Circular No. 675/TC/DT regarding the allocation of capital for basic construction projects in the 2002 plan.

LETTER

OF THE MINISTRY OF FINANCE NUMBER 1810 TC/ĐT ON MARCH 5, 2002
REGARDING THE ANNOUNCEMENT OF INVESTMENT CAPITAL PLANS

Dear: - State Treasury Central,

- Departments of Finance and Prices in provinces,

centrally governed cities.

The Prime Minister has issued Decision No. 196/2001/QĐ-TTg dated December 27, 2001 allocating budget targets and estimates for the State Budget for the year 2002. The Ministry of Finance has issued Document No. 675 TC/ĐT on January 21, 2002 guiding ministries, sectors, and localities regarding the preparation of plans and allocation of investment capital for construction projects in 2002. Specifically concerning the announcement of capital plans from financial authorities to State Treasury, the Ministry of Finance stipulates as follows:

In accordance with guidelines under the Law on State Budget, ministries and localities allocate budget estimates to beneficiary units according to the State Budget Classification; in construction, this includes a structure of capital comprising construction costs, equipment costs, and other expenses. Currently, financial authorities notify capital plans to State Treasury branches based on total amounts and capital structures for each project; State Treasury branches make payments within the scope of capital allocations by supervising bodies and notifications from financial authorities.

To simplify one step in the finance process, the allocation and notification of investment capital will be carried out as follows:

- Ministries, sectors, and localities allocate plans to project owners still according to a structure of capital comprising construction costs, equipment costs, and other expenses (according to the State Budget Classification). This is reflected in the consolidated plan sent to financial authorities and the allocation of volume plans for each project owner sent to both the project owner and the State Treasury branch responsible for payment.

- For centrally managed projects, when notifying capital plans to Central State Treasury, the Investment Department only notifies the total planned amount of the project without specifying the capital structure. The Central State Treasury then notifies provincial or city State Treasuries based on the total amount of the project.

For locally managed projects, Departments of Finance and Prices still notify capital plans to State Treasury branches according to current regulations (including total amounts and structures of construction costs, equipment, and other expenses for the project).

- Provincial or city State Treasuries base their notifications on the total amount of the project as notified by Central State Treasury (for centrally managed projects) or the capital plan as notified by Departments of Finance and Prices (for locally managed projects), along with detailed volume plans allocated to project owners (including a breakdown of capital structures) sent to the State Treasury branch responsible for payment, to make payments within the scope of total amounts and capital structures announced.

- When reporting periodically according to regulations and settling annual budget allocations, State Treasuries still implement based on total amounts and capital structures when settling accounts with the State Budget.

We request that State Treasury and Departments of Finance and Prices proceed with implementation.