Circular No. 71/2006/TT-BTC guides the implementation of Decree No. 43/2006/NĐ-CP dated April 25, 2006, of the Government on the rights to self-management and self-responsibility for performing tasks, organizational structure, staffing, and finance for public service units.

CIRCULAR

Guidelines for implementing Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government on the autonomy and self-responsibility regarding the performance of tasks, organizational structure, staffing, and finance for public service units.

Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government stipulates the autonomy and self-responsibility regarding the performance of tasks, organizational structure, staffing, and finance for public service units.

The Ministry of Finance provides guidance on certain provisions of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government concerning the implementation of autonomy and self-responsibility regarding finance for public service units as follows:

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On the basis of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government stipulates the autonomy and self-responsibility regarding the performance of tasks, organizational structure, staffing, and finance for public service units;

The Ministry of Finance provides guidance on certain provisions of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government concerning the implementation of autonomy and self-responsibility regarding finance for public service units as follows:

I. Regarding the scope and objects regulated under Article 1 of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government, it is guided as follows:

1. The subjects implementing autonomy and self-responsibility regarding finance are public service units established by competent state authorities (independent budget entities with their own seals and separate accounts, organized accounting systems according to the Accounting Law), operating in education and training, health care, social security, culture and information (including local broadcasting units), sports, economic services, and other fields.

For Voice of Vietnam Radio, Vietnam News Agency, and public service units with special operational procedures; for public service units with subordinate units, the subjects implementing autonomy and self-responsibility regarding finance are the subordinate public service units that meet the conditions of being independent budget entities with their own seals and separate accounts, organized accounting systems according to the Accounting Law.

2. Research organizations, research and technology development organizations, and science and technology service organizations implement autonomy and self-responsibility according to Decree No. 115/2005/NĐ-CP dated September 5, 2005 of the Government on the mechanism of autonomy and self-responsibility of public science and technology organizations and guiding documents.

3. Public service units subordinate to the Ministry of National Defense, the Ministry of Public Security, and political organizations implement according to the provisions of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government and the guidelines set forth in this Circular.

II. Regarding the classification of public service units as stipulated in Article 9 of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government, it is guided as follows:

1. Public service units are classified as follows:

a) Units with revenue from public services fully covering all regular operating expenses (referred to as public service units fully self-financing operating costs).

b) Units with revenue from public services partially covering regular operating expenses, with the remainder provided by the state budget (referred to as public service units partially self-financing operating costs).

c) Units with low revenue from public services, without revenue, and regular operating expenses fully covered by the state budget (referred to as public service units fully financed by the state budget).

The classification of public service units as specified above will be stable for a period of three years, after which the classification will be reviewed and adjusted as necessary.

During the classification stability period, if a public service unit changes its functions, tasks, or organizational structure, the competent state authority shall review and adjust the classification accordingly.

2. Method for determining the classification of public service units:

Of which:

- Total regular operating expenses as stipulated at Point 2.1, Clause 2, Section VIII; Point 2.1, Clause 2, Section IX of this Circular.

Total revenue from public services and total regular operating expenses are calculated based on the budget estimates for the first year of the stabilization period.

Based on the self-financing rate of regular operating expenses, public service units are classified as follows:

a) Public service units fully self-financing operating costs include:

- Public service units with a self-financing rate of regular operating expenses determined by the formula above, equal to or greater than 100%.

- Public service units that have fully financed their operating costs from public service revenue or from the state budget through orders placed by authorized state agencies.

b) Public service units partially self-financing operating costs: These are public service units with a self-financing rate of regular operating expenses determined by the formula above, ranging from over 10% to less than 100%.

c) Public service units fully financed by the state budget for operating costs include:

- Public service units with a self-financing rate of regular operating expenses determined by the formula above, up to 10%.

- Public service units without revenue.

3. For special public service units subordinate to Voice of Vietnam Radio, Vietnam News Agency, and public service units with special operational procedures as stipulated in Clause 2, Article 1 of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government, these special public service units are classified according to the type of the superior public service unit.

III. Regarding capital mobilization and credit borrowing as stipulated in Article 11 of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government, it is guided as follows:

1. Public service units fully self-financing operating costs and those partially self-financing operating costs, with appropriate service activities assigned by competent authorities, may borrow funds from financial institutions and mobilize funds from staff within the unit to invest in expanding and improving the quality of public service operations, organizing service activities, and bearing responsibility for repaying loans in accordance with the law.

Investment projects funded by borrowed funds and mobilized funds must comply with legal regulations, be transparent and democratic within the unit, follow approved planning by competent authorities, and report to higher-level management bodies for knowledge, monitoring, and inspection.

2. Regarding payment of interest on loans and interest on mobilized funds:

2. Regarding the payment of loan interest and deposit interest:

a) Pay interest on loans to credit institutions at the actual interest rate based on the loan contract;

b) Pay interest on funds raised from officers and employees (funds raised through loans from officers and employees) at the actual interest rate when signing the loan contract, but not exceeding the maximum interest rate for reasonable expenses as stipulated in the Law on Corporate Income Tax and current guiding documents.

