Circular No. 44/2003/TT-BTC guiding the management and settlement of investment capital and operational capital with investment nature from state budget funds.

CIRCULAR

Guidelines for managing and settling investment capital and operational capital with investment characteristics and construction from state budget funds

 and construction from state budget funds

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Pursuant to the State Budget Law No. 01/2002/QH11 dated December 16, 2002;

Pursuant to Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government on the issuance of the Investment Management and Construction Regulation, Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government on amending and supplementing certain articles of the Investment Management and Construction Regulation issued together with Decree No. 52/1999/NĐ-CP dated July 8, 1999, and Decree No. 07/2003/NĐ-CP dated January 30, 2003 of the Government on amending and supplementing certain articles of the Investment Management and Construction Regulation issued together with Decree No. 52/1999/NĐ-CP dated July 8, 1999 and Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government;

The Ministry of Finance guides the management and settlement of investment capital and operational capital with investment characteristics and construction from state budget funds as follows:

Part 1:

GENERAL PROVISIONS

1. These guidelines apply to investment projects funded by development investment capital and operational capital with investment characteristics from state budget funds managed by Ministries, ministerial-level agencies, agencies under the Government, political organizations, political-social organizations, social organizations, social-professional organizations, State-owned Corporations (hereinafter referred to collectively as the Ministry), provinces directly under the Central Government (hereinafter referred to collectively as the province), and districts, towns, and cities directly under provinces (hereinafter referred to collectively as the district).

These guidelines do not apply to projects funded by commune budgets; investment projects of Vietnamese representative offices abroad; projects requiring confidentiality for national security and defense; and projects purchasing ownership rights.

2. State budget capital (including domestic capital at all levels of the state budget, foreign loans of the Government, and foreign aid to the Government, local authorities, and state agencies) shall only be settled for investment projects eligible to use state budget capital according to the provisions of the State Budget Law and the Investment Management and Construction Regulation.

3. Investment projects funded by development investment capital or operational capital within the state budget estimate, investment projects using multiple sources of capital including separately identified state budget capital for specific project components or works, or investment projects using multiple sources of capital but unable to separate state budget capital where state budget investment capital constitutes the largest proportion of the total investment cost of the project must have complete investment and construction procedures, be included in the annual investment plan and annual operational expenditure plan of the State (hereinafter referred to collectively as the annual plan), and meet the conditions for capital settlement as stipulated in the Investment Management and Construction Regulation and these guidelines.

4. Investment projects funded by operational capital within the state budget estimate (hereinafter referred to as operational capital with investment characteristics) may only be applied in cases of repair, renovation, expansion, and upgrading of existing physical facilities aimed at restoring or increasing the value of fixed assets (including new construction of project components within existing facilities of administrative and public service units). New investment projects shall not be allocated operational capital.

5. Financial agencies at all levels shall implement financial management of investment capital and operational capital with investment characteristics from state budget funds. State Treasury shall be responsible for timely, full, and accurate settlement of capital for projects when they meet the settlement conditions.

Commercial banks involved in Official Development Assistance (ODA) projects must comply with the financial management regulations for ODA projects issued by the Ministry of Finance based on their assigned functions and responsibilities.

Part II:

SPECIFIC PROVISIONS

A. ESTABLISHING AND ANNOUNCING THE ANNUAL CAPITAL SETTLEMENT PLAN FOR INVESTMENT AND OPERATIONAL CAPITAL WITH INVESTMENT CHARACTERISTICS

I. PROJECTS SHALL ONLY BE INCLUDED IN THE ANNUAL STATE CAPITAL INVESTMENT PLAN WHEN THEY MEET THE FOLLOWING REQUIREMENTS:

1. For planning projects: They must have a project outline or task description and approved planning cost estimates according to authority.

2. For pre-investment projects: They must be included in approved industry and territorial development plans, have a permit to proceed with pre-investment activities, and approved pre-investment cost estimates according to authority.

3. For projects preparing to implement: They must have an investment decision from October of the previous year, and approved preliminary design and total cost estimates according to authority. In special cases for Class A and B projects without approved preliminary designs and total cost estimates, the investment decision must specify the capital amount for each component, with component designs and cost estimates approved by the competent authority. Class C projects must allocate sufficient capital to implement the project within two years.

4. For implementation projects: They must have an investment decision from October of the previous year, approved technical design and total cost estimates by the competent authority. For special cases of Class A and B projects without approved technical designs and total cost estimates, the investment decision must specify the capital amount for each component, with component designs and cost estimates approved by the competent authority. Class C projects must allocate sufficient capital to implement the project within two years.

5. For projects funded by operational capital: Projects with a capital amount of 1 billion VND or more must meet the requirements of points 2, 3, and 4 above; projects with a capital amount less than 1 billion VND must have approved designs and cost estimates.

