Decision No. 59/2005/QĐ-TTg On the Issuance of Financial Management Regulations for the Development Support Fund

DECISION OF THE PRIME MINISTER

Regarding the issuance of Financial Management Regulations for the Development Support Fund

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to Decree No. 106/2004/NĐ-CP dated April 1, 2004 of the Government on credit investment development by the State;

Pursuant to Decree No. 50/1999/NĐ-CP dated July 8, 1999 of the Government on the organization and operation of the Development Support Fund;

Considering the proposal of the Minister of Finance,

DECISION:

Article 1. The Financial Management Regulations for the Development Support Fund are hereby issued together with this Decision.

Article 2. The Ministry of Finance shall be responsible for guiding, supervising, and inspecting the implementation of these Regulations issued together with this Decision.

Article 3. This Decision shall take effect 15 days from the date of publication in the Official Gazette and shall replace Decision No. 232/1999/QĐ-TTg dated December 17, 1999 of the Prime Minister regarding the issuance of Financial Management Regulations for the Development Support Fund.

The Financial Management Regulations for the Development Support Fund issued pursuant to this Decision shall be implemented from January 1, 2005.

Article 4. Ministers, Heads of ministerial-level agencies, Chairmen of People's Committees of provinces and centrally governed cities, Chairmen of the Management Board and General Directors of the Development Support Fund shall be responsible for implementing this Decision.

REGULATIONS

 

FINANCIAL MANAGEMENT FOR THE DEVELOPMENT SUPPORT FUND

(Issued together with Decision No. 59/2005/QĐ-TTg dated March 23, 2005)

of the Prime Minister)

PART I

GENERAL PROVISIONS

Article 1. These Regulations apply to the financial management activities of the Development Support Fund system.

Article 2. The Development Support Fund is a state financial organization operating without profit-making objectives, ensuring capital recovery and cost coverage, having legal personality, registered capital, balance sheets, seals, and bank accounts at the State Treasury, domestic and foreign banks, and being able to conduct transactions with customers directly related to it and participating in payment systems as prescribed by law.

The Development Support Fund is a centralized accounting unit within the entire system; it implements revenue and expenditure and finalizes revenue and expenditure financial statements according to the regulations stipulated in these Regulations; its payment capability is guaranteed by the State; it is exempted from taxes and other payments to the state budget.

Article 3. The Development Support Fund performs the task of mobilizing medium and long-term capital, receiving and managing state funds allocated for investment credit development to implement the state's investment support policy.

Article 4. The Ministry of Finance performs the function of state management over finance, and is responsible for guiding, inspecting, and supervising the revenue and expenditure financial activities of the Development Support Fund.

Chapter II

CAPITAL, FUNDS, AND ASSETS

Article 5. Sources of operational capital for the Development Support Fund

1. State budget capital:

a) Registered capital of the Development Support Fund;

b) Annual state budget capital;

c) Capital from government programs and projects;

d) Capital from the Government of Vietnam for foreign loans under government agreements.

In case of changes to the registered capital, the Management Board of the Development Support Fund shall report to the Minister of Finance for submission to the Prime Minister for decision.

2. Raised capital:

a) Issuing bonds;

b) Loans from organizations (including the Vietnam Social Security Fund and postal savings fund), individuals domestically, and accumulated funds for repaying foreign debts;

c) Foreign loans for projects, decided by the Prime Minister.

3. Foreign loan and aid capital used by the Government for re-lending under the delegation of the Ministry of Finance.

4. Other legally raised capital.

5. Entrusted capital for allocation and investment lending by localities, organizations, and individuals both domestically and internationally.

Article 6. The Chairman of the Management Board and the General Director of the Development Support Fund shall be responsible for the safe management, proper use, and efficient utilization of the Fund's capital sources.

The Development Support Fund has the right to change the capital and asset structure within the Fund's system as prescribed to serve the development of the Fund's activities.

Article 7. The Development Support Fund may establish a risk reserve fund from operational expenses to offset losses and damages caused by external factors during the process of providing credit investment loans to projects and projects guaranteed by credit investment from the Fund. The annual maximum amount of the reserve fund is 0.2% of the average outstanding credit investment loans and credit investment guarantee liabilities.