3. Sources of funds for paying interest on loans and raised funds; loans and raised funds for operating service capital:

a) The source of funds for paying interest on loans and raised funds (through loans from officers and employees) shall be included in the costs of service activities generated by such loans and fund-raising. In cases where funds are raised through officers and employees contributing capital together with the unit and receiving interest dependent on their contribution ratio, the interest on raised funds shall be paid from the profits of the service activity, and shall not be included in the costs.

b) The sources of funds for paying loans and raised funds shall be implemented according to the current regulations of the State.

4. Units may use assets purchased from the development fund for public services and from borrowed and raised funds to collateralize loans in accordance with the law; they are not allowed to use budget funds or assets to collateralize loans, pay loans, or pay raised funds.

IV. Regarding the management of state assets as prescribed in Article 12 of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government, it is guided as follows:

1. Public service units are responsible for managing state assets in accordance with the current regulations on the management of state assets in public service units. The management and use of land in public service units must comply with the provisions of the Land Law and current guiding documents.

2. For fixed assets used in service activities, units must implement depreciation of fixed assets according to the regime applicable to state-owned enterprises as stipulated in Decision No. 206/2003/QĐ-BTC dated December 12, 2003 of the Minister of Finance.

Depreciation funds and proceeds from the liquidation (after deducting liquidation costs) of assets sourced from the state budget shall be retained and recorded in the Development Fund for Public Services (for self-financing public service units and partially self-financing public service units). If there are low-income public service units, these funds can be used to increase investment funding to enhance infrastructure and update equipment.

Depreciation funds and proceeds from the liquidation (after deducting liquidation costs) of assets sourced from borrowed and raised funds shall be used to repay loans and raised funds. If all loans and raised funds have been repaid, the remaining amount shall be added to the Development Fund for Public Services.

V. Regarding joint ventures and collaborations, it is guided as follows:

1. Self-financing public service units and partially self-financing public service units that engage in joint ventures and collaborations shall implement according to Standard No. 07 - Accounting for Investments in Joint Ventures, and Standard No. 08 - Financial Information on Joint Venture Contributions, issued pursuant to Decision No. 234/2003/QĐ-BTC dated December 30, 2003 of the Minister of Finance regarding the issuance and announcement of six accounting standards (batch 3).

2. Public service units may use assets invested from the Development Fund for Public Services, borrowed and raised funds to contribute capital to other units and organizations in the form of joint ventures and collaborations in accordance with the law. The use of land for joint venture and collaboration contributions must comply with the provisions of the Land Law and current guiding documents.

The financial results of joint ventures and collaborations of units, after tax payment as prescribed by law, shall be recorded as the results of service activities and managed and used in accordance with this Circular.

4. Joint ventures and collaborations must be publicly and democratically disclosed within the unit and reported to higher-level management authorities in accordance with the regulations.

VI. Regarding transaction accounts as prescribed in Article 13 of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government, it is guided as follows:

1. Public service units shall open accounts at the State Treasury to handle receipts and payments through the State Treasury for budget funds according to the State Budget Law, including: state budget funds allocated; revenue, expenses, and fees under the state budget, and other items of the state budget (if any).

2. Public service units may open accounts at banks or the State Treasury to reflect revenues and expenditures of service activities.

VII. Regarding the establishment of internal expenditure regulations, it is guided as follows:

1. To actively and effectively utilize assigned operational funds for their intended purposes, public service units that operate independently and bear financial responsibility must establish internal expenditure regulations as a basis for officers and employees to follow and for the State Treasury to control expenditures (details of establishing internal expenditure regulations are provided in Appendix No. 01 attached to this Circular).

2. Principles, contents, and scope of establishing internal expenditure regulations:

a) Internal expenditure regulations shall be issued by the head of the public service unit after widely and democratically discussing within the unit and obtaining unanimous agreement from the unit's trade union organization.

b) Internal expenditure regulations must be submitted to the higher-level management authority, the same-level finance authority for monitoring and supervision; and to the State Treasury where the unit has opened a transaction account for controlling expenditures. If there are provisions inconsistent with national regulations, the higher-level management authority must provide comments requiring adjustments within 15 days from receipt of the report, and send them to the same-level finance authority and the State Treasury where the unit has opened a transaction account.

c) The content of the internal expenditure regulation includes provisions on systems, standards, norms, and unified spending levels within the unit, ensuring the completion of assigned tasks, being suitable to the specific activities of the unit, using funds economically and effectively, and enhancing management work.

d) For expenditure items within the scope of establishing internal expenditure regulations (management expenses, regular business expenses) that already have standards and norms set by competent state agencies (except for certain standards, norms, and expenditure items specified in sub-item e of this clause), the head of the public service unit may:

- For public service units that self-fund their operational costs and those that partially self-fund their operational costs: The unit head may decide on management expense and regular business expense levels higher or lower than those stipulated by competent state agencies.

- For public service units fully funded by the state budget: The unit head decides on expense levels not exceeding those stipulated by competent state agencies.

