Decision No. 67/2004/QD-BTC On the issuance of the "Regulation on self-audit of finance and accounting at agencies and units using state budget funds"

 Pursuant to …;

Regarding the issuance of the Internal Financial and Accounting Audit Regulation at
agencies and units using state budget funds

THE MINISTER OF FINANCE

Pursuant to the State Budget Law No. 01/2002/QH11 dated December 16, 2002;

Pursuant to the Accounting Law No. 03/2003/QH11 dated June 17, 2003;

Pursuant to Decree No. 86/2002/NĐ-CP dated November 5, 2002 of the Government stipulating the functions, tasks, powers, and organizational structure of ministries and ministerial-level agencies;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Accounting and Auditing System Department, the Chief Inspector of Financial Inspection, the Director of the Cadre Organization Department, and the Chief of the Ministry's Office,

Pursuant to …;:

Article 1: Attached to this Decision is the "Internal Financial and Accounting Audit Regulation at agencies and units using state budget funds," which shall be uniformly implemented throughout the country.

Article 2: This Decision takes effect fifteen days from the date of publication in the Official Gazette.

Article 3: Heads of state administrative agencies, public service units, political-social organizations, political-social-professional organizations, social-professional organizations, and other organizations using state budget funds shall be responsible for implementing this Decision.

The Director of the Accounting and Auditing System Department, the Chief Inspector of the Ministry of Finance, the Director of the Cadre Organization Department, the Chief of the Ministry of Finance's Office, and related agencies, units, and organizations shall be responsible for guiding and supervising the implementation of this Decision.

REGULATIONS

On internal financial and accounting audit at agencies and units using

 state budget funds

(Issued pursuant to Decision No. 67/2004/QD-BTC dated August 13, 2004 of the Minister of Finance)

PART I

GENERAL PROVISIONS

Article 1. Purpose of the internal financial and accounting audit work

The internal financial and accounting audit work at agencies, units, and organizations (hereinafter referred to as units) using state budget funds aims to:

1. Evaluate the implementation of annual budget estimates at the unit in accordance with laws on state budgets, and the situation regarding thrift and waste prevention efforts of the unit.

2. Assess the quality of operations, compliance with mechanisms and policies, and management of revenue and expenditure, assets, capital, salary funds, bonus funds, and other funds, as well as basic construction investment activities within the unit.

3. Timely identify and correct violations, apply appropriate measures to address violations within the assigned authority, and organize lessons learned, evaluate shortcomings, determine causes, and propose solutions and measures to improve financial and accounting management within the unit.

Article 2. Scope of application of the internal financial and accounting audit regulation

State administrative agencies, public service units, political organizations, political-social organizations, political-social-professional organizations, social-professional organizations, and other organizations using all or part of state budget funds must conduct internal financial and accounting audits at their units according to this Regulation.

Article 3. Tasks of the internal financial and accounting audit work

The internal financial and accounting audit work at units using state budget funds has the following tasks:

1. Verify the legality of economic and financial transactions; the effectiveness and efficiency of financial and accounting activities at the unit, organizational and operational activities in performing assigned tasks, and other activities.

2. Monitor and control the quality and reliability of economic and financial information provided by the unit through financial reports and other reports.

3. Ensure compliance with financial mechanisms and state policies related to budget expenditures and funds at the unit. Evaluate the effectiveness of budget expenditures in fulfilling assigned tasks at the unit.

4. Prepare reports on audit results and the handling of violations discovered during the year or previous audits.

Article 4. Requirements for self-inspection work in finance and accounting

1. Self-inspection work in finance and accounting at units must be carried out immediately during the process of performing management tasks by each staff member and must ensure prudence, seriousness, honesty, and objectivity.

1.1. In the case of regular self-inspection, the self-inspection work in finance and accounting must be planned and conducted according to the prescribed procedures, with separate steps and methods of implementation ensuring suitability in different circumstances.

1.2. The unit must notify or make public to related parties within the unit before conducting inspections to limit deviations during the inspection process and to avoid bias based on the subjective will of the inspector.

1.3. During the implementation of self-inspection, it must always comply with the current regulations and policies of the State, clearly distinguishing and transparently identifying correct actions from incorrect ones. All violations must be clarified, their causes identified, and specific responsibilities assigned to organizations or individuals who have committed them.

1.4. The implementation of self-inspection must always ensure objectivity from the organizational stage of implementing inspection tasks to the stage of drawing conclusions about the results of the inspection.

