Circular No. 76-TC/HCVX on improving the allocation of trade union funds

CIRCULAR

Regarding the improvement of the allocation of union funds

MINISTER OF FINANCE

Pursuant to Circular No. 141-TTg dated December 29, 1969 of the Prime Minister, the Ministry of Finance has regulated the improvement of the allocation of union funds as follows:

"For enterprises, construction sites, and administrative and public service agencies under the management of central sectors, the Ministry of Finance will directly allocate union funds from the central government budget.

For enterprises, construction sites, and administrative and public service agencies under the management of local administrative committees, financial departments at the provincial level will directly allocate union funds from the local government budget to the trade union federations" (Circular No. 23-TC/VP dated January 14, 1970 of the Ministry of Finance)

After reaching consensus with the Vietnam General Confederation of Labor and the State Bank of Vietnam, the Ministry of Finance provides guidance on the implementation of the above regulations as follows:

I. BASIS FOR CALCULATING UNION FUNDS AND RECORDING IN THE STATE BUDGET

Annually, the General Confederation of Labor (at the central level) and the trade union federations (at the local level) - hereinafter referred to as the trade union bodies, based on the planned wage fund index of both material production and non-material production sectors approved by the Council of Ministers, prepare a budget for union funds equivalent to 2% of the planned wage fund, and submit it to the corresponding financial authorities for review and inclusion in the expenditure budget of the State Budget, Category II, Item 49, Subitem 7. (Union funds are recorded collectively under Item 49 of the budget, not separately by sector).

II. ALLOCATION AND PAYMENT OF UNION FUNDS

At the end of each quarter, the trade union body prepares a plan for the allocation of union funds for the next quarter and submits it to the financial authority. Based on the quarterly wage fund report submitted by the sectors, the financial authority calculates the planned amount of union funds to be allocated.

Within the first ten days of the first month of each quarter, the financial authority must allocate the calculated amount of union funds to the trade union body's account at the State Bank, titled "union fund," to ensure timely distribution to grassroots unions.

In cases where the budget faces difficulties, the financial authority may negotiate with the trade union body to make two allocations, but must ensure that the needs of grassroots unions are met in a timely manner.

At the end of each quarter, the trade union body requests the financial authority to settle the accounts based on the actual wages paid by the financial authority (for administrative and public service agencies), the State Bank (for production and business enterprises), and the Construction Bank (for agricultural farms) during the quarter. The actual wages paid mentioned herein:

a) For administrative and public service agencies, are the figures recorded in the reports prepared according to current regulations for finalizing expenditures on wages in the non-material production sector of each agency.

b) For production and business units, are the figures recorded in the reports of the State Bank and Construction Bank prepared according to current regulations for statistical purposes regarding the expenditure of the wage fund in the material production sector of each agency.

At the central level, the Central State Bank and the Central Construction Bank provide the Ministry of Finance with statistical data on the quarterly and annual plans and actual implementation of the wage fund of sectors under central management; at the local level, branches of the State Bank and Construction Bank provide local financial departments with statistical data on the quarterly and annual plans and actual implementation of the wage fund of sectors under local management.

Financial authorities, the State Bank, and the Construction Bank need to strengthen the management of wage fund expenditures in enterprises and agencies in accordance with current state regulations, supervise accounting, and ensure timely and accurate statistics on the wage fund, thereby ensuring timely and full payment of union funds.

Local levels of the trade union need to closely coordinate with financial authorities and the State Bank and Construction Bank in this work.

The improvement of the allocation of union funds according to this Circular shall take effect from January 1, 1970.

To ensure proper accounting in the State Budget for the year 1970 in accordance with new revenue and expenditure regulations and the newly issued budget structure, units that have paid union funds for the first quarter of 1970 according to old regulations should handle the matter as follows:

1. For administrative and public service units, starting from the beginning of the first quarter of 1970, the financial authority has allocated funds including union funds (2% of the wage fund) to administrative and public service units; therefore, these units are responsible for deducting and fully paying the union funds for the first quarter of 1970 to the trade union body based on the actual wages paid, and recording it in their final expenditure statement according to current regulations. Starting from the second quarter of 1970 onwards, the financial authority must allocate union funds according to the provisions of this Circular.

