Circular No. 46/TC-TCT guiding the financial management regime for the State Investment Development General Department

CIRCULAR

Regarding the financial management regime for the General Department of Investment Development

Pursuant to Decree No. 187/CP dated December 10, 1994 of the Government on the tasks, powers, and organizational structure of the General Department of Investment Development under the Ministry of Finance; Circular No. 6776-KTTH dated December 31, 1996 of the Government on the regulation of service fees for lending state credit funds, the Ministry of Finance guides the financial management regime for the General Department of Investment Development (IDG) as follows:

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1. The General Department of Investment Development is an organization directly under the Ministry of Finance, implementing the state financial management functions for investment development as stipulated in Decree No. 187/CP dated December 10, 1994 of the Government. The activities of the IDG system have the nature of administrative and public service units, while also disbursing investment development capital and issuing and recovering state credit funds. The operating expenses of the IDG are funded from the state budget and are consolidated in the Ministry of Finance's expenditure budget.

2. The IDG is a second-level budget unit directly under the Ministry of Finance. The Provincial/City Investment Development Bureau is a third-level budget unit directly under the IDG. The Investment Development Office is a subordinate unit of the Provincial/City Investment Development Bureau.

3. The IDG may use the income from service fees for lending state credit funds and other revenues generated during the course of its business transactions (after deducting costs and paying taxes to the state budget) to cover operational expenses, support infrastructure construction, train staff, and reward units and individuals who have made contributions in fulfilling assigned tasks.

4. The IDG and its subordinate units must comply with current financial management regulations, the Accounting and Statistics Ordinance, the accounting regime for administrative and public service units, and the provisions of this Circular.

II. SPECIFIC PROVISIONS

1. Sources of operating funds for the IDG.

1.1. State budget funds allocated:

- Regular funding provided according to the standard financial expenditure regime for administrative and public service units and ensuring certain special-purpose expenditures of the IDG as specified by the Ministry of Finance.

- Funding for investment development to meet requirements for equipping and purchasing fixed assets to serve professional tasks.

1.2. Supplementary revenue from service fees for lending state credit funds and other significant revenue surpluses arising from business transaction activities.

1.3. Other revenue (if any).

2. Principles for managing sources of funds.

All sources of funds ensuring the above activities of the IDG must be uniformly managed and tracked in detail according to their respective sources, usage must be purposeful, and expenditures must be economical and effective.

2.1. State budget funds allocated:

a. Contents of regular expenditure funding include:

- Payment to individuals: Salary, wages, allowances, social insurance contributions, health insurance, trade union fees... collective welfare expenses (if applicable).

- Expenses for goods and services, including payments for public services; office supplies, information, publicity, communication, travel expenses, conference fees, rental expenses, entry and exit fees, regular maintenance and repair, major repairs of fixed assets serving professional tasks...

- Professional activity expenses, including expenses for capital disbursement, issuance and recovery of state credit funds; review of total budgets, budgets, price certificates, final accounts; printing and distribution of payment vouchers; technical materials, information processing, training for staff within the IDG system and related units...

- Other expenses;

b. Contents of investment development expenditure funding include: Purchase of fixed assets, equipment, working tools, implementation of information technology; basic construction investment.

2.2. Service fees for lending state credit funds and other significant revenue surpluses arising from business transaction activities.

2.2.1. Service fees for lending state credit funds:

a. Revenue contents:

According to Point 1 of Circular No. 6776/KTTH dated December 31, 1996 of the Government, the service fee rate is 0.2% per month on the average loan balance for loans in Vietnamese dong and 0.5% per year on the average loan balance for loans in foreign currency, calculated as follows:

+ Quarterly, the IDG temporarily retains 75% of the service fee earned based on the average quarterly loan balance. In the following quarter, the IDG recalculates the service fee earned based on the actual average loan balance of the previous quarter to adjust promptly. If the temporary retention exceeds the earned amount, the excess must be deducted from the next quarter's temporary retention.

+ At year-end, based on the annual service fee earned according to the approved final account of the Ministry of Finance, the IDG adjusts the temporarily retained service fees throughout the year. If the retained amount is insufficient, it will be supplemented. If the retained amount exceeds the approved amount, the unused portion must be used to offset the excess or deducted from the next year's allocation.

b. Expenditure contents:

For activities related to lending and recovering state credit funds, such as reviewing loan applications; issuing and monitoring the use of loan funds; managing and collecting debts, interest; remuneration for consultants on investment management; overtime pay; other related activities.

2.2.2. Other revenue surpluses exceeding expenses arising from business transaction activities after deducting 10% for the state budget:

Other revenues generated during the operation of the IDG, such as storage and preservation fees for collateral documents, revenue differences from selling vouchers...

2.2.3. Distribution and utilization:

Any excess revenues over expenditures arising from transaction and settlement activities, after remitting 10% to the State budget and deducting the remaining service fees for lending state credit funds (after subtracting the expenses under Point b, Section 2.2.1) shall be distributed and utilized as follows:

- 45% for supporting the construction of physical infrastructure, developing business techniques, including: constructing, renovating, expanding office premises, rental costs for office premises; modernizing information technology systems and communication equipment; equipping work tools and transportation means; clothing and labor protection expenses; other expenses for developing business techniques.

