Circular No. 63-TC/ĐTPT guides the management and allocation of construction investment capital from state budget sources.

 

CIRCULAR

Guidelines for managing and allocating capital for construction investment

from state budget funds

_______________

Pursuant to the State Budget Law issued on March 20, 1996;

Pursuant to Decree No. 42-CP dated July 16, 1996 of the Government on the issuance of the Investment Management and Construction Regulation;

Pursuant to Circular No. 04/TTLB dated September 10, 1996 of the Joint Ministry of Construction - Ministry of Planning and Investment - Ministry of Finance guiding the implementation of the Investment Management and Construction Regulation issued together with Decree No. 42/CP dated July 16, 1996 of the Government;

The Ministry of Finance hereby provides guidelines for managing and allocating capital for basic construction investment from state budget funds as follows:

PART 1

GENERAL PROVISIONS

1- State budget funds (including domestic funds, foreign loans of the government, and foreign aid to the government, local authorities, and state agencies) shall only be allocated to investment projects that fall within the scope of state budget fund usage as stipulated by the State Budget Law and the Investment Management and Construction Regulation.Investment projects allocated state budget funds must have complete investment and construction procedures, be recorded in the national plan, and meet the conditions for allocation of funds according to the Investment Management and Construction Regulation and the provisions of this Circular.

2- 3- The Investment Development System under the Ministry of Finance (the General Department of Investment Development, the Department of Investment Development, and the Investment Development Sub-department – hereinafter referred to as the investment development agency) is the direct agency responsible for managing and allocating capital for basic construction investment to projects using state budget funds and other state funds, based on decisions of the Minister of Finance, and has the responsibility to strictly monitor and control during the allocation process to ensure timely and full allocation to projects that meet the conditions for allocation according to project progress.

4- Ministries, ministerial-level agencies, agencies under the Government, State-owned enterprises established pursuant to Decision No. 91/TTg dated March 7, 1994 of the Prime Minister, provincial People's Committees, and project sponsors are responsible for implementing state regulations on investment and construction, using investment capital for its intended purpose, economically and effectively, and complying with state financial management policies regarding basic construction investment.
PART 2:

I. INVESTMENT PROJECTS USING STATE BUDGET FUNDS:

SPECIFIC PROVISIONS

1- Projects belonging to economic and social infrastructure without the ability to directly recover costs in the following fields:

- Economic infrastructure: transportation, irrigation projects, etc. (except where otherwise decided by the Government).

- Upstream forest planting, protective forests, national parks, nature reserves, etc.

- Animal husbandry stations, zoological and botanical gardens, new seed research and improvement projects.

- Cultural, social, sports, and public welfare construction projects.

- State management, science and technology projects.

- Environmental protection projects in regions and territories.

- Security and defense projects.

2- Projects of state-owned enterprises engaged in public services, contributing capital shares to joint ventures in necessary sectors requiring state participation as prescribed by law.

3- Projects of certain key enterprises in the national economy as prescribed by the Government.

4- Industry and territorial planning projects, urban and rural construction planning projects.

5- Economic and social development programs and projects.

II. ESTABLISHING AND ANNOUNCING THE CAPITAL INVESTMENT PLAN FOR BASIC CONSTRUCTION

1- Establishing and reviewing the annual plan:

1. 1- During the time of preparing the state budget for the next year as prescribed by the State Budget Law, based on the project implementation progress and the figures reported by ministries and local people's committees, the project sponsor shall prepare the capital investment plan for basic construction of the project and submit it to the respective levels of people's committees (for projects managed by local authorities) and the ministry (for central projects).

1. 2- Ministries and provincial people's committees shall aggregate and prepare the capital investment plan for basic construction and submit it to the Ministry of Finance (General Department of Investment Development) and the Ministry of Planning and Investment.

1. 3- Based on the national economic and social development plans and the main economic balances of the national economy, the Ministry of Finance shall proactively coordinate with the Ministry of Planning and Investment to allocate the capital investment plan to each ministry, provincial people's committee, and important state projects.

1. 4- After being assigned the budget by the Government, ministries and local people's committees at all levels shall allocate capital for basic construction to each project within their jurisdiction, ensuring alignment with the total investment target; economic sector structure; investment capital structure; level of capital and structure of capital for important state projects.

