Circular No. 70/2019/TT-BTC guiding the accounting regime for state budget and commune finance

MINISTRY OF FINANCE --------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------------
Number: 70/2019/TT-BTC	Hanoi, October 3, 2019

 

CIRCULAR

GUIDELINES ON THE BUDGET ACCOUNTING SYSTEM AND COMMUNE FINANCE

Pursuant to the Accounting Law dated November 20, 2015;

Pursuant to the State Budget Law dated June 25, 2015;

Pursuant to Decree No. 174/2016/NĐ-CP dated December 30, 2016 of the Government detailing and guiding the implementation of certain provisions of the Accounting Law;

Pursuant to Decree No. 163/2016/NĐ-CP dated December 21, 2016, issued by the Government, detailing the implementation of certain provisions of the State Budget Law;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

On the proposal of the Director of the Department of Accounting and Auditing Supervision;

The Minister of Finance issues this Circular guiding the accounting system for budgets and commune finance.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the list, forms, and methods of preparing accounting vouchers; the list of account systems and methods of posting accounts; the list of ledger forms and methods of preparing ledgers; the list of report forms, methods of preparing and presenting financial reports of units subject to the provisions of Article 2 of this Circular.

Article 2. Applicability

This Circular applies to People's Communes, Wards, and Towns (hereinafter referred to as Communes) under Districts, Counties, Urban Areas, and Cities (hereinafter referred to as Districts) of Provinces and Central-Supervised Municipalities (hereinafter referred to as Provinces) throughout the country and other organizations and individuals related to budget accounting and commune finance work.

Chapter II

SPECIFIC PROVISIONS

Article 4. Provisions on accounting vouchers

1. Accounting vouchers are documents and objects carrying information reflecting economic and financial transactions that have occurred and been completed, serving as the basis for recording in the accounting books.

2. Communes uniformly use the accounting voucher forms prescribed in this Circular.

- For mandatory vouchers (marked with BB), communes may not modify the prescribed voucher forms during implementation.

- For guidance vouchers (marked with HD), communes are permitted to modify and supplement the voucher forms to suit the economic and financial transactions arising.

3. Pre-printed voucher forms must be carefully preserved and not allowed to become damaged or deteriorate. Checks, Receipts, and valuable papers must be managed like cash.

4. The list, forms, and explanations of the methods for preparing accounting vouchers prescribed in Appendix 01 "Accounting Voucher System" attached to this Circular. For economic transactions that have not been covered by the vouchers listed in Appendix 01, communes must prepare accounting vouchers ensuring at least seven contents stipulated in Article 16 of the Accounting Law.

Article 5. Provisions on accounting accounts

1. Accounting accounts reflect continuously, systematically, and regularly the situation of assets, receipt and utilization of funds from the state budget and other sources; the situation of income and expenditure activities, results of operations, and other items in communes.

2. Classification of the accounting account system:

a) Accounts in the table include accounts from type 1 to type 9, which are double-entry (posting between corresponding accounts). The accounting account system in the classification table and systematization of economic and financial transactions according to content includes 26 first-level accounts, some of which are detailed into second-level accounts as required by management needs.

b) Accounts outside the table are single-entry (no posting between corresponding accounts). Accounts outside the table include two accounts: Account 005 - Long-term Assets in Use and Account 008 - Budget Expenditure Estimate. Account 008, related to the state budget, is reflected according to the state budget classification and fiscal year (previous year, current year).

3. Application of the accounting account system:

a) Communes base on the accounting account system issued in this Circular to apply appropriate accounting accounts suitable for commune activities.

b) Communes may supplement accounting accounts in the following cases:

- Supplement detailed accounts for accounts already specified in the list of the accounting account system (Appendix 02) attached to this Circular to meet commune management requirements.

- The Ministry of Finance will approve in writing the addition of parallel-level accounts to the accounts already defined in the Accounting Account System Directory (Appendix No. 02) attached to this Circular.

4. The list of the accounting account system, explanations of content, structure, and methods of recording accounting accounts of communes are prescribed in Appendix 02 "Accounting Account System" attached to this Circular.

Article 6. Provisions on accounting books

1. Communes must open accounting ledgers to record, systematize, and retain all economic and financial transactions that have occurred. The preservation and storage of accounting ledgers shall be carried out in accordance with the Accounting Law, relevant legal documents, and the provisions of this Circular.

