Circular No. 57 TC/NSNN guiding the closing of the financial books for revenue and expenditure in the state budget year and the final settlement of the State budget for the year 1990.

CIRCULAR

Guidelines for closing the annual budget revenue and expenditure accounts and settling the state budget for 1990

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||| The work of closing the annual budget revenue and expenditure accounts and preparing the annual consolidated settlement of the state budget according to the regulations stipulated by the State is a regular task for all units, economic organizations, administrative and public service agencies, sectors, and localities with state budget revenues and expenditures. After completing the implementation of the State's plan and state budget revenue and expenditure tasks for each year, they must strictly follow the provisions set out in the "Regulations on the Preparation and Implementation of the State Budget" issued together with Decree No. 168/CP dated October 20, 1961 by the Council of Ministers.

Strictly implementing the closure of annual budget revenue and expenditure accounts will help sectors, localities, and grassroots units prepare the settlement comprehensively, accurately, and truthfully reflect the results of production and business operations, financial activities, and state budget revenues and expenditures. From this, lessons can be drawn regarding the preparation and implementation of financial plans and budget revenue and expenditure estimates for sectors, localities, and units to improve the quality and level of economic and financial management and the state budget for the following year.

In 1990, there were changes in financial management and state budget operations such as: establishing the National Treasury system, the tax collection system under the Ministry of Finance; the Council of Ministers decided to provide a subsidy of 20% of salary for civil servants and employees in the administrative and public service sector, armed forces, and social policy beneficiaries from September 1, 1990; adjusting the tax adjustment ratio for non-trade imports and exports and transferring some financial revenue and expenditure regulations for 1990 to certain localities; the Ministry of Finance guided the revision and supplementation of the state budget item list, decisions on electricity prices, oil prices, and guidance on compensating for electricity or oil lighting costs for certain groups...

Given the above situation and to address shortcomings in the closure of accounts and settlement of the state budget in previous years, the Ministry of Finance provides specific guidelines for certain tasks that need to be carried out to enhance the quality of the annual closure of budget revenue and expenditure accounts, ensuring the accuracy and deadlines for the consolidation of the state budget settlement for 1990.

A. CLOSING THE ANNUAL STATE BUDGET REVENUE AND EXPENDITURE ACCOUNTS:

To ensure that the annual settlement report is comprehensive, truthful, and accurate, it is first necessary to properly perform accounting closure work, prepare the balance sheet, and the final asset summary. The closure of state budget revenue and expenditure accounting at the end of the year before the settlement must be carried out in the following two stages:

1. Time for preparing to conclude the budget plan year:

The time for preparing to conclude the budget plan year starts from the end of November to December 31, 1990. This period is the time when the budgets of all levels (ending on December 31, 1990) are finalized.

2. Settlement adjustment period:

According to the current state budget accounting regulations, the settlement adjustment period is defined as follows:

- End of January of the following year for district, county, city, and town-level budgets directly under provinces.

- End of February of the following year for provincial, city, and central special zone-level budgets.

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

I. TASKS THAT NEED TO BE PAID ATTENTION TO AND RESOLVED DURING THE PREPARATION PERIOD FOR CONCLUDING THE BUDGET YEAR:

Specific tasks that need to be performed by budgetary units, economic organizations, and financial agencies at all levels during the preparation period for concluding the budget year:

1. Ministries, sectors, economic organizations, and financial agencies at all levels need to preliminarily assess the situation and capacity to implement the state budget revenue and expenditure plan for 1990; to take measures to guide and urge units and enterprises under their jurisdiction to timely and fully collect all generated revenues into the state budget, striving to complete and exceed the state budget revenue targets for 1990 assigned by the Council of Ministers and the Minister of Finance, resolutely not allowing units and enterprises to misappropriate state budget revenues to supplement production and business capital, fund construction projects outside the plan, repay bank loans, or lend for interest, and improperly spend according to the regulations stipulated by the State.

- For revenues already collected but not yet deposited, financial agencies need to inspect and urge their prompt deposit into the budget. Units under customs, tax sectors, local production and business companies, Central Special Task Force, and local special task teams shall not retain revenues and amounts due to the budget in their unit funds; strictly prohibit any misuse or appropriation of state budget revenues.

- For revenues already deposited into the budget, it is necessary to organize reconciliation with the National Treasury where daily transactions are conducted to ensure consistency in total amounts and detailed entries according to the chapters, types, items, and sub-items of the state budget item list and the correct distribution ratios for each level of the budget. If there are discrepancies, timely coordination and agreement with the National Treasury should be made to adjust them.

2. Regarding temporary receipts and temporary holds:

Depending on specific circumstances, these should be reviewed and resolved: either refunding to the relevant agency, unit, or individual if deemed appropriate; or transferring to another revenue account within the state budget for settlement. No temporary receipt or hold should remain on accounting books, in bank accounts, or in cash reserves of units as of December 31, 1990.

