- Other related documentation and vouchers (price lists, payment vouchers, etc.).

2- Advance funding and fund distribution and settlement:

2.1- For forest protection and regeneration enclosure combined with industrial crops, fruit trees, and specialty trees planted by the people:

- Based on the announced funding plan, approved budget estimate, and forest protection and regeneration enclosure combined with supplementary planting contracts between the project sponsor and households or individuals, the State Treasury advances 30% of the annual funding plan to the project sponsor. The project sponsor is responsible for timely and fully advancing capital to participating units and individuals involved in forest protection assignments.

- When there is actual work done, the project sponsor conducts completion acceptance of the forest volumes assigned to households or individuals for protection and regeneration enclosure combined with supplementary planting, along with a list of signatures from units and households receiving forest protection assignments sent to the State Treasury that provided the advance funding. The State Treasury, based on the completion acceptance record, checks and supervises related documentation and procedures, and processes the transition from advance funding to distribution and settlement.

2.2- For new forest planting and regeneration enclosure combined with supplementary planting of forestry crops:

- Based on the annual plan, design, and approved budget estimate, and new planting, regeneration enclosure combined with supplementary planting contracts between the project sponsor and households and contracting units, the State Treasury advances 30% of the annual funding plan for the project.

- When the project reaches 50% of the annual plan progress, the project sponsor conducts completion acceptance of the completed work volumes. The State Treasury checks the documentation and vouchers for completed volumes, processes the transition from advance funding to distribution and settlement, and makes additional payments if the accepted completed volume exceeds the advance funding. Subsequently, the State Treasury processes further advances to the project sponsor up to a maximum of 40% of the remaining annual funding plan for continued implementation.

- At year-end, the project sponsor conducts completion acceptance of all completed work volumes and submits them to the State Treasury for processing the transition from advance funding to distribution and settlement, and additional distribution of the remaining planned funding.

- The total advanced and settled funds for the project shall not exceed the annual funding plan allocated for the project.

2.3- For infrastructure investment funds:

- For works with investment capital under 100 million dong:

+ The project sponsor is permitted to use standard designs, approved and issued by the competent authority, or prepare designs and estimates for the works for approval by the competent authority.

In accordance with the annual plan, budget, approved design, construction contract between the project owner and the contractor, and residents (if any), the State Treasury temporarily advances up to 30% of the annual capital plan for the project to be implemented. When there is completed work volume, the project owner shall settle with the State Treasury the amount temporarily advanced. Subsequent disbursements of funds will be carried out according to the progress of the completed basic construction volume.

- Construction works with investment capital of 100 million dong or more shall be managed and disbursed in accordance with the current Investment Management and Construction Regulations.

2.4- Disbursement of capital support for planting production forests:

When the project completes the first year's planting and caring for the forest and subsequent years' caring for the forest, the project owner must inspect and submit the completed forest volume to the State Treasury as the basis for capital disbursement. The State Treasury, based on the prescribed regulations, will review the documentation and vouchers of the completed work volume and disburse support capital for the projects. The average support capital is 2 million dong/hectare and is allocated as follows:

+ For the first year's planting and caring for the forest, an average support of 1 million dong/hectare.

+ For subsequent years' caring for the forest, an average support of 1 million dong/hectare, with the caring period and support capital each year being implemented according to the technical procedures of the Ministry of Agriculture and Rural Development and the state's annual plan. The recipients of subsequent years' support capital must be areas of forest that have already received support capital for the first year's planting and caring for the forest and must comply with all regulations regarding tree species and planting density approved by the managing authority.

B- DISBURSEMENT OF PROJECT MANAGEMENT EXPENSES:

1- Conditions for fund settlement:

To obtain disbursement of project management expenses, the project owner must submit the following documents to the State Treasury where the account is opened:

- The annual capital plan announced by the managing authority.

- Detailed budget estimates of expenditures approved by the competent authority.

- Other payment vouchers related thereto.

2- Disbursement of capital payments:

- Project management costs of the Provincial Project Management Board and relevant central and local units are temporarily advanced and settled when there is a completed work volume according to the approved budget estimate within the announced capital plan.