2. Communes must monitor commune revenue and expenditure responsibilities according to the state budget classification and financial and budgetary regulations for the preparation of final accounts reports with the state budget and competent authorities.

3. Types of accounting ledgers

a) Communes only use one set of accounting ledgers for each annual accounting period, including general ledgers and subsidiary ledgers. All general ledgers and subsidiary ledgers must be fully opened and properly recorded according to the content, sequence, and method prescribed for each ledger form.

b) General ledger forms:

- Journal-General Ledger applied to communes implementing the Journal-General Ledger system, used to reflect all economic and financial transactions occurring in chronological order and systematized according to economic content on accounting accounts. Data on the Journal-General Ledger reflects the overall situation of assets, funding sources, and the use of funding sources in chronological order.

- General Ledger aggregates and systematizes economic and financial transactions occurring according to economic content on accounting accounts. Data on the General Ledger reflects the overall situation of assets, funding sources, and the use of funding sources.

c) Subsidiary ledger forms:

Subsidiary ledgers and cards are used to record in detail economic and financial transactions related to accounting objects that the General Ledger does not reflect in detail. Data on subsidiary ledgers provide specific information for management purposes and for calculating and preparing financial statements and final accounts reports.

Based on management requirements and accounting posting requirements for individual accounting objects, communes are allowed to further detail indicators on subsidiary ledgers and cards to serve the preparation of financial statements and final accounts reports according to management requirements.

4. Responsibilities of those holding and recording accounting ledgers

a) Accounting ledgers must be strictly managed, clearly assigning individual responsibilities for holding and recording. Personnel responsible for holding and recording accounting ledgers must bear responsibility for the content recorded in the ledgers during their tenure.

b) When there is a change in personnel responsible for maintaining and recording the accounting ledger, the village accountant supervisor must organize the transfer of management responsibility and ledger recording duties between the outgoing and incoming accounting staff. The outgoing accounting staff must be responsible for all contents recorded in the ledger during their tenure, while the incoming accounting staff will be responsible from the date of taking over. The handover record must be signed and confirmed by the village accountant supervisor.

c) Accounting staff responsible for maintaining and recording the ledger must promptly record economic transactions after they occur, ensuring clarity and completeness according to the content of the accounting ledger model. Information and figures entered into the accounting ledger must ensure accuracy and truthfulness based on corresponding accounting vouchers used for ledger entries.

d) Ledger recording must be carried out in chronological order of the occurrence of economic and financial transactions. Information and figures recorded in the accounting ledger of the following year must continue those of the preceding year, ensuring continuity from the opening to the closing of the ledger.

5. Opening the Accounting Ledger

a) Principles for Opening the Accounting Ledger

The accounting ledger must be opened at the beginning of the accounting year or immediately after the decision to establish and commence operations of the village. The accounting ledger should be opened at the start of the new fiscal and budget year to transfer the balance from the previous year's ledger and record new economic and financial transactions occurring from January 1 of the new fiscal and budget year.

Budget revenue and expenditure data of the previous year that arise during the adjustment period for final accounts shall be recorded in the revenue and expenditure ledgers during the adjustment period to track relevant accounts and discrepancies in budget revenue and expenditure for preparing the state budget final account report as prescribed. If economic transactions occur in the current year, they should be recorded in the current year's ledger.

b) In the case of ledger recording on paper (manual), the village must complete the legal procedures for the accounting ledger as follows:

- For bound ledgers:

+ The cover (upper left corner) must include the name of the village, the center of the cover should have the name of the ledger, the date of opening the ledger, the date of closing the ledger, the names and signatures of the ledger preparer, the accounting supervisor, and the Chairman of the People's Committee of the village signing and stamping; the date of completion of ledger recording or the date of transferring the ledger to another person.

+ Each page of the accounting ledger must be numbered from page one (01) to the last page, with a stamp placed between two pages.

- For loose-leaf ledgers:

+ At the beginning of each loose-leaf ledger, clearly record the name of the village, the serial number of each ledger sheet, the name of the ledger, the month of use, and the names of the ledger holder and recorder.

+ Loose-leaf ledgers must be signed and stamped by the Chairman of the People's Committee of the village before use and registered in the Register of Loose-Leaf Ledger Usage.

+ Loose-leaf ledgers must be arranged in the order of accounting accounts, ensuring safety and ease of retrieval.

c) In the case of ledger creation on a computer:

Computerized accounting ledger templates must comply with the elements of the ledger as stipulated by accounting laws. For electronic storage ledgers, the Chairman of the People's Committee of the village must ensure the security and confidentiality of information and data, and guarantee accessibility within the retention period. Specifically, consolidated ledgers must be printed on paper, bound into volumes, and all procedures specified in point b, Clause 5 of this Article must be completed.