II. ESTABLISHING THE ANNUAL CAPITAL INVESTMENT PLAN, REVIEWING, AND ANNOUNCING THE ANNUAL CAPITAL SETTLEMENT PLAN FOR INVESTMENT AND CONSTRUCTION:

1. For projects using investment capital: During the preparation of the annual state budget estimate, based on the progress and objectives of the project, the project sponsor establishes the project's annual investment capital plan and submits it to the superior management agency for inclusion in the annual state budget estimate according to the State Budget Law.

For projects using operational capital with investment characteristics: Based on the need for repair, renovation, expansion, and upgrading of existing facilities of the organization, the project sponsor establishes the operational capital investment plan and submits it to the superior agency for inclusion in the annual state budget estimate according to the State Budget Law.

2. Ministries aggregate and establish the annual investment capital plan and submit it to the Ministry of Finance and the Ministry of Planning and Investment.

Provincial People's Committees prepare the provincial budget estimate for the investment plan and submit it to the Standing Committee of the Provincial People's Council for review before submitting it to the Ministry of Finance and the Ministry of Planning and Investment.

3. After the State budget estimate has been decided by the National Assembly and assigned by the Prime Minister:

3.1- Ministries (for central-managed investment capital) allocate and decide to assign investment capital plans for each project that has completed investment procedures within their management scope, ensuring consistency with the allocated total investment amount; domestic and foreign capital structure; economic sector structure; state important project capital levels, and in accordance with the National Assembly Resolution and the Government's directives on economic and social development plan management and annual State budget estimates.

3.2- Provincial People's Committees (for locally-managed investment capital) establish plans to allocate locally-managed investment capital for submission to the same-level People's Councils for decision. In accordance with the People's Council Resolution, the People's Committee allocates and decides to assign investment capital plans for each project that has completed investment procedures within their management scope, ensuring consistency with the allocated total investment amount; domestic and foreign capital structure; economic sector structure; state important project capital levels, and in accordance with the National Assembly Resolution and the Government's directives on economic and social development plan management and annual State budget estimates.

The Department of Finance and Prices shall be responsible for coordinating with the Department of Planning and Investment regarding the proposed allocation of investment capital for each project managed by the province before reporting to the provincial People's Committee for decision.

The County Financial Office shall take the lead in coordinating with relevant county agencies to advise the County People's Committee on allocating investment capital for each project managed by the county.

For projects funded by sources of capital left over according to National Assembly Resolutions and Government Decisions, they must comply with regulations concerning investment targets and usage purposes of each source of investment capital.

After allocating investment capital for each project, the provincial People's Committee sends the investment capital plan to the Ministry of Finance; the county People's Committee sends the investment capital plan to the Department of Finance and Prices.

3.3- Projects allocated capital in the annual plan must comply with the following provisions:

- Ensuring that the conditions for projects to be allocated investment capital plans as stipulated in Section I Clause A Part II of this Circular are met.

- Ensuring capital allocation in accordance with points 3.1 and 3.2 above.

(Model form for implementing the investment capital plan as attached Appendix No. 01).

4. Inspection and notification of the annual construction investment payment plan:

4.1- For centrally-managed projects: After allocating investment capital for each project, ministries send the investment capital plan to the Ministry of Finance for inspection in accordance with point 3.3 above.

After inspection, if the allocation plan does not meet the requirements above, the Ministry of Finance will issue a document requesting ministries to adjust it. If ministries do not adjust or have adjusted but still do not comply with regulations, the Ministry of Finance will report to the Prime Minister for consideration and decision.

4.2- For projects managed by provincial or county People's Committees: If the allocation plan does not comply with point 3.3 above, the Department of Finance and Prices or the County Financial Office will report to the provincial or county People's Committee for consideration and adjustment.

4.3- After the investment capital plan has been allocated or after adjustments have been made in compliance with regulations, ministries and provincial or county People's Committees assign investment plan targets to project sponsors for implementation, simultaneously sending them to the State Treasury where the project account is opened for monitoring, serving as the basis for controlling and paying capital.

4.4- Notification of the investment capital payment plan for each project:

The investment capital payment plan is the allocation plan for each project from the State budget investment capital that meets the conditions as stipulated in point 3.3 above. The notification of the investment capital payment plan is carried out as follows:

- For projects managed by ministries, the Ministry of Finance notifies the investment capital payment plan to the State Treasury as the basis for paying capital to projects, simultaneously sending it to the ministries for monitoring and coordinated management.

- For projects managed by provinces or counties, the Department of Finance and Prices or the County Financial Office notify the investment capital payment plan to the State Treasury as the basis for paying capital to projects, simultaneously sending it to the managing sectors with projects for monitoring and coordinated management. In cases where the Department of Finance and Prices or the County Financial Office have not notified the investment capital payment plan to the State Treasury, the State Treasury will temporarily pay capital for project payments based on the project assignment plan decision of the provincial or county People's Committee.