3. Regarding year-end expenditures:

a. Financial agencies and units must continuously monitor and grasp the remaining budget allocation balances and bank account balances to proactively issue or suspend issuance of checks and other payment vouchers, avoiding situations where checks or payment orders are issued exceeding the remaining budget allocation at the National Treasury.

b. Financial authorities and State Treasury at all levels shall not be responsible for resolving cases of "checks" issued beyond their validity period or payment instruments exceeding the budgetary fund balance limit.

To ensure that "checks" issued and payment instruments have sufficient time to return to the State Treasury where the budget account of the unit is deposited before December 31, 1990, all units under central and local management must plan expenditures to proactively cease issuing "checks" and payment instruments no later than December 20, 1990.

c. For local financial authorities at all levels, during the last days of the year, they must closely coordinate with the State Treasury at the same level to grasp the daily revenue and expenditure situation and reserve fund balances to ensure timely disbursement of funds according to approved plans for various sectors and units.

Financial authorities and State Treasury at all levels must closely cooperate to strengthen inspection and supervision to prevent and promptly address cases of end-of-year budget spending to cover deficits through advance payments for purchasing materials, goods, research expenses on scientific topics... outside planned budgets or without economic contracts.

4. For expenditures implemented in 1990 but not yet settled, such as advance payments for basic construction investment, administrative-expenditure advances..., after verification, if all procedures are complete, valid, and comply with the principles and regulations set by the State, necessary settlement procedures should be completed to include these expenditures in the final accounts, ensuring no expenditure is omitted from the settlement.

5. Regarding loans, borrowings, receivables, and payables between different levels of budget and among agencies and units:

- Measures should be taken to actively recover or settle these amounts definitively to close out these accounts before the year-end accounting closure, avoiding carrying over debts into the next year, which would require continuing to maintain records while also risking mutual capital occupation and non-recovery, complicating the year-end closure and budget settlement.

- Strictly limit temporary advances and loans in December 1990; if it is determined that previous temporary advances or loans cannot be converted into formal expenditures and cannot be settled before December 31, 1990, then in truly necessary cases, funds from the next year's budget (already allocated) or the next year's budget can be used to resolve these temporary advances and loans from the previous year.

6. Subsidies from upper-level budgets to lower-level budgets and the determination of surplus amounts and establishment of financial reserve funds at each budget level (if applicable) need to be organized to reconcile accurately between levels to ensure accurate recording in accounting books and reflection in the final settlement reports of each budget level.

7. Time limit for transferring funds:

The Ministry of Finance stipulates the latest deadline for approving budget limits, issuing expenditure orders, and the State Treasury Bureau notifying and distributing budget limits to central budget units and transferring allocations by expenditure orders to units, subsidies, and authorized budget funds from the central government to provincial, city, and special zone governments directly under the central government as follows:

a. For the Central Budget:

- By the end of work hours on December 18, 1990: for central budget units and local budgets in provinces: Cao Bằng, Lang Son, Ha Tuyen, Son La, Lai Chau, Hoang Lien Son, Bac Thai, Quang Ninh, and southern provinces from Thua Thien Hue onwards.

- By the end of work hours on December 20, 1990: for units located in the Hanoi area.

Outside the above-mentioned deadlines, central budget units and provincial finance departments, city finance departments, and special zone finance departments directly under the central government wishing to transfer distribution notifications or funds to localities via hand delivery should negotiate specifically with the State Treasury Bureau to resolve this.

Central first-level budget units shall base their distribution of budget limits to subordinate units on the above deadlines to ensure timely use of funds within the 1990 fiscal year.

b. For Local Budgets:

Depending on the actual situation of each locality, provincial finance departments, city finance departments, and special zone finance departments directly under the central government, together with local State Treasury branches, shall determine the latest deadline for approving, distributing budget limits, and transferring local budget funds to units and lower-level budgets (districts, counties, towns, cities directly under provinces).

8. Use of allocated budget funds and capital:

a. Strictly prohibit budget units at all levels under central and local management from withdrawing funds from budget limit accounts into forecast deposit accounts; budget limits from one type, category, grade, or item may not be used for another.

b. Any remaining balance in budget limit accounts of central and local management units as of the end of December 31 will be nullified and may not be carried over to the next year for expenditure.

c. All authorized budget funds transferred from the central government to local budgets that remain unused by December 31 shall be transferred back to the State Treasury Bureau of the province, city, or special zone (accompanied by a list detailing the amount of each type of authorized central government budget funds transferred, the amount used, and the remaining amount as of December 31).

d. The following budget funds may be carried over to the next year for continued use:

- Remaining balances in budget limit accounts and deposit account balances of defense-security units as of the end of December 31, 1990, that have not been fully expended may be carried over to the next year for use. It is requested that the Financial Department of the Ministry of Defense and the Ministry of Interior provide specific guidance and regulations for subordinate units to implement.