If the reserve fund is not fully utilized at the end of the year, the remaining amount can be carried forward to offset risks in subsequent years. In cases where the risk reserve fund is insufficient to cover losses, the General Director of the Development Support Fund shall report to the Ministry of Finance for submission to the Prime Minister for consideration and decision on handling measures.

The establishment, use, and authority to handle risks shall be carried out in accordance with Decree No. 106/2004/NĐ-CP dated April 1, 2004 of the Government on state investment credit development and the guidance of the Ministry of Finance.

Article 8. Annually, the Development Support Fund shall be responsible for balancing capital sources and the demand for state investment credit development; when raising capital at market interest rates for investment lending, it must ensure that such capital is only mobilized after maximizing the use of non-interest-bearing or low-interest capital and aligning with the capital usage needs, avoiding large idle capital.

When performing the state-assigned investment credit development tasks, the Development Support Fund shall receive interest rate subsidies from the State. The subsidy level shall be determined based on the difference between the interest rates of the combined capital sources and the lending interest rates and the management fee of the Development Support Fund.

Article 9. The annual management fee of the Development Support Fund shall be calculated as 30% of the collected interest income from loans. This ratio shall remain stable for three years.

The management fee for re-lending from foreign credit (ODA) capital shall be implemented in accordance with the provisions of the Ministry of Finance.

In necessary cases, the Minister of Finance may decide to adjust the fees prescribed in these Regulations and report to the Prime Minister the content of the handling.

Article 10. The Development Support Fund shall receive state budget support for post-investment interest rates. The level of post-investment interest rate support shall be implemented in accordance with Article 25 of Decree No. 106/2004/NĐ-CP dated April 1, 2004 on state investment credit development.

Article 11. Sources of state investment credit development capital that the Development Support Fund may use:

1. Investment lending and project lending in accordance with government agreements.

2. Short-term lending to support exports.

3. Post-investment interest rate support.

4. Performing the task of guaranteeing investment credit.

5. Repaying raised capital.

6. Performing entrusted business operations and accepting entrustments.

7. Carrying out other tasks as prescribed by the Prime Minister.

Article 12. Investment Capital for Construction and Fixed Asset Purchases

1. The investment capital for construction and fixed asset purchases of the Development Support Fund shall be formed from the following sources: depreciation of fixed assets, development investment fund, state budget capital allocated annually according to plans, and other lawful sources.

2. The rate of depreciation of fixed assets; management and utilization of investment capital for construction and fixed asset purchases; sale and liquidation of assets; inventory and revaluation of assets of the Development Support Fund shall be carried out in accordance with regulations applicable to state-owned enterprises.

Article 13. The Development Support Fund is responsible for managing and utilizing investment capital for its intended purposes, for appropriate recipients, effectively, ensuring repayment and covering costs, in accordance with the following provisions:

1. Purchasing insurance for assets and other insurance related to capital and assets as prescribed.

2. Idle temporary capital may be deposited at domestic banks or the State Treasury.

3. In cases of necessity, the Development Support Fund is permitted to repurchase bonds issued by the Fund in accordance with current regulations.

4. Establishing a risk reserve fund in accordance with Article 7 of this Regulation.

Chapter III

INCOME AND EXPENSES

Article 14. Income of the Development Support Fund

1. Income from business operations:

a) Interest income from loans;

b) Interest income from deposits at domestic banks or the State Treasury;

c) Management fees for lending (including: domestic capital, ODA capital);

d) Subsidized interest rate differential payments provided by the state budget;

đ) Fees for entrusted capital disbursement and relending;

e) Service fee for payment transactions;

g) Other business operation and service income.

2. Income from leasing assets.

3. Income from other activities:

a) Penalties;

b) Proceeds from asset liquidation and sale (after deducting liquidation and sale expenses);

c) Recovery of previously written-off debts;

d) Other lawful income.

Article 15. Expenses of the Development Support Fund

1. Business operation expenses:

a) Interest expense on raised capital;

b) Interest expense on customer deposits at the Fund;

c) Capital raising expenses;

d) Payment transaction expenses;

đ) Entrusted business expenses;

e) Risk reserve expenses;

g) Other business operation expenses.