- Project management costs of the grassroots Project Management Board are temporarily advanced and settled quarterly according to the progress of the investment capital implementation. The State Treasury will not fully disburse project management costs to the project owner until the assigned work volume plan is completed.

- Project management capital of the State Treasury system is centrally managed and allocated by the Central State Treasury to provincial and municipal State Treasuries for use in accordance with the financial management regulations stipulated in Point 2, Section II, Circular No. 123/1998/TT-BTC dated September 4, 1998, of the Ministry of Finance.

IV- ACCOUNTING RECORDS, AUDITING, REPORTING AND SETTLEMENT

1- Accounting records:

- Project owners and units using state budget capital under the New Planting of Five Million Hectares of Forest project shall conduct accounting records and statistics in accordance with the current regulations of the State.

- The State Treasury shall conduct accounting records in accordance with the regulations of the Ministry of Finance and the guidelines of the Central State Treasury.

2- Inspection:

- The managing authorities, functional management agencies at the central and local levels, and the State Treasury shall inspect the implementation of plans and compliance with financial management regulations by the project owners, promptly reflecting any issues and difficulties in management and capital disbursement and settlement to the Ministry of Finance (Investment Department), the Ministry of Planning and Investment, the Ministry of Agriculture and Rural Development, the Steering Committee, and the National Project Management Committee for the New Planting of Five Million Hectares of Forest at the central level for appropriate measures.

- Through inspections and audits, if it is found that the capital disbursed to project owners has been misused or improperly used, it will be recovered and deposited into the state budget.

3- Reporting:

- Monthly, project owners are responsible for preparing and submitting reports on the use of capital to the managing authorities and simultaneously sending them to the State Treasury where the capital was disbursed (according to Form No. 02 attached) by the 5th day of the following month.

- Units of the State Treasury where the capital was disbursed are responsible for compiling monthly reports on capital disbursement and settlement and sending them to the Central State Treasury by the 10th day of the following month. The Central State Treasury compiles the implementation status of the capital disbursement plan nationwide and reports to the Ministry of Finance (Investment Department), the Steering Committee, and the National Project Management Committee for the New Planting of Five Million Hectares of Forest at the central level by the 20th day of the following month.

4- Annual capital settlement and final project settlement:

4.1- Annual capital settlement:

Capital allocated for the New Planting of Five Million Hectares of Forest project in any given year is disbursed for the completed work volume up to December 31 of that year; the inspection time of the project owners may be extended until March 31 of the following year, and the capital settlement time of the State Treasury may be extended until April 30 of the following year.

- For projects managed by central ministries and sectors:

+ Any capital disbursed and settled from January 1 of the planning year to March 31 of the following year shall be settled in the previous fiscal year; any capital disbursed and settled after March 31 shall be settled in the subsequent fiscal year.

+ The annual capital settlement process is as follows:

Project owners prepare and submit the annual capital utilization settlement report to the State Treasury where the capital was disbursed, and simultaneously report to the managing authority. Advance payments must be processed into disbursement and settlement before the end-of-year capital disbursement deadline of the State Treasury (April 30 of the following year); capital settled from January 1 of the planning year to March 31 of the following year shall be settled in the previous fiscal year, and capital disbursed and settled after March 31 shall be settled in the subsequent fiscal year. In cases where projects have completed work but do not meet settlement conditions, they can be transferred to the next year for settlement and reporting.

The State Treasury of provinces and centrally governed cities shall aggregate and settle the capital allocated for new planting projects of five million hectares of forest and send it to the Central State Treasury no later than May 15th of the following year.

The Central State Treasury is responsible for aggregating and settling the capital allocated for projects under the new planting project of five million hectares of forest and the management capital of the State Treasury system, and report to the Ministry of Finance for approval in accordance with regulations on the settlement of state budget capital.

- For projects managed by localities:

+ The Department of Finance and Prices shall coordinate with the State Treasury of the province or centrally governed city to settle the capital allocated for payment from January 1st of the planning year until March 31st of the following year within the previous local budget period; the capital allocated for payment occurring after March 31st shall be settled within the subsequent local budget period.

