Joint Circular No. 54 TT/LB guiding the closure of budget revenue and expenditure accounts at year-end and the settlement of the State budget for 1988

JOINT CIRCULAR

Guidelines for Closing the Annual Revenue and Expenditure Accounts and Settling the State Budget for 1988

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||| The work of closing the annual revenue and expenditure accounts and settling the state budget annually has been regulated in Circular No. 33/TT-LB dated February 1, 1982, issued jointly by the Ministry of Finance and the State Bank of Vietnam, and subsequent supplementary guidance documents from the Ministry of Finance.

||| In 1988, due to significant changes in financial management and state budget operations such as the implementation of a new state budget structure; starting July 1, 1988, the banking sector began operating under commercial accounting principles pursuant to Decree No. 53/HĐBT dated March 26, 1988, issued by the Council of Ministers on the organizational structure of the State Bank of Vietnam; implementing the system of state budget fund accounting according to Decision No. 56/NH-QĐ dated July 1, 1988, issued by the General Director of the State Bank of Vietnam, and Circular No. 32/TT-LB dated June 30, 1980, issued jointly by the Ministry of Finance and the State Bank of Vietnam guiding the execution of the state budget in terms of funds and the implementation of the state budget structure... To facilitate the implementation of the annual revenue and expenditure account closure and the preparation of the state budget settlement for 1988 by ministries, sectors, localities, and budgetary units, the Ministry of Finance and the State Bank of Vietnam hereby reiterate certain provisions in Circular No. 33/TT-LB and provide additional guidance on the following issues:

A. CLOSING THE ANNUAL ACCOUNTS:

1/ Deadline for transferring funds

The final deadline for approving budget limits, distributing budget limit notifications, and transferring funds at each level is determined based on the time it takes for documents to travel from the approval site to the receiving site to ensure that the budget limits or funds reach the recipient in a timely manner. For 1988, the Ministry of Finance and the State Bank of Vietnam have specified as follows:

a) For the Central Budget:

The Ministry of Finance and the Central State Bank will coordinate to set the final deadline for approving budget limits, issuing notifications and distribution notices for budget units at the central level, and transferring subsidies and authorized funds from the central budget to provincial budgets as follows:

- Before the end of working hours on December 18: for budget units at the central level located in provinces such as Ha Tuyen, Cao Bang, Lang Son, Lai Chau, Son La, Bac Thai, Hoang Lien Son, Quang Ninh, Nghe Tinh (Northern part), and southern provinces from Binh Tri Thien southward.

- Before the end of working hours on December 20: for budget units located in other provinces (excluding Hanoi City).

- Before the end of working hours on December 23: for budget units located in Hanoi City.

Level I central budget units shall base their distribution plans for budget limits to subordinate units on the deadlines specified above and the actual situation of their respective sectors.

b) For Local Budgets:

Provincial Departments of Finance together with the State Bank of Vietnam at the provincial level, District and County Financial Departments together with specialized commercial banks shall coordinate to determine the final deadline for approving, distributing budget limits, and transferring funds from their respective budgets to subordinate budget units, in accordance with the specific conditions of each locality.

2/ Issuing budget limits or transferring budget limits into deposit accounts:

a) For defense and security units: follow the regulations stipulated in Joint Circular No. 25/CT-LB dated December 28, 1961, issued by the Ministry of Finance and the State Bank of Vietnam.

b) For budget units that absolutely cannot withdraw funds from the budget limit account transferred into the deposit account. It is not allowed to use budget limits from one category, item, or sub-item to cover expenses in another.

c) Any remaining budget limits of central and local budget units as of December 31 will be canceled and cannot be carried over to the next year for spending (including defense and security).

d) Financial authorities and the State Bank at all levels must strengthen inspection and supervision to prevent and promptly address cases of unauthorized year-end expenditures under the guise of advance payments for materials, goods, etc., outside planned budgets or without economic contracts.

