Circular No. 73/2008/TT-BTC guiding the establishment, management, and use of local employment resolution funds and management fees for the national employment fund.

CIRCULAR

Guidelines for establishing, managing, and using local employment resolution funds and national employment fund management expenses locality and the management budget for the National Employment Fund

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Pursuant to Decree No. 39/2003/NĐ-CP dated April 18, 2003 of the Government detailing and guiding the implementation of certain provisions of the Labor Code on employment;

Pursuant to Decision No. 71/2005/QĐ-TTg dated April 5, 2005 of the Prime Minister on the mechanism for managing and operating the capital for lending by the National Employment Fund and Decision No. 15/2008/QĐ-TTg dated January 23, 2008 of the Prime Minister amending and supplementing certain provisions of Decision No. 71/2005/QĐ-TTg dated April 5, 2005 (hereinafter referred to collectively as Decision No. 71/2005/QĐ-TTg as amended and supplemented);

The Ministry of Finance issues guidelines for the establishment, management, and use of local employment resolution funds and national employment fund management expenses as follows:

I. ESTABLISHING, MANAGING, AND USING LOCAL EMPLOYMENT RESOLUTION FUNDS

1. Establishing local employment resolution funds:

a) Local employment resolution funds (hereinafter referred to as local employment funds) are formed from the following sources:

- Local budget decided by the People's Council of provinces and centrally governed cities.

- Support from organizations and individuals both within and outside the country.

- Other sources of support.

b) Annually, the People's Committee of provinces and centrally governed cities (referred to collectively as provinces) shall allocate a portion of the local budget based on the local financial capacity, employment needs, and socio-economic development tasks, to establish the local employment fund, and submit it to the People's Council of provinces and centrally governed cities for approval.

2. Managing and using local employment funds:

a) Management: The Chairman of the People's Committee of the province decides to establish the fund and assigns the Director of the Department of Finance as the account holder. The loan capital is entrusted through the Social Policy Bank. The entrustment mechanism is regulated by the Chairman of the People's Committee of the province in the Regulation on the management and use of local employment funds.b) Using the Fund: The local employment fund is used as loan capital for employment resolution according to the local employment program's objectives. Based on the approved annual new loan capital plan, each quarter (before the 20th day of the first month of the quarter), the Department of Finance transfers the capital to the Social Policy Bank to serve as the loan capital source. The use of the local employment fund is carried out as follows:

- Regarding the borrowing entity: Based on the provisions of Article 5 of Decision No. 71/2005/QĐ-TTg as amended and supplemented, and the actual situation of the locality, the People's Committee of the province determines the borrowing entities of the fund that align with the objectives of the local employment program.

- Regarding the conditions for borrowing, purpose of using borrowed capital, amount of capital, term, project construction, and review process, disbursement, recovery of capital, and handling overdue debt are applied according to Decision No. 71/2005/QĐ-TTg as amended and supplemented and guidance documents issued by the Ministry of Labor, Invalids, and Social Affairs and the Social Policy Bank.

- Regarding the interest rate for loans, it is implemented according to the current regulations on interest rates for loans to poor households and other policy targets. For borrowing entities that are production and business establishments exclusively for disabled workers, the interest rate for loans is set at 50% of the preferential interest rate for other policy targets according to Decision No. 51/2008/QĐ-TTg dated April 24, 2008 of the Prime Minister on state support policies for production and business establishments exclusively for disabled workers.

- Regarding risk handling due to force majeure: Borrowers subject to consideration for risk debt handling; objective reasons causing direct damage to the capital and assets of customers; measures for handling; legal documents for considering risk debt handling are applied according to Decision No. 69/2005/QĐ-TTg dated April 6, 2005 of the Prime Minister on the issuance of the Regulation on handling risk debt of the Social Policy Bank and Circular No. 65/2005/TT-BTC dated August 16, 2005 of the Ministry of Finance guiding the implementation of the Regulation on handling risk debt of the Social Policy Bank issued together with Decision No. 69/2005/QĐ-TTg dated April 6, 2005 of the Prime Minister. The authority to consider risk debt handling is determined by the Chairman of the People's Committee of the province. The capital for handling risk debt is taken from the local risk reserve fund.

- The distribution and use of the actual interest income from the local employment fund loans are carried out as follows:

+ Dedicate 50% to pay for the agency fees of the Social Policy Bank system to guide borrowers in building projects, preparing loan applications, organizing reviews, disbursing loans, recovering capital, handling debts, summarizing, and reporting on the loan implementation results. The use of agency fees follows the regulations of the Social Policy Bank.