Local finance agencies and investment development agencies shall proactively coordinate with planning agencies and local authorities in allocating capital for each project, ensuring compliance with the state targets and the project planning conditions.

1. 5- After allocating capital to each project, the district, town, city, and provincial city people's committees (hereinafter referred to as district level) and commune, ward, town people's committees (hereinafter referred to as commune level) shall send the investment capital plan to the local investment development agency; ministries and provincial people's committees shall send the investment capital plan to the Ministry of Finance (General Department of Investment Development) for review on the following aspects:

- Ensuring the conditions for recording the plan of projects recorded in the plan as stipulated in Point 1, Section II, Part II of this Circular.

- Alignment with the total investment target, economic sector structure, investment capital structure, level of capital and structure of capital for important state projects assigned by the Government.

After reviewing, the Ministry of Finance (General Department of Investment Development) shall provide comments in writing to ministries and provincial people's committees; local investment development agencies shall provide comments in writing to district and commune people's committees. In cases where the plan has not met the above requirements, adjustments shall be required.

After reviewing, the Ministry of Finance (General Department of Investment Development) must provide comments in writing to relevant Ministries and People's Committees of provinces; local investment development agencies must provide comments in writing to People's Committees of districts and communes. In cases where the plan has not met the above requirements, adjustments shall be required.

1. 6 On the basis of the allocated plan or after adjusting it in accordance with the State targets assigned and investment projects that meet the conditions to be recorded in the plan, the General Department of Investment Development shall notify the Direct Investment Development Bureaus to issue capital; Ministries and People's Committees at all levels shall assign plan targets for quantities to the investors and send them to the Investment Development agencies as the basis for issuing capital.

2 Establish and announce the quarterly state capital investment construction plan: The content of the quarterly state capital investment construction plan must reflect the value of the quantity completed in the previous quarter and the cumulative total from the beginning of the year to the end of the previous quarter; the temporarily advanced capital, recovered temporarily advanced capital, and paid capital of the previous quarter and the cumulative total from the beginning of the year to the end of the previous quarter; the estimated value of the quantity to be implemented this quarter, the need for temporarily advanced capital and paid capital this quarter. The procedure for establishing, approving, and announcing the quarterly plan is as follows:

2. 1 Based on the assigned state capital investment construction plan and the project implementation progress, the investor shall establish the quarterly state capital investment construction plan according to the above contents and submit it to the Investment Development agency where the investor directly transacts, and also send it to the Ministry or People's Committee at all levels.

2. 2 Local Investment Development agencies shall review and consolidate the quarterly plans for projects managed by localities and send them to the local financial agencies; they shall send the quarterly plans for projects managed by the Central Government within their jurisdiction to the General Department of Investment Development, which shall then review and consolidate the quarterly plans for projects managed by the Central Government and send them to the Ministry of Finance.

2. 3 Financial agencies (Ministry of Finance, local financial agencies) shall examine the expenditure plans of the Investment Development agencies (General Department of Investment Development, local Investment Development agencies), based on the annual state capital investment construction plan and budget capacity, allocate quarterly expenditure levels and notify the Investment Development agencies to implement.

2. 4 Based on the expenditure level notified by the Ministry of Finance, the General Department of Investment Development shall allocate the quarterly expenditure level for projects managed by the Central Government within the jurisdiction of the Bureau.

2.5 Based on the expenditure level notified by the Department of Finance and Price Control and the expenditure level notified by the General Department of Investment Development, the Investment Development Bureau shall allocate the quarterly expenditure level for projects managed by provinces and cities and projects managed by the Central Government within its jurisdiction, and notify the investors.

Based on the expenditure level notified by the financial agencies at the district and commune levels, local Investment Development agencies shall allocate the quarterly expenditure level for projects managed by districts and communes and notify the investors.

Within the scope of the notified expenditure level, the investor shall proceed with the procedures to request temporary advance payment or issuance of completed basic construction volume and submit them to the Investment Development agency.

2. 6 Based on the quarterly expenditure level notified by the financial agency, the Investment Development agency shall organize the issuance of capital to the investors.

2. 7 The Investment Development agency has the right to refuse issuance to projects where the investor does not establish a quarterly state capital investment construction plan.