2. Self-inspection work in finance and accounting must ensure continuity and regularity, without creating undue pressure or tension for staff members in the unit. Measures for education and propaganda should be taken so that everyone has a sense of responsibility to participate in self-inspection work in finance and accounting.

3. Conclusions of self-inspection must be clearly stated, accurately, and tightly structured. Each point of conclusion must be supported by evidence. Depending on the form of inspection, appropriate conclusions should be made, which may be partial or comprehensive regarding the financial and accounting work of the unit.

4. During inspection rounds, inspection records must be established, and after each round, the inspection department must prepare an inspection report. The inspection report must detail each step of the inspection process, the content, and the parts of the inspection work. Reports must highlight existing issues and recommendations for rectification and improvement.

Article 5. Persons Assigned Inspection Tasks

1. Persons assigned to perform self-inspection work in finance and accounting must be honest, objective, responsible in their work, free from serious deficiencies requiring disciplinary action, and possess the appropriate professional qualifications for the inspection content.

2. Persons assigned to perform self-inspection work in finance and accounting must be accountable to the head of the unit for the quality, truthfulness, and reasonableness of inspection conclusions.

Article 6. Forms of Self-Inspection in Finance and Accounting

Depending on the characteristics of operations, organizational structure, actual conditions, and specific circumstances, each unit shall apply the following forms to organize self-inspection in finance and accounting:

1. Time-based self-inspection form

1.1. Regular self-inspection

a. Regular self-inspection according to plan: Self-inspection work is planned for each accounting period or the entire fiscal year of the unit. The plan includes: Content, scope, objects, and time for inspection. This form aims to establish operational routines and practices for the unit.

b. Regular self-inspection of all economic and financial activities: Regularly inspecting all economic and financial activities of the unit. This form does not necessarily require organized inspections but involves cross-checking measures between departments responsible for financial and accounting work, or sequential checks among stages in economic and financial activities within the unit. This form enhances the self-awareness of staff in fulfilling their duties and promptly identifies individual or organizational work process violations.

1.2. Sudden self-inspection: Sudden inspection work is carried out based on the purpose and subjective will of the decision-maker. Sudden inspections are not planned or detailed beforehand. The decision-maker must base decisions on specific situations and unusual changes to clarify incidents. Depending on the specific circumstances and inspection purposes, the decision-maker must identify appropriate inspection contents aligning with management requirements.

2. Scope-based self-inspection form

2.1. Comprehensive self-inspection: Comprehensive inspection involves examining all financial and accounting activities of the unit to verify the accuracy and legality of financial data. Comprehensive inspection covers all aspects as stipulated in Chapter II of this Regulation.

2.2. Specialized self-inspection: Specialized inspection involves examining one or several aspects of financial and accounting activities of the unit to verify the accuracy and legality of certain financial data of the unit.

Article 2. This Decision shall take effect fifteen days from the date of publication in the Official Gazette.

Chapter II

CONTENT OF SELF-INSPECTION

Article 7. Inspection of budget revenues and income from activities of units

1. Inspection of revenues provided by the budget (central and local)

2. Inspection of the implementation of budget revenues assigned by authorized authorities for units to collect, including: Collection rates for each type of fee and charge; total amount of fees and charges collected; amount of fees and charges to be remitted to the state budget; amount of fees and charges retained by the unit; principles for distributing and using the retained fees and charges.

3. Inspection of revenues from voluntary contributions from organizations and individuals for investment and construction of infrastructure projects.

4. Inspection of revenues from business operations and service provision (if applicable).

Article 8. Inspection of budget expenditures and other expenditures of units

1. Inspection of the legality of expenditures within the approved total budget estimate.

2. Inspection of the legality of expenditures outside the budget estimate in special cases approved by superiors.

3. Inspection and determination of the content and reasons for changes in the budget estimate, reasons for non-compliance with the total budget estimate and detailed budget estimates.

4. Inspection of compliance with procedures for state budget expenditure as stipulated in the State Budget Law and guiding documents.

5. Inspection of regular expenditure items in accordance with national standards and internal regulations: For administrative agencies and non-revenue generating public institutions: Expenditure on personnel (salaries, wages, allowances, social insurance contributions, health insurance premiums, trade union funds, collective welfare, bonuses); operational expenditure according to the specific nature of each unit; expenditure on purchasing assets, repairs, maintenance, and regular upkeep of facilities and equipment at the unit; other expenditures. For revenue-generating public institutions: Expenditure on personnel (salaries, wages, allowances, social insurance contributions, health insurance premiums, trade union funds, collective welfare, bonuses); operational expenditure according to the specific nature of each unit; expenditure on purchasing assets, repairs, maintenance, and regular upkeep of facilities and equipment at the unit; expenditure directly serving revenue-generating public activities; other expenditures.

