Circular No. 55/2008/TT-BTC guiding the pilot construction of medium-term financial plans and medium-term expenditure plans for the period 2009-2011.

CIRCULAR

Guidelines for piloting the development of medium-term financial plans

 and medium-term expenditure plans for the period 2009-2011

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Pursuant to Resolution No. 15/2008/QH12 dated May 29, 2008 of the National Assembly on adjusting administrative boundaries of Hanoi City and some related provinces;

Implementing Decision No. 432/QĐ-TTg dated April 21, 2003 of the Prime Minister approving the Feasibility Report of the Project "Reform of Public Financial Management";

Implementing Directive No. 723/CT-TTg dated June 6, 2008 of the Prime Minister on developing socio-economic development plans and state budget estimates for 2009;

The Ministry of Finance guides the work of developing medium-term financial plans and medium-term expenditure plans for the period 2009-2011 in conjunction with the work of developing the state budget estimate for 2009 as follows:

A. GENERAL PROVISIONS:

1. Scope of application:

This Circular provides guidelines for developing medium-term financial plans and medium-term expenditure plans for the period 2009-2011 in conjunction with the work of developing the state budget estimate for 2009, applicable to six Ministries: Ministry of Finance, Ministry of Planning and Investment, Ministry of Education and Training, Ministry of Health, Ministry of Agriculture and Rural Development, and Ministry of Transport, and three localities: Hanoi, Binh Duong, and Vinh Long.

2. Some concepts and terms:

- Medium-term financial plan (MTFP) is a national or local budget plan for a medium-term period (from 3 to 5 years) starting from the next budget year, prepared annually on a rolling basis. It includes forecasts of macroeconomic indicators, the ability to balance revenue and expenditure; principles of balancing to ensure the sustainability of the budget in the medium term based on development goals and macroeconomic forecasts, current and expected government fiscal and budget policies during the medium term. Additionally, the MTFP reflects the priority order of allocating budget resources in the medium term for each sector and area across the country or within each locality. It also presents key measures to balance demand for spending and available public financial resources, and issues warnings about potential debt.

- Medium-term expenditure plan (MTEP) is a budget spending plan for each sector and agency for a medium-term period (from 3 to 5 years) starting from the next budget year, prepared annually on a rolling basis. It includes objectives, tasks, activities, basic and main systems and policies that each sector and agency will implement in the medium term and forecasts of financial resources, including specific forecasts of public financial resources to be utilized. Additionally, the MTEP reflects the method of determining and prioritizing the implementation of tasks, activities, systems, and policies, and specifies the estimated funding within the total ceiling of expenditures determined in advance. It also presents key measures to balance demand for spending and available public financial resources, and issues warnings about potential debt.

- Base expenditure: Represents expenditures to implement existing tasks, activities, systems, and policies currently being funded by the state budget and committed financially, which must continue to be implemented in the medium term; established based on the ceiling announced by the Ministry of Planning and Investment and the Ministry of Finance.

- New initiative expenditure: Represents expenditures to implement new tasks, activities, systems, and policies, or to expand previously implemented tasks, activities, systems, and policies, or those not yet committed financially or delayed due to lack of resources but need to be continued or completed in the medium term; established based on the ceiling announced by the Ministry of Planning and Investment and the Ministry of Finance.

3. Objectives of developing medium-term financial plans and medium-term expenditure plans for the period 2009-2011:

- Linked to the five-year socio-economic development plan 2006-2010, while focusing on controlling inflation, ensuring macroeconomic stability, social welfare, and sustainable growth.

- To forecast public financial resources; propose the priority order of allocating resources to each sector and each task, activity, system, and policy within each sector; analyze and propose solutions to ensure the achievement of socio-economic development goals set for the period 2006-2010; and contribute to improving the planning and policy-making process in the medium term, for the period 2011-2015 and annually in the future.

- Linked to the work of developing the state budget estimate for 2009 at participating ministries and localities for the purpose of continuing to evaluate, analyze, and improve existing issues in defining objectives, tasks, activities, systems, and policies; planning and policy-making linked to the ability to balance the budget for 2009 and the period 2009-2011 to enhance the efficiency of allocating and utilizing state budget resources for national socio-economic development goals.