đ) For necessary expenditure items and levels required for the operation of the unit within the scope of establishing internal expenditure regulations, but for which competent state agencies have not yet issued regulations, the unit head may establish expenditure levels for each task and work content within the unit's financial resources.

e) For certain standards, norms, and expenditure levels that public service units must strictly adhere to national regulations:

- Standards and norms for vehicle usage;

- Standards and norms for office space;

- Standards and norms for the provision of official telephones at home and mobile phones;

- Travel allowances for foreign missions;

- Reception allowances for foreign guests and international conferences in Vietnam;

- Management and utilization regulations for national target program funds;

- Regulations for the use of funds for urgent tasks assigned by competent authorities;

- Policies and regulations for streamlining staffing (if applicable);

- Management and utilization regulations for counterpart project funds and aid from state budget sources;

- Management and utilization regulations for construction investment capital, procurement, and major repair costs for fixed assets serving public service operations according to approved projects by competent authorities;

Special scientific and technological tasks at the national and ministerial levels shall be implemented in accordance with guidelines provided by the Ministry of Finance and the Ministry of Science and Technology.

g) Based on the nature of the work, volume of use, and implementation status of the previous year, the unit head determines the cost allocation method for each individual, department, and subordinate unit under dependent accounting, such as office supplies, telephone, fuel, electricity, water, travel expenses; savings from cost allocation are determined by the difference between income and expenditure and distributed and utilized according to prescribed regulations.

h) When implementing the internal expenditure regulation, the unit must ensure legitimate and valid vouchers and invoices as prescribed, except for expenditures on office supplies, travel expenses managed through cost allocation according to the internal expenditure regulation, and monthly telephone bills for official telephones at home and mobile phones, following the guidelines in Circular No. 29/2003/TT-BTC dated April 14, 2003, issued by the Ministry of Finance.

i) Public service units may not use unit funds to purchase equipment, supplies, or assets for personal use at home or lend them to individuals in any form (except for official telephones at home as prescribed).

VIII. Regarding the autonomy and responsibility for financial matters of public service units that self-fund their operational costs and those that partially self-fund their operational costs, they shall implement the provisions in Section 2 of Decree No. 43/2006/NĐ-CP dated April 25, 2006, issued by the Government, as follows: and public service units that partially self-fund their operational costs, shall implement the provisions as follows:

1. Regarding financial sources, they shall implement the provisions in Article 14 of Decree No. 43/2006/NĐ-CP dated April 25, 2006, issued by the Government, as follows:

1.1. State budget funds, including:

a) Operational funding to ensure regular activities in performing functions and tasks for public service units that partially self-fund their operational costs (after balancing with institutional revenue); allocated by the direct superior management agency within the approved budget;

b) Funding for scientific and technological tasks (for units that are not scientific and technological organizations);

c) Funding for training and cadre development programs;

d) Funding for national target program tasks;

đ) Funding for tasks commissioned by competent state agencies (surveys, planning, investigations, other tasks);

e) Funding for urgent tasks assigned by competent authorities;

g) Funding for staff reduction policies according to state regulations (if applicable);

h) Capital for basic construction, procurement of equipment, and major repairs of fixed assets serving public service operations according to approved projects by competent authorities within the annual budget;

i) Counterpart funds for implementing projects with foreign sources approved by competent authorities;

k) Other funds (if any).

1.2. Institutional revenue, including:

a) Portion retained from fees and charges collected by the unit as prescribed by the state;

b) Revenue from services consistent with the unit's expertise and capacity, specifically:

- Education and Training Services: Revenue from training contracts with domestic and foreign organizations; revenue from production and consumption of practical products, experimental products; revenue from science and technology service contracts and other revenues as prescribed by law.

- Health and Social Security Services: Revenue from health care, rehabilitation, preventive health, training, and research services with organizations; provision of blood products, vaccines, biologicals; revenue from labor supply services (laundry, catering, patient transportation, others); revenue from pharmaceutical compounding, intravenous fluid preparation, blood screening services and other revenues as prescribed by law.

- Cultural and Information Services: Revenue from ticket sales for performances, film screenings, contracts with organizations and individuals both domestically and internationally; provision of printing, dubbing, film restoration services; revenue from advertising publication, broadcasting, and other activities as prescribed by law; revenue from press distribution, propaganda information dissemination, and other revenues as prescribed by law.

- Physical Education and Sports Services: Revenue from service fees, advertising, broadcasting rights, and other revenues as prescribed by law.

- Economic Services: Revenue from consulting, design, planning, agricultural, forestry, water conservancy, fishery, transportation, industrial, construction, land administration, geological services, and other sectors; other revenues as prescribed by law.

c) Other revenues (if any).

d) Dividends from joint ventures and associated enterprises' activities, interest income from bank deposits from service activities.

1.3. Sources of funds from foreign aid, gifts, donations, and grants as prescribed by law.

1.4. Other sources, including:

a) Loans from financial institutions and funds raised from employees within the unit.

b) Capital contributions from domestic and international organizations and individuals in joint ventures and associated enterprises as prescribed by law.

