Circular No. 84/TC-KBNN guiding the temporary advance of funds by the State Treasury to the State Budget according to the Government Decree No. 25/CP dated April 5, 1995.

CIRCULAR

MINISTRY OF FINANCE DECREE NO. 84/TC-KBNN OF NOVEMBER 17, 1995

PROVISIONS ON TEMPORARY LOANS FROM STATE TREASURY TO NATIONAL BUDGET

PURSUANT TO DECREE NO. 25/CP

OF APRIL 5, 1995 ISSUED BY THE GOVERNMENT

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

I. GENERAL PROVISIONS:

1. The State Treasury temporarily lends idle funds to the National Budget through the Ministry of Finance (for the Central Budget) and Provincial Finance and Price 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 decided by the Ministry of Finance.

2. Temporary loans from the State Treasury to the National Budget must be approved by competent authorities: the Ministry of Finance for the Central Budget; the Central State Treasury for local budgets; and must ensure that they do not affect the State Treasury's payment obligations.

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

4. Temporary loans from the State Treasury to the National Budget can only be made by the Central State Treasury and Provincial State Treasuries under the central government. District, county, city, and regional State Treasuries are not permitted to lend to any entity.

II. SPECIFIC PROVISIONS:

1. Purpose of Temporary Loans:

1.1. The State Treasury provides temporary loans 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 targets recorded in plans approved by competent authorities such as construction and development expenditures, 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 provides temporary loans to projects and programs with specific economic goals recorded in plans decided by the Ministry of Finance. The provision of temporary loans to lottery companies for special payouts shall be implemented in accordance with Circular No. 2551/TC/KBNN dated November 11, 1993 issued by the Ministry of Finance.

2. Temporary Advance Limits:

- The loan limit is the maximum outstanding balance the State Treasury may provide to the National Budget in a fiscal year; the loan limit is based on the State Treasury's capital capacity and the budget's revenue and expenditure plans.

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

3. Procedures for Temporary Advances:

3.1. Temporary loans for the Central Budget: When there is a need for a temporary loan, the State Budget Department exchanges and agrees with the Central State Treasury, prepares a request for temporary loan submission 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 it.

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

4.1. Duration of Temporary Advance:

4.1. The maximum duration for temporary loans from the State Treasury to the National Budget is three months per loan. Extensions of the loan period must be decided by the Ministry of Finance for the Central Budget and by the Central State Treasury for local 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 Budget does not bear responsibility for repaying local budget loans from the State Treasury.

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

5. Loan Fee: 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 National 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: Temporary loans and repayments of temporary loans from the State Treasury to the National Budget are tracked outside the National Budget and recorded in the temporary loan account of the State Treasury for the National Budget. For the loan fee repayment, it is recorded in the National Budget expenditure according to the current National Budget classification.

7. Reporting, Inspection, Supervision, and Settlement:

- State Treasury units and financial agencies report the status of temporary loans and repayments 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 borrowed funds; if financial agencies misuse the funds, 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 borrowed, the amount repaid, and the outstanding balance. The Central State Treasury compiles and reports to the Minister of Finance for approval.

III/ IMPLEMENTATION

1. Units of the State Treasury, financial agencies shall closely coordinate in planning revenues and expenditures of the state budget, urging collection, ensuring timely and reasonable advance payments and capital utilization, effectively and fully and on time repayment.

2. Closely monitor the implementation of regulations on advance payments and the use of advance funds, the settlement and payment activities of the State Treasury within their jurisdiction. In case of necessity, if the local State Treasury reserve is insufficient to cover payments, immediately report to the Central State Treasury for consideration and resolution.

3. This Circular takes effect from the date of signing; previous provisions of the Ministry of Finance and the State Treasury regarding advance funding for the state budget and social welfare expenditures are hereby invalidated. The Central State Treasury shall provide detailed guidance on the implementation of this Circular./.