Circular No. 47/1999/TT-BTC guides the management and allocation of investment capital for infrastructure projects in particularly difficult communes in mountainous areas, remote regions.

 CIRCULAR

Guidelines for managing and allocating investment capital for infrastructure projects in particularly difficult mountainous communes, remote and far-flung areas

the particularly disadvantaged communes in mountainous areas, remote regions, and far-flung areas

(Pursuant to Decision No. 135/1998/QĐ-TTg dated July 31, 1998) of the Prime Minister)

Pursuant to Decision No. 135/1998/QĐ-TTg dated July 31, 1998 of the Prime Minister approving the Program on Socio-Economic Development of Particularly Difficult Communes in Mountainous Areas, Remote and Far-Flung Regions and Circular Joint No. 416/1999/TTLT-BKH-UBDTMN-TCKT-XD dated April 29, 1999 of the Ministry of Planning and Investment, the National Ethnic Minorities Commission, the Ministry of Finance, and the Ministry of Construction guiding management of investment and construction of infrastructure projects in particularly difficult communes;

Pursuant to Circular No. 234/CP-NN dated March 9, 1999 of the Government regarding the issuance of guidelines for the management mechanism of investment and construction under Program 135;

The Ministry of Finance guides the management mechanism for allocating state budget capital for infrastructure construction projects in particularly difficult communes as follows:

Part I
GENERAL PROVISIONS

1. The subjects applicable to this Circular are infrastructure construction projects in 1,000 particularly difficult communes according to Decision No. 135/1998/QĐ-TTg dated July 31, 1998 of the Prime Minister (referred to as Program 135 projects).

2. The sources of capital for Program 135 projects mainly rely on contributions from the people's labor and funds, supplemented by annual state budget support.

Provincial People's Committees have the responsibility to allocate capital levels for each project within the scope of the national plan assigned, and to guide and direct the implementation.

4. Based on the national plan allocated for infrastructure construction projects under Program 135, the Ministry of Finance manages and allocates investment capital through the State Treasury system. The State Treasury at the district level is responsible for organizing the management, inspection, supervision, and timely allocation of capital to the project sponsors approved by the competent authority.

Project sponsors are required to open accounts at the State Treasury where they directly manage the project to receive allocated capital, make payments, and are responsible for managing and using the capital in accordance with the intended recipients and purposes, effectively. State Treasuries at all levels shall open accounts to monitor the amount of capital allocated to project sponsors transferred by the financial authorities at the same level or by higher-level State Treasuries.

Part II
SPECIFIC PROVISIONS

I. SOURCES OF CAPITAL: THE SOURCES OF CAPITAL FOR IMPLEMENTING ECONOMIC AND SOCIAL DEVELOPMENT IN COMMUNES UNDER PROGRAM 135 INCLUDE

- Contributions from organizations and individuals (including both domestic and foreign entities) in terms of money, materials, and labor.

- Annual support from the state budget at central and local (province, district, commune) levels.

II. REGARDING THE PREPARATION OF ESTIMATES FOR BASIC CONSTRUCTION INVESTMENT PROJECTS FOR INFRASTRUCTURE UNDER PROGRAM 135

1. Annually, based on the socio-economic development plan and the state budget estimate, and on the basis of investment projects already approved by the competent authority, the People's Committee of the commune proposes investment projects for the year's plan to be sent to the People's Committee of the district. The People's Committee of the district reviews and consolidates the investment expenditure estimates for projects in its jurisdiction and sends them to the People's Committee of the province. The Department of Finance and Price Control collaborates with the Department of Planning and Investment to assist the People's Committee of the province in reviewing and consolidating these estimates to be submitted to the National Ethnic Minorities Commission (the permanent body of the Central Steering Committee for Program 135) for consolidation and submission to the Government.

2. Based on the plan assigned by the Government, the People's Committee of the province decides on the investment capital allocation for each project by district and informs the People's Committee of the district. The People's Committee of the district informs each commune's People's Committee, specifying the level of central government and provincial government budget support, and district budget support if applicable. The commune's People's Committee informs each project of the portion of materials, capital, and labor contributions from the people and the commune budget if applicable. These decisions and notifications must be sent to the State Treasury of the province or centrally-administered city for implementation.