2. Regarding expenditure items, implement as prescribed in Article 15 of Decree No. 43/2006/NĐ-CP dated April 25, 2006, of the Government, as follows:

2.1. Regular expenditures:

a) Regular operational expenditures according to assigned functions and tasks, including: salaries; wages; allowances; social insurance, health insurance, trade union fees as prescribed; public service fees; office supplies; business operation expenses; regular maintenance of fixed assets and other expenditures as prescribed.

b) Regular operational expenditures serving fee and tax collection activities, including: salaries; wages; allowances; social insurance, health insurance, trade union fees as prescribed for direct staff involved in fee and tax collection; specialized business operation expenses; regular maintenance of fixed assets and other expenditures as prescribed for fee and tax collection activities.

c) Expenditures for service activities, including: salaries; wages; allowances; social insurance, health insurance, trade union fees as prescribed; raw materials, purchased labor; depreciation of fixed assets; repairs of fixed assets; payment of loan interest and employee fundraising interest; payment of taxes as prescribed by law. and other expenditures (if any).

2.2. Non-regular expenditures, including expenditures as prescribed in Clause 2, Article 15 of Decree No. 43/2006/NĐ-CP dated April 25, 2006, of the Government.

3. Regarding salary, wage, and additional income, implement as prescribed in Article 18 of Decree No. 43/2006/NĐ-CP dated April 25, 2006, of the Government, as follows:

3.1. Salaries and Wages:

a) For activities implementing state-assigned functions and tasks; fee and tax collection activities, salaries and wages of employees are calculated based on state-prescribed rank and position salaries.

b) For activities providing products ordered by the state with labor cost rates included in product pricing approved by competent authorities, salaries and wages of employees are calculated based on the prescribed rate.

For products ordered by the state without labor cost rates included in product pricing, salaries and wages of employees are calculated based on state-prescribed rank and position salaries.

c) For service activities where the unit establishes affiliated non-profit organizations to operate services and separately accounts for each type of service's revenue and expenses, the costs of salaries and wages for employees engaged in these service activities can be applied according to the state enterprise salary system as prescribed in Decree No. 205/2004/NĐ-CP dated December 14, 2004, of the Government regarding the salary scale and allowance system in state-owned companies, and Decree No. 206/2004/NĐ-CP dated December 14, 2004, of the Government regarding labor management, salary, and income in state-owned companies.

For service activities where the unit does not establish affiliated non-profit organizations and separately account for each type of service's revenue and expenses, the costs of salaries and wages for employees engaged in these service activities are calculated based on state-prescribed rank and position salaries.

3.2. Additional Income:

a) The State encourages non-profit units to increase revenue, reduce expenses, streamline staffing, and increase employee income based on completing assigned tasks, after fulfilling all obligations to the state budget; based on financial results for the year, the unit decides the total additional income for the year as follows:

- For self-financed non-profit units, the total additional income for the year can be decided according to the internal expenditure regulations of the unit, after setting aside the Development Fund for Non-Profit Activities as prescribed in Clause 4, Section VIII of this Circular.

- For partially self-financed non-profit units, the total additional income for the year can be decided, but not exceeding twice the annual rank and position salary fund prescribed by the state, after setting aside the Development Fund for Non-Profit Activities as prescribed in Clause 4, Section VIII of this Circular.

The annual rank and position salary fund serves as the basis for calculating the total additional income for the year of the unit, including:

- Rank and position salaries and allowances for seniority beyond the standard (if applicable): Calculated based on the salary coefficient, position allowance coefficient, seniority allowance coefficient beyond the standard (if applicable) of employees in the unit (both permanent and contractual employees for at least one year) and the minimum wage level prescribed by the Government.

- Increased salary due to promotion based on years of service or early promotion (if applicable).

The annual rank and position salary fund of the aforementioned unit does not include remuneration paid under contract-based work agreements.

b) The payment of additional income for each employee within the unit (employees on the payroll and those under contracts of one year or longer) shall be carried out according to the internal expenditure regulations of the unit and ensure the principle that those with high work efficiency and significant contributions to increased revenue and cost savings shall receive more.

3.3. When the State adjusts the provisions regarding salaries, raising the minimum wage level; the additional salary grade and position allowance according to the State's regulations shall be self-funded by the unit from the proceeds of public services and other sources as prescribed by the Government.

In cases where, after utilizing the aforementioned sources, the unit still fails to adequately cover the additional salary as stipulated by State regulations, the shortfall will be reviewed and supplemented by the State budget to ensure the general salary system as prescribed by the Government.

4. Regarding the use of financial results in the year, it shall be implemented according to the provisions of Article 19 of Decree No. 43/2006/NĐ-CP dated April 25, 2006, issued by the Government, as follows:

Annually, after covering all expenses, paying taxes, and other payments as prescribed; the surplus of revenue exceeding expenditures (revenue and expenditure from regular activities and state-assigned tasks), the unit may utilize it in the following sequence:

- Allocate at least 25% of the revenue surplus over expenditures to establish the Development Fund for Public Services Activities;

- Pay additional income to employees, in accordance with the guidance provided in Point 3.2, Clause 3, Section VIII of this Circular;

- Establish the Award Fund, Welfare Fund, and Income Stabilization Reserve Fund. For the Award Fund and Welfare Fund, the maximum allocation for both funds shall not exceed three months' average salary, wages, and additional income of employees in the year.