6. Inspection of non-regular activity expenditures including: Expenditure pursuant to government orders; expenditure for scientific research projects; expenditure for national target programs; expenditure for staff reduction; development investment expenditure; other unexpected expenditures.

7. Inspection of declaration and payment of Value Added Tax (VAT) for activities subject to VAT as prescribed by the State.

Article 9. Inspection of determination of revenue-expenditure discrepancies in activities and establishment of reserve funds

1. Inspection of anticipated revenue-expenditure discrepancies during the process of financial receipts and payments, including: Discrepancies due to staffing and administrative cost contracts; discrepancies in public service activities; discrepancies in production and service supply activities; discrepancies in other public service activities.

2. Inspection of calculation and payment of Corporate Income Tax (if applicable).

3. Inspection of calculation, establishment, and utilization of reserve funds at the unit, including: Reward and welfare fund; fund for developing public service activities; fund for stabilizing income.

Article 10. Inspection of management and utilization of fixed assets

1. Inspection of procurement of fixed assets (FA), including: Purpose of use, source of funds, quality of assets, standard quotas for purchase.

2. Inspection of classification of FA at the unit, including classification according to the characteristics of FA, classification according to purpose and usage status of FA.

3. Inspection of recording in the original files of FA, including: Recording of FA cards, registration books, determination of original cost, sources of asset formation, reasons for increase or decrease, condition of FA, transfer procedures, inspection, payment, etc. Comparison between the figures recorded in accounting books with the actual existing FA.

4. Inspection of information circulation about FA, regarding the recorded data among tracking cards of FA.

5. Inspection of mobilization situation and effectiveness of FA utilization, situation of unused FA, leased FA, etc.

6. Inspection of depreciation calculation of FA. For units with income, inspection of depreciation calculation and allocation of FA for production activities and service provision.

7. Inspection of major repairs of FA, implementation of state regulations, legality of costs increasing the original value of FA, etc.

8. Inspection of disposed and pending disposal fixed assets. Examination of disposal reasons; organization of asset disposal; costs and income from asset disposal.

9. Inspection of timely and complete accounting recording and storage of accounting documents for FA managed by the unit.

Article 11. Inspection of management and utilization of materials and tools

1. Inspection of purchasing, transportation, loading and unloading of materials and tools: Sources of purchase, quality, specifications, costs of purchasing, transporting, loading and unloading of materials and tools.

2. Inspection of legality and validity of warehouse entry and exit procedures for materials and tools for use.

3. Inspection of accounting vouchers and recording of accounting for materials and tools when entering or exiting the warehouse by the warehouse keeper, accountant, and using department.

4. Inspection of rationality of material usage standards, material reserves, and material losses.

Article 12. Inspection of management and utilization of salary fund

1. Inspection of compliance with approved salary fund regulations consistent with assigned personnel establishment (if applicable) and assigned tasks.

2. Inspection of proper purpose use of the salary fund.

3. Inspection of social insurance, health insurance contributions, and other required deductions according to current regulations. Comparison and examination of the maximum allowable salary fund with the actual salary fund of the unit and internal distribution of salaries to individuals.

4. Inspection of budget preparation, disbursement, and accounting of the salary fund consistent with the State Budget Classification.

5. Inspection of compliance with accounting regulations for salary accounting and deductions: Inspection through accounting vouchers on working hours, workload, work quality. Inspection of application of salary and bonus calculation methods as prescribed by the State. Inspection of timely and complete accounting recording for salary, bonus, and other payments.

6. For units with income, it is necessary to inspect: Salary expenses, consolidation and allocation of salary expenses, for staff in production and service provision departments.

Article 13. Examination of payment relationships

1. Examination of the opening and use of accounts at the State Treasury, Bank, and credit organizations (if any).

2. Examination of payment relationships between units and state agencies, including the situation regarding state or superior-provided funding sources and amounts payable to the state, internal payments between superiors and subordinates.

3. Examination of payment relationships with officers and staff within the agency or unit, such as: advance payments and their settlement, salaries, bonuses, and other amounts calculated based on salary.