5. Project sponsors must submit project foundation documents to financial authorities at all levels for inspection and notification of the investment capital payment plan for projects, including:

- Approval documents for project outline or mission; Permission documents to proceed with investment preparation;

- Budget estimates for planning and investment preparation work or preparatory work for project implementation;

- Investment project decisions by competent authorities; Decisions approving technical design and estimate.

III. ADJUSTMENT OF ANNUAL INVESTMENT CAPITAL PAYMENT PLAN:

1. Principles:

- Ministries and localities review the progress and investment objectives of projects in the year to adjust the investment capital plan within their authority or request the Prime Minister to adjust the investment capital plan, transferring capital from projects unable to implement to projects ahead of schedule, with outstanding workloads, or projects capable of completing beyond the plan in the year.

- Before submitting the adjusted investment capital plan for each project to the financial authority, ministries and localities work with the State Treasury to determine the amount of capital from the annual plan already paid to the project and the surplus capital due to non-implementation.

2. Financial authorities at all levels review to notify the adjusted investment capital payment plan for each project as stipulated in point 4 Section II Clause A Part II of this Circular.

3. The deadline for adjusting the annual investment capital payment plan ends no later than December 31.

B. PAYMENT OF INVESTMENT CAPITAL AND ENTERPRISE CAPITAL WITH INVESTMENT CHARACTERISTICS

I. OPENING ACCOUNTS:

1. For domestic capital:

- Project sponsors (Project Management Board) may open accounts at the State Treasury convenient for payment control and sponsor transactions.

- The State Treasury guides sponsors in opening accounts.

2. For foreign capital:

The project investor (Project Management Board) is permitted to open an account at a bank in accordance with the guidelines of the Ministry of Finance and the Bank.

II. DOCUMENTS SUPPORTING THE PROJECT:

To serve management and control of investment capital disbursement, the project investor (Project Management Board) must submit to the State Treasury where the payment account is opened the documents supporting the project (these documents are only submitted once until the completion of the project, except in cases requiring supplementation or adjustment) including:

1. For planning projects:

- Documents from the competent authority approving the outline or task of the planning project;

- Budget estimate for planning work approved by the competent authority;

- Decision approving the tender results (in case of tendering), tender designation decision or task assignment decision;

- Economic contract between the project investor and the contractor.

2. For investment preparation projects:

- Document from the competent authority permitting the commencement of investment preparation;

- Budget estimate for investment preparation work approved by the competent authority;

- Decision approving the tender results (in case of tendering), tender designation decision or task assignment decision;

- Economic contract between the project investor and the contractor.

3. For projects preparing to implement:

- Feasibility Study Report (FSR) or Investment Report (IR) and investment decision of the competent authority. In addition:

For non-tendered works:

- Budget estimate for preparatory work to implement the project approved by the competent authority;

- Tender designation decision (for tenders valued at 100 million dong or more);

- Economic contract between the sponsor and the contractor.

For tendered works:

- Decision approving the tender results;

- Economic contract between the project investor and the winning contractor (including accompanying documents of the economic contract: forecast version of the tender document approved; forecast pricing of the bid attached with detailed price list of the contractor and conditions for price changes (if any), general and specific conditions of the contract). Specifically, imported equipment must have a contract approval document from the competent authority in accordance with current regulations.

4. For implementation investment projects:

- FSR or IR and investment decision of the competent authority (if not included in the preparatory stage);

- Detailed Technical Design (DTD) attached with the decision approving the Detailed Technical Design and DTD;

Additionally:

For non-tendered works:

- Detailed budget estimate approved for each work, construction item;

- Tender designation decision (for tenders valued at 100 million dong or more);

- Advance payment guarantee for ODA projects (according to the requirements of the financier stipulated in the Agreement); In cases of domestic investment projects implemented by foreign contractors, advance payment guarantees are required (for cases involving advance payments);

- Economic contract between the project investor and the contractor. Specifically, imported equipment must have a contract approval document from the competent authority in accordance with current regulations.

For tendered works:

- Decision approving the tender results;

- Advance payment guarantee for ODA projects (according to the requirements of the financier stipulated in the Agreement); In cases of domestic investment projects implemented by foreign contractors, advance payment guarantees are required;

- Economic contract between the project investor and the winning contractor (including accompanying documents of the economic contract: forecast version of the tender document approved; forecast pricing of the bid attached with detailed price list of the contractor and conditions for price changes (if any), general and specific conditions of the contract). Specifically, imported equipment must have a contract approval document from the competent authority in accordance with current regulations.

In cases where the project is implemented under the self-execution model, the supporting documents include the FSR or IR and investment decision of the competent authority; DTD and decision approving the DTD; decision of the competent authority allowing self-execution of the project in the investment decision; the executing unit organizes the signing of contracts to closely monitor investment and construction activities, and bears legal responsibility for the quality and cost of products and construction works.

5. For projects funded by public expenditure:

5.1- Projects with a capital amount of 1 billion dong or more, the supporting documents are similar to those for projects funded by development investment capital.