In cases where the revenue surplus over expenditures equals or is less than one times the annual salary grade and position allowance, the unit may decide to use it as follows:

- Pay additional income to employees;

- Establish the Development Fund for Public Services Activities (without a minimum allocation limit of 25% of the revenue surplus over expenditures), the Award Fund, Welfare Fund, and Income Stabilization Reserve Fund. For the Award Fund and Welfare Fund, the maximum allocation for both funds shall not exceed three months' average salary, wages, and additional income of employees in the year.

Based on the above provisions, the specific amount for paying additional income and establishing the funds shall be decided by the head of the public service unit according to the unit's internal expenditure regulations.

The expenditure content of the Award Fund and Welfare Fund, as stipulated above, includes the expenditure content for awards and welfare of fee and tax collection activities (for units assigned the task of collecting fees and taxes).

5. Regarding the use of funds, it shall be implemented according to the provisions of Article 20 of Decree No. 43/2006/NĐ-CP dated April 25, 2006, issued by the Government.

6. Advance payment of additional income: Based on the financial results of the quarter and year of the unit, to promptly motivate employees to complete assigned tasks, the head of the public service unit may advance the payment of additional income to employees in the unit. The maximum quarterly advance payment of additional income shall not exceed 40% of the revenue surplus over expenditures determined by the unit for the quarter.

After the annual settlement is approved by the competent authority and the exact revenue surplus over expenditures is determined, the head of the unit shall continue to pay additional income to employees according to the prescribed system based on the unit's internal expenditure regulations. If the unit has advanced more than the revenue surplus over expenditures allocated for additional income according to the internal expenditure regulations, the excess amount must be deducted from the additional income allocation of the following year.

7. Public service units shall not use the sources of funding specified in Clause 2, Article 19 of Decree No. 43/2006/NĐ-CP dated April 25, 2006, issued by the Government, to pay additional income to employees and establish funds.

IX. Regarding the autonomy and responsibility for finance of public service units fully funded by the State budget, it shall be implemented according to Section 3 of Decree No. 43/2006/NĐ-CP dated April 25, 2006, issued by the Government, as follows:

1. Financial sources, implemented according to the provisions of Article 21 of Decree No. 43/2006/NĐ-CP dated April 25, 2006, issued by the Government, as follows:

1.1. State budget funds, including:

a) Operating funds to implement functions and tasks assigned by the State, allocated by the direct superior management agency within the approved budget;

b) Funding for scientific and technological tasks (for units that are not scientific and technological organizations);

c) Funding for training and cadre development programs;

d) Funding for national target program tasks;

d) Funds for urgent tasks assigned by the competent authority;

e) Funds for implementing personnel reduction policies as prescribed by the State (if applicable);

g) Capital for basic construction, procurement of equipment, and major repairs of fixed assets serving public service activities according to approved projects within the annual budget;

h) Counterpart funds for projects financed by foreign sources as approved by the competent authority;

i) Other funds (if applicable).

1.2. Proceeds from public service activities (if applicable), including:

a) Portion retained from fees and charges collected by the unit as prescribed by the state;

b) Revenue from service activities appropriate to the unit's expertise and capacity, as guided in Subpoint b, Point 1.2, Clause 1, Section VIII of this Circular;

c) Other revenues.

1.3. Assistance, gifts, and donations (if applicable) as prescribed by law.

1.4. Other sources as prescribed by law (if applicable).

2. Regarding expenditure items, it shall be implemented according to the provisions of Article 22 of Decree No. 43/2006/NĐ-CP dated April 25, 2006, issued by the Government, as follows:

2.1. Regular expenditures:

a) Regular operational expenditures according to assigned functions and tasks, including: salaries; wages; allowances; social insurance, health insurance, trade union fees as prescribed; public service fees; office supplies; business operation expenses; regular maintenance of fixed assets and other expenditures as prescribed.

b) Regular operational expenses for fee and tax collection activities (if applicable), including: Salaries; wages; allowances; social insurance, health insurance, and trade union fees as prescribed; repair and maintenance of fixed assets and other expenses as prescribed for fee and tax collection activities;

c) Expenses for service activities (if applicable), including: Salaries; wages; allowances; social insurance, health insurance, and trade union fees as prescribed; raw materials, fuel, and external labor costs; depreciation of fixed assets; repair and maintenance of fixed assets and other expenses as prescribed.

2.2. Non-recurring expenses: including the items specified in Clause 2, Article 22 of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government.

3. Regarding salaries, wages, and additional income, it shall be implemented according to Article 25 of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government, and guided as follows:

3.1. Salaries and Wages:

a) For activities implementing state-assigned functions and tasks; fee and tax collection activities, salaries and wages of employees are calculated based on state-prescribed rank and position salaries.

b) For service activities (if any), the salary and wage costs for employees performing such service activities shall be calculated based on the state-defined rank and position salary.

3.2. Additional Income:

a) The State encourages public institutions to increase revenue, reduce expenses, streamline staffing, and increase additional income for employees based on the completion of assigned tasks, after fulfilling all obligations to the state budget; based on the financial results of the year, the unit may decide the total additional income for employees in that year, but not exceeding one time the state-defined rank and position salary fund for that year.

