Circular No. 84 TC/KBNN guides the advance payment of funds from the State Treasury to the State Budget according to Government Decree No. 25/CP dated April 5, 1995.

CIRCULAR

MINISTRY OF FINANCE DECREE NO. 84-TC/KBNN OF NOVEMBER 17, 1995 GUIDING TEMPORARY LOANS OF STATE TREASURY FUNDS TO THE STATE BUDGET ACCORDING TO GOVERNMENT DECREE 25/CP OF APRIL 5, 1995

Implementing Government Decree No. 25/CP dated April 5, 1995 on the tasks, powers, and organizational structure of the State Treasury system, the Ministry of Finance guides the implementation of temporary loans of idle funds from the State Treasury to the State Budget as follows:

I/ GENERAL PROVISIONS:

1. The State Treasury temporarily lends idle funds to the State Budget through the Ministry of Finance (for the Central State Budget) and Provincial Finance and Price Control Departments (for provincial budgets) to meet urgent spending needs when revenues have not yet been collected and to directly lend to projects and programs according to specific objectives determined by the Ministry of Finance.

2. Temporary loans of the State Treasury to the State Budget must be decided by competent authorities: the Ministry of Finance for the Central State Budget; the Central State Treasury for local state budgets; and must ensure that they do not affect the settlement payment tasks of the State Treasury.

3. Financial agencies (State Budget Department, Provincial Finance and Price Control Departments) are responsible for using the temporary loans from the State Treasury for approved purposes, repaying the loans fully and on time, and paying the State Treasury a fee on the amount of the loan as prescribed. Strictly prohibited is the use of temporary loans from the State Treasury for unauthorized financial expenditures, especially lending to economic units and organizations.

4. The temporary lending of idle funds from the State Treasury to the State Budget can only be carried out by the Central State Treasury and Provincial State Treasuries under the central government. District, county, city, and area State Treasuries are not permitted to lend to any entity.

II. SPECIFIC PROVISIONS:

1. Purpose of Temporary Advance of Funds:

1.1. The State Treasury temporarily lends to financial agencies to address the following budgetary expenditure needs:

+ Regular budgetary expenditures recorded in plans approved by competent authorities such as salaries, salary supplements, scholarships, living expenses, and other administrative and public service expenditures.

+ Non-regular expenditures according to specific goals recorded in plans approved by competent authorities such as construction investment, economic public services, and other non-regular expenditures in the budget plan.

+ Unexpected expenditures such as disaster relief approved by competent authorities.

1.2. The State Treasury temporarily lends to projects and programs with economic objectives recorded in plans determined by the Ministry of Finance. The temporary lending of funds to lottery companies for special payouts is implemented according to Circular No. 2551/TC/KBNN dated November 11, 1993 of the Ministry of Finance.

2. Temporary Advance Limits:

- The limit of temporary loans is the maximum outstanding balance the State Treasury lends to the State Budget in the fiscal year; the loan limit is based on the State Treasury's capital capacity and the budget revenue and expenditure plan.

- The Ministry of Finance sets the loan limit for the Central State Budget; the Central State Treasury sets the loan limit for local state budgets.

3. Procedures for Temporary Advances:

3.1. Temporary loans for the Central State Budget: When there is a need for a temporary loan, the State Budget Department exchanges and agrees with the Central State Treasury, prepares a loan request form, and submits it to the Minister of Finance for consideration and decision. Based on the Minister's decision, the Central State Treasury coordinates with the State Budget Department to implement the loan.

3.2. Temporary loans for local state budgets: When there is a need for a temporary loan, the Provincial Finance and Price Control Department prepares a loan request form, obtains confirmation from the People's Committee of the province, sends it to the Provincial State Treasury, which then forwards it to the Central State Treasury for consideration and decision. The Central State Treasury officially approves and transfers the approval to the Provincial State Treasury and Provincial Finance and Price Control Departments for implementation.

4.1. Duration of Temporary Advance:

4.1. The maximum duration of temporary loans from the State Treasury to the State Budget is three months per loan. Extensions of the loan period must be decided by the Ministry of Finance for the Central State Budget and by the Central State Treasury for local state budgets.

4.2. Five days before the loan repayment deadline, the State Treasury proactively informs the financial agency to arrange for the budget reserve to repay the loan. The Central State Budget does not bear responsibility for repaying local state budget loans from the State Treasury.

4.3. All remaining balances of temporary loans to the State Budget must be fully recovered within the fiscal year. If overdue loans are not extended as stipulated in Point 4.1, the State Treasury has the right to automatically deduct from the budget reserve to recover the debt and simultaneously notify the Provincial Finance Department (for local state budgets) and the State Budget Department (for the Central State Budget).

5. Loan fees: Financial agencies pay the State Treasury a fee calculated on the outstanding loan balance based on the actual number of days the loan was used. The loan fee rate for the State Budget is uniformly applied at 0.2% per month (30 days) on the outstanding loan balance. The loan fee is accounted for separately by the State Treasury and used according to the regulations of the Ministry of Finance.

6. Accounting entries: Temporary loans and recovery of temporary loans from the State Treasury to the State Budget are recorded outside the State Budget and are entered into the temporary loan account of the State Treasury for the State Budget. For the loan fee payments, they are recorded as State Budget expenditures according to the current State Budget classification.

7. Reporting, inspection, supervision, and settlement:

- State Treasury units and financial agencies report the status of temporary loans and recovery of temporary loans regularly (monthly, quarterly, annually) to the Central State Treasury and the Ministry of Finance (State Budget Department).

- State Treasury units are responsible for supervising the use of temporarily lent funds; if misuse by financial agencies is discovered, the State Treasury has the right to recover the debt early, suspend subsequent loans, and report to the financial agency.

- At the end of the fiscal year, financial agencies settle accounts with the State Treasury regarding the amount of temporary loans, amounts repaid, and outstanding balances. The Central State Treasury compiles and reports to the Minister of Finance for approval.

III/ IMPLEMENTATION

1. The State Treasury units and financial agencies shall closely coordinate in planning budget revenues and expenditures, urging timely collection, ensuring reasonable, prompt, and effective advance payment and capital utilization, and full and timely repayment.

2. Closely monitor the implementation of regulations on advance payments and the use of advance funds, as well as the settlement and disbursement activities of the State Treasury at the local level. In case it is necessary and the local State Treasury reserve is insufficient to cover disbursements, immediate reports must be made to the Central State Treasury for consideration and resolution.

3. This Circular takes effect from the date of issuance; previous provisions of the Ministry of Finance and the State Treasury regarding advance funding for the State Budget and social security expenditures are hereby annulled. The Central State Treasury shall provide detailed guidance on the implementation of this Circular.