III CONDITIONS FOR ISSUANCE OF STATE BUDGET CAPITAL

Investment projects shall be eligible for capital issuance when they meet the following conditions:

1 They have complete investment and construction procedures, specifically as follows for each type of project:

1. 1 Industry planning, territorial planning, urban and rural construction planning:

- Decision of the competent authority allowing the preparation of the planning project.

- Budget estimate for the planning work approved by the competent authority.

1. 2 Investment preparation:

- Decision of the competent authority allowing the preparation of investment work.

- Budget estimate for investment preparation approved by the competent authority.

1. 3 Project implementation preparation:

- Feasibility study report and investment decision.

- Budget estimate for project implementation preparation approved by the competent authority.

1. 4 Project implementation:

- Feasibility study report and investment decision.

- Technical design and decision approving technical design; general budget estimate and decision approving general budget estimate. For projects A and B, if there is no approved technical design and general budget estimate, the investment decision must specify the capital amount for each component and must have the technical design and budget estimate of the initial construction component approved by the competent authority.

- Land use permit and construction permit (for projects requiring land use permit and construction permit).

2 Recorded in the state capital investment construction plan as stipulated in Point 1, Section II, Part II of this Circular.

3 Decision establishing the Project Management Board (if required to establish a Project Management Board), appointing the Director and Chief Accountant (or Head of Accounting Department), and the investor having opened a capital account in the General Department of Investment Development system.

4 Organized bidding to select consultants, purchase materials and equipment, and construction works in accordance with the tendering regulations (except for projects permitted to designate contractors).

5 Completed basic construction volume meeting the conditions for capital settlement or meeting the conditions for temporary advance capital as stipulated in Sections IV and V, Part II of this Circular.

IV ISSUE AND RECOVERY OF TEMPORARY ADVANCE CAPITAL:

1 Objectives eligible for temporary advance capital:

- Investment projects implemented through project bidding.

- Construction works subject to bidding.

- Purchase of equipment (including imported equipment and domestically manufactured equipment).

- Consulting services that must be hired.

- Land clearance and compensation work.

- Other works under other project costs such as project management machinery costs, construction permit fees, land tax, or land use rights transfer tax.

Investment projects or works within investment projects outside the above objectives may only be granted temporary advance capital upon Prime Minister's approval.

2 Conditions for granting temporary advance capital:

2. 1 For investment projects implemented through project bidding (bidding for the entire project: design, supply of equipment, construction...):

- Decision of the competent authority approving the bidding results.

- Economic contract between the investor and the winning bidder.

- Performance bond of the winning bidder.

2. 2 For construction works subject to bidding:

- Decision of the competent authority approving the bidding results.

There is an economic contract between the project investor and the winning bidder.

- Performance bond of the winning bidder.

2. 3- For equipment procurement (including imported equipment and domestically manufactured equipment):

There is a decision by the competent authority approving the tender results (for the equipment portion that was tendered).

There is an equipment procurement contract between the project investor and the equipment supplier. Specifically for imported equipment, there must be approval of the contract in accordance with current regulations.

There is a performance bond for the contract issued by the winning bidder (for the equipment portion that was tendered).

2. 4- For works requiring consultancy services:

There is a decision by the competent authority approving the tender results (for works where a tender was conducted to select consultants).

There is an economic contract between the project investor and the consulting entity with legal personality.

2. 5- For certain works under other project costs:

Land compensation and relocation work for land clearance must have a compensation plan, relocation plan, and approved cost estimate.

Costs for land allocation, construction permits, land tax, or land use rights transfer must have a notification from the revenue collection agency.

For costs related to the operation of the project management organization, there must be an approved cost estimate.

3- Temporary advance funding level:

3. 1- For construction and installation quantities subject to tendering:

- For tenders valued at 50 billion VND or more, the temporary advance is 20% of the annual capital plan for the tender package.

- For tenders valued between 10 billion VND and less than 50 billion VND, the temporary advance is 15% of the annual capital plan for the tender package.

- For tenders valued below 10 billion VND, the temporary advance is 10% of the annual capital plan for the tender package.

All temporary advances specified above shall not exceed the performance bond amount of the winning bidder.