The rank and position salary fund serves as the basis for calculating the total additional income for the year, which the unit determines according to the guidance at item a, point 3.2, Clause 3, Section VIII of this Circular.

b) The payment of additional income to each employee (employees within the establishment and those under one-year contracts) shall be carried out according to the internal expenditure regulations of the unit and ensuring the principle that those with high work efficiency and significant contributions to increasing revenue and reducing expenses will receive more.

3.3. When the state adjusts the provisions on salaries, raising the minimum wage level; the additional rank and position salary according to the state-regulated system shall be guaranteed from sources as prescribed by the Government.

4. Regarding the use of saved funds (the difference between revenue and expenditure), it shall be implemented according to Article 26 of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government; and guided as follows:

Annually, after covering all expense items, paying taxes, and other payments as prescribed; the portion of saved funds, the difference between revenue and expenditure from service activities (if any), the unit may use according to the following procedure:

- Paying additional income to employees, according to the guidance at point 3.2, Clause 3, Section IX of this Circular.

- Expenditure on regular and extraordinary rewards for groups and individuals inside and outside the unit based on work performance and contributions to the unit's activities;

- Expenditure on welfare and emergency hardship assistance for employees, including cases of retirement and loss of health during the year; additional expenditure for employees within the establishment implementing staff reduction;

- Expenditure on strengthening the material infrastructure of the unit;

- In case the unit considers the ability to save funds unstable, the unit may establish a stable income reserve fund to ensure income for employees.

Based on the above provisions, the specific amounts for expenditures and the establishment of a stable income reserve fund shall be decided by the head of the public institution according to the unit's internal expenditure regulations.

The content of reward and welfare expenditures as stipulated above includes the content of reward and welfare expenditures of fee and charge collection activities (for units assigned the task of collecting fees and charges).

5. Advance payment for additional income: Based on the financial results of the quarter and year of the unit; to promptly motivate employees to strive to complete assigned tasks, based on the available savings, the head of the unit may decide to advance the payment of additional income to employees in the unit. The maximum quarterly advance payment shall not exceed 50% of the unit's potential savings for that quarter.

After the annual settlement has been approved by the competent authority and the actual surplus revenue over expenditure has been determined, the head of the unit shall implement the payment of additional income according to the prescribed regulations to employees according to the unit's internal expenditure regulations. In case the unit has advanced more than the surplus revenue over expenditure allocated for additional income payment according to the internal expenditure regulations; the excess amount must be deducted from the additional income expenditure of the next year.

6. Public institutions shall not use the sources of funds specified in Clause 2 of Article 26 of Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government to pay additional income to employees.

X. Budget preparation, implementation, accounting, and settlement of revenue and expenditure:

The preparation of budgets, implementation of budgets, accounting, and settlement of revenue and expenditure of public institutions shall be carried out in accordance with the State Budget Law, Accounting Law, guiding documents of the Laws, and the provisions of this Circular.

1. Establishment of budget projections:

1.1. Preparation of the budget of public institutions:

a) Preparation of the budget for the first year of the period of stable classification of public institutions:

Based on the functions and tasks assigned by the competent authority, the plan for the year, current financial expenditure systems, the results of institutional activities, and the financial revenue and expenditure situation of the previous year (excluding unexpected and non-recurring factors), the unit prepares the budget for planned revenue and expenditure; identifies the type of public institution according to the provisions of Section II of this Circular, the amount of funds requested from the state budget to ensure regular operations (for self-financing public institutions and those fully funded by the state budget for operational costs); specifically:

- Regular budget:

+ Revenue budget:

For fee and charge revenues: Based on the objects of collection, rates, and the proportion retained for expenditure as prescribed by the competent state authority.

For institutional revenues: Based on the service activity plan and the revenue levels determined by the unit or according to economic contracts signed by the unit.

+ Expenditure budget: The unit prepares detailed budgets for each type of task such as: regular expenditure to perform state-assigned functions and tasks; expenditure for fee and charge collection work; service activity expenditure according to current regulations and the provisions of this Circular.

- Non-regular budget: The unit prepares the budget for each task according to current state regulations.

The budget for revenue and expenditure of the unit must include detailed explanations of the basis for calculation, itemized according to each revenue and expenditure content, to be sent to the direct superior management agency for review and consolidation to be forwarded to the Ministry or sector in charge (for central public service units), or to the local management agency (for local public service units) in accordance with current regulations.

b) Prepare the budget for the next two years during the stabilization period:

- For the budget of regular activities' revenue and expenditure: Based on the state's regulations, public service units prepare the budget for regular activities' revenue and expenditure of the planned year. Among which, the state budget funds ensuring regular activities (for public service units self-financing part of their operating costs, or public service units fully financed by the state budget) shall be at the level of state budget funds ensuring regular activities of the previous adjacent year, plus (+) or minus (-) the funds for increased or decreased tasks of the planned year decided by the competent authority.

- For non-regular expenditure budget, the unit prepares the budget for each task's expenditure according to the current regulations of the State.

The budget for revenue and expenditure of public service units is sent to the direct superior management agency for review and consolidation to be forwarded to the Ministry or sector in charge (for central public service units), or to the local management agency (for local public service units) in accordance with current regulations.