Specifically, for central administrative and public service units located in local areas, after paying the 2% union fund, they must immediately report to the competent ministry which will consolidate the information and send it to the Ministry of Finance before May 30, 1970:

- The actual wages paid by the unit in the first quarter of 1970.

- The amount already paid to the local trade union federation for the union funds of the first quarter of 1970 (specify each locality).

These documents are essential for adjusting the accounting records of the 1970 state budget in accordance with the newly issued regulations.

2. For production, business, and basic construction units.

To ensure the implementation of the new regulations from January 1, 1970, while also ensuring that units must pay the state budget the amount deducted from profits for the union funds of the first quarter of 1970.

a) The trade union body prepares a plan to request the allocation of union funds (this amount is calculated from January 1, 1970, as stipulated in Part II above) and submits it to the financial authority, along with a list of units that have deducted profits to pay union funds for the first quarter of 1970. This list must clearly indicate the amount each unit has deducted and submitted, and must be made in three copies:

- One copy sent to the State Bank,

- One copy sent to the corresponding financial authority,

- One copy sent to the Vietnam General Confederation of Labor.

Based on this list, the trade union body:

- On one hand, issue a transfer voucher to refund the amount that each unit (including central units located in local areas) has paid for the first quarter of 1970 into their respective accounts.

- On the other hand, immediately inform the unit receiving the refund, and this unit shall be responsible for issuing a payment authorization form and a payment submission form (clearly indicating the type, item, category, and sub-item of revenue that the unit must pay according to the new budget classification) to send to the State Bank agency so that the bank can process the transfer into the state budget, as stipulated in paragraph c below.

b) Financial authority shall promptly review and disburse funds to the trade union organization. On the payment order, it is necessary to clearly indicate in the "notes for the bank" section the amount that the trade union organization must refund to the units, based on the list sent to the financial authority and the State Bank.

After disbursing, the provincial finance departments have the responsibility, together with enterprise management staff, to monitor and urge the units to submit the portion of profits already deducted and transferred to the state budget, and report to the Ministry of Finance before May 30, 1970;

- The amount that central units located in local areas have deducted from their profits to pay for the trade union expenses for the first quarter of 1970,

- The amount that these units have recovered and refunded to the state budget.

- The reasons for not having fully submitted (if any).

These documents are essential for adjusting the accounting records of the 1970 state budget in accordance with the newly issued regulations.

c) State Bank agency shall oversee the above actions; according to the agreement between the Ministry of Finance and the State Bank, the State Bank agencies must base their actions on the received documents (the payment order with the note from the financial authority, the transfer voucher from the trade union organization, the payment authorization form and the payment submission form from the unit); if they are complete, they shall proceed with the following procedures:

- Transfer the amount from the Debit account of the trade union organization to the Credit account of the unit, reflecting the trade union's refund to the unit of the amount previously paid for trade union expenses;

- Simultaneously, record the immediate transfer from the Debit account of the unit to the Credit account of the revenue collection, reflecting the amount the unit has paid to the state budget.

It is important to note that the amount transferred by the trade union must be ensured to be immediately deposited into the state budget and not withdrawn or used for other purposes.

These actions need to be carried out concurrently within a time frame agreed upon by the relevant sectors and must be completed by May 30, 1970, to ensure that the 1970 budget accounting records accurately reflect the results of implementing the new revenue and expenditure regulations.

This Circular does not apply to organizations funded by sources other than the state budget, such as party funds, trade union funds, social insurance funds, pension funds, nursery funds, canteen funds, etc.; these organizations will still use their own funds to pay the 2% trade union fee to the trade union organization.

The Ministry of Finance and the Vietnam General Confederation of Labor have agreed that the General Confederation will specify the payment method for convenience after discussing with related organizations.

Circular No. 07-TC/HCP dated January 31, 1959, of the Ministry of Finance regarding the payment of trade union expenses is hereby repealed.