3/ Issuing checks

Financial authorities and banks at all levels are not responsible for resolving cases where checks have been issued beyond the deadline or where transfer orders exceed the available balance in the budget limit account and the deposit account balance. To ensure that issued checks have sufficient time to return to the bank holding the budget limit account before December 31, all budget units at all levels must organize reconciliation of books and documents to accurately grasp the remaining budget balance at the bank and proactively plan expenditures, ceasing issuance of current fiscal year checks no later than December 25.

I. Reconciliation, review, deduction, and reporting of balances in deposit accounts of budget units.

1/ All budget units at all levels must strictly adhere to the daily reconciliation of their deposit account balances with the bank, completing the process of remitting excess capital and surplus budget funds, and unpaid budget revenues (operational income, miscellaneous income, temporary deposits, fines, etc.) to the budget by December 31. If the remaining balance in the deposit account is to be carried forward to the next year for use (prepaid funds for the next year, non-budgetary sources...), the unit must submit a detailed statement attached to a letter, clearly indicating the source of each amount included in the balance, confirmed by the bank where the account is held, and directly proceed to the finance authority to complete the carry-forward procedure between December 26 and the end of working hours on December 31.

2/ The rules for carrying forward balances in deposit accounts of budget units are as follows:

- The Ministry of Finance (Budget Department) approves for budget units at the central level located in Hanoi.

- Provincial Departments of Finance approve for budget units under provincial budgets and are authorized by the Ministry of Finance to approve for central budget units located in their jurisdictions (excluding Hanoi City).

- District and County Financial Departments approve for budget units under their district, county, or city management.

Military units and police forces wishing to transfer funds not from state budget sources for continued expenditure in the following year shall submit a request in writing to the daily transaction banking institution.

3/ By the end of the business hours on December 31, banks where units have accounts will only allow transfers to the following year for amounts that have been reviewed by financial authorities. The remaining balance in the deposit account will be remitted to the respective levels of budget (budget allocated according to the projected estimate). For amounts not declared or reconciled, the bank will also process the remittance to the respective levels of budget.

4/ The basic bank (where the unit's budget transactions take place) shall prepare detailed lists of the amounts remitted to the budget by each budgetary unit at each level of budget to send to the Provincial State Bank (or the Provincial Specialized Bank where there is no State Bank) and the District Financial Office as follows:

+ Send to the District Financial Office, the list detailing the balances of budget deposits already remitted to the district, county, or city budget.

+ Send to the Provincial State Bank, city (or the Provincial Specialized Bank where there is no State Bank), the list detailing the balances of budget deposits already remitted to the provincial, city, and central government budgets.

- The Provincial State Bank, city (or the Provincial Specialized Bank) shall compile the detailed lists from the basic banks and send them before January 20 of the following year to:

+ Department of Finance: the amount of deposits of budgetary units that have been remitted to the provincial, city budget.

+ Central State Bank (Department of State Budget Fund) the balances of deposits of budgetary units and military and police units that have been remitted to the central government budget (two copies) for the Central State Bank to retain one copy and send one copy to the Ministry of Finance.

II. Handling items related to the previous year's and the current year's budget:

1/ Preparing funds for expenditures at the beginning of the next year: from the beginning of December of the previous year, relevant ministries, sectors, and departments responsible for managing the main units must prepare plans for revenue and expenditure in the first quarter of the next year and work with financial authorities and the same-level State Bank to promptly notify, allocate limits, or transfer funds via payment orders to subordinate units that need funds from the start of the next year.

2/ Agricultural tax for winter crops collected in advance for the next year: for the year 1988, financial authorities and the State Bank at all levels recorded this as extra-budgetary revenue. As of January 1, 1989, it was transferred into the budget revenue of the 1989 fiscal year and distributed among the various levels of budget (central, provincial, county, commune) according to Decision No. 141/HĐBT dated September 6, 1988, of the Council of Ministers and the spirit of Circular No. 46 TC/NSNN dated October 28, 1988, of the Ministry of Finance. From 1989 onwards, agricultural tax revenues collected in any given year will be recorded in the budget revenue of that fiscal year. This revenue will be part of the year-end budget surplus available for immediate expenditures at the start of the next year; therefore, localities should plan their expenditures accordingly.