3. 2- For equipment procurement:

The temporary advance is provided according to the payment progress stipulated in the economic contract between the project investor and the equipment supplier or manufacturer, up until the equipment is stored in the investor's warehouse (for non-installation equipment) or installed and accepted (for installation equipment).

The project investor uses the temporary advance for:

- Paying the deposit.

- Opening a Letter of Credit (in cases where a guarantee is required to open a Letter of Credit).

- Making payments according to the payment schedule determined in the contract.

- Paying transportation, storage, import duties, etc.

The annual temporary advance for equipment procurement according to the economic contract but shall not exceed the annual capital plan allocated for that equipment category. In cases where the planned allocation is insufficient to meet the payment needs under the contract, the project investor is responsible for finding additional funding sources.

3. 3- For consultancy contracts, the minimum temporary advance is 25% of the annual capital plan but shall not exceed the annual capital plan allocated for the consultancy work and 50% of the contract value.

3. 4- For projects implemented through tendering (tendering the entire project from design, equipment supply, construction and installation...), the temporary advance is regulated as follows:

- The temporary advance for equipment procurement is based on the equipment supply schedule or manufacturing schedule (as stipulated in Section 3.2 above).

- The remaining temporary advance is 20% of the annual capital plan recorded for the remaining work volume but shall not exceed the performance bond amount.

3. 5- For land compensation and clearance work, the minimum temporary advance is 20% of the annual capital plan but shall not exceed the annual capital plan allocated for land compensation and clearance work.

3. 6- For other works under other project costs eligible for temporary advance funding, the investment development agency considers the temporary advance funding needs of the project investor (revenue notifications; project management organization cost estimates...) to provide temporary advance funding but shall not exceed the annual capital plan allocated for those types of work.

4- Recovery of temporary advance:

4. 1- For construction and installation contracts, the temporary advance is recovered in each payment cycle for completed construction and installation volumes and is fully recovered within the annual plan year according to the following provisions:

- The recovery of the temporary advance begins during the first payment cycle for completed construction and installation volumes in the annual plan year.

- The amount of temporary advance recovered in each cycle is calculated based on the value of the completed construction and installation volumes being paid out according to the formula:

Temporary advance recovery rate = Value of completed construction and installation volumes to be paid out x Temporary advance percentage

recovery = amount paid out minus advance payment

- The temporary advance is fully recovered when the final payment is made for the value of the completed construction and installation volumes in the annual plan year.

Example: A construction and installation contract is temporarily advanced at 15%, with the annual capital plan for the tender package being 1.000 million VND, and the completed construction and installation volumes are paid out four times in the year (100; 400; 300; 200 million VND). The calculation of the temporary advance and its recovery is as follows:

- Temporary advance (1.000 x 15%) = 150 million VND

- Value of the first payment installment: 100 million VND

+ Amount of temporary advance recovered in the first installment: 100 x 15% = 15 million VND

+ Remaining temporary advance (150 - 15) = 135 million VND

- Value of the second payment installment: 400 million VND

+ Amount of temporary advance recovered in the second installment: 400 x 15% = 60 million VND

+ Remaining temporary advance (135 - 60) = 75 million VND

- Value of the third payment installment: 300 million VND

+ Amount of temporary advance recovered in the third installment: 300 x 15% = 45 million VND

+ Remaining temporary advance (75 - 45) = 30 million VND

- Value of the final payment installment: 200 million VND

+ Amount of temporary advance recovered in the final installment: 30 million VND

If the temporary advance is not fully recovered in the annual plan year due to lack or insufficiency of completed construction and installation volumes for payment, the unrecovered temporary advance is carried over to the next year and included in the temporary advance of the next year's plan.

If the unrecovered temporary advance is carried over to the next year but the project is not recorded in the plan, the project investor must explain to the investment development agency about the use of the unrecovered temporary advance to report to the competent authority for handling.

If the project is suspended, if it is due to subjective reasons, the project investor is responsible for returning the unrecovered temporary advance; if it is due to objective reasons, the project investor must explain to the investment development agency to report to the competent authority for handling.

In the case where advance funds have been provided but the project does not commence construction within the time limit stipulated in the contract, the project investor must explain to the investment development agency and be responsible for refunding the amount of advance funds already provided.