1.2. Preparing the budget of the direct superior management agency:

a) Preparing the budget for the first year of the stabilization period:

Based on the budget for revenue and expenditure of the first year of the stabilization period prepared by the unit, the direct superior management agency forecasts the classification of public service units according to the provisions of Section II of this Circular and the level of state budget funds ensuring regular and non-regular expenditures for the unit, to be consolidated and sent to the same-level financial agency and related agencies in accordance with current regulations.

Determining the classification of public service units and the level of state budget funds ensuring regular activities in the first year of the stabilization period (for public service units self-financing part of their operating costs and public service units fully financed by the state budget for regular activities) is carried out in accordance with the guidance provided in Clause 1, Section XI of this Circular.

b) Preparing the budget for the next two years of the stabilization period:

Annually, during the period of classifying public service units, the Ministry in charge (for central public service units), the local management agency (for local public service units) bases on the budget for revenue and expenditure prepared by the public service unit, reviews and consolidates the state budget plan, and sends it to the same-level financial agency.

2. Allocation of the state budget revenue and expenditure budget:

2.1. Allocation of the budget for the first year of the stabilization period:

Based on the state budget revenue and expenditure budget allocated by the competent authority, the Ministry in charge (for central public service units), the local management agency (for local public service units) prepares the allocation plan to send to the same-level financial agency for review; after reaching a consensus with the same-level financial agency, the management agency allocates the budget to the unit for implementation:

a) Regular activities' revenue and expenditure budget:

- Allocation of revenue budget:

+ Total fees and charges collected

+ Amount of fees and charges retained by the unit for use in accordance with the regulations of the competent state agency for each type of fee and charge.

+ Amount of fees and charges to be remitted to the state budget.

- Allocation of expenditure budget:

+ Allocation of expenditure from retained fees and charges for use in accordance with the regulations of the competent state agency for each type of fee and charge.

+ Allocation of regular activities' expenditure from state budget funds: Based on the approved state budget funds ensuring regular activities in the first year of the stabilization period (for public service units self-financing part of their operating costs and public service units fully financed by the state budget for regular activities); the management agency allocates the regular activities' expenditure budget to the unit within the scope of the state budget expenditure budget allocated by the competent authority. The allocated regular expenditure budget is recorded under the "Other Expenditure" category in the state budget schedule.

For service activities, the management agency does not allocate revenue and expenditure budgets; public service units prepare revenue and expenditure budgets to manage operations for the year.

b) For non-regular expenditure budget: The management agency allocates the budget to the unit for implementation in accordance with current regulations.

The allocated non-regular expenditure budget is distributed into four categories of expenditure in the state budget schedule in accordance with current regulations.

2.2. Allocation of the budget for the next two years of the stabilization period:

a) For regular activities' revenue and expenditure budget:

Annually, during the period of classifying public service units, the management agency decides to allocate the revenue and expenditure budget to public service units in accordance with current regulations.

The state budget-funded regular expenditure budget (for public service units self-financing part of their operating costs and public service units fully financed by the state budget for regular activities) is at the level of the previous adjacent year and additional funds (including funds for increased tasks) or reduced according to the decision of the competent authority, within the scope of the state budget expenditure budget allocated by the competent authority, after reaching a consensus in writing with the financial agency.

b) For non-regular expenditure budget: The management agency allocates the budget to the unit for implementation in accordance with current regulations.

2.3. Implementation of the revenue and expenditure budget:

For the regular expenditure budget allocated by the competent authority, public service units can adjust the expenditure items to suit the actual situation of the unit, while sending the adjustment to the superior agency and the State Treasury where the unit has its transaction account for monitoring, payment, and settlement. At the end of the fiscal year, the remaining regular activities' expenditure budget and unused revenue from public services can be transferred to the following year for continued use.

For non-regular expenditure, adjustments to expenditure items, expenditure categories; unused funds at the end of the year, or funds not fully utilized are implemented in accordance with the State Budget Law and the guiding documents of the Ministry of Finance.

2.4. Accounting entries: Public service units record entries into the revenue and expenditure categories of the state budget schedule in accordance with current regulations. In addition, some expenditure items are specifically guided as follows:

- For units of public service that self-fund their operational costs or partially self-fund their operational costs: The expenditure for additional income payments to employees shall be recorded under Item 108 "Payments to Individuals" sub-item 03; the establishment of funds shall be recorded under Item 134 "Other Expenditures" corresponding sub-item.

- For units of public service fully funded by the state budget: The expenditure for additional income payments to employees shall be recorded under Item 108 "Payments to Individuals"; the expenditure for rewards shall be recorded under Item 104 "Bonuses"; the expenditure for welfare and additional subsidies outside general policies for those who voluntarily retire during the process of labor restructuring shall be recorded under Item 105 "Collective Welfare"; the expenditure for establishing the Income Stability Reserve Fund shall be recorded under Item 134 "Other Expenditures", sub-item 16 according to the State Budget Manual.

2.5. Settlement:

Public service units shall prepare quarterly accounting reports and annual settlement reports to submit to higher-level management authorities in accordance with current regulations.

