Joint Circular No. 44/2000/TTLT/BTC-BGDĐT-BLDTBXH guiding the financial management regime for non-state educational and training units operating in the field of Education and Training.

JOINT CIRCULAR

Guidelines on Financial Management for Non-Public Educational and Training Units

Operating in the Field of Education and Training

Pursuant to Resolution No. 90/CP dated August 21, 1997 of the Government on the Orientation and Policy for Socialization of Activities in Education, Health Care, Culture;

Pursuant to Decree No. 73/1999/NĐ-CP dated August 19, 1999 of the Government on Policies Encouraging Socialization of Activities in the Fields of Education, Health Care, Culture, and Sports.

To unify financial management work for non-public educational and training units; the Ministry of Finance, the Ministry of Education and Training, and the Ministry of Labor, Invalids and Social Affairs hereby issue guidelines on financial management as follows:

I. GENERAL PROVISIONS

1. Non-public educational and training establishments established and operating with the aim of implementing the policy of socialization are semi-public, private, and privately-owned institutions within the national education system.

2. Non-public educational and training establishments operate without the purpose of commercialization, managing finances under the mechanism of state-run units with income, self-financing operational costs. During their operation, if there is a surplus of revenue over expenses, the establishment may allocate funds for enhancing infrastructure, improving teaching quality, learning conditions, and setting up incentive and welfare funds to improve the material and spiritual living standards of employees.

3. Non-public educational and training establishments must organize financial management, assets, accounting records in accordance with each type as prescribed by the State; subject to inspection and supervision by competent state agencies, and allowed to open accounts at the National Treasury or Commercial Banks for transactions.

4. Non-public educational and training establishments shall apply preferential policies for those implementing socialization according to Circular No. 18/2000/TT-BTC dated March 1, 2000 of the Ministry of Finance "Guidelines on Certain Provisions of Decree No. 73/1999/NĐ-CP of the Government on Financial Regime Encouraging Non-Public Establishments in the Fields of Education, Healthcare, Culture, and Sports."

II/ SPECIFIC PROVISIONS

A - Applicability:                                                                        

1- The applicability of this Circular includes non-public educational and training establishments at all levels within the national education system, including:

Kindergartens, nursery groups;

Preschool classes;

Combined preschool centers (combining kindergartens and preschool classes);

Primary schools;

Secondary schools;

High schools;

Vocational Training Centers; Cultural Development Centers; Foreign Language Centers; Computer Centers; Continuing Education Centers; Supplementary Cultural Schools;

Vocational Training Institutions (vocational schools, vocational training centers, vocational classes);

Secondary Technical Schools;

Colleges;

Universities;

2-Non-public establishments operate under three types as follows:

a- Semi-public Educational and Training Establishments:

Semi-public educational and training establishments are established based on cooperation between state-run educational and training establishments and non-state organizations, enterprises, and individuals from various economic sectors in Vietnam through methods such as new establishment, transferring all or part of physical facilities from public units to jointly invest in building physical facilities, manage, and operate the establishment according to legal regulations.

b- Private Educational and Training Establishments - Established by organizations and collectives not belonging to the state, jointly investing in building physical facilities, and participating in managing and operating activities according to legal regulations.c - Privately-Owned Educational and Training Establishments

: Established and managed by individuals or households according to legal regulations. B - Sources of FinanceOperation and Revenue and Expenditure Content of Non-Public Educational and Training Establishments:

1- Sources of Finance for Operations: State Budget:

Initial value of physical facilities and new investments during operations for semi-public establishments;         

Refunds of budget payments made;

Costs of implementing national programs and projects (if applicable);

Annual financial activity surpluses;

Donations, grants, support, and gifts from organizations and individuals both domestically and internationally;

Contributions from organizations and individuals for new construction, renovation, expansion, and upgrading of physical facilities;

Loans from banks and credit organizations (if applicable);

2- Revenue and Expenditure Content

a- Revenue Content:

Tuition fees of students and trainees::

For centrally-managed schools, tuition fees are guided by the Ministry of Finance, the Ministry of Education and Training, and the Ministry of Labor, Invalids, and Social Affairs.