3/ Concentrated construction investment capital for 1987 (outside the plan) transferred by the central government budget to the authorized expenditure account in 1988, localities shall settle revenues and expenditures within the 1988 fiscal year; however, they must note separately the total amount outside the plan and provide a full analysis according to the chapters, types, items, and sub-items of the current State Budget Manual. (This note accompanies the settlement report of the national budget revenue on the entire provincial territory).

4/ Construction investment capital borrowed by localities from the State Bank can only be settled for expenditure within the 1988 fiscal year if the locality has settled the capital with the State Bank during 1988.

5/ Revenue from spring and summer agricultural taxes collected in 1988 but not yet settled with the budget by the grain sector shall not be recorded as revenue for the 1988 fiscal year; in 1989, when the grain sector settles with the budget, the locality shall record it as revenue for the 1989 fiscal year.

6/ Authorized expenditure items belonging to the 1988 fiscal year such as concentrated construction investment capital, hardship allowances, price subsidies for six controlled goods, debt repayment to the people, repair of historical sites... If the central government transfers these funds to localities too late (from December 15 to December 31, 1988), they may be carried over to the next year for continued expenditure on the above purposes.

III. Closing date, telegrams:

1/ The closing of the annual national budget revenue and expenditure records at banking institutions shall be uniformly conducted at the end of December 31 each year.

2/ Sending telegrams reporting the results of revenue, expenditure, and fund balances at all levels of budget up to the end of December 31 shall be carried out as follows:

- Specialized banks at the district, county, and city level shall send telegrams to the State Bank or specialized bank at the provincial or city level on January 2 of the following year.

- Provincial State Banks and specialized banks shall send telegrams to the Central State Bank (Department of State Budget Fund) on January 5 of the following year.

After sending telegrams to higher-level banks, lower-level banks must send copies of these telegrams to the same-level financial authorities (note: accurately calculate the fund balance of the budget level under their management).

3/ Content of telegrams:

- County budget revenue, county budget expenditure, county budget fund balance.

- Provincial budget revenue, provincial budget expenditure.

- Central government budget revenue, central government budget expenditure.

Additionally, provincial State Banks shall send information on provincial budget fund balances, and the Central State Bank shall supplement information on the central government budget fund balance.

B - SETTLEMENT OF BUDGET REVENUE AND EXPENDITURE:

I. Time for adjusting the settlement: is specified for each level of budget as follows:

- End of January of the following year for county budgets.

- End of February of the following year for provincial budgets.

- End of March of the following year for the central government budget.

During the adjustment period for the settlement, each level of budget needs to:

1/ Continue to adjust budget revenue and expenditure according to the prescribed sharing ratio between levels of budget and record according to the chapters, types, items, and sub-items of the current State Budget Manual.

From July 1, 1988, localities must implement the spirit of Circular No. 46 TC/NSNN dated October 28, 1988, of the Ministry of Finance guiding the implementation of Decision No. 141 - HĐBT dated September 6, 1988, of the Council of Ministers regarding the adjustment of sharing ratios for certain tax revenues to local budgets.

Provinces and cities that borrow from the central budget, if their reserve funds are insufficient to repay the central budget, must work specifically with the Ministry of Finance to resolve the issue.

2/ Urging the full submission of excess funds into the budget, ensuring that the allocated funds are the actual expenditures and will be consolidated into the annual settlement. If these excess funds are in cash and still held in the unit's fund, they should be fully submitted to the budget. If they are in inventory, either the next year's allocation can offset the previous year's excess and reduce the previous year's allocation, or it can be deducted from the next year's allocation.

3/ Settling all advances, loans, and borrowed amounts owed by units and various levels of budgets.