5.2- Projects with a capital amount below 1 billion dong, the supporting documents include: Budget estimate and decision approving design - budget estimate; additionally:

For non-tendered works:

+ Tender designation decision (for tenders valued at 100 million dong or more);

+ Economic contract between the project investor and the contractor.

For tendered works:

+ Decision approving the tender results;

+ Economic contract between the project investor and the winning contractor (including accompanying documents of the economic contract: forecast version of the tender document approved; forecast pricing of the bid attached with detailed price list of the contractor and conditions for price changes (if any), general and specific conditions of the contract).

In cases where the project is implemented under the self-execution model, the supporting documents include the budget estimate and decision approving design - budget estimate; decision of the competent authority allowing self-execution of the project; the executing unit organizes the signing of contracts to closely monitor investment and construction activities, and bears legal responsibility for the quality and cost of products and construction works.

III. ADVANCE PAYMENTS AND RECOVERY OF ADVANCE PAYMENTS:

1. Recipients of advance payments and the level of advance payments:

1.1- Projects or packages executed on a turnkey basis through EPC contracts (referred to as projects or packages executed under EPC contracts):

- Advance payment for equipment procurement based on payment progress (as specified for equipment advance payments).

- The remaining portion is 15% of the contract value, but not exceeding the annual plan allocated for these works.

1.2- Construction projects or packages tendered under lump-sum contracts or adjustable-price contracts:

- Package value under 100 billion dong, the advance payment is 20% of the contract value but not exceeding the annual plan allocated for the package.

- Package value from 100 billion dong to less than 500 billion dong, the advance payment is 15% of the contract value but not exceeding the annual plan allocated for the package.

- Package value 500 billion dong or more, the advance payment is 10% of the contract value but not exceeding the annual plan allocated for the package.

In cases where the annual plan allocation is lower than the advance payment level specified above (the contract has not been paid the full advance payment according to the prescribed ratio), the State Treasury will continue to make advance payments within the next year's plan until the advance payment ratio reaches the prescribed level.

1.3- Procurement package for equipment purchase (including imported equipment and domestic equipment):

The provisional advance amount is the sum of money that the project owner must pay according to the contract but shall not exceed the annual budget allocated for the procurement package.

The provisional advance is paid according to the payment schedule stipulated in the economic contract between the project owner and the supplier or manufacturer of the equipment, up until the equipment is stored in the project owner's warehouse (for unassembled equipment) or installed and accepted (for assembled equipment).

1.4- For consulting contracts:

The minimum provisional advance amount is 25% of the contract value, but shall not exceed the annual budget allocated for hiring consultants.

1.5- For land compensation and clearance works and other project costs eligible for provisional advances, the provisional advance amount is based on the necessary requirements but shall not exceed the annual budget allocated for these works. To be eligible for provisional advances, the project owner must submit relevant documents to the State Treasury where the account is opened for each type of work: land compensation and clearance works require a compensation plan and approved budget estimate; land use fees, land transfer taxes, etc., require a notice from the competent authority requiring the project owner to pay; management project operation costs require an approved budget estimate.

1.6- For urgent projects such as dike construction and repair, flood control structures, seedling projects, and disaster relief projects, the provisional advance amount is 50% of the annual budget allocated.

1.7- For investment projects funded by public funds with a value under 1 billion VND, the provisional advance amount is 30% of the annual budget allocated.

2. Recovery of provisional advances:

2.1- Projects or procurement packages implemented under the turnkey delivery method through EPC contracts (referred to as projects or procurement packages implemented under EPC contracts):

- Provisional advances for equipment procurement are recovered in installments upon completion and acceptance of equipment quantities (as specified below for equipment).

- Provisional advances for the remaining part of the project or procurement package are recovered as specified below for construction quantities.

2.2- Construction projects or procurement packages tendered under lump-sum contracts or price-adjustment contracts, provisional advances are gradually recovered when paying for completed quantities as follows:

- Start of recovery:

+ Procurement packages valued under 10 billion VND: when payments reach 30% of the contract value.

+ Procurement packages valued from 10 billion VND to under 50 billion VND: when payments reach 25% of the contract value.

+ Procurement packages valued at 50 billion VND or more: when payments reach 20% of the contract value.

- Provisional advances are fully recovered when the payment for completed quantities reaches 80% of the contract value.

- In cases where provisional advances have not been fully recovered due to the procurement package not reaching the specified percentage but the project has not continued its plan or been suspended, the project owner must explain to the State Treasury about the use of unrecovered provisional advances and report to the competent authority for handling.

- In cases where provisional advances have been paid but the procurement package has not commenced construction within the time frame stipulated in the contract, the project owner must explain to the State Treasury and is responsible for refunding the provisional advances.

2.3- Procurement packages for equipment purchase:

Provisional advances for equipment procurement are recovered in installments upon completion and acceptance of equipment quantities.