- The results of piloting medium-term financial plans and medium-term expenditure plans for the period 2009-2011, together with the results of previous pilot programs according to Decision No. 432/QĐ-TTg dated April 21, 2003 of the Prime Minister at ministries and localities, serve as a basis for disseminating knowledge to replicate the pilot model, laying the groundwork for further refining this model in conjunction with annual state budget planning, and serving as a foundation for proposing amendments and improvements to relevant legal documents on public finance and state budget management in the near future.

4. Legal validity of medium-term financial plans and medium-term expenditure plans for the period 2009-2011:

- The medium-term financial plan at the national level and the medium-term sectoral plan at the national level for the period 2009-2011 is one of the bases for the Government to consider building the state budget estimate and the allocation plan for central government expenditures in 2009 before submitting it to the National Assembly.

- The medium-term financial plan at the local level and the medium-term sectoral plan at the local level for the period 2009-2011 is one of the bases for the People's Committee of the province to build the local budget estimate and the allocation plan for provincial government expenditures in 2009 to be submitted to the Provincial People's Council for approval.

B. SPECIFIC PROVISIONS:

I. Contents of the Medium-Term Financial Plan and the Medium-Term Sectoral Plan for the Period 2009-2011

1. Contents of the Medium-Term Financial Plan for the Period 2009-2011:

1.1. The medium-term financial plan at the national level for the period 2009-2011 includes the following main contents:

- Forecasting trends and prospects for macroeconomic and financial conditions during the medium term from 2009 to 2011; forecasting important macroeconomic indicators for the period 2009-2011 such as GDP growth rate, consumer price index, exchange rate, investment ratio and structure in society, export and import growth rates, etc., presenting assumptions and potential risks.

- Anticipating changes in the State's revenue policies and reforms in public finance management during the medium term from 2009 to 2011, forecasting State budget revenue targets by sector and tax type for the period 2009-2011 based on tax, fee, and surcharge laws.

- Anticipating the level of budget deficit reflecting practicality and sustainability, and plans to mobilize resources to offset the deficit. Anticipating the level of government debt and national debt, analyzing and forecasting impacts on macroeconomic indicators.

- Forecasting the overall fiscal framework, the balance between revenue and expenditure in the State budget for the period 2009-2011, including changes in the budget revenue and expenditure structure, the sustainability and proactivity of the budget, difficulties and risks faced by the budget.

- Forecasting total budget expenditure resources for the period 2009-2011:

+ Determining the main socio-economic goals of the Government for the period 2009-2011, such as growth targets, poverty reduction, job creation, reform of state-owned enterprises, etc.

+ Commitments and agreements made by the Government with countries, organizations, and international financial institutions.

+ Forecasting total budget expenditure resources according to the expenditure structure for the period 2009-2011, proposing principles for allocating State budget expenditures to each sector and field based on the Government's development priorities for socio-economic policy in the period 2009-2011, anticipating the budgetary resources that can be allocated to each sector and field during the medium term (expenditure ceiling).

- Forecasting risks associated with the medium-term financial plan, including risks related to forecasting macroeconomic indicators, risks due to changes in mechanisms and policies, risks arising from contingent liabilities, etc.

1.2. The medium-term financial plan at the local level (not detailed for each province, district, commune) for the period 2009-2011 includes the following main contents:

- Forecasting trends and prospects for economic and financial conditions at the local level during the medium term from 2009 to 2011; forecasting important macroeconomic indicators for the period 2009-2011 such as growth rate and structure of agriculture, forestry, fisheries, industry, construction, services, investment ratio and structure in society, etc.

- Main socio-economic goals of the locality for the period 2009-2011, such as growth targets, poverty reduction, job creation, reform of the state-owned enterprise sector, etc.

- Principles and priorities in building and allocating the local budget estimate according to the State Budget Law.

- Mechanisms, policies, and guidelines issued by the Central Government applied in the locality, with localities responsible for implementation.

- Specific commitments and agreements of the locality with central ministries, agencies, organizations, and international financial institutions.