+ Annual capital settlement: The investor shall prepare a report on the settlement of the allocated capital usage to the investment management authority. Advance payments must be processed to convert to payment capital before the end of the year's capital allocation date of the State Treasury (March 31st of the following year); the capital paid from January 1st of the planning year until March 31st of the following year shall be settled within the previous budget period, while the capital allocated for payment occurring after March 31st shall be settled within the subsequent budget period. In cases where projects have implemented volumes but do not meet the conditions for payment, they may be transferred to the next year for payment and settlement in that year.

4.2- Settlement of completed projects:

The settlement of new planting projects of five million hectares of forest upon completion shall be carried out in accordance with current regulations on the settlement of investment capital.

- For projects managed by central ministries and sectors: the investor shall prepare a settlement report (with confirmation from the State Treasury issuing the capital for the project) and submit it to the superior authority of the investor. The superior authority of the investor is responsible for reviewing and approving the investor's settlement report, and compiling a report to the Ministry of Finance (Investment Department), and the Ministry of Agriculture and Rural Development (Central Steering Committee for the New Planting Project of Five Million Hectares of Forest).

- For projects managed by localities: the investor shall prepare a settlement report (with confirmation from the State Treasury issuing the capital) and submit it to the Department of Agriculture and Rural Development. The Department of Agriculture and Rural Development shall approve the project settlement and compile completed projects to submit to the Department of Finance and Prices. The Department of Finance and Prices shall take the lead in organizing the review of project settlements, submitting them for approval by the Chairman of the Provincial People's Committee, and reporting to the Ministry of Finance (Investment Department) and the Ministry of Agriculture and Rural Development (Central Steering Committee for the New Planting Project of Five Million Hectares of Forest).

V- RESPONSIBILITIES OF THE AUTHORITIES (MINISTRIES, SECTORS, PROVINCE AND CITY PEOPLE'S COMMITTEES, INVESTORS AND RELATED UNITS)

1. Investors are responsible for:

- Implementing projects according to assigned tasks, ensuring progress and quality as prescribed.

- Providing relevant documents, materials, and payment vouchers to the State Treasury as the basis for allocating and paying capital, and bearing responsibility for the accuracy and honesty of the provided materials.

- Receiving and using capital for its intended purpose, for the designated recipients, economically and effectively.

- Reporting and settling capital according to prescribed regulations.

2- Ministries, sectors, provincial and centrally governed city people's committees are responsible for:

- Being fully accountable for the results of projects under their management; guiding, inspecting, and urging investors to implement assigned plans, receiving and using investment capital for its intended purpose and in accordance with prescribed regulations.

- Allocating capital plans for projects according to total amounts, capital structures, and project lists arranged by the State.

- Approving budgets for expenditures, annual reports on capital usage, and settlement of completed projects.

3- Department of Agriculture and Rural Development:

- Advising and assisting the provincial and centrally governed city people's committees in directing and managing investors to implement assigned plans.

- Coordinating with the Department of Finance and Prices and members of the Project Steering Committee to review annual settlement reports and completed project settlements for submission to the provincial and centrally governed city people's committees for approval.

4- The State Treasury is responsible for:

- Based on allocated capital sources and prescribed regulations, conducting inspections, controls, and timely allocation of capital to investors.

- Having the right to request investors to provide documents, materials, and information for management and capital allocation purposes; having the right to refuse allocation to projects that do not meet conditions, recover improperly used capital, and bear responsibility for refusal to allocate and improper payment allocations.

- Cooperating with related agencies to verify project settlement data for authorities to approve.

- Carrying out capital reporting and settlement as prescribed.

5- Department of Finance and Prices:

- Promptly informing the State Treasury of the full limit (for projects managed by localities) for capital allocation and payment for projects.

- Taking the lead in coordinating with related agencies to review the settlement of projects managed by localities for submission to the provincial and centrally governed city people's committees for approval.

Part 3:

IMPLEMENTING PROVISIONS

This Circular takes effect from the date of signature. Previous provisions contrary to this Circular shall cease to be effective.

The Ministries, ministerial-level agencies, government agencies, People's Committees of provinces and centrally governed cities, investors, Departments and Bureaus under the Ministry of Finance, units within the State Treasury system shall be responsible for implementing this Circular.