+ Dedicate 20% for planning loan and employment resolution activities; inspecting, supervising, and evaluating new job creation indicators and loan activities of the fund; summarizing and reporting on loan results to district and provincial labor authorities. Based on reports from the Social Policy Bank and interest collection results; loan and employment resolution plans; inspection and supervision plans; the Department of Labor, Invalids, and Social Affairs decides on the allocation to units. The content and level of expenditure are carried out according to Point 3, Section II of this Circular.

+ Dedicate 30% to establish a local risk reserve fund to offset losses from local employment fund loans due to force majeure, which are written off by the People's Committee of the province, and to replenish the local employment fund capital based on the decision of the Chairman of the People's Committee of the province upon the proposal of the Department of Labor, Invalids, and Social Affairs, the Social Policy Bank, and the local Department of Finance.

Based on the above regulations and the actual situation of the locality, the People's Committee of the province promulgates the Regulation on the management and use of local employment funds.

II. EXPENSES FOR MANAGING THE NATIONAL EMPLOYMENT FUND AND LOCAL EMPLOYMENT FUNDS

Based on the aforementioned provisions and the actual situation of the locality, the Provincial People's Committee issues the Regulation on the management and use of the local employment fund.

II. MANAGEMENT BUDGET FOR THE NATIONAL EMPLOYMENT FUND AND LOCAL EMPLOYMENT FUND

- At the central level: The Ministry of Labor, Invalids, and Social Affairs, based on assigned tasks, prepares the budget for the management expenses of the Employment Loan Fund managed by the Steering Committee for the National Target Program on Employment within the annual administrative management expenditure budget and sends it to the Ministry of Finance as the basis for allocating funds.

- At the local level: The Labor, Invalids, and Social Affairs agency, based on assigned tasks for managing employment loan activities, prepares the budget for the management expenses of the Employment Loan Fund managed by the Steering Committee for the National Target Program on Employment within the annual administrative management expenditure budget and sends it to the same-level finance agency as the basis for allocating funds.

3. Management expenses of the Employment Loan Fund and the Local Employment Fund shall be used for the following purposes:

- Expenses for business training meetings, mid-term and final reviews of employment loan activities; inspection, supervision, and evaluation of new job creation targets, loan activities, and reporting on loan results. The content and expense levels shall be implemented according to Circular No. 23/2007/TT-BTC dated March 21, 2007, issued by the Ministry of Finance, stipulating travel expenses and meeting organization costs for state agencies and public institutions, and Circular No. 127/2007/TT-BTC dated October 31, 2007, issued by the Ministry of Finance, amending and supplementing Circular No. 23/2007/TT-BTC dated March 21, 2007, and Circular No. 57/2007/TT-BTC dated June 11, 2007, issued by the Ministry of Finance.

- Expenses for purchasing and repairing assets serving the management of the Employment Loan Fund.

- Expenses for surveys and investigations related to employment loans; supporting research and improvement of policies, drafting and promulgating guiding documents on employment loans. The content and expense levels shall be implemented according to current State regulations.

- Expenses for rewarding units and individuals (including project leaders) who have made significant achievements in employment loan management. The maximum expense level for units is 400,000 VND/year, and for individuals is 200,000 VND/year. For provinces with overdue debt rates below 3% and idle capital rates below 5%, the maximum expense level for units is 1,000,000 VND/year, and for individuals is 500,000 VND/year.

- Other expenses directly related to employment loan activities such as:

+ Office supplies, communication, and propaganda expenses: Expense levels are based on valid invoices and receipts.

+ Overtime and other expenses: Expense levels are according to current State regulations.

The preparation of budgets, settlement, and expense levels for the above items shall be carried out according to current State regulations.

III. IMPLEMENTATION

3. The Social Policy Bank shall base on the results of loans and debt collection from the Employment Loan Fund and Local Employment Fund managed by assigned agencies and organizations to provide service fee payments to central and local agencies and organizations implementing the Program according to regulations.

4. This Circular shall take effect 15 days after its publication in the Official Gazette and replace Circular No. 107/2005/TT-BTC dated December 7, 2005, issued by the Ministry of Finance, guiding the establishment, management, and use of the Local Employment Resolution Fund and the National Employment Loan Fund management expenses.

In the course of implementation, if there are difficulties, they should be promptly reflected to the Ministry of Finance for study and resolution.