- Forecasting the balance between revenue and expenditure in the local budget for the period 2009-2011, including changes in the budget revenue and expenditure structure, the sustainability and proactivity of the budget, difficulties and risks faced by the budget:

+ Detailed forecasting of State budget revenue on the local level by sector for the period 2009-2011 based on tax, fee, and surcharge laws; forecasting the prospects for local economic growth and anticipated changes in the State's revenue policies and the effectiveness of State budget revenue management on the local level, clearly defining and determining local budget revenue sources, including the share of provincial-level budget revenue under the decentralization system.

+ Proposing additional resource mobilization plans for development investment according to the State Budget Law, summarizing the level of debt and anticipating the allocation of repayment resources.

+ Forecasting total local budget expenditure resources according to the expenditure structure for the period 2009-2011, proposing principles for allocating local budget expenditures to each sector and field based on the locality's development priorities for socio-economic policy in the period 2009-2011, anticipating the budgetary resources that can be allocated to each sector and field during the medium term (expenditure ceiling).

- Forecasting risks associated with the medium-term financial plan, including risks related to forecasting major macroeconomic indicators at the local level, risks due to changes in mechanisms and policies, risks arising from contingent liabilities, etc.

2. Contents of the Medium-Term Sectoral Plan for the Period 2009-2011:

2.1. Medium-Term Sectoral Plan for the Period 2009-2011:

a) The medium-term sectoral plan at the national level for the period 2009-2011 includes the following main contents:

- Anticipating changes in State policies and systems during the period 2009-2011 that will affect the activities, tasks, and objectives of the sector.

- Objectives, tasks, activities, priority systems, and policies of the sector in the medium term linked to the five-year socio-economic development plans of the country and the sector's development plans.

- Anticipating specific revenue sources (fees, surcharges, etc.), and the amount allowed to be retained for specific tasks of the sector.

- Propose principles for allocating centralized funds prioritizing key tasks, activities, systems, and policies; propose specific allocations for each individual task, activity, system, and policy according to the nature of expenditure (development investment expenditure, recurrent expenditure); clearly define basic expenditure and new initiative expenditure based on the ceiling expenditure level announced by the Ministry of Planning and Investment and the Ministry of Finance. On this basis, propose expected outcomes.

- Determine any discrepancies (if any) between the announced budget ceiling and the actual expenditure needs (including basic expenditure, new initiative expenditure, price inflation, increased volume, budget adjustments, etc.) to ensure the implementation of tasks, activities, systems, and policies of the sector during the 2009-2011 period; identify outstanding debts after processing within the budget allocation (volume debt, loan debt, advance payment debt, financial obligations arising under regulations but without funding sources); recommend financial measures to address these issues (reduce funding for ongoing tasks, activities, systems, and policies that are less effective to adjust or replace with more effective ones; propose new mechanisms and policies to mobilize additional resources outside the budget, etc.); issue warnings about the feasibility of achieving the sector's set targets throughout the period.

- Propose potential risks of generating reserve accounts receivable.

b) Medium-term budget estimate for local government sectors (not detailed for each provincial, district, and commune level) for the 2009-2011 period, including the following main contents:

- Propose changes in central and local policies and systems during the 2009-2011 period affecting the tasks, activities, systems, and policies of the sector at the local level.

- Propose specific revenue sources (fees, charges, etc.), the amount allowed to be retained for specific tasks of the sector at the local level.

- Propose principles for allocating centralized funds prioritizing key tasks, activities, systems, and policies; propose specific allocations for each individual task, activity, system, and policy according to the nature of expenditure (development investment expenditure, recurrent expenditure), clearly distinguishing the source of expenditure implemented by the provincial budget; clearly define basic expenditure and new initiative expenditure based on the ceiling expenditure level announced by the Department of Planning and Investment and the Department of Finance. On this basis, propose expected outcomes.

- Determine any discrepancies (if any) between the announced budget ceiling and the actual expenditure needs (including basic expenditure, new initiative expenditure, price inflation, increased volume, budget adjustments, etc.) to ensure the implementation of tasks, activities, systems, and policies of the sector at the local level during the 2009-2011 period; identify outstanding debts after processing within the budget allocation (volume debt, loan debt, advance payment debt, financial obligations arising under regulations but without funding sources); recommend financial measures to address these issues (reduce funding for ongoing tasks, activities, systems, and policies that are less effective to adjust or replace with more effective ones; propose new mechanisms and policies to mobilize additional resources outside the budget, etc.); issue warnings about the feasibility of achieving the sector's set targets at the local level throughout the period.

