Joint Circular No. 78/2005/TTLT/BTC-BYT guides the financial management mechanism and disbursement for the "People's Health Care Project in the Central Highlands Provinces" using Asian Development Bank (ADB) loans and non-refundable aid from the Swedish Government.

 

JOINT CIRCULAR

Guidelines for the financial management and disbursement mechanism of the "People's Health Care Project in the Northwest Provinces" using loans from the Asian Development Bank and non-refundable aid from the Government of Sweden

Based on Decree No. 17/2001/ND-CP dated May 4, 2001 of the Government on the issuance of regulations on the management and use of Official Development Assistance funds;

Based on Decree No. 52/1999/ND-CP dated July 8, 1999 of the Government on the issuance of the Investment and Construction Management Regulations, and Decree No. 12/2000/ND-CP dated May 5, 2000 of the Government amending and supplementing certain articles of Decree No. 52/1999/ND-CP dated July 8, 1999; Decree No. 07/2003/ND-CP dated January 30, 2003 of the Government amending and supplementing certain articles of the Investment and Construction Management Regulations issued together with Decree No. 52/1999/ND-CP dated July 8, 1999 and Decree No. 12/2000/ND-CP dated May 5, 2000 of the Government;

Based on Decree No. 16/2005/ND-CP dated February 7, 2005 of the Government on project management for investment construction works;

To implement the Loan Agreement No. VIE-2076 (SF) for the People's Health Care Project in the Northwest Provinces between the Government of the Socialist Republic of Vietnam and the Asian Development Bank dated April 8, 2004, the Financial Agreement for the People's Health Care Project in the Northwest Provinces between the Government of the Socialist Republic of Vietnam and the Asian Development Bank dated April 8, 2004, and the Separate Agreement between the Government of Sweden and the Government of the Socialist Republic of Vietnam regarding the non-refundable aid from the Government of Sweden through the Asian Development Bank co-financing the People's Health Care Project in the Northwest Provinces (2004-2009) dated July 2, 2004;

The Ministry of Finance and the Ministry of Health jointly issue guidelines for the financial management and disbursement mechanism of the People's Health Care Project in the Northwest Provinces (referred to as the Northwest Health Project) as follows:

1. Abbreviations and term explanations

In this Circular, the following terms are understood as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

a. ADB: Asian Development Bank

b. BHYT: Health Insurance

c. Ban QLDA: Project Management Board

d. Project Managing Authority of the Northwest Health Project: Ministry of Health

e. HCSN: Administrative and Public Services

f. KHTC: Financial Plan

g. L/C: Letter of Credit

h. Project Serving Bank: The selected bank to serve the project is the Vietnam Agricultural and Rural Development Bank

i. NSNN: State Budget

j. NSĐP: Local Budgets of the provinces participating in the project

k. NSTW: Central Budget

l. ODA: Official Development Assistance

m. PMU Central: Project Management Board for the People's Health Care Project in the Northwest Provinces and Supporting the Development of the Preventive Health System

n. PPMU: Provincial Project Management Board for the Northwest Health Project

o. SIDA: Swedish International Development Cooperation Agency

p. TW: Central

q. TSCĐ: Fixed Assets

r. TCĐN: Foreign Financial Management

s. UBND: People's Committee

t. USD: United States Dollar

u. VND: Vietnamese Dong

v. XDCB: Basic Construction

2. Principles of Management

2.1. The total budget and the structure of funding sources for the Northwest Health Project are stipulated in Decision No. 984/QD-BYT dated March 18, 2004 of the Minister of Health approving the Northwest Health Project, Loan Agreement No. VIE-2076 (SF) dated April 8, 2004, and other commitment documents for non-refundable aid, specifically:

- State Budget investment from ADB loan: 20 million USD, equivalent to 312 billion VND;

- Non-refundable aid from SIDA: 5.579 million USD, equivalent to 87.032 billion VND;

- Counterpart funding from the Government of Vietnam: 78 billion VND, equivalent to 5 million USD (including central budget and local budgets participating in the project).

2.2. The ADB loan and non-refundable aid from the Government of Sweden are revenues of the State Budget. The State allocates these funds to the Ministry of Health and the provinces participating in the project to implement the Northwest Health Project. The Ministry of Health is responsible for directing the project to manage and use the budget funds for the intended purposes and contents approved in accordance with the terms committed in the Loan Agreement, Financial Agreement signed with ADB, commitment documents signed with the Government of Sweden, and related documents attached to these agreements, while complying with current regulations on financial management and foreign exchange management of the Government of Vietnam.