3. After receiving specific allocation plans for each project from the province, the State Treasury of the province immediately informs the State Treasury responsible for managing the project of the allocation level for each project as a basis for management and disbursement.

III. ALLOCATION AND PAYMENT

Based on the allocation plan for annual state budget capital for infrastructure construction under Program 135, financial agencies at all levels transfer capital to the State Treasury at the same level for allocation to projects.

1. Allocation of investment capital for projects.

1.1. Conditions for allocation: To be eligible for capital allocation, project sponsors must submit the following documents to the State Treasury where they have their account opened:

- Decision appointing the project sponsor.

- The project and the Decision approving the project by the competent authority.

- Design and estimate of the works approved by the competent authority, clearly distinguishing the sources of capital for the project.

- Economic contracts between the project sponsor and the contractor in accordance with regulations.

- Payment vouchers accompanied by payment orders.

- Completion acceptance records.

- Other relevant documents.

The basis for payment is the price set by the People's Committee of the province for each area.

1.2. Allocation of capital for investment projects.

- For projects with a state budget capital scale exceeding 500 million dong, management and allocation follow the current regime for managing basic construction capital.

- For projects with a state budget capital scale of 500 million dong or less, management and allocation follow the provisions below:

+ For projects implemented by the commune itself, based on the annual plan, approved estimate, design, and signed construction contract between the project sponsor and the construction unit, the State Treasury at the district level temporarily allocates 50% of the annual estimate of the project to the project sponsor for implementation. When there is a completion of basic construction work, the project sponsor must settle the temporarily allocated amount with the State Treasury. Subsequent capital allocations will be made according to the progress of completed basic construction work. The State Treasury will check the project files and make payments.

+ For projects constructed by construction enterprises, allocation and payment follow the current mechanism.

The total amount of capital allocated and paid out may not exceed the approved estimate of the project or the capital index announced for the year.

For the year 1999, due to slow implementation, there may not be any planning projects, but there are approved designs and project estimates. These projects, if not completed according to the plan for that year, are permitted to continue construction until the end of the first quarter of 2000 and must be fully disbursed and settled by April 2000.

2. Disbursement of program management funds.

The operating costs of the Provincial Steering Committee for Program 135 and the Project Management Board are funded from the local budget, so their management and disbursement are decided by the province.

IV. ACCOUNTING RECORDS, INSPECTION, REPORTING AND SETTLEMENT

1. Accounting records.

- Investors and agencies, units using investment capital under Program 135 must organize accounting and statistical work in accordance with current state regulations to ensure clear management of project funds used and in accordance with the state budget schedule.

- State Treasury implements accounting records according to the detailed system prescribed by the Central State Treasury regarding sources of funds, amounts temporarily advanced, and amounts already settled for each project.

2. Reporting.

- Quarterly, no later than the 10th day of the first month of the next quarter, project investors are responsible for reporting on the implementation volume and fund usage of the previous quarter to the project's supervising investor and the State Treasury where the funds were sourced.

- County-level State Treasury units are responsible for summarizing the situation of funds, amounts temporarily advanced, and amounts settled for each project, reporting to the Provincial State Treasury and sending to the County Finance Department no later than the 15th day of the first month of the next quarter. The Provincial State Treasury summarizes and reports to the Central State Treasury, the Provincial Steering Committee for Program 135, and the Provincial Department of Finance and Prices.

- Based on the reports from the Provincial State Treasury no later than the 25th day of the first month of the next quarter, the Provincial Steering Committee for Program 135 summarizes and reports to the Provincial People's Committee and reports to the Central Steering Committee for Program 135. The Central State Treasury summarizes and reports to the Ministry of Finance.

3. Annual settlement and settlement upon completion of investment projects.

3.1. Investment capital for construction works under Program 135 is disbursed annually for the quantity completed up to December 31 of the planning year (based on the completion quantity acceptance report); the State Treasury receives settlement documents until January 15 of the following year and concludes capital disbursement for projects on January 31 of the following year.