- Propose potential risks of generating reserve accounts receivable,...

2.2. Medium-term budget estimate for agencies (ministries, departments) for the 2009-2011 period:

a) Medium-term budget estimate for ministries for the 2009-2011 period, including the following main contents:

- Propose general policies and systems of the State and the sector during the 2009-2011 period directly impacting the ministry's operations and tasks.

- Propose specific revenue sources (fees, charges, etc.), the amount allowed to be retained for specific tasks of the ministry.

- Propose principles for allocating centralized funds prioritizing key tasks, activities, systems, and policies; propose specific allocations for each individual task, activity, system, and policy according to the nature of expenditure (development investment expenditure, recurrent expenditure); clearly define basic expenditure and new initiative expenditure based on the ceiling expenditure level announced by the Ministry of Planning and Investment and the Ministry of Finance. On this basis, propose expected outcomes.

- Determine any discrepancies (if any) between the announced budget ceiling and the actual expenditure needs (including basic expenditure, new initiative expenditure, price inflation, increased volume, budget adjustments, etc.) to ensure the implementation of tasks, activities, systems, and policies of the ministry during the 2009-2011 period; identify outstanding debts after processing within the budget allocation (volume debt, loan debt, advance payment debt, financial obligations arising under regulations but without funding sources); recommend financial measures to address these issues (reduce funding for ongoing tasks, activities, systems, and policies that are less effective to adjust or replace with more effective ones; propose new mechanisms and policies to mobilize additional resources outside the budget, etc.); issue warnings about the feasibility of achieving the ministry's set targets throughout the period.

- Propose potential risks of generating reserve accounts receivable.

b) Medium-term budget estimate for departments for the 2009-2011 period, including the following main contents:

- Propose general policies and systems of the State and the sector during the 2009-2011 period directly impacting the department's operations and tasks in managing the sector at the local level.

- Propose specific revenue sources (fees, charges, etc.), the amount allowed to be retained for specific tasks of the department.

- Propose principles for allocating centralized funds prioritizing key tasks, activities, systems, and policies; propose specific allocations for each individual task, activity, system, and policy according to the nature of expenditure (development investment expenditure, recurrent expenditure); clearly define basic expenditure and new initiative expenditure based on the ceiling expenditure level announced by the Department of Planning and Investment and the Department of Finance. On this basis, propose expected outcomes.

- The discrepancy (if any) between the ceiling budget announced and the expenditure needs (including basic expenditures, new initiative expenditures, inflation adjustments, volume increases, budget revisions, etc.) to ensure the fulfillment of the department's tasks, activities, benefits, and policies during the period from 2009 to 2011; the amount of outstanding debts remaining after being processed within the budget expenditure limit (volume debts, loan debts, advance payment debts, financial obligations arising according to regulations but without funding sources); recommendations on financial measures to address these issues (cutting down expenses for ongoing tasks, activities, benefits, and policies that are less effective to adjust or replace with more effective new ones; proposing the issuance of new mechanisms and policies to mobilize additional resources outside the budget, etc.); issuing warnings about the feasibility of achieving the department's set targets throughout the period.

- Propose potential risks of generating reserve accounts receivable,...

2.3. Summary of the medium-term budget estimate for the period 2009 - 2011:

It is a summary of the medium-term budget estimate of the industry and the medium-term budget estimate of the agency for the period 2009 - 2011, established after completing the medium-term budget estimate of the industry and the medium-term budget estimate of the agency for the period 2009 - 2011 according to the proposal of the planning and investment agency and the finance agency.

