Circular No. 67/TC-ĐTPT on guiding the management and use of investment capital for primary education projects

 CIRCULAR

MINISTRY OF FINANCE DECREE NO. 67/TC-ĐTPT SEPTEMBER 12, 1995 GUIDELINES FOR THE MANAGEMENT AND USE OF FUNDS FOR THE PRIMARY EDUCATION PROJECT

BASED ON THE LOAN AGREEMENT BETWEEN THE GOVERNMENT OF VIETNAM AND THE INTERNATIONAL DEVELOPMENT ASSOCIATION SIGNED ON NOVEMBER 1, 1993.
BASED ON DECREE NO. 58/CP OF AUGUST 30, 1993 ISSUED BY THE GOVERNMENT ON THE REGULATIONS FOR MANAGING FOREIGN LOANS AND DEBTS AND THE GUIDING CIRCULARS ATTACHED TO THE DECREE.
BASED ON DECREE NO. 177/CP OF OCTOBER 20, 1994 ISSUED BY THE GOVERNMENT ON THE REGULATIONS FOR INVESTMENT AND CONSTRUCTION MANAGEMENT.
AFTER CONSULTATION WITH THE NATIONAL PLANNING COMMITTEE, THE MINISTRY OF EDUCATION AND TRAINING, THE STATE BANK OF VIETNAM, AND THE AGRICULTURAL BANK OF VIETNAM.
THE MINISTRY OF FINANCE GUIDES THE MANAGEMENT AND USE OF FUNDS FOR THE PRIMARY EDUCATION PROJECT AS FOLLOWS:

I. GENERAL PROVISIONS:

1. THE WORLD BANK LOAN FOR IMPLEMENTING THE PRIMARY EDUCATION PROJECT UNDER THE MINISTRY OF EDUCATION AND TRAINING IS A FOREIGN GOVERNMENT LOAN, THEREFORE PROCEDURES FOR WITHDRAWING FUNDS, USING FUNDS, AND REPAYING LOANS SHALL BE CONDUCTED IN ACCORDANCE WITH DECREE NO. 58/CP OF AUGUST 30, 1993 ISSUED BY THE GOVERNMENT AND THE GUIDING CIRCULARS ATTACHED TO THE DECREE, THE TERMS AND CONDITIONS ATTACHED TO THE LOAN AGREEMENT BETWEEN THE GOVERNMENT OF VIETNAM AND THE INTERNATIONAL DEVELOPMENT ASSOCIATION SIGNED ON NOVEMBER 1, 1993, AND ANY AMENDMENTS TO THIS AGREEMENT. THE LOAN WILL BE BALANCED AGAINST THE NATIONAL BUDGET, AND THE MINISTRY OF FINANCE WILL ALLOCATE ANNUAL BUDGETS TO REPAY THE LOAN WHEN DUE.

2. THE MINISTRY OF FINANCE AND THE STATE BANK OF VIETNAM AUTHORIZE THE AGRICULTURAL BANK OF VIETNAM TO SERVE AS THE BANK FOR THE PROJECT, TO IMPLEMENT WITHDRAWAL PROCEDURES (INCLUDING DIRECT PAYMENT METHODS, REIMBURSEMENT PROCEDURES, AND COMMITMENT PROCEDURES), AND TO PAY THE PROJECT OWNER UPON APPROVAL FROM THE MINISTRY OF FINANCE.

DURING THE PROCESS OF WITHDRAWING FUNDS FROM THE WORLD BANK ACCORDING TO THE ABOVE METHODS, THE AGRICULTURAL BANK OF VIETNAM IS ENTITLED TO CHARGE SERVICE FEES FOR EACH WITHDRAWAL (INCLUDING FEES FOR OPENING LETTERS OF CREDIT, DOCUMENT HANDLING, TELEGRAMS, FAXES, ETC.), BUT THE AMOUNT OF FEES CHARGED MUST NOT EXCEED THE LEVEL SET BY DECISION NO. 162/QĐ-NH2 OF AUGUST 19, 1993 ISSUED BY THE GOVERNOR OF THE STATE BANK REGARDING CHARGES FOR SERVICES THROUGH BANKS. THESE SERVICE FEES ARE INCLUDED IN THE TOTAL INVESTMENT COST OF THE PROJECT.

3. FIVE DAYS BEFORE THE DUE DATE FOR PRINCIPAL AND INTEREST REPAYMENT, THE STATE BANK OF VIETNAM SHALL NOTIFY THE MINISTRY OF FINANCE OF THE AMOUNT OF PRINCIPAL AND INTEREST TO BE PAID SO THAT THE MINISTRY CAN ALLOCATE THE BUDGET TO REPAY THE WORLD BANK ON TIME.