2.3. The allocation of project expenditure items including basic construction investment and administrative and public services expenses is stipulated in Decision No. 984/QD-BYT dated March 18, 2004 of the Minister of Health approving the Northwest Health Project as follows:

a. Basic Construction Investment Expenditure:

- Investment in basic construction for 24 health facilities (including: 1 provincial preventive health center, 3 provincial health education and communication centers, 3 provincial centers for the prevention of social diseases, 14 district health centers, 1 multi-specialty hospital in Ngoc Hoa, 2 provincial medical high schools);

- Equipment accompanying construction projects;

- Costs for land acquisition and resettlement;

- Contingency reserve;

- Taxes and fees.

b. Administrative and Public Services Expenditure:

- Purchase of equipment and transportation means (excluding equipment listed in point 3.1 above);

- Medical examination and treatment for the poor;

- Consulting services;

- Training, program framework development, and teaching material preparation;

- Communication activities;

- Research, monitoring, and evaluation;

- Operation, maintenance, and repair;

- Salaries of project staff;

- Project management costs;

2.4. Hierarchical Management:

Based on Decision No. 984/QD-BYT dated March 18, 2004 of the Minister of Health, the PMU Central and the PPMUs are responsible for implementing the following tasks:

b. Administrative and Public Services Expenditure:

- Purchase of equipment and transportation means (excluding equipment listed in point 3.1 above);

a. PMU Central:

- Implement international tendering for procurement of vehicles, medical equipment, and other specialized equipment to supply to the provinces under the project;

- Implement tendering for procurement of goods and consulting services within the project investment at the PMU Central (office equipment, domestic and foreign consultants...);

- Implement training of healthcare personnel under the postgraduate training model and the undergraduate training enhancement model (the provincial level has not yet been implemented);

- Manage and coordinate the implementation of activities funded by non-refundable aid from the Government of Sweden for the Poor People's Medical Examination and Treatment Fund in the provinces benefiting from the project;

- Implement training for health staff under the postgraduate training module and the university-level refresher training module (for the provincial level which has not yet been implemented);

- Manage and coordinate the implementation of activities funded by the Swedish Government's non-repayable grant for the Poor People's Medical Examination and Treatment Fund in the beneficiary provinces;

- Direct, manage, and supervise all investment contents of the Project.

b. The Project Management Units at the Provincial Level (PPMU):

- Implement tendering for all construction packages of the Project in the province;

- Implement tendering for procurement of goods and consulting services under the Project's investment in the province (office equipment, consulting experts...);

- Implement training for health staff on training modules: Technical Officer and Midwife Training; Primary Health Care Training; Health Education Communication Training;

- Carry out management, supervision, and advisory work at the localities benefiting from the project;

- Implement activities under the non-reimbursable grant portion of the Swedish Government for the Fund for Outpatient and Inpatient Services for the Poor;

- Land acquisition and resettlement organization;

- Maintenance of equipment.

2.5. The People's Committees of the provinces participating in the project shall be responsible for allocating sufficient counterpart funds for the project from the provincial budget for activities within the components of the capital (HCSN, XDCB) that have been decentralized to implement the project contents according to Decision No. 984/QĐ-BYT mentioned above.

2.6. The banking system serving the Project shall carry out procedures to withdraw funds from ADB (including both ADB loan funds and non-reimbursable grants from SIDA) in accordance with Circular No. 78/2004/TT-BTC dated August 10, 2004, issued by the Ministry of Finance guiding the management of fund withdrawal for Official Development Assistance (ODA) sources.

2.7. The Central Project Management Unit (PMU) and the Provincial Project Management Units (PPMU) may use the interest generated on their respective advance payment accounts to pay bank service fees, and the remaining interest must be regularly remitted to the State Budget. In cases where the interest is insufficient to cover bank service fees, the Central PMU and the PPMUs shall aggregate the shortfall into the counterpart capital plan and use counterpart capital to pay bank service fees.

