Circular No. 80-TC/NSNN guides the issuance and management of funds delegated from the State Budget of the Central Government to localities.

CIRCULAR

Guidelines for the allocation and management of central budget funds delegated to localities

In recent years, some expenditures from the State Budget at the central level, managed by the Ministry of Finance, have been transferred to localities and delegated to Provincial Departments of Finance and Prices for direct allocation and management, such as pension and allowances for social policy beneficiaries; forest protection and forestry development funds; labor resettlement and employment; mobilization funds; restoration of historical sites; new economic zones and settlement; population and family planning funds; hardship allowances for state employees; opium eradication... but there have been no regulations on the management of these delegated expenditure items.

Implementing Directive No. 132/TTg dated March 27, 1993 of the Prime Minister on strengthening the management of revenue and expenditure of the State Budget, the Ministry of Finance guides and stipulates the allocation and management of central budget funds delegated to localities as follows:

I/ GENERAL PROVISIONS:

1/ Funds under the management of Ministries and Central Sectors, which the Ministry of Finance transfers to localities and delegates to Provincial Departments of Finance and Prices for direct allocation and management. Based on the annual budget plan figures incorporated into the State Budget draft submitted to the National Assembly for approval, or according to the formal decisions of the Prime Minister approving the annual expenditure plans for items managed by Ministries, simultaneously, Ministries and Central Sector heads must be responsible for allocating the annual expenditure plans for each locality after consultation and agreement with the Ministry of Finance.

2/ Provincial Departments of Finance and Prices, authorized by the Ministry of Finance to directly allocate and manage expenditures from central budget funds transferred through the State Treasury, must comply with the purpose, target, and recipients of the expenditures; adhere to the expenditure standards and norms; and follow current financial and budgetary policies, systems, and principles of the State.

3/ Local financial authorities and State Treasuries at all levels must open accounts and sub-accounts, maintain accounting books to record and monitor separately the centrally-delegated funds transferred to localities. These funds cannot be used to allocate or spend on other items, nor can they be included in the local budget balance.

4/ Any remaining centrally-delegated funds not fully utilized by December 31 will be handled according to the measures specified by the Ministry of Finance (depending on specific circumstances) as detailed in the Circular (or Official Letter) guiding year-end accounting closure and annual budget revenue and expenditure settlement.

5/ Provincial Departments of Finance must cooperate with the relevant State Treasury units (managing the delegated fund accounts) to organize inspections of the use of centrally-delegated funds.

II/ SPECIFIC PROVISIONS:

1/ Based on national targets and planning indicators set forth and the Circular of the Ministry of Finance guiding the preparation of annual financial and budget plans; Ministries, Sectors, and People's Committees of Provinces and Cities directly under the Central Government must organize and instruct subordinate units under their management to develop and consolidate plans for centrally-delegated expenditures to be allocated to localities in accordance with prescribed contents and timelines and the current State Budget structure; the proposed allocations for each locality should be sent to the financial authority and the State Planning Commission at the same level for review. Based on the State Budget's capacity, the Ministry of Finance and the State Planning Commission are responsible for incorporating these into the State Budget draft to be submitted to the National Assembly for approval.

2/ After the annual State Budget has been approved and the Prime Minister has assigned budget targets to Ministries, Sectors, and localities for expenditures from central budget funds managed by Ministries and Sectors before being delegated to localities and allocated by Provincial Departments of Finance, such expenditures must be agreed upon by the Minister of Finance and the heads of the responsible Ministries and Sectors before implementation.

3/ For central budget funds delegated to local finance departments, the Ministry of Finance, based on the approved annual plan and agreements with responsible Ministries and Sectors, will allocate quarterly and transfer to localities via a separate account at the State Treasury in the Province/City (as regulated and guided by the State Treasury Bureau), using payment orders according to Chapter 99A, Type, Item, Sub-item, and Sub-sub-item of the current State Budget structure, following the principle that:

a/ For regular expenditures such as pensions, allowances, and hardship subsidies for social policy beneficiaries; operational costs for forest protection agencies, new economic zones; settlement; hardship allowances (if applicable)... the Ministry of Finance will transfer funds to localities monthly according to the approved quarterly plan starting from the beginning of the month.

b/ For expenditures such as investment in new economic zones and settlements; mobilization capital; funds to prevent deterioration of work facilities in various sectors; restoration of historical sites; forestry development... the Ministry of Finance will transfer funds to localities according to the progress of the implementation plan and the approved annual expenditure plan.

When localities allocate funds for the above expenditures, they must comply with Decree No. 385/HĐBT of the Council of Ministers (now the Government) on the management of construction investment funds.

c/ For expenditures under projects such as: reduction of administrative and public service staff according to Decision No. 111/HĐBT, resolution of labor in state-owned enterprises dissolved according to Decision No. 315/HĐBT, funding for vocational training centers and employment services; eradication of opium cultivation... The Ministry of Finance will transfer funds back to localities according to the projects and plans after they have been officially reviewed and approved by the competent authority as stipulated by the Government.

4/ After receiving the transferred central government delegated funds, the Departments of Finance and Prices and State Treasury of provinces and cities shall promptly allocate and disburse these funds to agencies and units according to the approved expenditure plans. At the same time, the Departments of Finance and Prices shall proactively coordinate with the State Treasury to regularly inspect and monitor the use of central government delegated funds by units. In cases where improper use of funds is discovered, violating the purpose, spending regulations, and financial management principles set by the State, the Department Heads of Finance and Prices of localities have the authority to issue orders to stop payments on those expenditures to recover the funds for the Central State Treasury and report to the Ministry of Finance, the relevant ministries, and the People's Committees of provinces and cities (for units managed by localities) to take appropriate measures.