4. THE ISSUE OF DOMESTIC AND FOREIGN CAPITAL FOR THE PRIMARY EDUCATION PROJECT SHALL BE CONDUCTED IN ACCORDANCE WITH THE REGULATIONS FOR INVESTMENT AND CONSTRUCTION MANAGEMENT ISSUED TOGETHER WITH DECREE NO. 177/CP OF OCTOBER 20, 1994 ISSUED BY THE GOVERNMENT AND THE GUIDING CIRCULARS IMPLEMENTING THE DECREE, THE REQUIREMENTS OF THE WORLD BANK FOR THE LOAN, AND THE PROVISIONS OF THIS CIRCULAR.

5. THE MINISTRY OF EDUCATION AND TRAINING AND THE PROJECT OWNER ARE RESPONSIBLE FOR PREPARING AND SUBMITTING ANNUAL INVESTMENT BUDGET PLANS (INCLUDING BOTH DOMESTIC MATCHING FUNDS AND WORLD BANK LOANS) IN ACCORDANCE WITH THE ESTABLISHED REGULATIONS.

6. THE PROJECT OWNER (AS PER DECISION NO. 2847/QĐ-TCCB OF DECEMBER 15, 1993 ISSUED BY THE MINISTRY OF EDUCATION AND TRAINING) IS RESPONSIBLE FOR USING FUNDS FOR THEIR INTENDED PURPOSES IN ACCORDANCE WITH THE CONDITIONS OF THE AGREEMENT SIGNED.

7. THE PRINTING AND TRANSPORTATION OF TEXTBOOKS BY THE EDUCATION PUBLISHING HOUSE MUST BE CONDUCTED ON A FULL COST RECOVERY BASIS FOR THE STATE BUDGET AND WILL BE SPECIFIED IN SEPARATE DOCUMENTS.

8. THIS CIRCULAR APPLIES TO THE FOLLOWING PROJECT COMPONENTS: IMPROVEMENT AND CONSTRUCTION OF PRIMARY SCHOOLS; SCHOOL FURNITURE EQUIPMENT; PURCHASE OF OTHER GOODS; PRINTING AND TRANSPORTATION OF TEXTBOOKS.

THE COMPONENT OF ADVISORY SERVICES (TRAINING AND EXPERTS) FROM OPERATIONAL FUNDS WILL BE HANDLED AS FOLLOWS:

II. SPECIFIC PROVISIONS:

1. THE ANNUAL INVESTMENT AND CONSTRUCTION BUDGET PLAN (ALLOCATED BY QUARTER) OF THE PROJECT MUST INCLUDE THE SOURCES OF FUNDS AND THE WITHDRAWAL SCHEDULE, INCLUDING:

a. WORLD BANK LOAN FUNDS:

- FUNDS TO BE PAID THROUGH DIRECT PAYMENT METHODS, REIMBURSEMENT PROCEDURES, AND COMMITMENT PROCEDURES

- FUNDS TO BE TRANSFERRED TO A SPECIAL ACCOUNT, WHEREIN IT IS NECESSARY TO ANALYZE CLEARLY:

+ THE PORTION TO BE PAID IN FOREIGN CURRENCY

+ THE PORTION TO BE PAID IN VIETNAMESE DONG

b. DOMESTIC MATCHING FUNDS ANNUALLY FOR INVESTMENT AND CONSTRUCTION ARE TO BE ARRANGED IN THE INVESTMENT AND CONSTRUCTION BUDGET PLAN.

THE FUNDS PLAN (a, b) IS TO BE DIVIDED MONTHLY AND QUARTERLY AND DETAILLED BY EACH WORK CATEGORY:

+ CONSTRUCTION

+ SCHOOL EQUIPMENT

+ GOODS

+ TEXTBOOK PRINTING AND TRANSPORTATION

2. OPENING ACCOUNTS AND DISTRIBUTING FUNDS FOR THE PROJECT

- THE PROJECT COORDINATION BOARDS AT PROVINCES AND CITIES SHALL OPEN ACCOUNTS AT THE INVESTMENT AND CONSTRUCTION MANAGEMENT DEPARTMENT TO RECEIVE DOMESTIC MATCHING FUNDS AND OPEN ACCOUNTS AT THE AGRICULTURAL BANK TO RECEIVE WORLD BANK LOANS.