II. Reconciliation of figures:  To ensure the accuracy of the settlement figures, the Joint Ministries have stipulated the reconciliation process as follows:

- Within each agency (Finance, State Bank, budgetary units), reconcile detailed accounting with consolidated accounting, and verify figures between the accounting department and related departments' records.

- Budgetary units reconcile actual receipts, payments, allocations, excess funds submitted and not yet submitted, advances, loans, borrowed amounts, allocations, and reduced allocations with the finance agency and State Bank where transactions occur, and must obtain confirmation from the State Bank before closing the books for the annual settlement.

- The finance agency reconciles with the Investment and Construction Bank regarding the amount of budget capital allocated and advanced, the amount of capital the Investment and Construction Bank has allocated and settled, and resolving over-allocations or under-allocations of budget capital.

- The finance agency reconciles with the State Bank on:

+ Budget revenues and expenditures (transferred from the previous year, within the year, prepayments for the following year).

+ Adjusted revenues and expenditures between upper and lower-level budgets (subsidies or contributions to the upper-level budget).

+ In-budget and out-of-budget revenues.

+ Borrowed amounts paid back, loans and advances recovered, allocations made and reduced allocations.

+ Entrusted funds: received, allocated, remaining.

+ Budget reserves, surplus or deficit, analysis of surplus and local financial reserve funds.

- Between the Department of Finance and the Ministry of Finance; the State Bank at provincial and city level and the Central State Bank reconcile on:

+ Adjusted revenues and expenditures between different levels of budgets (Chapter 99, Type 14, Clause 01, Category 2, Sections 48, 49).

+ Out-of-budget revenues and expenditures: borrowing, lending, advances, and settlements between different levels of budgets.

+ Last year's surplus recorded as revenue this year (Chapter 99, Type 14, Clause 01, Category 3, Section 47) and this year's surplus.

+ Financial reserve funds established.

III. Settlement figures for revenues and expenditures:

- Budgetary units: The settlement statement must be complete according to the chapters, types, clauses, categories, and sections of the current state budget manual.

- Various levels of the State Bank: Revenue settlement statements according to chapters and all generated sections, expenditure settlement statements according to chapters and groups of sections.

- Accompanying these settlement statements are comprehensive annual statistical reports according to types, clauses, categories of the state budget manual. Specifically, the Investment and Construction Bank must settle according to chapters, types, clauses, categories, and sections of the state budget manual.

- Various levels of the Finance Agency: Settle according to chapters, types, clauses, categories, and sections; divided into two different systems: by national economic sectors (types, clauses, categories, sections) and by main management sectors (chapters, sections); additionally, there must be a balance sheet of accounts after the settlement adjustment period, and a detailed explanation of the settlement must be provided, clearly explaining the settlement figures compared to the plan, reasons for achieving or failing to achieve the plan, and the impact of influencing factors on budget revenue and expenditure activities...

- All annual reports from finance agencies and banks sent to higher levels must be confirmed by two departments to ensure accurate figures; if discrepancies exist, they must be fully explained.

IV. Deadline for submitting the final settlement:

- Level I budgetary units under district and county budgets submit their settlements to the District or County Finance Departments before January 31 of the following year.

- Units under provincial and city budgets (district and county budgets, Level I budgetary units under provincial and city budgets) submit their settlements to the Provincial Finance Department before February 28 of the following year.

- Units under the central budget (including Level I budgetary units of the central budget and provincial and city budgets) submit their settlements to the Ministry of Finance before March 31 of the following year.

4. Liquid bull semen IMPLEMENTATION:

Finance agencies, State Banks at various levels, budgetary units, and Investment and Construction Banks at various levels need to prepare thoroughly and provide training to ensure that the closure of accounts and the final settlement of budget revenues and expenditures at the end of the year are quick, accurate, and efficient.

During implementation, if any difficulties arise, please report them for the Joint Ministries to discuss and resolve./.