5/ Agencies and economic organizations must be responsible for managing and using the central government delegated funds properly for their intended purposes and beneficiaries, maximizing efficiency; they must prepare quarterly expenditure plans (divided by month) as a basis for local finance departments and State Treasuries to allocate and manage funds. After each quarter, they must submit quarterly final accounts reports on fund usage from the previous quarter to the Departments of Finance and Prices of provinces and cities no later than the 15th day of the first month of the next quarter. Units that fail to submit final accounts reports within the prescribed timeframe will only receive salary and wage-related allowances and subsidies from the finance department and State Treasury. Other expenditures (excluding salaries) will be temporarily suspended until new final accounts reports are received (as stipulated in Circular No. 57 TC/NSNN dated November 26, 1990 issued by the Ministry of Finance guiding the settlement of the State Budget and Directive No. 132/TTg dated March 27, 1993 issued by the Prime Minister on strengthening the management of State Budget revenues and expenditures).

6/ Accounting and final accounting of expenditures funded by central government delegated funds at agencies, units, and Departments of Finance and Prices of provinces and cities must be carried out strictly in accordance with the Accounting and Statistics Law promulgated on May 10, 1988 by the State Council; Decree No. 25/HĐBT dated March 18, 1989 of the Council of Ministers (now the Government) on the organizational regulations of accounting; Decision No. 257 TC/CĐKT dated June 1, 1990 of the Ministry of Finance on the accounting system for administrative and public institutions; Decision No. 478 TC/KBNN dated November 19, 1992 of the Minister of Finance; Circular No. 15TC/HCVX dated May 19, 1992 of the Ministry of Finance on the review and approval of final accounts for administrative and public institutions; and Circular No. 29-TT/LB dated July 27, 1990 of the Ministry of Finance and the Ministry of Labor, War Invalids, and Social Affairs on reporting final accounts for delegated funds used for pension and social welfare payments. Additionally, the Ministry of Finance provides supplementary guidance on the following specific issues:

a) Agencies and units must be responsible for maintaining accounting books to record, account for, track, and settle final accounts of central government funds used quarterly and annually in accordance with the provisions of the aforementioned documents. Annual final accounts reports submitted to the superior supervising agency and the Departments of Finance and Prices of provinces and cities must be summarized according to the Chapters, Types, Clauses, Categories, Sections of the current State Budget Catalogue and detail the sources of funds from the previous year carried over; the amount of funds allocated during the year; the amount of funds actually withdrawn during the year from the State Treasury; other sources of funds (if any); total funds actually spent during the year; the amount of funds actually settled; and the remaining funds carried over to the next year (including the remaining balance on the unit's deposit account at the State Treasury, cash funds, and the value of remaining inventory and goods at the unit). There must be confirmation from the State Treasury branch managing the central government delegated fund account.

Ministries and sectors responsible for management must, upon receipt of annual final accounts reports from subordinate units, review and approve the final accounts of these units and consolidate the final accounts of all expenditures funded by central government delegated funds under their management nationwide according to the Chapters, Types, Clauses, Categories, Sections of the State Budget Catalogue and submit them to the Ministry of Finance no later than March 31 of the following year for inclusion in the overall final accounts of the State Budget to be reviewed and approved by the Government and the National Assembly.

b) When receiving notification of the arrival of central government delegated funds, the Departments of Finance and Prices of provinces and cities shall record the accounting entries as follows:

- Debit Account 1.08 "Central State Treasury Deposits"

- Credit Account 2.06 "Central State Treasury Funds Deposited"

- When allocating delegated funds to units, the Department of Finance shall issue payment orders to draw from the delegated fund account at the State Treasury branch. Upon receipt of the State Treasury's debit notice, the finance department shall record the accounting entry as follows:

Debit Account 2.06 "Central State Treasury Funds Deposited"

Credit Account 1.08 "Central State Treasury Deposits"

By the end of the year, the Department of Finance and Prices at each locality shall be responsible for preparing the final report on the settlement of the situation regarding the allocation of authorized expenditure funds transferred from the State Treasury, compiling the balance sheet of authorized expenditure funds, summarizing each item of authorized expenditure; The remaining budget funds from the previous year carried over (including remaining funds in units and remaining funds in the account at the State Treasury); the total amount of funds transferred by the Ministry of Finance during the year; the remaining budget funds as of December 31 of the settlement year (including remaining funds in units and remaining funds at the State Treasury). The final report on authorized expenditure must be submitted separately to the Ministry of Finance no later than January 31 of the following year, accompanied by the confirmation of the Provincial or City State Treasury regarding the total amount of funds received, the total amount of funds withdrawn during the year, and the balance of the authorized expenditure account as of the end of December 31.

III/ IMPLEMENTATION PROVISIONS:

This Circular takes effect from the date of signature. Ministries, sectors, localities, and financial agencies at all levels shall organize the dissemination and guidance for subordinate units to implement correctly the guidelines and regulations stipulated in this Circular.

During the implementation process, if difficulties arise or there are unclear issues, they should be promptly reported to the Ministry of Finance for research and resolution.