- DOMESTIC MATCHING FUNDS: THE MINISTRY OF FINANCE (GENERAL DEPARTMENT OF INVESTMENT AND CONSTRUCTION MANAGEMENT) SHALL MANAGE AND DISTRIBUTE ACCORDING TO CURRENT REGULATIONS.

- WORLD BANK LOANS: THE AGRICULTURAL BANK OF VIETNAM SHALL MAKE PAYMENTS TO THE PROJECT OWNER UPON APPROVAL FROM THE MINISTRY OF FINANCE TO ALLOW THE PROJECT OWNER TO WITHDRAW FUNDS.

3. TO BE ELIGIBLE FOR FUNDS FOR THE CONSTRUCTION OF PRIMARY SCHOOLS;

THE LOCAL GOVERNMENT WHERE THE PRIMARY SCHOOL IS TO BE BUILT MUST DEPOSIT A SECURITY DEPOSIT AT A DOMESTIC BANK EQUAL TO 10% OF THE PROJECT VALUE. WHEN THE COMPLETED WORK REACHES 10% OR MORE OF THE PROJECT BUDGET, FUNDS FROM THE WORLD BANK CAN BE USED FOR PAYMENT, AND THE SECURITY DEPOSIT WILL BE RETURNED TO THE LOCAL GOVERNMENT AFTER THE FINAL ACCOUNTING OF THE CONSTRUCTION WORK IS COMPLETED.

4. WITHDRAWING LOAN FUNDS:

a. WITHDRAWING FUNDS THROUGH A SPECIAL ACCOUNT:

* WITHDRAWING FUNDS FROM THE WORLD BANK TO SUPPLEMENT THE SPECIAL ACCOUNT: WHEN IT IS NECESSARY TO WITHDRAW FUNDS FROM THE WORLD BANK CREDIT ACCOUNT TO SUPPLEMENT THE SPECIAL ACCOUNT OPENED AT THE AGRICULTURAL BANK OF VIETNAM, THE PROJECT OWNER MUST SUBMIT TO THE MINISTRY OF FINANCE (DEPARTMENT OF FINANCIAL MANAGEMENT) AND THE STATE BANK (BRANCH TRANSACTION) THE FOLLOWING DOCUMENTS:

+ APPLICATION FOR FUNDS WITHDRAWAL

+ Request for capital withdrawal

+ COPY OF CONTRACTS FOR EQUIPMENT PURCHASE, TEXTBOOK PRINTING...

+ ITEMIZED EXPENSES

+ RECONCILIATION STATEMENT WITH THE AGRICULTURAL BANK OF VIETNAM

WITHIN FIVE BUSINESS DAYS, THE MINISTRY OF FINANCE WILL NOTIFY THE STATE BANK TO WITHDRAW FUNDS FROM THE WORLD BANK AND TRANSFER THEM INTO THE SPECIAL ACCOUNT IN THE NAME OF THE PRIMARY EDUCATION PROJECT OWNER AT THE AGRICULTURAL BANK OF VIETNAM.

* WITHDRAWING FUNDS FROM THE SPECIAL ACCOUNT FOR PAYMENT:

- TO BE ELIGIBLE FOR FUNDS WITHDRAWAL FROM THE SPECIAL ACCOUNT, THE PROJECT OWNER MUST SUBMIT THE FOLLOWING DOCUMENTS TO THE MINISTRY OF FINANCE (GENERAL DEPARTMENT OF INVESTMENT AND CONSTRUCTION MANAGEMENT):

+ APPLICATION FOR FUNDS WITHDRAWAL

+ COPY OF CONTRACTS FOR EQUIPMENT PURCHASE, TEXTBOOK PRINTING...

+ CERTIFICATE OF THE VALUE OF COMPLETED WORK ISSUED BY THE INVESTMENT AND CONSTRUCTION MANAGEMENT DEPARTMENT WHERE THE PROJECT COORDINATION BOARD AT THE PROVINCE OR CITY HAS OPENED AN ACCOUNT (IF PAYMENT IS FOR COMPLETED WORK).

+ A copy of the provincial, municipal guarantee certificate (In the case of the first capital payment for construction investment).

+ A copy of the bill of lading (In the case of subsequent payments for equipment and goods value).

+ A reconciliation statement with the Vietnam Agricultural Bank regarding the withdrawal process from the special account.

Within seven working days after receiving all necessary documents mentioned above, the Ministry of Finance (General Department of Investment Planning) will notify the amount to be paid so that the Vietnam Agricultural Bank can make payments to the units.