6. Recording in the Accounting Ledger

a) Ledger recording must be based on accounting vouchers; all figures recorded in the ledger must be supported by accounting vouchers; it must ensure clear and systematic figures and characters without abbreviations, overlapping entries, or skipping lines.

b) It must follow the recording sequence and accounting ledger models prescribed in Appendix No. 03 "Accounting Ledger System" attached to this Circular. When a page is fully recorded, the total of each page must be carried forward to the next page, without additional entries above or below.

c) In the case of ledger recording on paper, non-fading ink must be used, and red ink must not be used for ledger entries. If a page is not fully recorded, the unused portion must be crossed out diagonally, without erasing or using chemical substances for corrections.

7. Closing the Accounting Ledger

Closing the accounting ledger involves summing up to determine the total debit and credit occurrences and the end-of-period balance for each accounting account or the total revenue, expenditures, fund balances, inventory receipts, issues, and stock balances.

a) Periods for Closing the Accounting Ledger

- Cash ledgers must be closed at the end of each day. After closing, a reconciliation must be conducted between the cash ledger of the accountant and the cash box ledger of the cashier and the actual cash in the safe to ensure accuracy and agreement. Additionally, a Cash Inventory Sheet must be prepared at the end of each month, which is then stored together with the cash ledger of the last day of the month.

- Bank deposit and treasury ledgers must be closed at the end of each month to reconcile with the bank and treasury; a Reconciliation Statement with the bank and treasury (confirmed by the bank and treasury) must be stored together with the monthly bank deposit and treasury ledgers.

- The village must close the accounting ledger at the end of the accounting year before preparing the financial statements. Additionally, the village must close the accounting ledger in cases of sudden inventory checks or other situations as prescribed by law.

b) Procedure for Closing the Accounting Ledger

(1) For manual ledger recording:

Step 1: Checking and Reconciling Before Closing the Ledger

- At the end of the accounting period, after reflecting all accounting vouchers generated during the period in the ledger, the accountant must reconcile the figures on the accounting vouchers (if necessary) with the ledger entries, and the figures among related ledgers, ensuring consistency between the figures on the accounting vouchers and those in one ledger and between ledgers. Sum up the occurrences on the General Ledger and detailed ledgers.

- Based on detailed accounting ledgers and cards, prepare a detailed consolidation table for accounts that need to be recorded across multiple ledgers or pages.

- Perform the addition of all debit occurrences and credit occurrences of all accounts on the General Ledger or Journal - Ledger to ensure that the consolidated and detailed data match accurately. Then, reconcile the data on the Ledger with the detailed accounting books or Detailed Summary Table, between the accounting data and the cashier's or warehouse keeper's data. After confirming that the data matches accurately, lock the accounting ledger. In case of discrepancies, determine the cause and handle the discrepancies until the data matches accurately.

Step 2: Locking the Ledger

- When locking the ledger, draw a horizontal line under the last transaction entry of the accounting period. Then write "Total Occurrences in the Period" below the drawn line;

- Write the line "Ending Balance for the Period" (month, quarter, year);

The "Ending Balance for the Period" is calculated as follows:

After calculating the ending balance for each account, record the debit balance in the debit column and the credit balance in the credit column.

- Write the line "Cumulative Total Occurrences from the Start of the Year";

- Draw two consecutive lines to conclude the ledger locking process.

- For detail ledgers structured with debit occurrence, credit occurrence columns and a "Balance" (or input, output, "remaining" or income, expenditure, "cash reserve"...), record the balance (remaining or cash reserve) data in the "Ending Balance for the Period" line of the "Balance" column or "Cash Reserve" column, or "Remaining" column.

After locking the accounting ledger, the ledger recorder must sign below the two drawn lines, the accounting supervisor who ensures accuracy and balance will confirm by signing. Then submit to the Chairman of the People's Committee of the commune for review and approval to confirm the legal validity of the locked accounting ledger data.

(2) For computerized ledger recording:

The ledger locking process on accounting software must be established to ensure and reflect the ledger locking principles for manual accounting ledger recording.

8. List of accounting ledgers, ledger templates, and instructions for establishing accounting ledgers according to Appendix No. 03 "Accounting Ledger System" attached to this Circular.

