Circular No. 66/1999/TT-BTC guiding the establishment and amendment of the Financial Regulations of State-owned Corporations

 CIRCULAR

Guidelines for the establishment and amendment

Financial regulations of State-owned Corporations

The Ministry of Finance has issued the "Model Financial Regulations of State-owned Corporations" attached to Decision No. 838 TC/QĐ/TCDN dated August 28, 1996 and Decision No. 995 TC/QĐ/TCDN dated November 1, 1996 "on amending and supplementing the Model Financial Regulations" as a basis for State-owned Corporations to establish their own financial management regulations.

To align with Decree No. 27/1999/NĐ-CP dated April 20, 1999 of the Government (hereinafter referred to as Decree No. 27/1999/NĐ-CP) on amending and supplementing the financial management regulations and accounting practices for state-owned enterprises issued together with Decree No. 59/CP dated October 3, 1996 of the Government (hereinafter referred to as Decree No. 59/CP), the Ministry of Finance provides guidelines for the establishment and amendment of financial regulations of State-owned Corporations as follows:

1. For State-owned Corporations that have already established financial regulations, they shall base themselves on Decree No. 27/1999/NĐ-CP and the guiding documents implementing this Decree issued by the Ministry of Finance to amend and supplement their financial regulations to be consistent with new provisions. After being approved by the Board of Directors of the Corporation, the amended and supplemented regulations shall be submitted to the authority deciding the establishment of the enterprise and the Ministry of Finance for monitoring.

2. For State-owned Corporations that have not yet established financial regulations, they shall base themselves on the financial management and accounting regulations issued together with Decrees No. 59/CP and No. 27/1999/NĐ-CP, the aforementioned Model Financial Regulations of State-owned Corporations, and the guiding documents of the Ministry of Finance to establish their own financial regulations. After obtaining written agreement from the Ministry of Finance, the Board of Directors shall approve the financial regulations of the Corporation and submit them to the authority deciding the establishment of the enterprise and the Ministry of Finance for monitoring.

3. When amending and supplementing the financial regulations of the Corporation, attention should be paid to the following issues:

3.1. According to Decree No. 27/1999/NĐ-CP, the State Capital and Asset Management General Department does not have the responsibility to review or provide opinions on cases of pledging, mortgaging, liquidating, or selling important assets of enterprises.

3.2. To ensure the autonomy and responsibility of enterprises in handling assets and capital during business operations, eliminate unnecessary burdens on enterprises, after each asset liquidation, non-performing debt resolution, asset loss handling, and decisions on compensating improper expenditures, State-owned Corporations and their member enterprises no longer need to send these matters to the enterprise's financial management authority. However, these cases must be documented with evidence, summarized, and explained in the annual financial report of the enterprise.

3.3. The total management fee of the Corporation raised from its member enterprises shall be decided by the General Director based on approval by the Board of Directors after consultation with the Directors of the member enterprises and reflected in the annual financial plan of the enterprises. The Ministry of Finance will no longer participate in determining the annual management fee of the Corporation.

3.4. Decree No. 27/1999/NĐ-CP allows member enterprises to include scientific research and training expenses in their operating costs. The Development Fund mainly serves expanded reproduction and technological innovation. Therefore, the Corporation shall not raise funds from the Development Fund for scientific research and training. Common requirements for scientific research and training of the Corporation, first, should be sourced from income from such activities, supported by the budget (if available); any shortfall can be included in the operating costs of the Corporation. If there is still a shortfall, additional funding can be raised from the member enterprises.

3.5. Both the Corporation and its member enterprises operate independently economically and are fully legal entities under the law. Therefore, they must manage capital, assets, revenue, expenses, post-tax profit distribution, fund establishment and use, and prepare financial reports according to current regulations.

Financial relations between the Corporation and its member enterprises, such as raising management fees, mobilizing financial reserves, development funds, unemployment reserve funds, reward funds, welfare funds, continue to be implemented according to the provisions of Decision No. 838 TC/QĐ/TCDN dated August 28, 1996 on issuing the Model Financial Regulations of State-owned Corporations and Decision No. 995 TC/QĐ/TCDN dated November 1, 1996 of the Ministry of Finance "on amending and supplementing the Model Financial Regulations."

3.6. Member enterprises that operate as dependent units are those with incomplete legal status. Therefore, the Corporation's financial regulations must clearly define the rights and responsibilities in managing and accounting for assets, capital, revenue, expenses, and using funds. The Corporation shall bear full responsibility before the State and the law for all activities of this member enterprise.

4. Clause 1 of Article 40 of Decree No. 27/1999/NĐ-CP of the Government stipulates the reward and punishment system for the Board of Directors and the General Director (or the Director) in managing the enterprise's finances. The Corporation needs to specify these provisions in the financial regulations of the Corporation and its member enterprises.

5. This Circular takes effect from the date Decree No. 27/1999/NĐ-CP of the Government dated April 20, 1999 comes into force.

During implementation, if there are any difficulties, please reflect them to the Ministry of Finance for study and resolution./.