For unassembled equipment, once the equipment is accepted and stored in the project owner's warehouse, the project owner is responsible for immediately submitting documentation to the State Treasury to process payment for completed equipment quantities and recover all provisional advances.

For assembled equipment, once the equipment arrives at the project owner's warehouse, the project owner informs the State Treasury for monitoring; once the equipment is installed and accepted, the project owner immediately submits documentation to the State Treasury to process payment for completed equipment quantities and recover all provisional advances.

In cases where provisional advances have been paid but the equipment has not been received within the time frame stipulated in the contract, the project owner must explain to the State Treasury and is responsible for refunding the provisional advances.

2.4- For consulting contracts:

Provisional advances are recovered in installments upon completion and acceptance of consulting work quantities according to the principle:

- Recovery starts when payments for completed quantities are made.

- The amount recovered equals the payment amount multiplied by (x) the provisional advance ratio.

2.5- For land compensation and clearance works and other project costs eligible for provisional advances, provisional advances are recovered during the payment period for completed quantities of this work.

2.6- For urgent projects such as dike construction and repair, flood control structures, drainage structures, and disaster relief projects, provisional advances are recovered when payments reach 30% of the annual budget and are fully recovered when payments reach 80% of the annual budget.

2.7- For investment projects funded by public funds with a value under 1 billion VND, provisional advances are gradually recovered in installments upon completion and acceptance of quantities and are fully recovered within the annual plan. The amount recovered in each installment equals the payment amount multiplied by (x) the provisional advance ratio.

2.8- The recovery rate of provisional advances for various types of contracts may be higher than the above provisions if agreed upon by the project owner and contractor.

2.9- In cases where provisional advances for certain works (such as land compensation and clearance) cannot be disbursed to beneficiaries due to force majeure, the project owner must deposit the funds at the State Treasury or financial institutions, and if interest accrues, it must be fully remitted to the State Budget.

2.10- For procurement packages and project works temporarily advanced according to contract value, if the provisional advances have not been fully recovered by the end of the budget year due to the procurement package not reaching the specified percentage, recovery will continue in the following year's budget without being deducted from the next year's investment payment plan.

3. Payment of provisional advances:

In addition to the basic dossier as prescribed in Section II above, the project investor (Project Management Board) shall submit to the State Treasury a request for advance investment capital and withdrawal vouchers for investment capital.

The State Treasury shall control and provide capital to the project investor, while simultaneously making direct payments on behalf of the investor to the contractor or other beneficiaries.

4. For certain large-value components, semi-finished products in construction that must be produced in advance to ensure the progress of investment and some special types of materials that need to be stored seasonally, as well as other incidental works arising during the implementation of the project, if it is necessary to apply for more advance capital than the amount stipulated above, the project investor shall work with the State Treasury to consider such requests.

This advance capital will be recovered when payment is made for completed construction works that include the materials mentioned above.

5. For projects with foreign capital or international tender packages where the Credit Agreement signed between the Government of Vietnam and the financier specifies different provisions regarding advance capital (eligible recipients, conditions, and amounts of advance capital, recovery of advance capital) from those stated above, such provisions shall be implemented according to the financier's regulations.

IV- PAYMENT FOR COMPLETED WORK VOLUMES.

1. Payment for completed construction installation volumes:

1.1- Completed construction installation volumes under direct award or self-execution forms shall be paid based on the value of the volume accepted at each stage or monthly acceptance according to the signed contract and meeting the following conditions:

- The accepted volume must comply with the approved construction drawings (or construction technical drawings) and be included in the assigned annual investment plan;

- There must be a detailed budget estimate approved in accordance with current national unit price norms.

1.2- Completed construction installation volumes under tendering or EPC contracts shall be paid based on the volume accepted according to the contract schedule as follows:

- For lump sum contracts and EPC contracts without additional payment conditions specified in the contract, the accepted volume according to the schedule is the volume included in the signed contract (as regulated for tender organization at Point 4, Section II, Clause B, Part II of this Circular), calculated based on the bid price, and included in the assigned annual investment plan.

- For price-adjustment contracts and EPC contracts with specific conditions, limits, and scope of adjustable works and adjustment formulas specified in the contract, the accepted volume for payment is the volume and value accepted in the signed contract (as regulated for tender organization at Point 4, Section II, Clause B, Part II of this Circular), included in the assigned annual investment plan.

If the volume increases or decreases compared to the contract volume, the accepted volume for payment must comply with the specific conditions stipulated in the contract, calculated based on the bid price and not exceeding the contract value, and included in the assigned annual investment plan.

Based on the accepted volume, the project investor and the contractor shall determine the contract performance progress to request payment.

1.3- When there is a completed volume accepted, the project investor shall prepare a payment request dossier to submit to the State Treasury, including:

- A completion acceptance record for the construction installation volume accompanied by a calculation of the accepted volume value;

- A payment invoice;

- A request for advance investment capital payment (if applicable);

- Withdrawal vouchers for investment capital.