4. Examination of payment relationships involving receivables and payables with external entities outside the unit.

5. Examination of compliance with accounting regulations for receivables and payables.

Article 14. Examination of management and use of monetary funds

1. Examination of cash in the fund, including: verification of the actual amount of cash in the fund against the records in the accounting books.

2. Examination of cash receipts and expenditures to ensure they comply with current regulations and are timely and complete.

3. Examination of the balance of deposits held by the unit at the State Treasury and Bank; verification of deposit balances against the records in the accounting books.

4. Examination of financial investments (if any) currently held by the unit, including their value, legality, and remaining duration.

5. Examination of compliance with accounting regulations for monetary funds at the unit.

Article 15. Examination of the execution of financial revenue and expenditure settlement

1. Examination of the settlement of actual expenditures based on adherence to the approved annual budget estimate (including any adjustments to the annual budget estimate) and the State Budget Appendix.

2. Examination of economic transactions that occur and adjustments to revenues and expenditures during the settlement adjustment period.

3. Through the settlement of revenues and expenditures, analyze and evaluate the results of budget execution by the unit, identify reasons for non-compliance with the budget, and draw necessary lessons and experiences for future budget execution periods.

Article 16. Examination of basic construction investment work

1. Examination of the process of building investment plans and the allocation of capital for each project at the unit.

2. Examination of the process of project appraisal, technical design, and preparation of total estimates for each project implemented at the unit.

3. Examination of tendering procedures for selecting consulting firms and contractors for each project at the unit.

4. Examination of supervision and management of consulting firms and contractors by the project sponsor.

5. Examination of procedures related to payment activities associated with investment operations.

6. Examination of final settlement, acceptance, and handover for use of basic construction projects.

7. Examination of compliance with and adherence to state regulations on basic construction investment management systems; compliance with reporting systems by the unit to various levels of management agencies.

8. Examination of compliance with accounting regulations for basic construction investment work.

Article 17. Examination of Accounting

During self-examination of financial matters, accountants must self-examine the implementation of accounting standards, accounting systems, and current legal regulations on accounting as follows:

1. Examination of the preparation, collection, processing of accounting vouchers.

2. Examination of the establishment, recording, and closing of accounting ledgers.

3. Examination of the application and recording of accounting accounts.

4. Examination of the preparation, analysis, submission, and utilization of financial reports.

5. Examination of regular or spot inventory checks according to state regulations, and the implementation of accounting record storage.

6. For units required by law to have their financial statements audited, examination of whether the unit has conducted the audit as required, the auditor's opinion, and the unit's handling of the audit findings.

Article 18. Inspection of the organization and leadership of financial and accounting work

1. Inspect the organizational structure, job assignment, and working procedures, evaluate the rationality of staff deployment and utilization, work relations, and relationships between individuals and departments.

2. Inspect the qualifications and credentials of financial and accounting staff according to state regulations and the actual situation of the unit.

3. Inspect the recruitment, training, development, and deployment of chief accountants, financial and accounting staff.

Article 3. Heads of administrative agencies, public service units, political-social organizations, political-social-professional organizations, social-professional organizations, and other organizations using state budget funds shall be responsible for implementing this Decision.

The Director of the Accounting System and Audit Department, the Inspector General of the Ministry of Finance, the Director of the Cadre Organization Department, the Director of the Ministry of Finance's Office, and related agencies, units, and organizations shall be responsible for guiding and inspecting the implementation of this Decision. REGULATIONS ON SELF-AUDITING OF FINANCIAL AND ACCOUNTING MATTERS AT ORGANIZATIONS USING STATE BUDGET FUNDS (Issued pursuant to Decision No. 67/2004/QĐ-BTC dated August 13, 2004 of the Minister of Finance)

Chapter III

PROCEDURES AND FORMS OF SELF-AUDITING

Article 19. For regular self-inspection of all economic and financial activities

Regular self-inspection does not require the establishment of a department or inspection team. Financial self-inspection is carried out at each stage of work by individuals within relevant departments. Self-inspection is conducted according to the following procedures and forms:

1. Each individual involved in handling tasks related to economic and financial transactions must review the work they have completed and their own work.

2. Upon discovering violations or issues, report them immediately to the direct supervisor for prompt resolution.

Article 20. For regular self-inspections according to plans or unexpectedly

1. Develop a plan and select an inspection method: The unit must define the scope and objectives of each periodic inspection. Simultaneously, determine the scale of the inspection, methods, ways of conducting the inspection, measures to implement, and organize inspection forces.