II. SPECIFIC PROVISIONS

1. Establishing the project capital plan

Upon signing the Loan Agreement and Financial Agreement, the Central PMU and the PPMUs must develop the operational and financial plans for the first year of the project. For subsequent years, the operational and financial plans shall be established and reviewed simultaneously with the preparation of the state budget draft in accordance with the State Budget Law and current guiding regulations.

a. For the PPMU:

- Annually, based on the progress of implementing the Project, the PPMU shall establish the project capital plan for its locality according to the expenditure items specified in Point 4.2, Section I, Clause II and the structure of the project's capital sources including ADB loans, non-reimbursable grants from the Swedish Government, and counterpart funds from the provincial budget as stipulated in Decision No. 984/QĐ-BYT mentioned above, detailed by item of work and nature of the capital source used (investment in construction, HCSN) specifically according to the form attached as Appendix I to this Circular and the detailed statement of capital requirements for each item of work.

- The PPMU shall submit the Capital Plan to the Department of Health, Department of Planning and Investment, and Department of Finance for consolidation and submission to the competent authority for approval of the counterpart capital plan for the project in the provincial budget, while sending it to the Central PMU (before July 30) for consolidation of the overall project capital plan.

b. For the Central PMU:

- Each year in July, the Central PMU shall issue a letter guiding the provinces participating in the project to prepare the capital plan for the next year.

- Consolidate the overall capital plan for the entire project including: ADB capital plan, non-reimbursable grants from the Swedish Government, counterpart funds allocated from the central budget, and other sources (if any), detailed by item of work and nature of the capital source used (HCSN, investment in construction) specifically according to the form attached as Appendix 1 to this Circular and the detailed statement of capital requirements for each item of work. This capital plan shall be consolidated into the Ministry of Health's (Planning and Finance Department) capital plan before being submitted to the Ministry of Planning and Investment, Ministry of Finance for approval by the Government and National Assembly.

2. Allocation and transfer of the budget

a. For construction investment capital: Based on the approved capital investment plan, the Ministry of Health decides to allocate the centralized construction investment budget using loan funds to the project provinces, notifying the Ministry of Finance (Investment Department) for verification. The Ministry of Finance notifies the construction investment fund disbursement plan using loan funds to the Treasury System as the basis for controlling payments, and sends it to the Ministry of Health and the Central PMU for monitoring and managing.

b. For public service capital: Based on the approved budget plan, the Ministry of Health allocates loan capital, the central budget counterpart capital, and aid according to the expenditure categories and nature of the capital source for the Western Highlands Health Project and sends it to the Ministry of Finance for verification. Based on the verification results, the Ministry of Health makes a decision to approve the total public service capital budget for the entire project. The approval decision is sent to the Treasury as the basis for controlling expenditures.

c. Based on the annual budget approval decision made by the Ministry of Health (centralized construction investment capital and public service capital), the People's Committees of the participating provinces allocate the counterpart capital plan (construction investment and public service capital) to the PPMU. The provincial counterpart capital allocation decision is sent to the Department of Finance, Department of Health, and the State Treasury of the province for expenditure control and payment according to the ratio for the activities specified in the Agreement, and sent to the Central PMU as the basis for disbursing and supplementing loan and aid funds into the PPMU's advance payment account.

d. Based on the approved public service expenditure budget, the Ministry of Health allocates the counterpart capital for public service expenditure to the Central Project Management Board. The decision on the allocation of the counterpart capital plan for the PMU is sent to the Ministry of Finance and the State Treasury where the PMU has an account for expenditure control and payment according to the ratio for the activities specified in the Agreement.

e. Based on the allocated counterpart capital budget, units shall withdraw the budget at the Treasury where they have an account in accordance with the State Budget Law and current guiding regulations.

3. Opening Accounts

3.1. The Central PMU shall open the following accounts:

a. Advance Payment Account: The PMU shall open two advance payment foreign currency (USD) accounts named after the Project at the serving bank, including:

- One advance payment account to receive ADB loan funds.

- One advance payment account to receive non-reimbursable grants from SIDA.

b. Deposit Account: The PMU shall open two commercial bank deposit accounts, including:

- An account for USD deposits and an account for VND deposits to deposit revenues from the project such as tender document sale proceeds, bid guarantee funds, contract performance guarantee funds, and other miscellaneous receipts.

c. Budget account:

A budget account at the State Treasury to receive counterpart funds provided by the State Treasury for the activities of the project.

3.2. Provincial Project Management Units (PPMU) participating in the project shall open the following accounts:

a. At the branch bank serving the project, the PPMU shall open two accounts: One advance payment account (VND) to receive ADB funding and one advance payment account (VND) to receive non-repayable aid funding from SIDA transferred by the Central Project Management Unit according to the approved financial plan.

b. At a commercial bank, the PPMU shall open one deposit account (VND) to deposit revenues from the project such as: Tender document sale proceeds, bid guarantee funds, contract performance guarantee funds, contributions from beneficiaries (if any)...

c. At the provincial State Treasury, the PPMU shall open two accounts:

- A budget expenditure account for implementing the disbursement of counterpart funds for state budget expenditures.