2.6. Supervision and Control of Revenue and Expenditure Activities:

a) National Treasury at all levels:

- Implement expenditure control in accordance with the Circular guiding expenditure control for public service units implementing autonomy and self-responsibility for tasks, organizational structure, staffing, and finance, and the guidance provided in this Circular;

- In cases where public service units have not yet received the Decision on granting autonomy and self-responsibility for finance from the competent authority, and have not yet submitted the Internal Expenditure Regulation to the National Treasury where the unit has its transaction account, the National Treasury shall implement expenditure control according to the current expenditure systems issued by the competent authority;

- At year-end, based on the proposal of the unit, the National Treasury where transactions take place shall transfer the balance of regular expenditure funds and proceeds from services to the following year for continued use. Specifically, regarding the balance of regular expenditures after transferring funds, the National Treasury shall compile it according to the primary budgetary unit and send it to the financial authority at the same level within 45 days after the deadline for adjusting the final settlement of each level of budget. The financial authority shall base its examination and procedures for transferring sources to the following year on the report of the National Treasury at the same level.

b) During the implementation of autonomy and self-responsibility for finance, public service units shall be responsible for self-inspecting the situation at their own units;

c) Management agencies and relevant state agencies shall conduct inspections and audits of revenue and expenditure activities of public service units in accordance with current regulations and the provisions of this Circular.

XI. Implementation Organization.

1. Determining the classification of public service units and the level of state budget guarantee for regular operations in the first stable year:

a) For central public service units:

- Based on the functions and tasks assigned by the competent authority and the guidance provided in this Circular, the unit shall develop an autonomy and self-responsibility plan for finance and submit it to the higher-level management agency (as per Appendix 2 attached to this Circular);

- The principal ministry shall review and audit the budget estimates of revenues and expenditures and the level of regular state budget funding for the unit (for units partially self-funding their operational costs, and public service units fully funded by the state budget); consolidate and submit to the Ministry of Finance (as per Appendix 3 attached to this Circular).

The Ministry of Finance shall review and provide comments in writing on the classification of public service units and the level of regular state budget funding for operations (for units partially self-funding their operational costs, and public service units fully funded by the state budget).

- After reaching a consensus with the Ministry of Finance, the principal ministry shall issue a decision granting autonomy and self-responsibility for finance to the public service unit; specifying the classification of the public service unit and the level of regular state budget funding for operations (for units partially self-funding their operational costs, and public service units fully funded by the state budget).

b) For local public service units:

- Based on the functions and tasks assigned by the competent authority and the guidance provided in this Circular, the unit shall develop an autonomy and self-responsibility plan for finance and submit it to the higher-level management agency (as per Appendix 2 attached to this Circular).

- The local management agency shall review and audit the budget estimates of revenues and expenditures and the level of regular state budget funding for operations (for units partially self-funding their operational costs, and public service units fully funded by the state budget); consolidate and submit to the local financial authority (as per Appendix 3 attached to this Circular).

- The local financial authority shall review and provide comments in writing on the classification of public service units and the level of regular state budget funding for operations (for units partially self-funding their operational costs, and public service units fully funded by the state budget).

- After receiving comments from the local financial authority, the local management agency shall submit to the People's Committees at various levels (or authorized agencies) to issue a decision granting autonomy and self-responsibility for finance to the public service unit; specifying the classification of the public service unit and the level of regular state budget funding for operations (for units partially self-funding their operational costs, and public service units fully funded by the state budget).

2. In the final year of the stabilization period, public service units shall prepare a comprehensive report evaluating the implementation of the autonomous and self-responsible mechanism for finance over three years. Based on the results of the previous period, the tasks of the planning year, and the subsequent period, public service units shall develop an autonomy and self-responsibility plan for the next stabilization period and submit it to the higher-level management agency for review together with the time for preparing the state budget estimate for the planning year.

The procedure for reviewing, classifying, and granting autonomy and self-responsibility for finance to public service units shall be implemented as prescribed in Clause 1, Section XI of this Circular.

3. Units that have been granted autonomy rights under Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government on financial regulations applicable to service units with income shall implement the provisions set forth in Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government on autonomy and self-responsibility for the implementation of tasks, organizational structure, staffing, and finance for public service units from the date Decree No. 43/2006/NĐ-CP takes effect; In 2007, it will be the first year of stable implementation of autonomy and self-responsibility according to Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government for the period 2007-2009.

4. For service units with income that have not yet been granted financial autonomy rights under Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government, 2007 will be the first year of stable implementation of autonomy and self-responsibility according to Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government for the period 2007-2009.

In cases where units request and meet the conditions to implement Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government, they shall implement autonomy and self-responsibility according to Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government from the date this Decree takes effect in 2006.

5. Annual reporting system:

- Service units implementing the autonomous and self-responsible financial regime must report annually to their superior management agencies on the results of their autonomous and self-responsible financial activities before January 31 of the following year (in accordance with Appendix No. 05 attached hereto).

- Ministries, ministerial-level agencies, government agencies, People's Committees of provinces and centrally governed cities must annually organize evaluations of the implementation of the autonomous and self-responsible financial mechanism and submit reports to the Ministry of Finance before February 25 of the following year (in accordance with Appendix No. 06 attached hereto).

During the implementation process, if there are difficulties or obstacles, units are requested to reflect them to the Ministry of Finance for prompt resolution./.