For completed construction installation volumes under tendering, the State Treasury shall base its payment on the performance progress determined by the project investor and the contractor based on the contract and the accepted volume. The project investor and the contractor shall bear legal responsibility for quality and progress of execution.

1.4- Any excess or out-of-contract volumes must have a written approval (if the excess volume is tendered) or an approved supplementary budget estimate (if the excess volume is directly awarded) from the competent authority.

2. Payment for completed equipment volumes:

2.1- Completed equipment volumes eligible for payment must meet the following conditions:

- The equipment list must be consistent with the investment decision and included in the assigned investment plan;

- Included in the economic contract between the project investor and the contractor;

- Already warehoused by the project investor (for non-installation equipment) or fully installed and accepted (for installation equipment).

2.2- When there is a completed volume accepted, the project investor shall prepare a payment request dossier to submit to the State Treasury, including:

- An invoice and warehouse release form (for domestically purchased equipment);

- Import documentation set (for imported equipment);

- A comprehensive trial operation acceptance record for installation equipment; Warehouse receipt (if a business entity) or acceptance record (if an administrative service unit) for non-installation equipment;

- Transportation, insurance, tax, and storage fee documents (if not included in the equipment price);

- A payment statement or payment invoice;

- A request for advance investment capital payment (if applicable).

- Withdrawal vouchers for investment capital.

Payment for completed consultancy work volumes:

3.1- Completed consultancy work volumes eligible for payment are those performed and accepted within the economic contract and the assigned annual investment plan.

3.2- When there is a completed volume accepted, the project investor shall prepare a payment request dossier to submit to the State Treasury, including:

- A completion acceptance record for consultancy work volume;

- A payment invoice or payment statement;

- A request for advance investment capital payment (if applicable);

- Withdrawal vouchers for investment capital.

Payment for other completed volumes:

Apart from consultancy services, other types of work shall be paid when sufficient evidence proves that the work has been carried out as follows:

- For land construction fees and land transfer taxes, valid invoices and receipts from the revenue collection agency are required.

- For compensation costs and land clearance, a confirmation of the completed compensation volume; an economic contract and a handover record (in case of purchasing houses for relocation due to land clearance).

For land acquisition and clearance work, construction projects (including relocation housing for land clearance) shall be temporarily advanced and settled as with other projects or construction contracts.

- For demolition costs and site clearance expenses, there must be approved estimates, contracts, and acceptance certificates.

- For project management staff costs, there must be cash plans, detailed expense lists, and related documents.

- For start-up, acceptance, trial operation, and completion ceremony expenses, there must be approved estimates and detailed expense lists.

- For expert fees, technical worker training, and production management staff costs, there must be economic contracts and approved cost estimates.

- For construction insurance costs, there must be insurance contracts.

- For planning, investment preparation, and project implementation preparation costs, there must be approved estimates, economic contracts, quantity acceptance certificates, or reports on completed work results. Specifically, for planning tasks, the approved planning project mission must be provided.

Settlement of public works projects with investment nature:

- For projects with capital exceeding one billion dong, the settlement of completed quantities shall be carried out according to the investment capital settlement system.

- For projects with capital under one billion dong, when the completed quantities have been accepted, the investor shall prepare a payment request form to send to the State Treasury, including:

+ Acceptance certificate of completed quantities;

+ Detailed value calculation table;

+ Payment voucher or expense list;

+ Capital withdrawal document.

6. Payment methods:

Based on the payment request forms submitted by the investor (as stipulated in points 1, 2, 3, 4, and 5 above), within seven working days from the date of receipt of complete and valid documents, the State Treasury will control, allocate funds to the investor, and simultaneously make direct payments to contractors on behalf of the investor, recovering advance payments according to regulations.

7. In cases where projects have completed investment procedures, are included in the annual plan but the investor has not received the plan and has not been notified of the investment capital settlement plan, if there is an urgent need for funds for payment, the following measures shall be taken:

- For centrally managed projects: based on the proposal of relevant Ministries, the Ministry of Finance will consider and resolve to advance the annual plan for the project. The advanced capital will be recovered upon notification of the project's investment capital settlement plan.

- For locally managed projects: based on the proposal of relevant Departments, the Department of Finance and Price Control (or County Finance Office), they will consider and resolve to advance the annual plan for the project. The advanced capital will be recovered upon notification of the project's investment capital settlement plan.

8. Projects with foreign capital or international tender packages, if the credit agreement signed between the Government of Vietnam and the financier specifies different payment provisions from those stated above, such provisions shall be implemented according to the financier's regulations.

9. Investors must allocate sufficient funds annually to purchase construction project insurance. The State will not reimburse investors for losses and risks covered by insurance if the investor does not purchase construction project insurance as prescribed.

10. Annually, the State Treasury will transfer 5% of the planned investment capital settlement amount of the project (excluding ODA projects) into a temporary holding account pending final settlement. The withholding ratio for each specific work item is determined by the investor; however, for certain special work items (such as compensation and land clearance), once all settlement documents are complete as required, the investor may request full payment up to 100% of the annual plan for that work item.