- A capital disbursement account for implementing the disbursement of counterpart investment funds for construction works of the project.

4. Disbursement of Counterpart Funds

The disbursement of counterpart funds shall be carried out in accordance with Circular No. 79/2003/TT-BTC dated August 13, 2003 issued by the Ministry of Finance guiding the management, allocation, and payment of state budget expenditures through the State Treasury and subsequent amendments and supplements thereto.

5. Withdrawal, Allocation, and Payment of ADB Loan Funds and Non-Repayable Aid Funds from SIDA

All procedures and forms for withdrawing and paying funds from abroad and from advance payment accounts shall be implemented in accordance with Circular No. 78/2004/TT-BTC dated August 10, 2004 issued by the Minister of Finance on guiding the withdrawal of Official Development Assistance (ODA) funds, and the guidelines for Decree No. 17/2001/NĐ-CP dated May 4, 2001 of the Government on the issuance of regulations on the management and use of ODA funds, and adhering to the disbursement principles of the Asian Development Bank (ADB).

Payments from ADB loan funds and SIDA aid funds must be made in accordance with the financing ratios specified for each component of the project in the Loan Agreement and the project's legal documents.

Depending on the requirements and nature of each payment, the following withdrawal methods may be applied: Withdrawal and payment through advance payment accounts, direct payment, refund procedures, and commitment letters.

Specifically regarding payments through advance payment accounts, the Joint Ministries provide detailed guidance as follows:

5.1. Payments from Provincial Advance Payment Accounts

When there is a request for payment from the provincial advance payment account to fund project activities implemented by the province, the PPMU shall submit to the provincial State Treasury the necessary documentation for expenditure control including:

- A letter requesting payment

- Relevant documentation and vouchers in accordance with current regulations on the payment of construction investment funds or state budget expenditure funds.

Upon receipt of complete and valid documentation, based on the results of the documentation review, the provincial State Treasury shall confirm the completed work volume eligible for payment on the Payment Price List or the Payment Schedule or the Advance Payment Request Form (in the format of the State Treasury), and simultaneously make the corresponding counterpart payment (if applicable).

The PPMU shall send the branch bank serving the project the payment request along with the Payment Price List or the Payment Schedule or the Advance Payment Request Form confirmed by the provincial State Treasury to withdraw funds from the PPMU's advance payment account to pay the beneficiary.

The Payment Price List or the Payment Schedule confirmed by the provincial State Treasury (original copy) serves as one of the bases for the PPMU to process supplementary funding for the PPMU's advance payment account, and concurrently serves as the basis for the Central Project Management Unit to process additional funding withdrawal from the sponsor.

5.2. Supplementary Funding for PPMU Advance Payment Accounts

Monthly or when the provincial advance payment account has been spent up to 50% of the ceiling limit, the PPMU must process supplementary funding for the provincial advance payment account and submit it to the Central Project Management Unit including:

- A letter to the Central Project Management Unit requesting supplementary funding for the advance payment account;

- Statements of expenditures from the provincial advance payment account and copies of the Payment Price Lists or Payment Schedules confirmed by the provincial State Treasury;

- Statements of the advance payment account balance at the branch bank serving the PPMU.

Within five working days from the date of receiving complete and valid documentation, the Central Project Management Unit shall transfer supplementary funding to the provincial PPMU's advance payment account.

The documentation submitted by the PPMU for supplementary funding of the PPMU's advance payment account also serves as the documentation for the Central Project Management Unit to prepare the application for additional funding withdrawal for the PPMU's advance payment account.

6. Certain Expenditure Standards Applicable to the Project

6.1. Expenditures using ADB loan funds and domestic counterpart funds: The project shall apply the expenditure standards prescribed in Decision No. 112/2001/QĐ-BTC dated November 9, 2001 issued by the Minister of Finance on the issuance of certain expenditure standards applicable to projects utilizing Official Development Assistance (ODA) loans.