For locally-managed schools, the provincial People's Committees guide appropriate tuition fee levels based on local socio-economic conditions.

Revenue from training service contracts, vocational training, scientific research, and technology application;

Bank interest income, National Treasury deposits (if applicable);

Revenue from production labor, joint ventures, and cooperative agreements;

Other lawful revenues (if applicable).

b- Expenditure Content

Salaries, wages, bonuses, and contributions according to prescribed regulations such as social insurance, health insurance, trade union fees for employees;

Expenditures for students and trainees: scholarships, rewards, and implementation of social policies for students and trainees under policy categories;:

Remuneration for lecturers, researchers, and visiting professors;

Costs for teaching, learning, training, vocational training, scientific research, and technology application services for teaching and learning;

Costs for staff training to enhance the qualifications of teachers and personnel of the institution;

Office supplies, conference fees, travel expenses, communication costs, etc.;

Rent for physical facilities (if applicable), purchase and construction, repair of fixed assets, equipment, and teaching materials;

Depreciation of fixed assets;

Payment of tax obligations to the State (if applicable);

Interest payment on loans and capital contributions;           

Other expenditures (if applicable);

C-

Financial Management System:

1- For Semi-Public Educational and Training Establishments a- Management and Use of Capital and Assets:

In the process of financial management for semi-public educational and training units, the principle of clearly distinguishing and publicly disclosing state budget investment sources and sources of funds raised outside the state budget must be followed. - Part-time Trainingg:

a-Management and use of capital and assets:

The financial management process for units of part-time Education and Training shall clearly distinguish and publicly disclose state budget funds invested and non-state budget funds raised.

Part of the state's capital contribution includes monetary capital, materials, goods, fixed assets (buildings, land, machinery, equipment, transportation means, other assets...) initially provided by the state and transferred during the operation process. Educational and training institutions organize an inventory and assess the entire part of the state's capital contribution, submit it to the competent authority for review, and then send it to the financial authority at the same level to handle the transfer of state assets and funds to the public-private partnership educational institution according to Circular No. 43/TC-QLCS dated July 31, 1996 issued by the Ministry of Finance.

Annually, public-private partnership institutions organize an inventory and reassess the value of their assets, report to the financial authority at the same level, including a detailed analysis of assets retained from the state's capital contribution.

Assets that are not needed or are technologically obsolete may be sold off to recover additional funding for the institution's operations. Prior to selling, the institution must establish a valuation committee and conduct a public auction in accordance with legal regulations.

State budget funds allocated for implementing programs, topics, and projects shall be managed and utilized according to the approval of the competent authority. Quarterly progress reports on implementation and income and expenditure statements shall be submitted to the approving authority.

Capital contributions from organizations that are not state entities, individuals from all economic sectors; borrowed capital shall be managed and used for the approved project purposes.

Depreciation of fixed assets left to the unit shall enhance material facilities. In necessary cases, the head of the public-private partnership institution may stipulate a higher depreciation rate to recover capital, but it must be consistent with the service users' payment capacity.

b- Public-private partnership educational and training institutions shall apply the management system of income and expenditure of public institutions. Annually, these institutions prepare budgets for income and expenditure based on sources of formation; after being approved by the Board of Management, they submit them to the superior management authority for consolidation and submission to the financial authority at the same level.

c-Public-private partnership educational and training institutions implement accounting systems according to Decision No. 999/TC-QĐ-CĐKT dated November 2, 1996 issued by the Ministry of Finance establishing the administrative and public service accounting system.

d-Public-private partnership educational and training institutions implement regular or sudden financial inspection and audit systems regarding the use of funds; publicly disclose income and expenditure items and income distribution payments to employees within the institution; situations of asset increases or decreases according to state capital sources and external non-state treasury sources.

g-The head is the account holder of the institution, responsible before the Board of Management and the direct supervisory authority for the entire financial and asset management work of the institution.

h-The annual financial results of public-private partnership institutions are determined based on the difference between total income and total expenditures of the unit in the fiscal year. If there is a larger income surplus than expenditures, the Board of Management (for public-private partnership institutions) or the head of the unit (for public institutions with private components) shall decide the proportion of expenditures for the following items:

Supplementing the operational capital of the institution by no less than 30% of the total income surplus over expenditures.