II. Basis for establishing the medium-term budget estimate and medium-term financial plan for the period 2009 - 2011:

The basis for establishing the medium-term budget estimate and medium-term financial plan for the period 2009 - 2011 at the national, sectoral, and local levels includes strategies, plans, tasks, programs, and projects for the entire period up to 2010 and orientations up to 2015; the national, sectoral, and local socio-economic development tasks for the entire period up to 2010 and orientations up to 2015; the State Budget Law, tax laws, and related guiding documents; current mechanisms and policies that have been approved and expected changes in the medium term; while focusing on the goal of continuing to implement measures to control inflation, ensure macroeconomic stability, social security, and sustainable growth, maintaining national financial security; forecasts of economic and social development situations and other relevant factors. Below, the Ministry of Finance provides additional guidance on some points as follows:

1. Basis for establishing the medium-term budget estimate for the period 2009 - 2011

1.1. Basis for establishing the medium-term budget estimate at the national level for the period 2009 - 2011:

- National socio-economic development plans for the period up to 2010 and orientations up to 2015; Resolution No. 56/2006/QH11 of the National Assembly of the 11th term on the five-year socio-economic development plan from 2006 to 2010; Vietnam Financial Development Strategy until 2010, Tax System Reform Program until 2010, which have been approved by competent authorities and some major orientations until 2015 and 2020.

- Forecast of macroeconomic indicators for the whole country:

+ General assessment: Forecasting the situation in 2009 and the period 2010 - 2011, the macroeconomic situation will gradually stabilize, inflation trends will decrease compared to 2008, domestic economic growth will recover somewhat; the economic structure will continue to shift positively; total social investment remains high, foreign direct investment continues to increase significantly;

+ Forecast of economic growth rate in 2009 around 7-7.5%, average for the period 2010 - 2011 is 7.5-8% per year;

+ Consumer Price Index forecast for 2009 around 12-14%, average for the period 2010 - 2011 is 8-10% per year;

+ Economic structure will shift positively: Increase the share of the industry, construction, and service sectors; reduce the share of agriculture, forestry, and fisheries;

+ Export turnover is expected to increase by about 24-26% in 2009, and by about 22-24% in the period 2010 - 2011; import turnover is expected to increase by about 24-26% in 2009, and by about 20-22% per year in the period 2010 - 2011.

- Assumptions related to salary reform during the period 2009 - 2011:

+ Ceiling expenditure announced for each sector during the period 2009 - 2011 based on the minimum wage of 540,000 VND (excluding state budget support for implementing salary adjustment during the period 2009 - 2011 if applicable);

+ Continue to implement measures to create sources for salary reform according to current regulations: save 10% of regular expenses (excluding salaries and salary-like allowances) within the announced expenditure ceiling; use 35-40% of retained revenue according to regulations; use part of the central government's increased revenue and 50% of local government's increased revenue.

- Assumption that the mechanism for dividing revenue and expenditure responsibilities in 2011 remains stable as in the period 2007-2010.

1.2. Basis for establishing the medium-term budget estimate at the local level for the period 2009 - 2011:

- Central-level guidelines, mechanisms, and policies applied in the locality; local socio-economic development plans for the period up to 2010 and orientations up to 2015; resolutions of the local Party Congress and the People's Council Resolution of the provincial level on the five-year socio-economic development plan from 2006 to 2010 of the locality.

- Forecast of socio-economic development indicators of the locality.

- Assumptions related to salary reform during the period 2009 - 2011:

+ Ceiling expenditure announced for each sector in the locality during the period 2009 - 2011 based on the minimum wage of 540,000 VND (excluding state budget support for implementing salary reform during the period 2009 - 2011 if applicable);

+ Continue to implement measures to create sources for salary reform according to current regulations: save 10% of regular expenses (excluding salaries and salary-like allowances) within the announced expenditure ceiling; use 35-40% of retained revenue according to regulations; use 50% of local government's increased revenue.

- Assumption that the mechanism for dividing revenue and expenditure responsibilities between the central government budget and the local government budget as well as among local government levels in 2011 remains stable as in the period 2007-2010.

2. Basis for establishing the medium-term financial plan for the period 2009 - 2011:

2.1. Basis for establishing the medium-term financial plan at the national level for the sector for the period 2009 - 2011:

- Strategic development goals of the sector; action plans of the sector to implement the Resolution of the 10th National Party Congress; anticipated changes in mechanisms and policies for sectoral development in the medium term.

- Projections of socio-economic indicators related to the implementation of the sector's development objectives nationwide.