2. Management expenses:

a) Wages and allowances in accordance with regulations. The Ministry of Labor, Invalids and Social Affairs shall coordinate with the Ministry of Finance and the Ministry of Home Affairs to submit to the Prime Minister for decision on the wage system of the Development Support Fund;

b) Social insurance, health insurance, and trade union contribution expenses in accordance with state regulations;

c) Meal allowance during work breaks. The amount per person shall not exceed the minimum wage stipulated by the state for workers and civil servants;

d) Expense for setting up a severance pay reserve fund. The level of contribution shall be as prescribed for state-owned enterprises;

đ) Allowances for Council members working part-time;

e) Transaction attire expenses, the level of which shall be guided by the Ministry of Finance;

h) Personal protective equipment expenses in accordance with regulations;

i) Depreciation expenses of fixed assets. The level of contribution shall be as prescribed for state-owned enterprises;

j) Postal fees, maintenance and repair expenses of fixed assets, purchase of tools, office supplies, warehouse transaction expenses, loading and transportation expenses, electricity and water expenses, medical expenses, office cleaning expenses, fuel expenses, travel expenses, training and professional education expenses, scientific research and technological innovation expenses;

k) Publicity, press conference, transaction, external relations, conference expenses. These expenses shall not exceed 5% of total expenses;

3. Financial activity expenses:

a) Expenses for issuing government bonds;

b) Asset rental expenses.

4. Other expenses:

a) Expenses for recovering written-off debts, ensuring that the amount spent is lower than the amount recovered from written-off debts;

b) Expenses for collecting penalties as prescribed;

c) Asset insurance expenses and other types of insurance expenses as prescribed;

d) Liquidation and sale expenses of assets (if any), after deducting proceeds from liquidation and sale of assets;

đ) Expenses for supporting political parties and organizations of the Development Support Fund;

e) Other expenses.

Article 16. The Development Support Fund shall record expenses in accordance with prescribed regulations; bear legal responsibility for the content and accuracy of the expenses; comply with regulations on invoice and accounting voucher systems.

Article 17. Expenses that cannot be recorded as operating expenses of the Development Support Fund:

1. Losses that have been supported by the Government or compensated by insurance agencies or the party causing the loss.

2. Administrative fines, environmental fines, financial system violation fines.

3. Expenses for basic construction investment and fixed asset purchases.

4. Expenses from other funding sources.

Chapter IV

FINANCIAL INCOME AND EXPENSE DIFFERENCES

AND ESTABLISHMENT OF FUNDS

Article 18. The financial income and expense difference realized in a year is the result of the financial activities of the Development Support Fund, determined by subtracting total expenses incurred in the year from total income.

Article 19. Distribution of financial income and expense differences

After paying fines for violations of laws, the annual financial income and expense differences shall be distributed as follows:

1. Allocate 50% to the development investment fund.

2. Allocate to the reward fund and welfare fund. The allocation levels of these two funds shall be implemented in accordance with regulations applicable to state-owned enterprises.

3. The remaining amount after establishing the above funds shall be added to the registered capital.

4. The balance of the business risk reserve fund up to the time this Regulation takes effect shall be transferred to the risk reserve fund.

Article 20. The annual financial plan and salary plan of the Development Support Fund shall be approved by the Management Board, including:

1. Plan for sources and use of capital.

2. Plan for state budget allocations for preferential activities: subsidized interest rate differential and post-investment interest rate support.

3. Basic construction investment plan.

4. Income and expenditure financial plan.

5. Staffing and salary fund plan.

Article 21. The Development Support Fund is responsible for submitting reports on the plans specified in Article 20 of this Regulation to relevant agencies as prescribed.

Chapter V

ACCOUNTING, STATISTICAL RECORDS, AND AUDIT REGULATIONS

Article 22. The Development Support Fund must implement current accounting and statistical regulations and guidance documents issued by the Ministry of Finance.

The fiscal year of the Development Support Fund begins on January 1 and ends on December 31 of each calendar year.

Article 23. The Development Support Fund is responsible for preparing and submitting operational reports, statistical reports, accounting reports, and other periodic and ad hoc reports as prescribed by current regulations and at the request of the Minister of Finance.

The annual financial settlement report of income and expenditure of the Development Support Fund must be approved by the Fund's Management Board and submitted to the Ministry of Finance for review and inspection according to the functions of the state management agency.

Article 24.

1. The annual financial report of the Development Support Fund must be subject to mandatory audit in accordance with the provisions of the law.

2. The Development Support Fund implements internal audit procedures, publicly discloses the results of its annual financial operations in accordance with the guidelines of the Ministry of Finance and is responsible for the published figures./.