This temporarily withheld capital will be released after the competent authority approves the final settlement report and it will be paid after the final settlement of the project, sub-project, component project, or project section has been approved according to regulations. The release of the 5% temporarily withheld capital will follow these principles:

- If the approved final settlement amount exceeds the amount already paid to the project (excluding the 5% temporarily withheld capital), then the full amount will be paid according to the approved final settlement within the 5% temporarily withheld capital limit.

- If the approved final settlement amount is less than the amount already paid to the project (excluding the 5% temporarily withheld capital), then the investor is responsible for recovering the excess payment from the contractor and returning it to the State, while the State Treasury will remit the 5% temporarily withheld capital of the project to the State Budget.

- If the approved final settlement amount equals the amount already paid to the project (excluding the 5% temporarily withheld capital), then the State Treasury will remit the 5% temporarily withheld capital of the project to the State Budget.

11. The payment amount for each work item or project section cannot exceed the estimate or bid price; the total payment amount for the project cannot exceed the total estimate and approved investment ceiling.

This Circular takes effect fifteen days after its publication in the Official Gazette./.

12. For some particularly important projects requiring different advance payment and settlement mechanisms from those specified above, after obtaining the opinion of the competent authority, the Ministry of Finance will issue separate guidance.

C. REPORTING, SETTLEMENT, AND INSPECTION REGULATIONS

I. REPORTS:

1. For project sponsors:

- Quarterly, on the fifth day of the first month, the investor is responsible for reporting the implementation of investment and capital settlement of the project to the investment decision-making body, the State Treasury, and the same-level finance agency (for projects under local management). Specifically, for group A projects, the investor sends the report on the twentieth day of each month to the Ministry or Provincial People's Committee, the Ministry of Planning and Investment, and the Ministry of Finance for consolidation and reporting to the Prime Minister. (Model form according to Appendix No. 02).

- At the end of the annual plan, the investor shall prepare a report on the implementation of investment capital for the year to be sent to the investment decision-making body, the State Treasury, and the same-level finance agency (for projects under local management) by January 10th of the following year. (Model form according to Appendix No. 03).

The annual investment capital implementation report must analyze and evaluate the implementation of the plan, investment results for the year, existing issues, and propose solutions.

- At the end of the plan year, the project investor shall prepare a reconciliation table of investment capital disbursement figures for each project regarding the amount disbursed during the year and the cumulative amount disbursed from the start of construction to the end of the fiscal year, and send it to the State Treasury for confirmation (in accordance with Form 06 attached).

2. For Ministries and Provincial People's Committees:

- On the 15th day of the first month of each quarter, the Ministries and Provincial People's Committees shall be responsible for compiling the implementation status of the investment plan and the capital disbursement situation of projects under their management and sending them to the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Construction, and the General Statistics Office as prescribed (in accordance with Form 04 attached).

- At the end of the plan year, the Ministries and Provincial People's Committees shall compile and submit a report on the implementation of investment capital for the year to the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Construction, and the General Statistics Office by January 20 of the following year (in accordance with Form 05 attached).

The report on the implementation of investment capital for the year must analyze and evaluate the implementation status of the plan, the results of investment for the year (physical indicators), existing issues, and propose measures to resolve them.

3. For the State Treasury:

- Implement the information reporting system as stipulated separately by the Ministry of Finance.

- At the end of the plan year, the State Treasury shall settle accounts for the use of investment capital with the corresponding financial authority according to the regulations on finalizing the state budget.

- At the end of the plan year, the State Treasury shall confirm the amount disbursed during the year and the cumulative amount disbursed from the start of construction to the end of the fiscal year for each project prepared by the project investor.

II. FINALIZATION OF INVESTMENT CAPITAL:

1. Annual Finalization of Investment Capital:

At the end of the plan year, the project investor shall prepare an annual finalization report on investment capital according to the prescribed accounting form issued by the Ministry of Finance applicable to the project investor unit.

2. Finalization of Completed Investment Capital:

When a project component, sub-project, or completed investment project is finished, the project investor shall be responsible for preparing a finalization report on investment capital; the authorized person shall organize a review and approve the finalization according to the regulations on finalizing investment capital.

In cases where the approved finalization amount is lower than the amount already disbursed to the project, the project investor shall be responsible for recovering the excess amount paid from the contractor to return to the State.

III. INSPECTION:

Ministries, provincial people's committees, and financial authorities shall periodically or unexpectedly inspect project investors and contractors participating in projects regarding the use of advance payment capital, completion volume payment capital, and compliance with State financial policies and systems for development investment.

Financial authorities at all levels shall periodically or unexpectedly inspect the State Treasury regarding the implementation of the system for disbursing investment capital.

