Circular No. 79/2003/TT-BTC guides the management, allocation, and payment of state budget expenditures through the State Treasury.

CIRCULAR

Guidelines for the management, allocation, and settlement of state budget expenditures through the State Treasury

Settlement of state budget expenditures through the State Treasury

Pursuant to the State Budget Law No. 01/2002/QH11 dated December 16, 2002, enacted by the National Assembly, and Decree No. 60/2003/NĐ-CP dated June 6, 2003, issued by the Government, detailing and guiding the implementation of the State Budget Law;

The Ministry of Finance hereby provides guidelines for the management, allocation, and settlement of state budget expenditures through the State Treasury as follows:

I - GENERAL PROVISIONS

1\. The scope of application of this Circular includes all state budget expenditures, including regular expenditures; economic public service expenditures; program-target expenditures; entrusted budget funds, and other state budget expenditures.

This Circular does not apply to village budgets; construction investment expenditures; public service expenditures with investment characteristics; special expenditures on national defense and security; and expenditures of Vietnamese representative offices abroad.

2\. The entities subject to the provisions of this Circular include agencies, units, project leaders, etc., using state budget funds (hereinafter referred to collectively as budget-using units); administrative agencies implementing personnel quotas and administrative management expenses, and units implementing financial systems applicable to revenue-generating public service units (for the portion of state budget funds not implemented under quota).

3\. Principles for the management, allocation, and settlement of state budget expenditures through the State Treasury:

3.1\. All state budget expenditures must be monitored and controlled during the allocation and settlement processes. Expenditures must be included in the state budget estimates allocated, comply with regulations, standards, and norms set by competent authorities, and have been decided upon by the head of the budget-using unit or authorized person.

3.2\. All state budget expenditures shall be recorded in Vietnamese Dong according to the fiscal year, level of government, and state budget classification. State budget expenditures in foreign currency, goods, and labor days shall be converted and recorded in Vietnamese Dong according to exchange rates, prices of goods, and labor day rates prescribed by competent state authorities.

3.3\. During the management, settlement, and final accounting of state budget expenditures, erroneous expenditures must be recovered. Based on decisions from financial authorities or competent state authorities, the State Treasury shall implement recovery for the state budget.

Responsibilities and authorities of agencies and units in managing, allocating, and settling state budget expenditures.

4.1\. The Ministry of Finance, Provincial Departments of Finance-Price, District Financial Offices, and County Financial Offices (collectively referred to as financial authorities):

a\. Review the allocation of state budget estimates to budget-using units. In cases where the allocation does not align with the content in the estimate assigned by competent authorities, or does not comply with policies, regulations, standards, and norms, they shall request the budget allocator to adjust accordingly;

b\. Allocate resources to meet expenditure needs. If the expenditure requirements exceed the revenue and mobilization capacity of the state budget fund, the financial authority must proactively implement temporary borrowing measures as stipulated to ensure funding sources. If these measures fail to meet the expenditure needs, the financial authority has the right to request (in writing) the State Treasury to temporarily suspend payments for certain procurement and repair expenditures, on a task-by-task basis, to ensure balance in the state budget fund without affecting the execution of primary tasks assigned to the unit;

c\. Monitor and supervise the use of state budget funds by budget-using units. If unauthorized expenditures or violations of regulations are discovered, or if units fail to comply with reporting requirements, the financial authority has the right to request the State Treasury to temporarily suspend payments.

4.2\. Central and local government agencies shall guide, monitor, and inspect the use of state budget funds within their sectors and subordinate units; regularly report on the implementation of state budget expenditures and other financial reports as prescribed.

4.3\. Budget-using units shall be responsible for:

- All budget-using units and organizations receiving regular state budget support must open accounts at the State Treasury; they must accept supervision and control by financial authorities and the State Treasury during the implementation of allocated state budget estimates and final accounting, in accordance with prescribed regulations.

- Heads of budget-using units shall be responsible for:

+ Deciding on expenditures within the limits of the state budget estimates allocated by competent authorities, in accordance with regulations, standards, and expenditure levels;

+ Managing and utilizing state budget funds and state assets in compliance with state budget expenditure regulations, standards, and norms; ensuring purpose, economy, and effectiveness. Violations will result in disciplinary action, administrative penalties, or criminal prosecution, depending on the nature and severity, as prescribed by law.

4.4\. The State Treasury shall be responsible for controlling expenditure documents and promptly settling state budget expenditures that meet the conditions for payment as stipulated in Article 51 of Decree No. 60/2003/NĐ-CP dated June 6, 2003, issued by the Government, and the provisions in Part II of this Circular; participating with financial authorities and competent state management agencies in inspecting the use of state budget funds; confirming actual state budget expenditures settled by the State Treasury for budget-using units.

- The State Treasury has the right to temporarily suspend, refuse to pay, and notify budget-using units of such actions; while bearing responsibility for its decisions in the following circumstances:

+ Expenditure not in accordance with the intended purpose and recipients as approved in the budget;

+ Expenditure not in compliance with regulations, standards, and norms set by competent state authorities;

+ Failure to meet the conditions for expenditure as stipulated in Point 1, Part II of this Circular.

- The State Treasury shall be responsible for temporarily suspending payment upon the written request of the financial authority in cases specified in Clause b, c, Section 4.1, Point 4, Part I of this Circular.

II- SPECIFIC PROVISIONS

1/ Conditions for Payment and Settlement.

The State Treasury shall only carry out payments and settlements of state budget expenditures when the following conditions are met:

1.1 / It is included in the approved state budget expenditure plan, except for the following cases:

- The budget and the budget allocation plan have not been decided by the competent state agency or require adjustment of the state budget according to regulations.

- Expenditure from increased revenue compared to the approved state budget and from the state budget reserve funds as authorized by the competent authority to address natural disaster consequences, fire damage, etc.; urgent expenditures outside the approved budget that cannot be delayed.

- Advance expenditure for the next year's state budget.

The State Treasury shall implement payments and settlements in accordance with Articles 45, 51, and 61 of Decree No. 60/2003/NĐ-CP dated June 6, 2003, of the Government detailing and guiding the implementation of the Law on State Budget, and decisions of competent state agencies.

1.2 / In compliance with the state budget expenditure standards, norms, and limits prescribed by the competent state agency.

1.3 / It has been decided by the financial authority or the head of the budget-using unit or the person authorized to decide on expenditure.

- For direct disbursements by the financial authority, the expenditure decision is the "order to pay money" issued by the financial authority. The financial authority is responsible for checking and controlling the content and nature of each expenditure item to ensure compliance with state budget disbursement conditions. The State Treasury shall make payments and settlements to budget-using units based on the content recorded in the financial authority's order to pay money.

- For expenditures not directly disbursed by the financial authority, when there is a need for expenditure, the budget-using unit shall prepare and submit to the State Treasury a budget withdrawal form (Annexes 04, 05, 06 attached).

1.4 / Having complete payment documents and vouchers.

Beyond the annual budget plan assigned (sent once at the beginning of the year), quarterly expenditure requirements sent to the State Treasury (sent once at the end of the previous quarter), depending on the nature of each expenditure item, the payment documents and vouchers include:

a/ Personal payment:

- For salary payments:

+ Staff establishment and salary fund table approved by the competent state agency (sent once initially);

+ List of individuals receiving salaries and allowances (sent once initially);

+ Increase and decrease staff establishment and salary fund table approved by the competent state agency (if applicable).

- For scholarship and living expense payments for students:

+ Scholarship and living expense registration table for students approved by the competent state agency (sent once initially);

+ Increase and decrease scholarship and living expense table approved by the competent state agency (if applicable).

- For external labor hire payments: including wages, fees, and royalties recorded in the labor contract.

b/ Professional business expenses: relevant documents and vouchers.

c/ Purchase and acquisition of equipment, work tools, major repair of fixed assets:

- Quarterly budget for purchase and major repair of fixed assets approved by the competent authority;

- Decision approving the tender results or decision appointing the tenderer by the competent authority (for procurement of work tools and major repairs which must be conducted through bidding according to regulations);

- Sales contract or service agreement;

- Price quotation sheet from the supplier (for small purchases without a sales contract); sales invoice, materials, and equipment;

- Other relevant documents and vouchers.

d/ Other expenditures:

- Payment voucher with signatures of the head, chief accountant of the budget-using unit or the authorized person (Annex 01 attached);

- Other relevant documents and vouchers.

2/ Forms of Payment and Settlement of the State Budget.

2.1/ Payment and settlement according to the budget plan from the State Treasury.

a/ The objects of payment and settlement according to the state budget plan from the State Treasury include regular expenditures within the approved budget of the following entities:

- Administrative state agencies;

- Public Service Units;

- Political and social organizations, political and social-professional organizations, social organizations, social-professional organizations supported by the state budget regularly;

- State-owned corporations supported to perform certain regular tasks as stipulated by law.

b/ Procedure for payment and settlement according to the budget plan from the State Treasury:

- Based on the quarterly expenditure requirements registered with the State Treasury and the demand for expenditure tasks, the head of the budget-using unit shall prepare a budget withdrawal form along with the required payment documents (as stipulated in Section 1.4, Point 1, Part II of this Circular) and send it to the State Treasury where transactions are handled as the basis for control and settlement. In case of urgent necessary expenditures within the approved annual state budget but exceeding the quarterly expenditure requirements already submitted to the State Treasury, the State Treasury will still make payments but must promptly report to the same-level financial authority to proactively balance the sources;

- The State Treasury shall check and control the payment documents of the budget-using unit as stipulated in Point 3, Part II of this Circular. If they meet the conditions as prescribed, it shall make direct payments to individuals receiving salaries and social allowances or to suppliers, or settle through the budget-using unit.

- When making payments and settlements according to the budget plan from the State Treasury, the State Treasury shall provide funds to the budget-using units strictly according to the actual expenditure items within the allocated budget categories. However, the miscellaneous category in the budget plan may be settled for all categories, but must be accounted for according to the actual expenditure items.

2.2/ Payment and settlement by means of an order to pay money.

a/ The objects subject to payment and settlement through payment orders include:

- Payment to enterprises and economic, social organizations that do not have regular relations with the state budget;

- Debt repayment and aid;

- Supplementary funding from higher-level budgets to lower-level budgets and other expenditures as decided by the head of the financial agency.

b/ Responsibilities of financial agencies and State Treasury in controlling and settling payments through payment orders:

- Financial agencies are responsible for checking and supervising the content and nature of each expenditure item, ensuring the conditions for state budget disbursement according to prescribed regulations;

- The State Treasury implements the withdrawal of state budget funds and settlement to budget-using units based on the contents recorded in the payment orders issued by financial agencies.

3/ Control and settlement of state budget expenditures.

3.1/ Settlement documents.

When there is a need for expenditure, in addition to the documents sent to the State Treasury once (state budget expenditure estimates; quarterly expenditure needs registered with the State Treasury; registration forms for personnel quotas, salaries, scholarships, living expenses, etc.), budget-using units shall submit to the State Treasury at the transaction location the following related documents, files, and vouchers:

- Withdrawal notice of state budget estimate;

- Other documents appropriate to the nature of each expenditure item as stipulated in Clause 1.4, Point 1, Part II of this Circular.

3.2/ The State Treasury controls the documents of the unit, including:

- Checking and comparing expenditure items against the state budget estimate, ensuring that all expenditure items must be included in the state budget estimate allocated by the competent authority and quarterly expenditure needs registered with the State Treasury;

- Checking the legality and validity of documents and vouchers according to regulations for each expenditure item;

- Inspecting and supervising expenditure items, ensuring compliance with the state budget expenditure regulations set by the competent state authorities;

For expenditure items without state budget expenditure regulations, the State Treasury bases its control and settlement on the state budget estimate allocated by the competent authority.

3.3/ After controlling the expenditure documents and vouchers of the unit, the State Treasury shall implement:

- In cases where all conditions for expenditure as prescribed are met, the State Treasury shall process payment and settlement for budget-using units in accordance with Clause 4.2, Point 4, Part II of this Circular;

- In cases where settlement conditions are not yet met but fall within the category eligible for advance payment, the State Treasury shall process advance payment for budget-using units in accordance with Clause 4.1, Point 4, Part II of this Circular;

- In cases where expenditure conditions are not met, the State Treasury is permitted to refuse payment and settlement in accordance with Clause 4.4, Point 4, Part I of this Circular (Annex 03 attached).

4/ Methods of payment and settlement.

Payment and settlement are carried out in two forms: advance payment and settlement payment.

4.1/ Advance payment.

a/ Objects of advance payment:

- Administrative expenses;

- Procurement of assets, minor repairs and construction, major repairs of fixed assets that do not yet meet the conditions for direct disbursement or advance payment under contracts.

b/ Amount of advance payment:

The amount of advance payment depends on the nature of each expenditure item as proposed by budget-using units and consistent with the progress of implementation. The maximum amount of advance payment shall not exceed the groups of items in the state budget estimate allocated.

c/ Procedure and formalities for advance payment:

- Budget-using units shall submit to the State Treasury relevant documents and materials for each expenditure item as stipulated in Clause 1.4, Point 1, Part II of this Circular, along with the withdrawal notice of the state budget estimate (advance payment), clearly stating the content of the advance payment for the State Treasury to have grounds for handling and tracking when making advance payment settlements;

- The State Treasury shall check and supervise the contents of the documents and materials. If they meet the prescribed conditions, the State Treasury shall make advance payment to the unit.

d/ Settlement of advance payment:

When settling, budget-using units shall be responsible for submitting to the State Treasury the request for advance payment settlement (Annex No. 02 attached), along with related documents and vouchers for the State Treasury to inspect and settle.

- In cases where the conditions stipulated are met, the State Treasury shall proceed with the settlement of advance payment for budget-using units:

+ If the requested settlement amount exceeds the amount already advanced: based on the unit's settlement request, the State Treasury shall process the transfer from advance payment to final payment (the amount already advanced) and require the unit to issue a withdrawal notice of the state budget estimate to provide additional settlement payment (the excess amount requested for settlement);

+ If the requested settlement amount is less than the amount already advanced: based on the unit's advance payment settlement request, the State Treasury shall process the transfer from advance payment to final payment (equal to the requested advance payment settlement amount).

- In cases where the advance payment has not yet met the conditions for settlement, budget-using units may settle in the following month or quarter. All amounts advanced for expenditure according to the state budget estimate up to December 31st can continue to be settled during the adjustment period and settled in the previous fiscal year. If the adjustment period expires and the settlement procedures are still incomplete, the unit must request the co-level financial agency to consider transferring the advance payment to the next year. If no request is made or if the request is not approved, the State Treasury will recover the advance payment by deducting it from the corresponding expenditure item in the next year's state budget estimate of the unit. If the next year's state budget estimate does not allocate the corresponding expenditure item or allocates it at a lower amount than the amount to be recovered, the State Treasury will notify the financial agency and handle it according to the decision of the financial agency.

As for cash advance payments outstanding at the end of December 31 that have not been spent, they must be returned to the state budget and recorded as a reduction in current year's state budget expenditures, except for amounts due under regulations such as salaries, allowances, subsidies for eligible recipients, and student scholarships. To ensure that budget-using units have cash available for spending in the early days of the new year, these units must process procedures with the State Treasury to request a cash advance from the next year's state budget funds.

4.2 / Payment issuance.

a/ Payment issuance items include:

- Salaries, salary allowances;

- Scholarships, living expenses;

- Expenditures eligible for direct payment issuance;

- Advance payments eligible for conversion from advance to payment issuance.

b/ The amount of payment issuance:

The amount of payment issuance is based on the budget expenditure documents and vouchers submitted by budget-using units according to their requests. The maximum amount of payment issuance in a quarter or year shall not exceed the budgeted needs for that quarter or year as allocated by authorized government agencies (including unrecovered advance payments).

c/ Procedures and formalities for payment issuance:

- When there is a need for payment issuance, budget-using units submit relevant documents, materials, and vouchers to the State Treasury in accordance with prescribed regulations;

- The State Treasury checks and controls the validity and legality of the documents and vouchers, and compares them with approved state budget estimates. If the conditions stipulated in Section 1.4, Point 1, Part II of this Circular are met, direct payments will be made to suppliers of goods and services or paid through budget-using units.

4.3/ Temporary allocation of state budget funds.

- In cases where at the beginning of the fiscal year, the state budget estimate and the plan for allocating the state budget estimate have not yet been decided by authorized government agencies, or adjustments to the state budget estimate are required according to regulations, financial authorities and the State Treasury will temporarily allocate state budget funds for the following expenditures:

+ Expenses for activities serving the management of investment projects.

+ Operational and official expenses;

+ Certain necessary expenditures to ensure the operation of administrative machinery, excluding expenditures for purchasing equipment and repairs;

+ Expenditures for ongoing projects under national target programs;

+ Supplementary balancing expenditures for lower-level budgets.

- Based on the expenditure level notified by the financial authority (in writing), the State Treasury will temporarily allocate state budget funds to budget-using units in accordance with Point 2, Part II of this Circular. The maximum monthly temporary allocation shall not exceed the average monthly expenditure level of the previous year.

- After the state budget estimate and the plan for allocating the state budget estimate have been decided by authorized government agencies, the State Treasury will recover the temporarily allocated funds by deducting them from the corresponding expenditure categories in the allocated state budget estimate of the budget-using unit.

4.4/ Anticipation of the next year's budget.

- The objects of anticipation of the next year's state budget are implemented in accordance with Article 61 of Decree No. 60/2003/NĐ-CP dated June 6, 2003 issued by the Government.

- Based on the decision of authorized government agencies, the State Treasury will implement the anticipation of the next year's state budget for budget-using units in accordance with Point 2, Part II of this Circular, but the total amount of anticipated expenditures for agencies and units shall not exceed 20% of the current year's state budget estimate in each corresponding field that has been assigned or announced to those agencies and units.

- The State Treasury will recover the advanced funds according to the decision of the Minister of Finance for the central budget; and the Chairman of the People's Committee for local government budgets.

4.5/ Control and retention of vouchers at the State Treasury.

- For direct payments made by the State Treasury: budget-using units must submit all related documents and vouchers to the State Treasury for control. The State Treasury will check the documents and vouchers, stamp "Paid" and return them to the unit. The State Treasury only retains the approved state budget estimate; the registration form for staffing - salary fund, scholarships, living expenses; purchase contracts for goods, equipment, property repairs; decisions approving tender results; tender designation decisions; payment invoices; payment schedules.

- For advance payment settlements:

+ In cases of advance payment for small purchases and repairs, budget-using units must bring all related documents and vouchers to the State Treasury in accordance with Section 1.4, Point 1, Part II of this Circular for control and retention of vouchers as in the case of direct payments by the State Treasury;

+ In cases of advance payment for other regular expenditures, budget-using units base on original vouchers for each expenditure item to prepare two copies of the "payment voucher schedule" (Appendix No. 01 attached) and send them to the State Treasury. The State Treasury will check, control, and retain one copy of the payment voucher schedule in the accounting file (expenditure control). Budget-using units are responsible for the truthfulness and accuracy of the payment voucher schedule.

5/ Methods of control and settlement for certain major expenditures.

5.1 / Control and settlement of regular expenditures.

a/ Payments to individuals.

The group of expenditure items for payments to individuals in the regular expenditure budget of budget-using units includes items 100, 101, 102, 103, 104, 105, 106, 107, 108, 122, 124 of the current state budget classification. The State Treasury will control the expenditures belonging to this group of expenditure items as follows:

- For salary-related amounts, including salaries, scholarships, and living expenses: each month, based on the payroll list for salaries, allowances, scholarships, and living expenses, compare with the registration form for personnel establishment - salary fund, scholarship fund, and living expense fund for the year or the adjustment registration form (divided into quarters and months) approved by the competent state agency, accompanied by the budget withdrawal request from the unit using state budget funds, the State Treasury shall make payments to the unit for distribution to the beneficiaries. The maximum amount shall not exceed the approved monthly salary fund, scholarship fund, and living expense fund (or adjusted).

- For payments to external individuals: based on the state budget estimate assigned by the competent authority; quarterly needs registered by the unit using state budget funds; payment content according to economic contracts; labor contracts; the budget withdrawal request from the unit, the State Treasury shall directly pay to the beneficiary or transfer through the unit for payment to the beneficiary.

b/ Professional business expenses.

The group of professional business expense items in the regular expenditure budget assigned to units using state budget funds includes items 109, 110, 111, 112, 113, 114, 115, 116, 117, 119 of the current state budget classification.

Based on the group of professional business expense items in the state budget assigned by the competent authority; quarterly needs registered by the unit; regulations, standards, and expenditure quotas for professional business expenses for each field; the budget withdrawal request from the unit using state budget funds and related documents, the State Treasury shall process payments to the unit.

c/ Expenses for purchasing office supplies, equipment, working tools, major repairs of fixed assets, and small construction works.

- The group of procurement and repair expense items in the regular expenditure budget assigned to units using state budget funds includes items 118, 144, 145 of the current state budget classification. For expenses within this group of items, the State Treasury shall check and control the payment documents (as stipulated in point 1, part II of this Circular). If conditions are met, it shall process payments to the unit. Based on the unit's request for payment, the State Treasury shall make direct payments by bank transfer or cash payments through the unit using state budget funds to pay suppliers of goods and services.

- In cases where expenses do not meet the conditions for direct payment, the State Treasury shall provide advance payments to units using state budget funds:

+ Based on the budget withdrawal request (advance payment) from the unit using state budget funds, accompanied by relevant documents, the State Treasury shall provide advance payments to transfer funds to suppliers of goods and services by bank transfer or provide cash to the unit using state budget funds for the unit to pay suppliers of goods and services;

+ After making expenditures, the unit using state budget funds shall be responsible for repaying the advance payment according to regulations: based on invoices, supporting documents, and other related documents attached to the unit's request for advance payment repayment, the State Treasury shall check and control if the conditions for payment are met as stipulated in point 1, part II of this Circular, then process the conversion from advance payment to advance payment settlement and retain one copy of the payment document ledger.

d/ Other regular expenses.

The group of other expense items in the assigned budget of units using state budget funds includes items in the state budget classification not included in the three groups of individual payment expenses, professional business expenses, procurement and repair expenses, and items from item 147 to item 150. For expenses within this group of items, the State Treasury shall implement control and payment to the unit as follows:

- For expenses that the unit requests to be paid directly, the State Treasury shall check and control the payment documents and conditions as stipulated and make direct payments to suppliers of goods and services;

- For expenses that cannot be processed for direct payment: based on the annual state budget estimate assigned by the competent authority; quarterly needs of the unit using state budget funds submitted to the State Treasury, accompanied by the budget withdrawal request (advance payment), the State Treasury shall provide advance payments to the unit. At the beginning of the following month, no later than the 5th day of each month, units using state budget funds must prepare a payment document ledger and submit it to the State Treasury. Based on the payment document ledger and comparing with the conditions for state budget expenditure, if the conditions are met, the State Treasury shall process the conversion from advance payment to advance payment settlement and retain one copy of the payment document ledger.

5.2/ Control and payment of economic public service expenses.

The State Treasury shall implement control and payment according to the provisions at point 4, part II and section 5.1, point 5, part II of this Circular, except for certain special-purpose public service funds such as railway public service, geological public service, road public service, inland waterway public service, etc., which are disbursed and paid according to the current regulations of the Ministry of Finance.

5.3/ Control and payment of expenses for national target programs.

- For expenses for national target programs and projects tied to management tasks assigned by the competent authorities in the state budget estimates of units using state budget funds, control and payment shall be implemented according to the provisions at section 5.1, point 5, part II of this Circular.

- For expenses delegated to national target programs, control and payment shall be implemented according to the provisions at section 5.4, point 5, part II of this Circular.

- For special-purpose national target program expenses such as the 5 million hectare forest program, the 135 program, etc., implementation shall follow the current guidance documents of the Ministry of Finance.

5.4/ Control and payment of delegated funds.

- In the case where the authorized agency (financial agency, lower-level state management agency) disburses budget funds to budget-using units according to the budget estimate, the State Treasury shall supervise and make payments to these units in accordance with Clause 5.1, Point 5, Part II of this Circular.

- In the case where the financial agency uses payment orders to directly pay for budget-funded units, the State Treasury shall make payments and disbursements based on the payment orders issued by the financial agency.

5.5/ Supervision and payment of budget funds for loans.

For budget funds allocated for loans, the financial agency transfers the source of funds to the agency tasked with lending or transfers money to the borrowing entity according to the loan contract (in cases of direct lending). The State Treasury implements the withdrawal of state budget funds and transfers money based on the payment order from the financial agency.

5.6/ Supervision and payment of budget funds for debt repayment.

a/ Repayment of foreign debts:

- Based on the budget estimate for debt repayment and payment requests, the financial agency issues a payment order to transfer to the State Treasury for payment. On the basis of the financial agency's payment order, the State Treasury processes the withdrawal of state budget funds to repay foreign debts;

- In cases where foreign debts are repaid in foreign currency, it shall be carried out in accordance with Clause 5.8, Point 5, Part II of this Circular.

b/ Repayment of domestic debts:

- Debts related to government bonds and construction bonds: based on the request document from the State Treasury, the Ministry of Finance issues a payment order to transfer to the State Treasury for the withdrawal of central government budget funds to repay;

- For local project bonds (under the responsibility of the local budget for repayment): when the repayment deadline arrives, the provincial finance and price departments have the responsibility to repay the bondholders;

- Other domestic debt repayments: the State Treasury makes payments based on the Ministry of Finance's payment order.

5.7/ Supervision and payment of budget funds for activities of the Communist Party of Vietnam, political-social organizations, political-professional organizations, social organizations, and social-professional organizations.

- For expenditures related to the activities of the Communist Party of Vietnam, they are implemented under a separate mechanism.

- For other organizations, expenditures are disbursed according to the budget estimates, and the State Treasury pays and settles accounts for budget-using units as stipulated in Clauses 4.1 and 4.2, Point 4, Part II of this Circular.

5.8/ Supervision and payment of foreign currency expenditures.

a/ Foreign currency expenditures are disbursed through payment orders, including: repayment of foreign debts; aid to international organizations and foreign countries as decided by the Government; funding for Vietnamese representative offices abroad; contributions to international organizations; operational expenses, import of equipment and materials for security and defense; subsidies and training for Vietnamese students studying abroad as decided by the Minister of Education and Training; other expenditures as decided by the Prime Minister and the Minister of Finance. The disbursement and payment process is as follows:

- The Ministry of Finance issues a payment order specifying the amount of foreign currency expenditure and converting it to Vietnamese Dong at the accounting exchange rate set by the Ministry of Finance, which is then sent to the Central State Treasury;

- Based on the Ministry of Finance's payment order, the Central State Treasury records the central government budget expenditure in Vietnamese Dong; simultaneously, it draws down the foreign currency reserve of the state budget to make payments for foreign currency expenditures as detailed in the payment order.

b/ Foreign currency expenditures are disbursed according to annual budgets calculated in Vietnamese Dong, including: expenses for overseas missions; contributions to international organizations; purchase of information and satellite transmission fees; other expenditures as decided by the Minister of Finance, the Central State Treasury supervises state budget expenditures, draws down the foreign currency reserve of the state budget to make payments for budget-using units; at the same time, records the expenditure in Vietnamese Dong corresponding to the foreign currency amount according to the exchange rate set by the Ministry of Finance and gradually deducts it from the unit's budget in Vietnamese Dong, specifically as follows:

- Issuing foreign currency to overseas missions belonging to central government budget-using units, based on the actual situation of the mission and the temporary advance request from the budget-using unit (Annex 06 attached), the Central State Treasury processes the drawdown of the state budget foreign currency reserve for the temporary advance to the unit; simultaneously, records the temporary advance in foreign currency and Vietnamese Dong according to the accounting exchange rate set by the Ministry of Finance;

+ Temporary advance: based on the foreign currency budget expenditure estimate (converted to Vietnamese Dong) approved by the competent authority and the temporary advance request from the budget-using unit (Annex 06 attached), the Central State Treasury processes the drawdown of the state budget foreign currency reserve for the temporary advance to the unit; simultaneously, records the temporary advance in foreign currency and Vietnamese Dong according to the accounting exchange rate set by the Ministry of Finance;

+ Payment settlement: within 15 days after the mission returns, the central government budget-using unit is responsible for submitting the final account of the foreign currency expenditure to the Central State Treasury for settlement of the temporary advance. Based on the mission final account document approved by the managing agency and the payment settlement request from the unit (Annex 07 attached), the Central State Treasury processes the conversion from temporary advance to payment settlement and gradually deducts it from the unit's budget; simultaneously, settles the foreign currency advance according to the exchange rate set by the Ministry of Finance. The temporary advance settlement process offsets surpluses and deficits between missions within the same unit. After offsetting between missions, if there is still a difference, it will be handled as follows:

. If the temporary advance is less than the settled amount, the unit will receive additional foreign currency from the Central State Treasury and it will be deducted from the approved state budget;

. If the temporary advance exceeds the settled amount, the unit is responsible for returning the excess foreign currency to the state budget reserve. When the unit returns, the Central State Treasury records a reduction in central government budget expenditure in Vietnamese Dong.