4.2 Advance funds for purchasing equipment shall be recovered in installments upon payment for completed equipment quantities.

For equipment that does not require installation, once the equipment has been inspected and accepted into the investor's warehouse, the investor is responsible for immediately submitting documentation to the investment development agency to process payment issuance and recovery of the advance funds.

For equipment requiring installation, the investor is responsible for reporting to the investment development agency when the equipment arrives according to the contract schedule for monitoring purposes. Once the equipment installation is complete, the investor must immediately submit documentation to the investment development agency to process payment issuance and recovery of the advance funds. The investment development agency will recover all advance funds for the equipment upon payment issuance for the completed installation quantity.

In the event that advance funds have been provided but the equipment has not arrived even after the time limit stipulated in the contract, the investor must explain to the investment development agency and be responsible for refunding the advance funds.

Advance funds for equipment in any given year are included in the investment capital plan for that year, including cases where the full amount cannot be recovered within the planning year due to insufficient completed equipment quantities eligible for payment.

4.3 For consultancy contracts, advance funds shall be recovered in installments upon payment for completed consultancy work quantities and fully recovered within the planning year. The timing for recovery initiation, the amount to be recovered, the completion date for recovery, and the handling of unrecovered advance funds shall be carried out in accordance with the provisions for construction contracts.

4.4 For land clearance compensation works and other expenses under other costs, advance funds shall be recovered in one installment upon payment for the completed basic construction quantity of such works.

V. ISSUANCE OF PAYMENTS FOR COMPLETED BASIC CONSTRUCTION QUANTITIES

1 Issuance of payments for construction quantities:

1.1 Construction quantities executed through direct award are eligible for payment issuance if they have been monthly inspected and accepted and meet the following conditions:

- The inspected quantities must conform to the approved construction drawings (or construction technical drawings) and be included in the annual investment plan assigned.

- Detailed cost estimates must be approved.

- They must be included in the economic contract between the project investor and the contractor.

- National norms and unit prices must be correctly applied.

- Quality must meet design requirements.

1.2 Construction quantities executed through tendering are eligible for payment issuance if they have been inspected and accepted according to the inspection and payment schedule stipulated in the economic contract between the project investor and the winning bidder and meet the following conditions:

- The inspected quantities must conform to the approved construction drawings (or construction technical drawings) and be included in the annual investment plan assigned.

- Detailed cost estimates and the winning bidder's tender estimate must be approved.

- They must be included in the economic contract between the project investor and the winning bidder.

- Quality must meet design requirements. The payment amount for these quantities is based on the tender estimate prepared for those quantities.

1.3 To be eligible for payment issuance, the project investor must submit the following documents to the investment development agency:

- Inspection records for quantity and quality of the works.

- Detailed calculation sheets for materials, labor, and construction machinery, accompanied by a summary cost sheet.

- Payment invoice.

1.4 Based on the investor's request and the submitted payment documents, the investment development agency must inspect and issue funds to the investor within five working days, while simultaneously paying the contractors and recovering any advance payments (if applicable).

1.5 At the end of the project year (when the project or component is completed), the investment development agency retains 5% of the recorded construction value of the completed project (component) from the annual plan. After the investor submits and the final settlement report of the completed project (component) is approved, the investment development agency will settle the remaining unpaid amount based on the settlement figures, but not exceeding the retained amount or recovering excess funds paid based on the settlement figures.

The retention of 5% of funds is not implemented for planning projects, completed investment preparation projects, equipment funds, and other project costs (project or component) upon completion.

2 Issuance of payments for equipment:

2.1 Equipment quantities eligible for payment issuance are those that have been accepted into the investor's warehouse (for non-installation equipment) or installed and inspected (for installation equipment) and meet the following conditions:

- The equipment list must comply with the investment decision regarding quantity, quality, type, function, capacity, technical standards, etc., and be included in the assigned investment plan.

- It must be included in the economic contract between the project investor and the supplier.

- There must be relevant documents or transportation, receipt, unloading, insurance, import tax, etc., contracts.

- The equipment must have been accepted into the investor's warehouse or inspected.

2.2 To be eligible for payment issuance, the project investor must submit the following documents to the investment development agency:

- Contract.

- Invoice and warehouse release form (for domestically purchased equipment).