For training expenses, the Ministry of Finance and the Ministry of Health provide specific guidance as follows:

a. Training and retraining costs

To be implemented based on actual receipts in accordance with the current regulations of the Schools as stipulated in Circular No. 44/2002/TTLT-BTC-BYT dated May 8, 2002 guiding the financial management mechanism of the Rural Health Project funded by the Asian Development Bank and Circular No. 87/2001/TT-BTC dated October 30, 2001 of the Ministry of Finance guiding the content and expenditure standards for developing framework programs for higher education, college, and vocational secondary education, and compiling course materials and textbooks, and certain specific expenditure standards of the project as follows:

- Short-term training and refresher courses: (not exceeding three months) shall apply the expenditure standards as prescribed in Circular No. 44/2002/TTLT-BTC-BYT dated May 8, 2002 issued jointly by the Ministry of Finance and the Ministry of Health guiding the financial management mechanism of the Rural Health Project funded by the Asian Development Bank.

- Long-term postgraduate training:

Examination preparation and admission support:

+ Examination fees and admission fees: Based on the actual receipts of the educational institution.

+ Purchase of study materials: 200,000 VND per course

+ Office supplies: 50,000 VND per course

+ Food allowance for trainees: 500,000 VND/month but not exceeding 2 months/course.

+ Accommodation allowance for trainees: 500,000 VND/month but not exceeding 2 months/course.

+ Travel expenses: reimbursed based on actual receipts for public transportation tickets (excluding airfare).

Postgraduate training support:

+ Study fees and thesis writing costs (including graduation thesis support) at the actual collection rate according to current regulations of educational institutions but not exceeding 15,000,000 VND/year.

+ Food allowance: 500,000 VND/month.

+ Accommodation allowance: The project contracts with educational institutions to rent housing for trainees at dormitory rates set by the educational institution (or rented externally if the institution does not have available accommodation) but not exceeding 500,000 VND/month/trainee.

+ Travel expenses during breaks: reimbursed based on actual receipts for public transportation tickets (excluding airfare).

+ Material and office supply costs: 1,000,000 VND/course.

b. Expenses for international conferences and short-term training:

The expenditure level for officials participating in conferences, training, and short-term courses abroad shall be in accordance with Circular No. 45/1999/TT-BTC dated May 4, 1999, issued by the Ministry of Finance, which stipulates travel expenses for state officials going on short-term missions abroad, and Circular No. 108/1999/TT-BTC dated September 4, 1999, issued by the Ministry of Finance, providing supplementary guidance on Circular No. 45/1999/TT-BTC mentioned above.

c. Travel expense allowance:

For staff members of the Project who frequently use personal vehicles for work-related travel (more than 15 days/month), the travel expense allowance shall not exceed 150,000 VND/month/person.

d. Night shift and overtime pay:

To be applied in accordance with the Labor Law and current guiding documents (Joint Circular No. 08/2005/TTLT-BNV-BTC dated January 5, 2005, issued by the Ministry of Home Affairs and the Ministry of Finance, guiding the implementation of night shift and overtime pay for civil servants and public officials).

6.2. Expenditure from SIDA grant funds

The expenditure level for training, conferences, seminars, workshops, travel expenses, and other management costs from SIDA grant funds shall be in accordance with the current budget standards of the Vietnam-Sweden Health Cooperation Program or as agreed upon by SIDA and ADB.

a. Expenditure from grants supporting medical examination and treatment (KCB) for poor people and ethnic minorities includes:

- Support for food expenses for inpatient patients:

+ In cases where patients are treated at healthcare facilities within the province: The specific support amount is 5,000 VND/patient/day. The maximum duration of food support is not more than 7 days for district-level hospitals and 10 days for provincial-level hospitals per treatment session. For special cases requiring long-term inpatient treatment, the hospital director decides the number of days of support for each individual case. Depending on actual conditions, healthcare facilities may organize meals or directly reimburse daily food expenses for patients.

+ In cases where patients must be transferred to specialized care at out-of-province healthcare facilities, the support amount is 10,000 VND/patient/day. The healthcare facility responsible for transferring the patient will provide food support along with the transfer procedures, with a maximum support period of 15 days.

- Support for travel expenses for poor people and ethnic minorities:

+ In emergency cases, the healthcare facility transporting the patient to the hospital can be reimbursed for fuel costs according to the current standard (for both the trip to and return).

+ In emergency cases, if the patient uses their own means of transportation from home to the hospital (at least district level), the hospital will reimburse the patient with a support amount of 30,000 VND/100 km (one-way trip) and a minimum of 20,000 VND/patient (one-way trip).

+ Transporting deceased patients back home: Reimbursed based on actual fuel consumption for the transport (for both the trip to and return).