- Current state regimes, policies, and expenditure standards prescribed by the State for the sector.

2.2. Basis for constructing medium-term financial plans at the local level for each sector from 2009 to 2011:

- Socio-economic development plan of the locality up to 2010, with orientation to 2015; Resolution of the Local Party Congress and the People's Council Resolution on the five-year socio-economic development plan from 2006 to 2010 of the locality; action plans of each sector to implement the Resolution of the 10th National Party Congress.

- Socio-economic development targets of the locality related to sectoral development.

- Current state regimes, policies, and expenditure standards generally applicable to the sector and the locality.

III. Some requirements when building medium-term financial plans and sectoral medium-term plans for the period 2009 - 2011

1.  Re-evaluation of budget allocation priorities:

- To build medium-term financial plans and sectoral medium-term plans for the period 2009 - 2011, ministries and localities must re-evaluate the implementation of medium-term financial plans and sectoral medium-term plans for the period 2008 - 2010 with the set goals and tasks for this phase; assess and forecast the context, requirements, and goals in the new phase, based on which they should consider adjusting budget allocation priorities.

- To prepare for building the next medium-term sectoral plan, ministries and localities must carefully review basic expenditures, eliminating one-time expenses occurring only in the current year, while reviewing and considering adjustments to expenditures for programs, projects, tasks, policies, and activities that have been decided but have not achieved the desired results in practice, reallocating them to higher-priority programs, projects, tasks, policies, and activities. The allocation of funds for current programs, projects, tasks, policies, and activities must be based on the assessment of their actual implementation effectiveness.

2. Requirement to ensure the ceiling of state budget expenditure:

- One of the main goals of building medium-term financial plans is to link planning with the state budget's balancing capacity. Therefore, the construction of medium-term financial plans must ensure that they are arranged within the ceiling of state budget expenditure announced by the Financial Department and the Planning and Investment Department.

- Within the announced budget ceiling, ministries, sectors, and localities must proactively arrange and review tasks, activities, regimes, and policies to ensure strict and effective basic expenditures, while reserving appropriate funding for new initiatives.

3. Analysis of solutions to address deficits, evaluation, and proposal of measures to handle reserve debts:

- Based on determining the difference between the announced budget ceiling and the demand for expenditure, ministries, sectors, and localities must clearly analyze the reasons for the difference and propose clear measures to address the difference so that it can be accommodated within the announced budget expenditure ceiling while ensuring the mobilization of additional resources to implement the plan.

- Implement detailed analysis and classification of reserve debts, on the basis of which proactively arrange and handle them to gradually reduce reserve debts in the medium term.

4. Linking with the process of drafting the state budget estimate for 2009:

The construction of medium-term financial plans and sectoral medium-term plans for the period 2009 - 2011 must be linked to the drafting of the state budget estimate for 2009 by ministries, sectors, and localities. The time frame, procedures, and division of responsibilities for constructing medium-term financial plans and sectoral medium-term plans shall be carried out according to the provisions in Part IV of this Circular.

IV. Timeframe, procedures, and organization of implementation for constructing medium-term financial plans and sectoral medium-term plans for the period 2009 - 2011:

Implemented in accordance with the provisions of Directive No. 723/CT-TTg dated June 6, 2008, of the Prime Minister on the construction of socio-economic development plans and state budget estimates for 2009 and Circular No. 54/2008/TT-BTC dated June 20, 2008, of the Ministry of Finance on guiding the construction of the state budget estimate for 2009. The Ministry of Finance will provide additional guidance on the procedures and organization of implementation for constructing medium-term financial plans and sectoral medium-term plans for the period 2009 - 2011 as follows:

1. In June 2008:

- The Ministry of Planning and Investment announces the ceiling for investment development expenditure of the sector and the ceiling for investment development expenditure of the four participating pilot ministries for the period 2009 - 2011; the Ministry of Finance announces the ceiling for regular expenditure of the sector and the ceiling for regular expenditure of the four participating pilot ministries for the period 2009 - 2011.