2. Prepare for inspection: Prepare relevant documents and policies related to the content of the inspection or related to the situation requiring inspection. Review and study previous inspection conclusions and similar incidents.

3. Conduct inspection: Organize financial and accounting inspections according to the contents stipulated in Chapter II in accordance with the self-inspection procedures and methods of financial and accounting matters as prescribed in Article 21 of these Regulations.

Article 21. Procedures and methods of self-inspection of financial and accounting matters

1. Collect and process documents related to the inspection concerning current policies and regulations, internal unit rules.

2. Inspect, identify, record, and compile data and information related to the inspection.

3. Cross-check discovered actions during the inspection with current state policies and regulations, unit provisions, budgets, assigned tasks. Conduct verification and investigation for cases of doubt.

4. Evaluate the severity of violations, research and propose remedial measures, and handle the inspection results within authority.

5. Draft and submit a report on the inspection results, recommendations for resolution, and publicly disclose the inspection results.

Article 22. Handling the results of self-inspection and publicizing the results of self-inspection

1. Based on the results of self-inspection, units and individuals with achievements in financial and accounting activities shall be considered for immediate or periodic rewards as prescribed. In cases of violations of financial management principles and accounting, depending on the nature and extent of the violation, the unit must notify the relevant departments and individuals and issue administrative and service responsibility decisions as prescribed.

2. Periodically or at year-end, when financial transparency is required, the unit must publicly announce the results of its self-inspection in financial and accounting matters and the results of handling the conclusions of self-inspection.

Article 23. Reporting System

1. Annually, units using state budget funds must prepare a self-inspection report on financial and accounting matters regarding the implementation of inspection plans, inspection contents, and inspection results of their own unit.

2. For sudden inspections, the unit must prepare a self-inspection report on the reasons for conducting sudden inspections, inspection contents, and sudden inspection results.

3. The annual consolidated self-inspection result report is used to evaluate and correct the operational situation of the unit and is sent to the superior supervisory agency.

4. The deadline for submitting self-inspection reports from units along with the annual final accounts report.

Chapter IV

RESPONSIBILITIES OF THE HEAD OF THE UNIT AND PERSONS ASSIGNED INSPECTION TASKS

Article 24. Responsibilities of the head of the unit

1. Establish regulations, principles, and methods of self-inspection within their managed unit and subordinate units based on the provisions of this Regulation. Organize propaganda on the necessity of financial and accounting self-inspection work.

2. Annually develop a self-inspection plan, organize financial and accounting self-inspection within their unit according to the contents stipulated in this Regulation and specific provisions of the unit. Bear responsibility for guiding and directing departments and offices on the contents that need to be inspected, the progress and deadlines for inspection.

3. Form an inspection team with competent members, procedures, and qualities to carry out inspection work according to the plan or in emergency situations within their unit or subordinate units.

4. Direct self-inspection work for subordinate units under their management and control.

5. Examine and approve inspection conclusions made by the inspection department, approve and urge the implementation of measures to address issues discovered during the inspection process. Handle violations by departments and individuals within their authority. If there are signs of law violations or serious breaches of financial and accounting principles, they must report to the competent state agency to conduct inspections and audits to clarify the matter.

Article 25. Responsibilities of the inspection department and persons assigned inspection tasks

1. Implement the directives of the unit head to conduct inspections according to the determined contents or planned contents.

2. Directly inspect the contents that need to be inspected at the assigned units and departments, adhering strictly to current financial and accounting regulations and systems during the inspection process.

3. Urge units and departments within the agency to perform financial and accounting self-inspections.

4. Compile the situation and results of inspections, prepare inspection result reports, propose solutions, and submit them to the unit head for consideration and decision-making.

Article 26. Responsibilities of other departments and individuals within the unit

1. Provide all necessary documents to serve the inspection work, cooperate, and facilitate the person assigned with inspection tasks to complete their work.

2. Implement conclusions and opinions after inspection, take measures to address issues identified during the inspection process.

Chapter V

IMPLEMENTATION

Article 27. Implementation Organization

1. The head of the unit that uses state budget funds shall organize the dissemination and popularization of the content of self-inspection work for all officials and civil servants in the unit to be aware of and implement it.

2. The head of the unit shall direct and coordinate with the People's Inspectorate to jointly conduct regular and ongoing self-inspection work within their own unit and report the results of self-inspection to the higher-level unit.

3. Annually, units need to summarize and evaluate the financial and accounting self-inspection work to improve and enhance the effectiveness of self-inspection work.