- The limit on personnel expenses including salaries, scholarships, living allowances, and various allowances and subsidies for cadres and employees of central and local budgetary units, if due to cash shortages, any unit that has not been able to pay out before December 31, 1990, may transfer from the account of the limit on personnel expenses (the above items) to a separate account according to the regulations of the State Treasury to withdraw at the beginning of the year to continue paying to the relevant recipients.

- Funds for preventing deterioration of five hospitals under the Ministry of Health (Bach Mai, Viet Duc, Viet So, Institute for Maternal and Child Health, Thong Nhat Hospital).

9. Withdrawing and reviewing the balance of the deposit account of budgetary units.

a. All levels of budgetary units must reconcile the balance of their deposit accounts with the State Treasury where they conduct transactions daily, and complete procedures to fully remit to the higher-level budget; all revenue collected but not yet remitted to the budget before December 31. Any remaining balance in the budget deposit account that the unit wishes to carry over to the next year for use (funds allocated by the budget for the following year, funds not from budget sources, and those units specified in point 8d above), the unit shall prepare a letter accompanied by a detailed list confirmed by the State Treasury where the account is opened regarding the remaining balance, directly proceed to the financial authority to complete the procedures to transfer the balance to the next year, from December 26, 1990 until the end of work hours on December 31, 1990.

b. The review of the balance of the budget deposit account of budgetary units is regulated as follows:

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

- Provincial Departments of Finance, cities, and special administrative regions approve and are authorized by the Ministry of Finance to approve for budgetary units at the central level located in their respective areas (excluding Hanoi).

- District and county finance departments and equivalent bodies approve for budgetary units managed by district, county, and equivalent budgets.

The State Treasury branch where the unit opens its transaction account will only allow the transfer to the next year of amounts that have been approved by the financial authority. Amounts not declared, confirmed, and not approved by the financial authority for transfer to the next year, by the end of work hours on December 31, the State Treasury has the responsibility to deduct and remit to the appropriate level of budget (units managed by which level of budget shall be remitted to that level of budget).

It should be noted that after reconciling and confirming the balance of the deposit account up to December 26, 1990, and completing the procedures as instructed, the units must still maintain regular contact with the State Treasury where the deposit account is held to promptly grasp any further transactions in this account from December 27 to December 31, 1990; simultaneously, the State Treasury must promptly inform the units to propose the financial authority to consider and resolve any further issues, before the State Treasury cuts off the account and remits to the budget at the end of work on December 31.

10. Year-end cash balances of units:

Must analyze each source of cash currently available in the unit's fund to handle: If there are cash amounts belonging to budget allocations that were not spent, or revenues that have not been remitted... then procedures must be completed to fully remit them to the State Budget; If there are loans or temporary deposits... they must be returned to the relevant units, facilitating the timely closure of the unit's own books and those of other units, ensuring compliance with financial management regulations.

11. Handling revenues and expenditures related to the previous and current fiscal years:

a. From 1990 onwards, agricultural tax revenues in cash and various types of goods converted to rice, when paid into the budget in which year (allocated to each level of budget according to the prescribed ratio) shall be recorded in the fiscal year's budget revenue (implemented according to Circular No. 1238 TC/TNN dated August 22, 1990, and No. 1513 TC/TCT dated October 2, 1990, issued by the Ministry of Finance). Local government budget surplus funds for use in expenditures from the start of the next year.

b. For some localities facing difficulties, temporarily borrowing from the local financial reserve fund to cover expenditures, if unable to repay by the end of 1990, the Department of Finance shall report to the People's Committee of the province, city, or special administrative region for permission to adjust the borrowed amount and include it in the local government budget revenue for 1990.

c. To accurately reflect the fiscal balance of local governments in 1990, in cases where some localities borrow from banks or temporarily borrow from the State Treasury to cover construction or administrative expenses, and by December 31, 1990, have fully repaid the temporary borrowings and loans, these expenditures shall be recorded and settled in the local government budget for 1990; however, if repayment using local government budget revenue occurs in 1991, the related expenditures shall be settled in the 1991 budget. (For temporary borrowings from the State Treasury, new temporary borrowings can be made in 1991 to repay old debts from 1990).

12. Deadline for closing the books on budget revenues and expenditures at year-end:

The deadline for closing the books on budget revenues and expenditures at the State Treasury is uniformly regulated as follows:

a. At the branches of the State Treasury at the district and county level and equivalent, the deadline for closing the books on budget revenues and expenditures at all levels (central, provincial, municipal, district, and county) within their jurisdiction is set for the end of work hours on December 31 each year.

b. At the Central State Treasury: the final deadline for closing the books on central budget revenues and expenditures is set for the end of work hours on January 15 of the following year.