The remainder shall supplement income, rewards, and welfare for those within the institution, direct cooperators with the institution, and distribute income according to the capital contribution ratio (if applicable): Income derived from the state's capital contribution shall be reinvested to strengthen material facilities and recorded as an increase in the state's capital contribution.

2- For educational institutions - Established by organizations and collectives not belonging to the state, jointly investing in building physical facilities, and participating in managing and operating activities according to legal regulations.:

a-Democratically established educational and training institutions operate under the principle of ensuring full coverage of unit costs and preserving and developing financial resources.

b-When democratically established educational and training institutions are assigned to implement state programs, topics, and projects, they shall receive state budget funding. This portion of funding shall be accounted for separately and managed according to state regulations.

c-For unused assets or technologically obsolete assets, democratically established educational and training institutions may sell them off to recover capital. The unit establishes a valuation committee and conducts auctions according to legal provisions. Proceeds from the sale of assets, after deducting reasonable expenses for the sale process, shall be used to supplement the operational capital of the institution.

d-Annually, the Board of Management approves the budget for income and expenditure and determines the structure of regular and investment expenditures; expenditures for personnel and activities; and sets the interest payment rates for organizations and individuals participating in capital contributions according to their contribution ratios.

g-Democratically established educational and training institutions implement regular financial inspection and audit systems regarding the use of funds; publicly disclose financial income and expenditure items and asset increases or decreases according to sources of formation for the knowledge of staff within the institution.

h-The annual financial results of democratically established educational and training institutions are determined based on the difference between total income and total expenditures of the unit in the fiscal year. The excess income over expenditures shall be decided by the Board of Management for allocation to the following items after consulting the supporting authority:

Enhancing material facilities by no less than 30% of the total income surplus over expenditures;

The remainder shall be used for rewards and welfare for those within the unit, direct cooperators with the unit, and income distribution according to the capital contribution ratio;

i-Democratically established educational and training institutions implement accounting according to the state-prescribed accounting system, submit quarterly and annual final reports on the entire financial operation situation of the institution, and are subject to inspection and supervision by the financial authority at the same level.

3- For educational institutions - Private education:

Privately established educational and training institutions operate according to the principle of self-sufficiency in income and expenditure and bear responsibility for financial management of their activities.

D-Financial settlement after dissolution, bankruptcy:

When non-publicly established educational and training institutions declare bankruptcy or dissolution, financial settlement shall proceed in the following priority order:

Expenses stipulated by law for resolving dissolution and bankruptcy of the institution;

Debts for salaries, termination allowances, social insurance, and other benefits according to labor contracts;

Tax debts (if any);

All debts of other organizations and individuals listed;

If the remaining value (assets and money) of the entity is sufficient to pay off all debts of the creditors, each creditor shall be fully paid their debt.

If the remaining value (assets and money) of the entity is insufficient to pay off all debts of the creditors, each creditor shall only be partially paid their debt according to the corresponding ratio.

The portion of the remaining value (assets and money) (if any) of the entity after fully paying off the debts of the creditors belongs to:

The entity owner if it is a private entity

The contributing members of the entity (including the State budget) if it is a public-private partnership entity or a privately established entity.

III/ IMPLEMENTATION

This Circular takes effect 15 days after the date of signature.

During implementation, if there are any difficulties, they should be promptly reported to the Joint Ministry for consideration, amendment, and supplementation to ensure appropriateness./.