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

CIRCULAR

OF THE MINISTRY OF FINANCE NO. 46 TC/TVQT ON JULY 18, 1997
GUIDING THE MANAGEMENT REGIME FOR FINANCIAL RESOURCES OF
INVESTMENT DEVELOPMENT GENERAL DEPARTMENT

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

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. The State Investment Development General Department is an organization under the Ministry of Finance, implementing the state management function over investment finance development as prescribed in Decree No. 187/CP dated December 10, 1994 of the Government. The operation of the IDGD system has the nature of an administrative and public service unit, while also disbursing investment development capital and issuing and recovering state credit funds. The operating expenses of the IDGD are funded from the state budget and are consolidated in the Ministry of Finance's expenditure budget.

2. The IDGD is a second-level budget entity under the Ministry of Finance. The Provincial Investment Development Bureau under centrally-administered cities and provinces is a third-level budget entity under the IDGD. The Investment Development Sub-bureau is a subordinate unit of the Provincial Investment Development Bureau under centrally-administered cities and provinces.

3. The IDGD may use the income from service fees for lending state credit funds and other revenues generated during the process of performing business transaction activities (after deducting costs and paying 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 of the IDGD.

4. The IDGD 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 IDGD.

1.1. State budget funds:

- Regular funding allocated according to the standard financial expenditure regime for administrative and public service units and ensuring certain special expense items of the IDGD 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 revenues exceeding expenses arising from business transaction activities of the IDGD.

1.3. Other revenues (if any).

2. Principles for managing sources of funds.

All sources of funds ensuring the above activities of the IDGD must be uniformly managed and tracked in detail according to their respective sources, usage must be in accordance with intended purposes, ensuring frugal and effective spending.

2.1. State budget funds:

a. Contents of regular expenditure include:

- Payment to individuals: salaries, 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, propaganda, communication, travel expenses, conference expenses, rental expenses, entry and exit expenses, regular maintenance and repair, major repairs of fixed assets serving professional work...

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

- Other expenses;

b. Contents of investment development expenditure 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 revenues exceeding expenses 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 outstanding loan balance for loans in Vietnamese dong and 0.5% per year on the outstanding loan balance for loans in foreign currency, calculated as follows:

+ Quarterly, the IDGD temporarily retains 75% of the service fee earned based on the average quarterly loan balance plan. In the following quarter, the IDGD recalculates the service fee earned in the previous quarter 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 planned temporary retention of the next quarter.

+ At year-end, based on the annual service fee earned from lending state credit funds according to the approved settlement figures by the Ministry of Finance, the IDGD calculates and adjusts the temporary retained service fees throughout the year. If insufficient, additional retention will be allowed to make up the difference. If excessive, the unused retained fees must be used to refund the excess or deducted from the next year's allowable retention.

b. Expenditure contents:

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

2.2.2. Revenues exceeding expenses arising from business transaction activities after deducting 10% to the state budget:

Other revenues generated during the operation of the IDGD 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 and the development of technical operations, including: Construction, renovation, expansion of office premises, rental costs for office premises; modernization of information technology systems and communication equipment; provision of work tools and transportation means; expenditure on uniforms and labor protection; other expenditures for the development of technical operations.

Expenditures on investment, procurement of fixed assets, construction, renovation, and repair of office premises must comply with the established standards, norms, financial management regulations, and basic construction investment management systems of the State and the Ministry of Finance.

- 55% for supporting scientific research and training of operational 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 and Planning system; expenditures for disaster relief and compensation for losses due to objective causes; propaganda expenses for operational activities of the General Department of Investment and Planning system and other expenditures.

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

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

3.1. Budget Preparation:

- The General Department of Investment and Planning 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 for the entire system.

- The Ministry of Finance (Financial Management Department) is responsible for notifying the General Department of Investment and Planning about the next year's budget estimate no later than July 5th of the previous year; organizing discussions on the State budget with the General Department of Investment and Planning, compiling and submitting the State budget estimate of the entire General Department of Investment and Planning 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 and Planning system and the annual government and Ministry of Finance guidelines for budget revenue and expenditure preparation.

+ Specialized tasks and unique activities of the General Department of Investment and Planning system.

+ Forecasting the situation of non-State budget revenue items.

+ 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 and Planning system in the following cases:

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

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

- After being allocated the State budget by the Ministry of Finance, the General Department of Investment and Planning must organize the allocation of budget revenue and expenditure to each subordinate unit before December 31st of the previous year, ensuring that it matches the total amount and details of each item according to the allocated budget schedule, while simultaneously compiling 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 and Planning 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 financial 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 and Planning and its subordinate budget units are responsible for organizing and implementing accounting work in accordance with current State regulations and this Circular. Quarterly and annually, they must prepare and submit settlement reports in accordance with the accounting system regulations issued by the Ministry of Finance. The report data must be complete, accurate, and truthful. The content of the settlement report must match the approved budget estimate and the State budget schedule.

- The General Department of Investment and Planning is responsible for inspecting, reviewing, and consolidating the settlement of the entire General Department of Investment and Planning 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 and Planning's quarterly and annual settlement reports are prepared 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 and Planning.

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 and Planning.

- For service fees and debt recovery from state credit funds arising before January 1, 1997, the General Department of Investment and Planning 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 and Planning is responsible for guiding subordinate units in implementing the provisions of this Circular.