- Import documentation set (for imported equipment).

- Transportation invoice.

- Insurance certificate (if applicable).

- Warehouse acceptance form (for non-installation equipment) or payment invoice for completed installation equipment quantities (for installation equipment).

- Other related documents (taxes, storage fees, etc.).

- Equipment payment invoice.

2.3 Based on the investor's request and the submitted payment documents, the investment development agency must inspect and issue funds to the investor within five working days, while simultaneously recovering any advance payments (if applicable) for the issued payment quantities of equipment.

3 Issuance of payments for consultancy services:

3. 1- The volume of consulting work eligible for payment is the volume that has been accepted and meets the following conditions:

- The volume of work must be included in the economic contract between the project owner and the consulting unit and in the annual investment plan assigned.

- The volume of work accepted must be consistent with the schedule specified in the economic contract.

- The quality of consulting work must meet the requirements stipulated in the contract.

 3.2- To be eligible for payment, the project owner shall submit to the investment development agency the following documents:

 - Acceptance record of completed consulting work volume.

 - Report on the results of consulting work implementation.

 - Payment voucher. Upon completion of the contract, in addition to the above documents, there shall also be a contract termination agreement.

3. 3- Based on the project owner's proposal and the payment file submitted within five working days, the investment development agency shall review and provide funds to the project owner, while recovering any advance payments (if applicable).

4- Payment for other expenses:

4. 1- In addition to the consulting services already contracted, other types of work under the project's other expense budget shall be eligible for payment when the following proof of work completion is provided:

 - For land fees, construction permit fees, land taxes, or transfer taxes, etc., there must be receipts issued by the relevant collection agencies.

- For compensation costs, relocation of residents, and land clearance, there must be a compensation plan accompanied by an approved budget estimate, and a confirmation of the volume of compensation (signed by the beneficiaries).

 - For demolition costs of existing structures and site cleanup, there must be a current status report, budget estimate, contract between the project owner and the demolition unit, and acceptance record.

 - For project management board operating costs, there must be a cost budget, cash flow plan, detailed list of costs, and related purchase or installation invoices for equipment or construction for the project management board, etc.

 - For start-up, acceptance, inauguration, etc., costs, there must be a budget estimate and a detailed list of costs.

 - For expert, technical worker training, and production management staff costs, there must be an economic contract, cost budget estimate, and contract termination agreement.

- For construction insurance costs, there must be insurance contracts.

- For pre-investment preparation and project implementation preparation costs, there must be an approved budget estimate, economic contract, acceptance record of work volume, or report on completed work results.

 - For certain costs that require consulting but can be self-executed by the project management board (such as quality supervision costs, settlement preparation costs, etc.), there must be a budget estimate and an approved result report.

4. 2- Based on the project owner's proposal and the payment documents for each work item as specified above, within five working days, the investment development agency shall review and provide funds to the project owner, while recovering any advance payments (if applicable).

5- For projects funded by foreign capital (loans, aid), the withdrawal of foreign capital for the project shall be carried out according to specific financial management regulations for projects funded by loans and aid, in accordance with international practices and the terms of the Loan Agreement or Aid Agreement signed between the Government of the Socialist Republic of Vietnam and foreign countries; the domestic counterpart funding shall be implemented in accordance with this Circular.

6- It is mandatory for the project owner to purchase construction insurance, therefore, the investment development agency will not provide funds to the project owner to cover losses and risks within the scope of insurance if the project owner does not purchase insurance.

7- The investment development agency assists the project owner in retaining warranty money for construction projects in accordance with the construction project warranty regulations.

VI. REPORTING, SETTLEMENT, INSPECTION, AND VIOLATION HANDLING REGIME

1- On the 25th of each month and the 10th of the first month of each quarter, the project owner is responsible for reporting the implementation of investment, receipt of funds, and fund usage in the previous month or quarter to the direct investment development agency providing funds, and simultaneously sending the reports to the Ministry or People's Committees at various levels. For Class A projects, the project owner shall send the reports to the direct investment development agency providing funds, the Ministry, the Provincial People's Committee, the Ministry of Planning and Investment, the Ministry of Finance (State Capital Investment Administration), the Ministry of Construction, and the General Statistics Office for compilation and reporting to the Prime Minister.