D. RESPONSIBILITIES AND LIMITATIONS OF RELATED AUTHORITIES

I. FOR PROJECT INVESTORS:

- Fulfill the functions and tasks assigned according to the Investment Management Regulation and Construction. Receive and use capital for the intended purpose, for the correct target, economically, and effectively. Adhere strictly to the legal provisions on the financial management system for development investment.

- Be responsible for the correctness and legality of the project volume or progress when making payments (the volume must be according to the construction design drawings or construction technical design, quality meeting the design requirements); ensure the accuracy, legality, and validity of the data and documents provided to the State Treasury and relevant State agencies.

- Upon having sufficient construction volume according to the contract conditions, promptly conduct acceptance, complete settlement documentation, and request payment from the contractor within ten working days from the date the contractor submits complete payment procedures.

- Timely and fully report to the investment decision-making agency and related State agencies as prescribed; provide sufficient documentation, information, and status as required to the State Treasury and financial authority to serve management and capital disbursement; accept inspection by the financial authority and the investment decision-making agency regarding the use of investment capital and compliance with State financial policies and systems for development investment.

- Implement the accounting system for the project investor unit; finalize investment capital according to current regulations.

- Have the right to request payment of capital when having sufficient conditions and request the State Treasury to respond and explain any unsatisfactory points in the capital disbursement process.

II- FOR MINISTRIES AND PROVINCIAL PEOPLE'S COMMITTEES:

- Guide, inspect, and urge project investors under their management to implement the investment plan, receive and use investment capital for the intended purpose and according to State regulations.

- Report the implementation status of the investment plan as prescribed.

- Within the scope of their authority, bear responsibility before the Government and national laws for their decisions.

III- FOR THE STATE TREASURY:

- The Central State Treasury shall establish a uniform procedure for disbursing investment capital nationwide.

- Guide project investors to open accounts for advance payments and capital disbursements.

- Control and disburse capital promptly and fully for projects when having sufficient conditions and within the prescribed time frame.

- Provide clear written opinions to project investors regarding reductions or refusals in disbursements, and respond to project investors' queries about capital disbursements.

- If discovering that decisions made by authorized bodies violate current regulations, they must issue a written request for reconsideration and clearly state their recommendations. If not responded to within the prescribed timeframe, they have the right to proceed based on their recommendation; if the response is deemed unsatisfactory, they still follow the opinion of the authorized body while simultaneously reporting to a higher authority and the financial authority for consideration and handling.

- Implement the information reporting system and finalization of the use of investment capital and operational funds with investment characteristics from state budget sources according to the State Budget Law and the guidance of the Ministry of Finance.

- Have the right to request project investors to provide documents, information, and data according to the prescribed system to serve the control and disbursement of capital.

- Have the authority to temporarily suspend capital disbursements or recover capital misused by project investors for incorrect purposes, incorrect targets, or contrary to State financial management regulations, and simultaneously report to the Ministry of Finance for handling.

- Not to participate in the completion acceptance boards for construction works.

- To organize the work of capital control and payment according to unified business procedures, simplifying administrative formalities but ensuring strict capital management, timely, full, and convenient payments for the project sponsors.

- At the end of the plan year, confirm the amount paid within the year, accumulate the amount paid from the start of construction to the end of the specified fiscal year for each project, comment on compliance with construction procedures, cost norms, and financial policies as prescribed.

- To be responsible before the Minister of Finance and national laws regarding the receipt, use of state budget funds, and payments in construction investment.

IV- FOR THE FINANCIAL AUTHORITIES AT ALL LEVELS:

- To ensure sufficient sources of funds for the State Treasury in accordance with the regulations of the Ministry of Finance so that the State Treasury can make payments for projects.

- To implement final settlement of investment capital in accordance with the State Budget Law.

- To coordinate with relevant agencies to guide and inspect project sponsors, the State Treasury, and contractors related to compliance with financial investment development systems and policies, the situation of capital management and use, and the situation of investment capital payments to develop solutions to handle violations and issue decisions to recover amounts and contents of expenditures that violate state regulations.

- To have the right to request the State Treasury and project sponsors to provide necessary documents and information to serve state management of financial investment development, including documents for project investment assessment and annual investment capital planning, reports on implementation status and investment capital use as required by reporting regulations, and documents for final settlement capital audit as prescribed.

Part 3:

IMPLEMENTING PROVISIONS

1. This Circular shall take effect fifteen days from the date of publication in the Official Gazette and shall replace Circular No. 96/2000/TT-BTC dated September 28, 2000, issued by the Ministry of Finance guiding the management and payment of investment capital and operating capital with investment characteristics from state budget funds.

2. For other development investment expenditures from the state budget (national reserve expenditures, working capital support for enterprises, joint stock contribution expenditures, expenditures for foreign loans and foreign aid, expenditures for development support funds), they shall be implemented in accordance with separate guidance documents for each type of expenditure.

3. For investment projects from other state sources, the principles of payment as stipulated in this Circular shall also be applied./.