Investment expenses, procurement of fixed assets, construction, renovation, and repair of office premises must comply with the national standards, norms, financial management regulations, and basic construction investment management systems of the Ministry of Finance.

- 55% for supporting scientific research, training of business staff; allowances for civil servants and employees; regular and extraordinary rewards for collectives and individuals who contribute to the completion of tasks assigned to the General Department of Investment Promotion system; expenses for disaster relief and compensation for losses due to objective causes; propaganda expenses for business activities of the General Department of Investment Promotion system and other expenses.

3. Budget Preparation, Execution, Inspection, and Settlement.

The preparation, execution, inspection, and settlement of the State budget at the General Department of Investment Promotion system must be carried out in accordance with current national regulations (State Budget Law and related guiding documents).

3.1. Budget Preparation:

- The General Department of Investment Promotion is responsible for guiding subordinate units in preparing annual and quarterly budgets according to each expenditure item; consolidating and reporting to the Ministry of Finance (Financial Management Department) before July 25th of the previous year regarding the next year's budget of the entire system.

- The Ministry of Finance (Financial Management Department) is responsible for notifying the next year's budget estimate to the General Department of Investment Promotion no later than July 5th of the previous year; organizing discussions on the State budget with the General Department of Investment Promotion, compiling and submitting the State budget of the entire General Department of Investment Promotion system to relevant state management agencies within the total budget estimate of the Ministry of Finance before August 15th of the previous year.

- The preparation of the budget is based on the following contents:

+ The approved staffing standards, norms, and quotas of the General Department of Investment Promotion system and the annual government and Ministry of Finance guidelines for budget revenue and expenditure estimates.

+ Specialized tasks and specific activities of the General Department of Investment Promotion system.

+ Forecasting the situation of non-budgetary revenue sources.

+ The implementation status of the previous years' budget estimates.

+ The budget estimate notification issued by the Ministry of Finance.

- The Minister of Finance decides to adjust the budget estimate of the General Department of Investment Promotion system in the following cases:

+ The Government adjusts the budget estimate of the Ministry of Finance, which includes the General Department of Investment Promotion system.

+ Due to adjustments in the tasks of the General Department of Investment Promotion system.

- After being allocated the State budget, the General Department of Investment Promotion must organize the allocation of budget revenue and expenditure estimates to each subordinate unit before December 31st of the previous year, ensuring that the total amount and detailed items match the allocated budget schedule, while simultaneously consolidating and reporting the detailed allocation results to the Ministry of Finance before January 5th of the following year.

3.2. Budget Execution:

- Based on the allocated annual budget and anticipated expenditures for the quarter of the entire system, the General Department of Investment Promotion is responsible for preparing the quarterly budget estimate of the entire system and sending it to the Ministry of Finance before the 10th day of the last month of the quarter.

- According to the allocated annual budget expenditure estimate and the approved quarterly budget estimate, the finance department and the State Treasury will issue funds to third-level budget units (or record accounts) directly to the beneficiaries (or service providers). In the short term, fund issuance and payment will be conducted through quota-based funding and other methods.

- The management, distribution, and utilization of funds provided by the State budget must ensure strict control, proper purpose, economy, efficiency, and compliance with current regulations.

3.3. Accounting and Budget Settlement.

- The General Department of Investment Promotion and its direct subordinate budget units are responsible for organizing and implementing accounting work in accordance with current national regulations and this Circular. Quarterly and annual reports must be prepared and submitted in accordance with the accounting system issued by the Ministry of Finance. The report data must be complete, accurate, and truthful. The content of the settlement report must correspond to the approved budget estimate and the State budget schedule.

- The General Department of Investment Promotion is responsible for inspecting, approving, and consolidating the settlement of the entire system to submit to the Ministry of Finance for approval and to send the quarterly consolidated settlement report to the Ministry of Finance no later than 45 days after the end of the quarter, and the annual consolidated settlement report no later than 60 days after the end of the year. The General Department of Investment Promotion's quarterly and annual settlement reports are made in three copies, one copy sent to the Ministry of Finance (Financial Management Department) and two copies retained by the unit.

The Ministry of Finance is responsible for inspecting and approving the settlement of the General Department of Investment Promotion.

III. IMPLEMENTATION

- This Circular takes effect from January 1, 1997, and replaces Circular No. 112 TC/HCSN dated December 10, 1994, of the Ministry of Finance concerning the financial management system for the General Department of Investment Promotion.

- For service fees and debt recovery from state credit funds arising before January 1, 1997, the General Department of Investment Promotion is responsible for reporting specifically to the Ministry of Finance for review and handling in accordance with the provisions of this Circular.

- The Director of the General Department of Investment Promotion is responsible for guiding subordinate units in implementing the provisions of this Circular.