At the end of the planning year and upon completion of the investment project (construction works or project components), the project owner is responsible for preparing the final settlement report in accordance with the regulations on the settlement of basic construction investment capital.

2- Quarterly, the investment development agency (State Capital Investment Administration, local investment development agencies) is responsible for preparing reports to the finance agencies (Ministry of Finance, Department of Finance and Price Control, county-level finance agencies, village-level finance agencies) regarding the receipt and use of state budget funds and other state funds.

At the end of the planning year, the investment development agency shall settle accounts with the finance agency regarding the amount of state budget funds received and the amount paid out in accordance with the regulations on the settlement of state budget funds.

3- Quarterly and at the end of the planning year, the Ministries and provincial People's Committees are responsible for compiling the implementation of investment plans, receipt of funds, and fund settlements of projects under their jurisdiction and submitting them to the Ministry of Finance (State Capital Investment Administration), the Ministry of Planning and Investment, the Ministry of Construction, and the General Statistics Office as required.

4- Ministries, People's Committees at all levels, and investment development agencies have a system of regular and spot inspections of project owners regarding the use of advance payments and paid-out funds. If the project owner misuses funds, the investment development agency has the right to suspend fund disbursements or recover previously disbursed funds. Additionally, depending on the severity of the violation, the project owner may face economic penalties, administrative disciplinary actions, or criminal prosecution as prescribed by law.

VII. RESPONSIBILITIES OF RELATED AUTHORITIES

1- The project owner is responsible for:

 - Implementing construction projects in accordance with assigned tasks, ensuring compliance with schedules and quality standards.

 - Providing files and documents on the situation to the investment development agency to facilitate management and payment issuance.

- Receive and utilize allocated capital for the intended purpose, target group, economically, and effectively. Adhere to legal regulations on financial management systems for basic construction investment.

- Report and settle investment capital according to the provisions herein.

- Be entitled to request allocation of settlement capital when all necessary conditions are met and demand the investment development agency explain any unsatisfactory points regarding the allocation of settlement capital.

2- Ministries and People's Committees at all levels shall be responsible for:

 - Implementing investment and construction management according to their functions and tasks assigned by the Government.

 - Directing, inspecting, and urging project sponsors under their jurisdiction to implement investment plans, receive and utilize investment capital for the intended purpose and in accordance with state regulations.

- Report the situation according to the provisions herein.

3- The investment development agency shall be responsible for:

 - Based on the state plan and the sponsor's proposal, promptly and fully allocate settlement capital for projects that meet the payment conditions.

 - Have the right to request sponsors to provide files, documents, and information to serve the management and allocation of settlement capital.

 - Be permitted to temporarily suspend or recover allocated capital from projects where sponsors misuse funds, use them for unintended purposes, or violate state financial management regulations.

 - Supplementally allocate to sponsors amounts that have met allocation conditions but were not yet allocated or insufficiently allocated, and issue written responses to sponsors regarding reduced or refused allocations.

 - Carry out reporting and settling of allocated capital according to the provisions herein.

- The investment development agency shall organize management and allocation of settlement capital in accordance with unified procedures, ensuring strict control, timely and full allocation, and avoiding unnecessary inconvenience for sponsors.

4- Financial agencies at all levels (Ministry of Finance, Departments of Finance and Price Control, county-level financial agencies, commune-level financial agencies) shall be responsible for:

 - Ensuring the timely and full availability of state budget capital for the investment development agency (State General Investment Development Administration, local investment development agencies) to allocate to sponsors according to the State Budget Law.

- Report and settle development investment capital according to the State Budget Law.

PART 3 :

ARTICLE TRANSITION PROVISIONS

1- This Circular takes effect from the date of issuance and replaces previous guiding documents on managing and allocating investment capital for basic construction from the state budget issued by the Ministry of Finance.
2- For other development expenditure from the state budget (state reserve expenditure, working capital support for enterprises, equity contribution for joint ventures that are not basic construction, expenditure for foreign loans and foreign aid, expenditure for development assistance, etc.), implementation shall follow separate guiding documents for each type of expenditure.

During implementation, if there are any difficulties, ministries, sectors, localities, and entities should promptly report to the Ministry of Finance for supplementation, amendment, and improvement.