- Project investors are responsible for preparing annual settlement reports on the use of disbursed capital to send to the Steering Committee for the Program, the State Treasury where transactions occurred, and the financial agency where capital was transferred. Advance payments must be processed to convert to disbursement and settlement before the final disbursement date of the State Treasury (January 31 of the following year). In special cases where payment cannot be made due to objective reasons, the project investor must report to the project supervising agency for consideration and resolution. The deadline for submitting the annual settlement report by the project investor is no later than February 28 of the following year.

- The State Treasury directly managing the project is responsible for preparing reports on the sources of disbursed capital used for investment projects under Program 135 to the higher-level State Treasury, the financial agency where capital was transferred no later than March 15 of the following year. The Provincial State Treasury, city State Treasury compiles and reports to the Provincial Department of Finance for review and approval by the Provincial People's Committee, then sends to the Central State Treasury no later than March 31 of the following year.

- The Central State Treasury is responsible for compiling the sources of investment capital disbursed for Program 135 and reporting to the Ministry of Finance no later than April 30 of the following year.

- Local government budget support funds that have expired the payment period and have not been fully disbursed will be transferred back to the Central State Treasury (for central government budget portion) and to the Provincial Department of Finance and Prices (for local government budget support portion) by the Provincial State Treasury.

3.2. Settlement of completed works and settlement upon completion of projects.

Upon completion of the works, investors prepare settlement reports (with confirmation from the State Treasury where the funds were sourced) and submit to the Provincial Steering Committee for Program 135; the Provincial Steering Committee for Program 135 leads and coordinates with relevant specialized agencies such as the Provincial Department of Finance and Prices, the Provincial State Treasury to audit, examine, and compile reports to the Provincial People's Committee and report to the Central Steering Committee for Program 135. The Central Steering Committee for Program 135 compiles and reports to the Government, concurrently sent to the Ministry of Finance and the Ministry of Planning and Investment.

After completing the works, the investor is responsible for transferring the entire project to the People's Committee of the commune for management, with supervision by the Construction Supervision Board. The total cost of the project is settled into the commune budget. Parts of the support from upper-level budgets through the State Treasury during the adjustment period are adjusted to targeted subsidies for the local budget.

3.3. According to the established regulations, local authorities at provincial, county, and commune levels are responsible for publicly announcing annual settlements and project settlements upon completion for the people to know.

4. Inspection.

The Steering Committees for Program 135 at all levels and related comprehensive agencies are responsible for guiding and inspecting the implementation of projects and the financial management systems of project investors.

Funds disbursed to project investors, if found to be misused or improperly managed through inspection and audit, shall be recovered and deposited into the central government budget. If corruption is discovered, it will be handled according to the law.

5. Responsibilities of related agencies in managing and disbursing funds for implementing Program 135.

- Project investors are responsible for:

+ Implementing projects in accordance with assigned tasks, ensuring progress and quality as stipulated.

+ Providing complete and valid documents as required by the State Treasury as the basis for capital disbursement; being responsible for the accuracy and honesty of the provided materials.

+ Receiving and using funds for the intended purpose, for the designated beneficiaries, economically and effectively.

+ Fully complying with reporting and settlement regulations for capital.

- The supervising agency of the project is responsible for:

+ Being fully accountable for the results of projects within its management scope; guiding, inspecting, and urging project investors to implement assigned plans, receiving and using funds for the intended purpose and in accordance with prescribed regulations.

+ Allocate the capital plan for each project according to the plan assigned by the State.

+ Approve the annual budget estimates, final accounts reports, and final settlement of the program for projects.

- The State Treasury shall be responsible for:

+ Based on the allocated funds and prescribed regulations, carry out inspections and controls over the payment documentation for completed work volumes; timely disburse funds to project sponsors.

+ Have the right to refuse disbursement to project sponsors who do not meet the prescribed disbursement conditions; recover funds misused by project sponsors. At the same time, bear responsibility for refusing disbursement and cases of non-compliant disbursement and payment as prescribed.

+ Implement reporting and final settlement of funds in accordance with prescribed regulations.

Part III
IMPLEMENTING PROVISIONS

This Circular takes effect from the date of issuance.

Ministries, agencies at the ministerial level, People's Committees of provinces having Program 135, the State Treasury, and project sponsors shall be responsible for implementing this Circular. During the implementation process, any issues encountered should be promptly reported to the Ministry of Finance for appropriate resolution measures.