Article 6. Final Accounts Report

1. The final settlement report of the commune budget is used to summarize the commune budget revenue and expenditure situation, presented in detail according to the state budget item list to provide for the Commune People's Council, reported to the district finance department and other competent authorities.

2. Communes establish the final settlement report of the budget in accordance with Circular No. 344/2016/TT-BTC dated December 30, 2016 of the Ministry of Finance on commune budget management and other financial activities of communes, wards, towns, and amendments and supplements to Circular No. 344/2016/TT-BTC.

Article 7. Financial Reports

1. Financial statements are used to provide information about the commune's financial status, operating results, and cash flows. After the end of the annual accounting period, communes must lock the ledger and prepare financial statements.

Information from commune financial statements serves as the basis for compiling national financial statement information for the district.

2. Principles and requirements for preparing financial statements

a) Principles:

Preparing financial statements must be based on post-ledger-locking accounting data. Financial statements must be prepared in accordance with the prescribed principles, content, and methods and presented consistently across accounting periods; if financial statements differ in presentation between accounting periods, the reasons must be clearly explained.

Financial statements must bear the signatures of the preparer, the commune accounting supervisor, and the Chairman of the People's Committee of the commune. The person signing the financial statements is responsible for their content.

b) Requirements:

Financial statements must truthfully and objectively reflect the content and value of the reporting indicators; presented according to the prescribed format regarding the commune's financial status, operating results, and cash flows.

Financial statements must be prepared promptly within the time frame stipulated by law, clearly and easily understandable, with accurate accounting information and data.

Thông tin, số liệu báo cáo phải được phản ánh liên tục, số liệu của kỳ này phải kế tiếp số liệu của kỳ trước.

3. Preparation period for financial statements

Financial statements are prepared at the end of the annual accounting period as prescribed by the Accounting Law.

4. Responsibilities of communes in preparing financial statements

Communes must prepare annual financial statements according to the form specified in Appendix No. 04, attached to this Circular.

5. Submission location and deadline for financial statements

a) Submission location:

Communes submit financial statements to the State Treasury at the district level where the commune conducts transactions, the Commune People's Council, the district finance department, and other state agencies as prescribed by law.

b) Deadline for submitting financial statements:

Commune annual financial statements must be submitted to the competent authority within 90 days from the end of the annual accounting period as stipulated by accounting law.

6. Publicizing financial statements

Financial reports shall be publicized in accordance with laws on accounting and related documents.

7. List of reports, report templates, and explanations of the methods for preparing financial statements as set out in Appendix No. 04 "Financial Reporting System", attached to this Circular.

Chapter III

IMPLEMENTATION

Article 8. Effective Date

1. This Circular takes effect from January 1, 2020.

2. This Circular replaces Decision No. 94/2005/QD-BTC dated December 12, 2005 of the Ministry of Finance on the accounting system for the state budget and commune finances and Circular No. 146/2011/TT-BTC dated October 26, 2011 of the Ministry of Finance guiding amendments and supplements to the accounting system for the state budget and commune finances issued together with Decision No. 94/2005/QD-BTC dated December 12, 2005.

Article 9. Implementation Organization

1. The Chairman of the People's Committee of communes, wards, and towns must strictly implement the provisions of this Circular.

2. The Director of the Department of Accounting and Auditing Supervision, the Director of the State Budget Department, the General Director of the State Treasury, the Head of the Office of the Ministry, and the Heads of relevant units under the Ministry of Finance are responsible for disseminating, guiding, inspecting, and enforcing this Circular./.

 

Place of Receipt: - Central Party Committee Secretariat; - Prime Minister, Deputy Prime Ministers; - Central Party Office and Party Committees; - General Secretary's Office; - Government Office; - National Assembly's Office; - President's Office; - National Assembly's Ethnic Council and Committees; - State Audit Agency; - Ministries, agencies equivalent to ministries, and government agencies; - Central Agencies of Mass Organizations; - Supreme People's Court; - Supreme People's Procuracy; - People's Committees, Provincial Departments of Finance; - Ministry of Justice's Legal Documents Inspection Department; - Official Gazette; - Government Electronic Portal; - Ministry of Finance Portal; - Units under and directly affiliated with the Ministry of Finance; - To be filed: VT, Management and Supervision of Accounting Bureau (40 copies).

DEPUTY MINISTER DEPUTY MINISTER Do Hoang Anh Tuan