The circulation of documents and the relationship between units during the payment process for construction works and domestic equipment procurement are illustrated in Diagram 1.

After making payments to the units or paying for equipment and goods to suppliers, the Vietnam Agricultural Bank will prepare a statement (detailing the expenditure, date of payment, foreign currency recipient unit, exchange rate applied, and converted to Vietnamese Dong) and send it to the Ministry of Finance (General Department of Investment Planning) to record the loan repayment from the World Bank into the State Budget, and record the transfer of construction investment capital for the project according to the buying rate announced by the Foreign Trade Bank at the time of recording receipts and payments.

b. Withdrawal of funds from the World Bank for direct payment and commitment procedures.

Based on the supplier's payment request, the project owner needs to prepare a fund withdrawal application from the loan account and necessary documents to send to the Ministry of Finance (Department of Financial Cooperation), the State Bank (Trading Department). The fund withdrawal payment file includes:

+ Request for capital withdrawal

+ COPY OF CONTRACTS FOR EQUIPMENT PURCHASE, TEXTBOOK PRINTING...

+ A copy of the bill of lading (In the case of direct payment for equipment and goods value).

+ A copy of the supplier's invoice.

+ Proof of payment made (for refund procedures).

+ A copy of the letter of credit expected to be issued by the Vietnam Agricultural Bank (In the case of commitment procedures).

Within five working days from the date of receipt of the complete withdrawal file, the Ministry of Finance (Department of Financial Cooperation) will issue an opinion notification. If approved, the primary education project owner and the Vietnam Agricultural Bank will sign the withdrawal application to be sent to the World Bank for payment to the beneficiary.

Upon receipt of the World Bank's notification of payment to the seller, the project owner is responsible for sending one copy of the notification to the Ministry of Finance (Department of Financial Cooperation) for tracking, and one copy to the General Department of Investment Planning to record the loan repayment from the World Bank into the State Budget, and record the transfer of construction investment capital for the project according to the buying rate announced by the Foreign Trade Bank at the time of recording receipts and payments.

In both cases above (4a, 4b), based on the payment order, the General Department of Investment Planning will record the receipt of State Budget capital and issue a notice of receipt of capital for recording and accounting purposes for the Investment Planning Departments where the project owner has opened accounts.

5. The special account shall be periodically audited. Expenditures from the special account must be strictly monitored. Annually, the special account, books, and accounting files of the project must be independently audited in accordance with state regulations and the loan agreement. Audit documents are one of the bases for considering additional withdrawals to the special account, or withdrawals from the special account for payment.

6. While the loan amount in the special account remains unused, interest accrues. On the fifth day of each month, the Vietnam Agricultural Bank must deposit the entire accrued interest from the special account into the State Budget (the national foreign currency reserve account at the State Bank Trading Department, account number 331.213.020.1).

7. Monthly, quarterly, and annually, the project owner is responsible for reporting to the Ministry of Finance (General Department of Investment Planning), the Ministry of Education and Training, the National Science Council, and the State Bank of Vietnam on the implementation of the project, including details of fund withdrawals and loan usage.

8. The Vietnam Agricultural Bank is responsible for notifying the Ministry of Finance (General Department of Investment Planning) and the State Bank (Trading Department) about the results of fund withdrawals, fund usage, and the balance of the special account monthly. Monthly, the Vietnam Agricultural Bank sends a statement of special account expenditures to the Ministry of Finance (one copy for the General Department of Investment Planning and one copy for the Department of Financial Cooperation). The special account statement clearly states the monthly accrued interest and the date of transferring this interest to the Ministry of Finance.

III. SETTLEMENT AUDIT WORK:

- The "Primary Education" project owner must settle accounts when the construction work or component is completed.

- Periodically and unexpectedly, the Ministry of Finance, the Ministry of Education and Training, and the National Science Council will audit the project implementation, the use of funds (domestic and foreign) by the project. If the project owner uses funds improperly without effectiveness, the Ministry of Finance will suspend capital transfers to address violations.

IV, IMPLEMENTATION PROVISIONS:

This Circular takes effect from the date of signing. During implementation, if there are difficulties, the project owner, the Ministry of Education and Training, and the Vietnam Agricultural Bank need to promptly reflect them to the Ministry of Finance for research and supplementation.

 

DIAGRAM 1

WITHDRAWAL OF FUNDS FROM THE SPECIAL ACCOUNT

 

 

 

 

 

 

 

 

 

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