13. Telegraphic reports on budget revenues and expenditures at all levels and transferring budget funds to the higher-level State Treasury:

a. After closing the books on budget revenues and expenditures at year-end and preparing the balance sheet, telegraphic reports on the results of budget revenues and expenditures, and year-end cash balances on December 31, December 32, 33, etc., shall be carried out as follows:

- Branches of the State Treasury at the district, county, and provincial city level shall telegraph to the Provincial State Treasury and send copies to the financial authorities at the district and county level.

- The Treasury Branches at provincial and municipal levels shall aggregate the results of revenue and expenditure and balances of all budget levels, report to the National Treasury, and simultaneously send to the Provincial/Municipal Department of Finance.

- The National Treasury shall aggregate the results of revenue and expenditure and balances of all budget levels nationwide, report to the Minister of Finance, and send to the State Budget Department.

The content of the telegrams shall be guided and specifically regulated by the National Treasury.

b. Transfer of budget funds:

After closing the books for the year-end and reporting the results of revenue and expenditure and budget balances, the branches and treasury offices shall immediately process the transfer of the following types of budget funds to higher-level treasuries as specifically guided by the National Treasury:

- The branches of the National Treasury shall transfer to the provincial/municipal treasury offices.

+ The difference between the amount of revenue exceeding expenditure within the limit of central government and provincial/municipal budgets occurring on the territory of districts and counties up to December 31.

+ Remaining authorized budget funds from the central government and provincial/municipal budgets transferred to districts and counties that were not fully utilized by December 31.

+ Remaining budget funds from the central government and provincial/municipal budgets transferred back to have sources for expenditures of central and local budgetary units up to December 31 that were not fully utilized.

- After receiving the above-mentioned budget funds, the provincial/municipal treasury offices must promptly notify the Provincial/Municipal Department of Finance to consider whether additional expenditures can be made from January 1 to January 5, 1991, mainly for basic construction investment, with strict prohibition against further administrative and public service expenditures for 1990. At the same time, they shall process the transfer of the following central government budget funds to the National Treasury:

+ The excess revenue of the central government budget over expenditure on the territory of provinces and cities (untransferred surplus revenue).

+ Remaining authorized central government budget funds transferred to localities in 1990 that were not fully utilized.

+ Remaining budget funds transferred by the National Treasury to the treasury offices for expenditures of central budgetary units up to December 31 that were not fully utilized.

Therefore, after the end of the 1990 fiscal year, the balances of all budget levels shall be fully concentrated in the accounts of the corresponding treasury level (including small cash deposits at banks and cash in treasury vaults). Strictly prohibit branches and treasury offices from retaining 1990 budget funds for expenditures in 1991.

The use of the central government budget balance from January 1 to January 5, 1991, shall be decided by the Minister of Finance.

II. MATTERS TO BE ATTENTIVE TO AND RESOLVED DURING THE FINALIZATION PERIOD:

The finalization period is the time when the implementation of budget revenue and expenditure has ended and preliminary closing of the annual books has been completed.

During this period, the tasks to be carried out include continuing to reconcile and adjust the figures of budget revenue and expenditure to ensure accuracy, ensuring the formal closing of the books and the preparation of the annual settlement accurately. Additionally, it is necessary to continue resolving remaining tasks that were not completed in December 1990, such as:

1. Continuing to adjust budget revenue according to the prescribed distribution ratios among budget levels and recording and accounting for budget revenue and expenditure according to the chapters, categories, items, and sub-items specified in the State Budget Manual.

2. Urging the full submission of surplus funds into the budget to ensure that the allocated funds match the actual expenditures and will be included in the annual settlement of the unit or locality. These surplus funds usually remain in two stages:

- Cash in the unit's fund.

- Materials, supplies, goods, and office supplies stored in warehouses without being used.

If surplus funds are retained in the unit's fund, they should be submitted in full to the budget as previously instructed.

If surplus funds are represented by inventory in the warehouse, then the funds from the next year (1991) should be used to repay the previous year's funds and reduce the allocation for 1990.

3. Continuing to settle temporary advances, loans, borrowings, receivables, and payables between units and budget levels.

- All tasks that need to be performed as directed above aim to ensure that the accounting records of budgetary units and financial authorities at all levels are consolidated to derive the debit balance of the expenditure account and the credit balance of the allocated fund account for mutual offsetting, and the accounting records of the budget levels only show the credit balance of the revenue account and the debit balance of the expenditure account to derive the accurate and correct budget surplus for 1990.

B. PREPARATION OF THE 1990 BUDGET SETTLEMENT:

Prior to preparing the settlement, attention should be paid to performing the following work well: