Circular No. 80/TC-KBNN guiding the management of disbursement and lending of State budget capital according to Decision No. 556/TTg dated September 12, 1995 of the Government Prime Minister.

CIRCULAR

MINISTRY OF FINANCE DECREE NO. 80/TC-KBNN SEPTEMBER 9, 1995

GUIDELINES FOR MANAGEMENT OF ISSUANCE AND LOANS OF STATE BUDGET FUNDS ACCORDING TO THE PRIME MINISTER'S DECISION NO. 556/TTG SEPTEMBER 12, 1995

 

To implement Decision No. 556/TTg dated September 12, 1995 of the Prime Minister on adjusting Decision No. 327/CT dated September 15, 1992 of the Chairman of the Council of Ministers (now the Prime Minister), after reaching consensus with relevant state agencies, the Ministry of Finance provides guidelines for managing issuance and loans of funds for projects under Program 327 using state budget funds as follows:

PART I:GENERAL PROVISIONS

1\. The State Budget (central budget) invests in projects under Program 327 including investment grants, operational funds, interest-free loans which are balanced within the annual state budget approved by the National Assembly.

2\. Based on the national plan indicators allocated to Program 327, the Ministry of Finance issues grants and loans to projects that have been approved by competent authorities through the State Treasury system. The State Treasury is directly responsible for managing the issuance and loans, organizing inspections and controls over the use of funds by project owners, and recovering loans fully and on time.

3\. Unissued and unloaned Program 327 funds from the previous year will be carried over to the next year for continued issuance and loans according to the plan approved by competent authorities.

4\. The supervisory authority of the project owner (ministries, agencies equivalent to ministries, government-affiliated agencies for centrally managed projects; provincial People's Committees, centrally affiliated cities for locally managed projects) is responsible for allocating plan indicators to each project within the announced national plan; guiding and directing project owners to implement according to the approved plan. The allocation of capital indicators must ensure the proportionate structure of investment funds for forestry, infrastructure, loans, and operational funds as stipulated by the Government and guided by the Ministry of Planning and Investment.

5\. Project owners shall open accounts at the State Treasury to receive grant and loan funds and are responsible for managing and using funds for their intended purposes effectively, repaying loans fully and on time, complying with current financial regulations, and being subject to inspection and control by the State Treasury. The State Treasury has the right to refuse issuance and loans to projects that do not meet conditions and to recover funds misused by project owners.

PART II: SPECIFIC PROVISIONS

I\. SCOPE AND OBJECTS OF GRANTS AND LOANS

1\. SCOPE AND OBJECTS ELIGIBLE FOR GRANTS

1.1\. Projects in the Forestry-Agriculture-Industry sector implementing the following tasks:

- Planting new special-use forests and protective forests to form contiguous protective forest areas.

- Protecting and nurturing special-use forests and protective forests only in weak areas where shifting cultivators are still cutting down forests for swidden fields.

- Constructing some basic infrastructure works such as roads, wells, schools, health stations, etc., directly serving the project area.

1.2\. Projects in the Agriculture-Forestry-Industry sector implementing the following tasks:

- Planting new protective forests.

- Protecting and nurturing protective forests.

- Constructing some basic infrastructure works such as roads, wells, schools, health stations, etc., directly serving the project area.

1.3\. Planting new production forests, scattered forests, planting industrial trees, fruit trees, pure pastures for livestock breeding, and independent resettlement projects do not fall within the scope of Program 327 investments.

2\. SCOPE AND OBJECTS ELIGIBLE FOR LOANS

2.1\. The central budget provides preferential loans (interest rate = 0%) for the quantities of work included in approved projects, including: costs for planting and caring for crops (industrial trees, fruit trees, specialty crops) and initial livestock breeding costs until harvest according to the economic and technical cycle of each crop and animal.

2.2\. Depending on the nature and characteristics of the project, the direct recipients of loans from the State Treasury are households within the project area (as listed by the project owner) or the project owner who receives funds to lend to households (without charging any fees) under the supervision of the State Treasury.

3\. SCOPE AND OBJECTS ELIGIBLE FOR OPERATIONAL FUNDS

3.1\. Population transfer, reception, and dispersion work under Program 327 will be funded according to standards and rates set by the Ministry of Labor, Invalids, and Social Affairs.

3.2\. Project management work

a\. Agencies receiving project management funds include:

- The Central Steering Committee for Program 327

- The supervisory agency of the project owner

- The State Treasury system

- Relevant central and local agencies directly involved in implementing projects under Program 327.

- The Project Management Board

Project management funds for these agencies are implemented according to the national plan indicators assigned, ensuring the ratio specified in Article 4 of Decision No. 556/TTg dated September 12, 1995 of the Prime Minister.

b\. Project management funds are used for the following activities:

- Reviewing and approving projects

- Training, inspection, survey, propaganda, commendation, preliminary and final summary meetings.

- Promoting agriculture, forestry, building technology transfer models.

- Supplementing some equipment and office supplies for general management activities.

- Costs for project management operations of the Project Management Board, including allowances, subsidies, travel expenses, etc., according to administrative and operational regulations.

- Costs for management, issuance, loans, and debt recovery by the State Treasury.

II\. CONTENT AND PROCEDURE FOR ESTABLISHING PLANS FOR GRANTS AND LOANS

1\. Annual planning:

1.1\. The supervisory agency of the project owner bases the annual plan volume to establish a plan (including: project list, quantity and total amount of grants and loans) sent to the Ministry of Planning and Investment, Ministry of Finance for comprehensive balancing and submission to the State for approval. The calculation and establishment of plans for grants and loans must be based on current unit prices and standards.

1.2\. Based on the national plan indicators assigned, the total amount of grants and loans, and the project list announced by the Ministry of Planning and Investment, the supervisory agency of the project owner allocates grant and loan indicators to each project within its management scope and sends them to the Ministry of Finance (Central State Treasury) using Form No. 01.

1.3/ BASED ON THE PLANNING INDICATORS ANNOUNCED BY THE MINISTRY OF PLANNING AND INVESTMENT, THE MINISTRY OF FINANCE (STATE TREASURY) ALLOCATES FUNDS TO EACH PROJECT OF THE MINISTRIES, PROVINCES, AND CITIES AND NOTIFIES THE STATE TREASURY OF THE PROVINCES AND CITIES TO SERVE AS THE BASIS FOR ISSUING FUNDS AND PROVIDING LOANS.

2/ TRANSFER FUNDS FOR ISSUANCE AND LOANS:

- BASED ON THE TOTAL AMOUNT OF FUNDS OF PROGRAM 327 LISTED IN THE ANNUAL PLAN, THE MINISTRY OF FINANCE TRANSFERS FUNDS (INCLUDING FUNDS FOR INVESTMENT PROJECTS, FUNDS FOR PUBLIC SERVICES 327, AND FUNDS FOR LOANS) TO THE STATE TREASURY AT THE CENTRAL LEVEL MONTHLY THROUGH PAYMENT ORDERS.

- BASED ON THE APPROVED ANNUAL PLAN, THE SITUATION OF FUNDS ISSUANCE AND LOANS IN LOCALITIES, THE STATE TREASURY AT THE CENTRAL LEVEL DISTRIBUTES AND TRANSFERS FUNDS TO THE STATE TREASURIES OF THE PROVINCES AND CITIES UNDER DIRECT MANAGEMENT, SUPERVISION, AND REVIEW OF FUNDS ISSUANCE AND LOANS TO PROJECTS, AND IMPLEMENTS DEBT COLLECTION ACCORDING TO REGULATIONS.

3/ FUNDS ISSUANCE AND LOANS AT THE STATE TREASURY BRANCHES:

3.1/ FUNDS ISSUANCE

a/ PRINCIPLES OF FUNDS ISSUANCE

- FOR FORESTRY INVESTMENTS:

+ MONTHLY FUNDS ARE ISSUED FOR THE CONSERVATION AND PROTECTION OF FORESTS.

+ FOREST PLANTING IS FUNDED FOR EACH TECHNICAL STAGE REASONABLY, INCLUDING:

* PREPARATION OF SEEDLINGS, FERTILIZERS, AND OTHER CONDITIONS FOR FOREST PLANTING.

* IMPLEMENTATION OF FOREST PLANTING.

* CARE AND PROTECTION IN THE FIRST YEAR.

TO ISSUE FUNDS IN A TIMELY MANNER, THE STATE TREASURY ADVANCES 70% OF THE APPROVED BUDGET FOR EACH TECHNICAL STAGE. WHEN THE PROJECT OWNER MOVES TO THE NEXT STAGE, THEY MUST COMPLETE THE QUANTITY ACCEPTANCE AND PAY THE AMOUNT ADVANCED FOR THE PREVIOUS STAGE. THE STATE TREASURY CHECKS THE COMPLETED QUANTITY AND ISSUES THE REMAINING 30% AND ADVANCES FUNDS FOR THE NEXT STAGE.

- FOR INFRASTRUCTURE AND PUBLIC WELFARE INVESTMENTS, THERE ARE TWO TYPES SPECIFICALLY AS FOLLOWS:

+ FOR PROJECTS WITH AN INVESTMENT CAPITAL UNDER 150 MILLION, THE PROJECT OWNER CAN USE STANDARD DESIGNS. THE STATE TREASURY ISSUES FUNDS BASED ON THE COMPLETED QUANTITY ACCORDING TO THE A-B ACCEPTANCE DOCUMENT (IN CASE OF INVOLVING HOUSEHOLDS, THE ACCEPTANCE IS BETWEEN THE PROJECT OWNER AND THE HOUSEHOLDS); LEGITIMATE DOCUMENTS WITHIN THE APPROVED BUDGET.

+ FOR PROJECTS WITH AN INVESTMENT CAPITAL OF 150 MILLION OR MORE, FUNDS ARE ISSUED ACCORDING TO THE CURRENT MANAGEMENT REGULATIONS FOR CONSTRUCTION PROJECTS.

- FOR PUBLIC SERVICE FUNDS:

+ PROJECT MANAGEMENT COSTS AND EXTENSION COSTS ARE TEMPORARILY ISSUED MONTHLY. AT THE END OF THE MONTH, THE UNIT THAT RECEIVED FUNDS HAS THE RESPONSIBILITY TO SETTLE WITH THE STATE TREASURY THE AMOUNT ISSUED ACCORDING TO THE APPROVED BUDGET AND CURRENT REGULATIONS. AFTER SETTLEMENT, THE STATE TREASURY ADVANCES FUNDS FOR THE NEXT MONTH.

+ FUNDS FOR POPULATION RELIEF AND RESettLEMENT IN PROJECT 327 ARE ISSUED BASED ON THE ACTUAL NUMBER OF HOUSEHOLDS RELIEVED AND RESettLED IN THE APPROVED ANNUAL PLAN. THE STATE TREASURY ADVANCES 50% OF THE APPROVED FUNDS FOR EACH RELIEF AND RESettLEMENT PHASE. AFTER COMPLETING THE PHASE, THE PROJECT OWNER HAS THE RESPONSIBILITY TO ESTABLISH SETTLEMENT DOCUMENTS WITH THE CONFIRMATION OF THE POPULATION RELIEF AND RESettLEMENT AUTHORITY OF THE PROVINCE/CITY FOR ISSUANCE OF THE REMAINING FUNDS ACCORDING TO REGULATIONS.

+ FUNDS FOR THE MANAGEMENT OF SYSTEM 327 ARE UNIFIEDLY MANAGED AND ALLOCATED BY THE STATE TREASURY AT THE CENTRAL LEVEL FOR THE STATE TREASURIES OF THE PROVINCES AND CITIES TO USE ACCORDING TO THE FINANCIAL MANAGEMENT REGULATIONS.

b/ CONDITIONS FOR FUNDS ISSUANCE

PROJECT OWNERS SUBMIT THE FOLLOWING DOCUMENTS TO THE STATE TREASURY WHERE THEIR ACCOUNT IS OPENED:

- DECISION APPROVING THE PROJECT BY THE AUTHORIZED BODY.

- DECISION APPOINTING THE PROJECT OWNER BY THE AUTHORIZED BODY.

- THE ANNUAL CAPITAL PLAN OF THE PROJECT ANNOUNCED BY THE SUPERIOR AUTHORITY OF THE PROJECT OWNER INCLUDING THE INDICATORS FOR FOREST PLANTING, CARE, AND PROTECTION.

- THE BUDGET AND TOTAL BUDGET (INCLUDING SUPPLEMENTS) APPROVED BY THE AUTHORIZED BODY.

- ECONOMIC CONTRACTS SIGNED BETWEEN THE PROJECT OWNER AND HOUSEHOLDS (FOR FORESTRY INVESTMENTS), AND WITH CONTRACTORS (IF ANY) ACCORDING TO REGULATIONS.

- QUANTITY ACCEPTANCE DOCUMENTS BETWEEN THE PROJECT OWNER AND HOUSEHOLDS AND CONTRACTORS AND OTHER RELATED DOCUMENTS.

- A LIST OF HOUSEHOLDS RELIEVED AND RESettLED IN THE PROJECT WITH THE CONFIRMATION OF THE POPULATION RELIEF AND RESettLEMENT AUTHORITY OF THE PROVINCE/CITY.

3.2/ LOANS

a/ PRINCIPLES OF LOANS

- LOANS FOR PROJECTS UNDER PROGRAM 327 ARE IMPLEMENTED ACCORDING TO THE APPROVED PROJECT, WITHOUT APPLYING COLLATERAL OR CREDIT GUARANTEES.

- BASED ON THE APPROVED PROJECT, THE SOURCE OF FUNDS FOR LOANS TRANSFERRED BY THE NATIONAL TREASURY, THE STATE TREASURY SIGNS LOAN CONTRACTS DIRECTLY WITH THE PROJECT OWNER. THE TOTAL AMOUNT OF LOANS IN THE YEAR DOES NOT EXCEED THE APPROVED LOAN CAPITAL PLAN, AND THE LOAN PERIOD DEPENDS ON THE BUSINESS CYCLE AND CAPITAL USE OF EACH PROJECT AND IS DETERMINED BY THE STATE TREASURY.

- THE PROJECT OWNER IS RESPONSIBLE FOR USING THE LOAN FUNDS FOR THE INTENDED PURPOSES EFFECTIVELY AND REPAYING THE STATE TREASURY ON TIME AS AGREED.

b/ CONDITIONS FOR TAKING OUT LOANS

TO OBTAIN LOANS, THE PROJECT OWNER MUST COMPLETE THE FOLLOWING PROCEDURES:

- DECISION APPROVING THE PROJECT BY THE AUTHORIZED BODY.

- DECISION APPOINTING THE PROJECT OWNER BY THE AUTHORIZED BODY.

- THE ANNUAL CAPITAL PLAN OF THE PROJECT ANNOUNCED BY THE SUPERIOR AUTHORITY OF THE PROJECT OWNER.

- SIGN A LOAN CONTRACT WITH THE STATE TREASURY.

- ESTABLISH A LOAN PROMISE FOR EACH LOAN DRAWDOWN.

c/ ISSUE LOANS, COLLECT DEBTS

- LOANS ARE ISSUED IN INSTALLMENTS ACCORDING TO THE PROJECT PROGRESS. THE STATE TREASURY ISSUES LOANS DIRECTLY TO HOUSEHOLDS (BASED ON THE LIST PROVIDED BY THE PROJECT OWNER) OR ISSUES LOANS THROUGH THE PROJECT OWNER FOR DISTRIBUTION TO HOUSEHOLDS. THE PROJECT OWNER MAY NOT CHARGE ANY FEES, AND THE STATE TREASURY IS RESPONSIBLE FOR INSPECTION BEFORE, DURING, AND AFTER THE LOAN. IF IMPROPER USE OF FUNDS IS DISCOVERED, THE STATE TREASURY HAS THE RIGHT TO SUSPEND FUNDS ISSUANCE AND LOANS, RECALL LOANS EARLIER THAN SCHEDULED, AND REPORT TO THE AUTHORIZED BODY FOR ACTION.

- THE STATE TREASURY ORGANIZES THE COLLECTION OF LOANS FROM PROJECTS WHEN DUE.

- THE MANAGEMENT AND USE OF RECOLLECTED LOANS WILL BE GUIDED SEPARATELY BY THE MINISTRY OF FINANCE.

PART III: ACCOUNTING RECORDS, AUDITING, REPORTING AND SETTLEMENT

1/ Accounting Records

- The project sponsors and agencies using State budget capital under Program 327 shall conduct accounting records and statistics in accordance with current regulations of the State.

- State Treasury offices shall conduct accounting records and statistics in accordance with guidelines from the Central State Treasury.

2/ Auditing

- The supervisory authorities of the project sponsors, central and local functional management agencies, and State Treasury offices shall regularly audit the implementation of plans and financial management systems, as well as the actual progress of projects by the sponsors, promptly reflecting any issues and difficulties in management to the Ministry of Finance, the Ministry of Planning and Investment, and the Central Steering Committee for Program 327 for appropriate resolution measures.

- Any funds allocated or lent to project sponsors that are found to be misused or improperly utilized through audits and inspections shall be recovered and remitted to the Central State Budget.

3/ Reporting

- Monthly, the project sponsors are responsible for preparing and submitting reports to the State Treasury office where the funds were disbursed, and simultaneously sending them to the project's supervisory authority (Form No. 02).

- The State Treasury offices where the funds were disbursed are responsible for compiling and reporting to their superior State Treasury offices (State Treasury offices at district and county levels report to State Treasury offices at provincial and municipal levels. State Treasury offices at provincial and municipal levels compile and report to the Central State Treasury) on the disbursement and lending of Program 327 funds within their jurisdiction.

- Quarterly, based on the reports from the State Treasury offices, the Central State Treasury compiles the implementation status of fund disbursement and lending plans nationwide and reports to the Ministry of Finance, the Ministry of Planning and Investment, and the Central Steering Committee for Program 327.

4/ Annual Settlement of Capital and Settlement Upon Completion of Projects

4.1/ Annual Capital Settlement

- The project sponsors are responsible for settling the use of allocated and lent funds with the State Treasury office where the funds were disbursed, and simultaneously reporting to their superior supervisory authorities.

- The State Treasury offices are responsible for summarizing the settlement of allocated and lent funds for Program 327 projects and sending them to their superior State Treasury offices; State Treasury offices at district and county levels send to State Treasury offices at provincial and municipal levels; State Treasury offices at provincial and municipal levels send back to the Central State Treasury, and simultaneously send to the project's supervisory authority. For projects managed by localities, the State Treasury offices at provincial and municipal levels also report to the People's Committees of the respective provinces and cities.

- The Central State Treasury is responsible for summarizing the settlement of allocated and lent funds for Program 327 projects and the 327 public service funds across the entire State Treasury system and reporting to the Ministry of Finance for review.

4.2/ Settlement of Completed Works and Settlement Upon Project Completion

- For centrally-managed projects: The project sponsors prepare final settlement reports (with confirmation from the State Treasury office where the funds were disbursed) and submit them to their superior authorities. The superior authorities of the project sponsors are responsible for reviewing and approving the final settlement reports of the sponsors, and compiling reports to the Ministry of Finance (Central State Treasury) and the Ministry of Planning and Investment (Central Steering Committee for Program 327).

- For locally-managed projects: The project sponsors prepare final settlement reports (with confirmation from the State Treasury office where the funds were disbursed) and submit them to the People's Committees and State Treasury offices at provincial and municipal levels. The State Treasury offices will coordinate with the 327 Steering Committees of the respective provinces and cities and relevant departments to review the final settlements of the sponsors and submit them for approval by the Chairpersons of the People's Committees of the respective provinces and cities, and report to the Ministry of Finance (Central State Treasury) and the Ministry of Planning and Investment (Central Steering Committee for Program 327).

PART IV: IMPLEMENTING PROVISIONS

This Circular takes effect from January 1, 1996; previous documents that conflict with this Circular shall no longer be effective.

Ministries, ministerial-level agencies, People's Committees of provinces and centrally governed cities, project sponsors, Departments and Bureaus under the Ministry of Finance, units within the State Treasury system are responsible for implementing this Circular./.

Ministry, Sector...Form 01

COMPREHENSIVE PLAN PROGRAM TABLE 327/CT

Date Month Year 199...

Head

(Signature, stamp)

Superior Authority...Form Number: 02

Project...

PROJECT IMPLEMENTATION REPORT 327

Month ...Year 199...

 

Project Owner

(Signature, stamp)

 

 

 

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