- Issuing foreign currency for annual membership fees payment, news purchase, broadcasting fees:

+ For expenditures on annual membership fees to international organizations and news purchases: based on the foreign currency expenditure budget estimate attached with relevant payment documents (payment contracts, demand notices from international organizations) and the budget withdrawal notice, the State Treasury Central Office shall draw upon the state budget foreign currency reserve to issue and pay to state budget using units; at the same time, record the transaction in Vietnamese dong according to the accounting exchange rate prescribed by the Ministry of Finance, deducting from the state budget estimate of the unit;

+ For broadcasting and communication expenses serving high-level delegations of the Party, Government, and National Assembly on overseas trips, such expenses shall be handled like issuing foreign currency for overseas delegations;

c/ Purchasing foreign currency from banks: Purchasing foreign currency from banks shall be carried out when the state budget foreign currency reserve is insufficient to cover central government budget expenditures or local government budget expenditures in foreign currency. Based on the allocated state budget estimate, the budget withdrawal notice (advance payment or settlement) of state budget using units, the State Treasury shall provide advance payment or settlement to state budget using units in Vietnamese dong according to the foreign currency selling rate published by the bank (where the unit purchases foreign currency) at the time of foreign currency expenditure for the unit to directly purchase foreign currency from the bank;

5.9 / Expenditure in kind and labor days.

For state budget expenditures in kind and labor days, based on the budget revenue and expenditure orders of financial agencies, the State Treasury shall record the budget revenue and expenditure;

6/ Accounting and reporting of state budget expenditures.

6.1/ Accounting.

State budget using units and the State Treasury shall organize accounting for state budget expenditures according to the national accounting system and other accounting laws and regulations;

6.2/ Reporting of state budget expenditures.

- Monthly, quarterly, and annually, state budget using units shall prepare reports on state budget expenditures, send them to the managing agency for confirmation by the State Treasury where transactions take place. The managing agency shall compile the state budget expenditure report and submit it to the same-level financial agency;

- Monthly, quarterly, and annually, the State Treasury shall prepare reports on state budget expenditures, send them to the same-level financial agency, relevant agencies, and higher-level State Treasuries. The State Treasury Central Office shall compile the state budget expenditure report and submit it to the Ministry of Finance (Department of State Budget) according to the prescribed regulations;

7/ Recovery of reduced state budget expenditures.

7.1/ During the management, issuance, and settlement of state budget expenditures, financial agencies have the authority to decide on the recovery of reduced state budget expenditures for expenditures that violate regulations, are not in accordance with standards and quotas set by the State. State budget using units shall promptly remit the state budget according to the decision of the financial agency. The State Treasury shall base its procedures for recovering reduced state budget expenditures on the financial agency's decision and the payment receipts from state budget using units;

7.2/ Based on the decisions of authorized state agencies (Courts, Police, People's Procuratorates, etc.) regarding the recovery of expenditures that violate regulations, embezzlement causing loss of state funds, etc., the State Treasury shall handle the recovery of reduced state budget expenditures and record accounting according to the state budget classification;

8/ Management of state budget reserves.

- Based on the assigned state budget revenue and expenditure tasks for the year (divided into quarters), financial agencies shall establish minimum quarterly state budget reserve levels to ensure payment and disbursement of state budget expenditures during the period and notify the same-level State Treasury for coordinated management;

- When the state budget reserve falls below the minimum level, the State Treasury shall be responsible for notifying the same-level financial agency to take measures, specifically:

+ Urging timely collection of state budget revenues to ensure concentrated revenue according to the plan;

+ Temporarily borrowing from the financial reserve fund or other sources as prescribed to meet state budget expenditures according to approved estimates. After collecting the revenue, the financial agency must repay according to the prescribed regulations;

In case all measures above still fail to ensure payment and disbursement, the financial agency must temporarily suspend state budget expenditures. The State Treasury has the right to refuse to implement expenditure requests from financial agencies and state budget using units if the state budget reserve does not guarantee payment and disbursement;

III- IMPLEMENTATION

This Circular takes effect from the 2004 fiscal year; replacing Circular No. 40/1998/TT-BTC dated March 31, 1998 of the Ministry of Finance. Other documents and systems issued previously on the management, issuance, and settlement of state budget expenditures through the State Treasury contrary to the provisions of this Circular are no longer effective./.