- Provincial People's Committees in participating pilot localities instruct the Provincial Departments of Planning and Investment to announce the ceiling for investment development expenditure of the sector in the locality and the ceiling for investment development expenditure of specialized departments for the period 2009 - 2011; the Provincial Finance Departments announce the ceiling for regular expenditure of the sector in the locality and the ceiling for regular expenditure of the departments for the period 2009 - 2011 for participating pilot specialized departments.

2. In July 2008:

- The Ministry of Finance, in collaboration with the Ministry of Planning and Investment, constructs the national medium-term financial plan for the period 2009 - 2011.

- Ministries of Education and Training, Health, Agriculture and Rural Development, and Transport construct the medium-term sectoral plan and the medium-term ministry plan for the period 2009 - 2011 along with the state budget estimate for 2009; submit reports to the Ministry of Finance, the Ministry of Planning and Investment, and the State Audit Office.

- People's Committees of the localities: Hanoi, Binh Duong, Vinh Long organize the construction of medium-term financial plans and sectoral medium-term plans for the period 2009 - 2011 in their respective localities:

+ Direct the Provincial Finance Department to collaborate with the Provincial Department of Planning and Investment to construct the medium-term financial plan for the period 2009 - 2011 at the provincial level.

||| Direct the four Departments: Education and Training, Health, Agriculture and Rural Development, and Transport to develop the medium-term financial plan for their respective sectors for the period 2009-2011 along with preparing the state budget estimate for 2009; submit reports to the Department of Finance and the Department of Planning and Investment; send the medium-term financial plans for their respective sectors to the four relevant ministries participating in the pilot program.

||| 3. In August 2008:

||| - The People's Committees of the pilot provinces shall direct the Department of Finance and the Department of Planning and Investment to organize discussions with the relevant departments on the medium-term financial plans for the period 2009-2011 and the state budget estimate for 2009; assign the Department of Finance to compile the medium-term financial plans and report to the People's Committee for comments from the Provincial People's Council before reporting to the Ministry of Finance, the Ministry of Planning and Investment, and the State Audit Office.

||| - The Ministry of Finance and the Ministry of Planning and Investment shall organize discussions with the four participating ministries (on the medium-term financial plans for their respective sectors for the period 2009-2011) and three pilot provinces (on the medium-term financial plans at the provincial level for the period 2009-2011) along with discussions on the state budget estimate for 2009.

||| - By August 31, 2008, the participating ministries and provinces shall refine their medium-term financial plans and medium-term financial plans for the period 2009-2011 based on the results of discussions with the finance authorities and planning and investment authorities, and submit them to the finance authorities and planning and investment authorities; the Ministry of Finance shall be responsible for compiling the national medium-term financial plans and sectoral medium-term financial plans for the period 2009-2011 along with the state budget estimate for 2009 to present to the Government.  

||| C. IMPLEMENTATION:

||| 1. The Ministries of Finance, Planning and Investment, Education and Training, Health, Agriculture and Rural Development, and Transport; the People's Committees of Binh Duong and Vinh Long Provinces shall, according to their assigned functions and responsibilities, be responsible for organizing the development of medium-term financial plans or medium-term financial plans for the period 2009-2011 along with the preparation of the state budget estimate for 2009 as stipulated in this Circular.

||| 2. The People's Committee of Hanoi City shall be responsible for organizing the development of medium-term financial plans and medium-term financial plans for the period 2009-2011 along with the preparation of the state budget estimate for 2009 as stipulated in this Circular based on the newly defined administrative boundaries as specified in Resolution No. 15/2008/QH12 of the National Assembly regarding the adjustment of the administrative boundaries of Hanoi City and related provinces.

||| 3. Assign the Project Management Board for Public Financial Management Reform to develop and issue a Handbook of Procedures for Compiling Medium-Term Financial Plans and Medium-Term Financial Plans for the period 2009-2011 to ensure compliance with the requirements and contents stipulated in this Circular.

||| This Circular shall take effect fifteen days from the date of publication in the Official Gazette.

||| During the process of developing the 2009 state budget estimate linked to the work of compiling medium-term financial plans and medium-term financial plans for the period 2009-2011 as stipulated in this Circular, if there are any difficulties, the participating ministries and provinces are requested to reflect them to the Ministry of Finance for timely resolution.