Circular No. 85/1997/TT/BTC guides the implementation of Directive No. 254/TTg dated May 16, 1994, issued by the Prime Minister regarding support and facilitation for enhancing the effectiveness of operations of the Vietnam Red Cross Society.

CIRCULAR

DIRECTIVE NO. 85/1997/TT-BTC OF THE MINISTRY OF FINANCE DATED NOVEMBER 22, 1997 GUIDING THE IMPLEMENTATION OF THE PRIME MINISTER’S DIRECTIVE NO. 254/TTG DATED MAY 6, 1994 ON SUPPORT AND CREATION OF CONDITIONS FOR IMPROVING THE EFFECTIVENESS OF THE VIETNAM RED CROSS SOCIETY’S OPERATIONS

Pursuant to Directive No. 01/CT dated January 5, 1989 of the Chairman of the Council of Ministers (now the Prime Minister) on the management of organizations and activities of mass associations;
Pursuant to Directive No. 254/TTg dated May 16, 1994 of the Prime Minister on support and creation of conditions for improving the effectiveness of the Vietnam Red Cross Society’s operations;
Pursuant to Decree No. 87/CP dated December 19, 1996 of the Government detailing the division of management authority, budget preparation, implementation, and settlement of the State budget;
Pursuant to Decree No. 87/CP dated August 5, 1997 on the issuance of regulations on the management and use of Official Development Assistance funds;
Pursuant to Circular No. 30 TC/VT dated June 12, 1997 of the Ministry of Finance on guiding the financial management system of state-owned assets from non-reimbursable aid;
After reaching consensus with the Vietnam Red Cross Society, the Ministry of Finance guides the implementation of the financial income and expenditure of the Vietnam Red Cross Society as follows:

I. SOURCES OF FINANCIAL INCOME OF THE VIETNAM RED CROSS SOCIETY

The Vietnam Red Cross Society is a mass organization operating according to its charter approved by the Government. The sources of financial income of the Society include the following items:

1. Membership fees contributed by members to the organization.

2. Income from production and service activities conducted by the Society in accordance with the law.

3. Income from donations and benevolent contributions from individuals and organizations both domestically and internationally supporting the Society and the Humanitarian Fund.

4. Income from relief and humanitarian assistance, aid, and development projects and programs provided by international individuals and organizations through the Society.

5. Financial support from the State Budget as stipulated by the State Budget Law.

II. REGULATIONS ON THE USE OF FINANCIAL RESOURCES OF THE SOCIETY

1. Relief funds;

All relief funds received by the Society from international organizations and charitable organizations at all levels must be transferred entirely to the designated recipients in accordance with agreements between the relief organizations, without retaining any portion without permission from the Government. For projects and programs where relief organizations do not allow management and transportation costs, the Society must request the People's Committee and the finance department at the same level to consider providing support under the condition that:

- For consignments with designated recipients, the recipient unit or locality must bear the cost of receiving and transporting the goods. The Vietnam Red Cross Society assists in the procedures for receiving the goods but does not charge this fee.

- For consignments without designated recipients, the Vietnam Red Cross Society directly receives them and works with the Ministry of Finance to consider temporarily allocating initial reception costs. Once received, if distributed to localities or units, those localities or units must bear the transportation and management costs. The Vietnam Red Cross Society is responsible for collecting these costs and settling the aforementioned temporary allocation with the State Budget.

2. Income from development aid, projects, and programs: The Society implements in accordance with the agreed agreements with partners. All project management costs such as organizational deployment, transportation expenses, travel expenses, and allowances for project organizers cannot be automatically deducted but must be negotiated with the funding and aid organizations to be included in the project budget. In cases where funding and aid organizations agree to allow the Society to deduct a certain percentage to supplement administrative management costs to reduce State Budget expenditures and build a humanitarian fund, the Society must implement the commitments made to these organizations. If the organizations do not agree, the Society still must comply with the commitments made to the funding and aid organizations.

3. Income from production and service activities of the Society shall be allocated and used in accordance with the provisions applicable to self-financing public institutions as stipulated in Circular No. 01TC/HCVX dated January 4, 1994 and Circular No. 25 TC/TCT dated March 28, 1994 of the Ministry of Finance.

4. Income from donations and benevolent contributions from individuals and organizations supporting the Society: The Society must maintain records, establish a Humanitarian Fund for immediate use when needed for relief purposes. If the donation is for a specific locality, the Society transfers it to that locality and uses it according to the requirements of the donating organization or individual. The Society can allocate 3% of the total fundraising and donation proceeds in cash to the Humanitarian Fund for unspecified recipients to cover management and transfer costs to the designated relief recipients.

5. Financial support from the State Budget in accordance with the State Budget Law, together with other legitimate income sources of the Society, is used for the payment of annual international dues, regular administrative management expenses of the Society such as salaries for staff within the approved establishment, travel expenses, etc. Salary payments must comply with Circular No. 252/TCCP-TC dated November 20, 1995 of the Government Civil Service Organization Board.

Administrative management expenses of each level of the Society are supported by the budget of that level. Allowances for grassroots leaders of the Society are paid from the Society's own financial resources, with the amount of payment based on the current national regulations.

III. MANAGEMENT OF FINANCIAL RESOURCES AND SETTLEMENT OF INCOME AND EXPENSES

1. To have a basis for supporting regular operational expenses, each level of the Society must prepare, implement, and settle the budget annually in accordance with the current state budget management regulations.

2. Financial resources obtained from aid, relief, development projects... in the form of money or goods must complete all necessary procedures for receipt in accordance with Decision No. 80/QD dated March 28, 1991 of the Prime Minister on the issuance of regulations on the relationship of receipt of aid goods from non-governmental organizations and Decree No. 87/CP dated August 5, 1997 of the Government on the issuance of regulations on the management and use of Official Development Assistance funds. In cases where aid goods are unsuitable for use by the people, the Society prepares a document to request the Government's approval to sell through a public auction as prescribed by the State, and the proceeds must be used for the intended purpose of the aid agreement with the aid organization.

- When implementing relief and assistance projects, if there arise certain expenses such as handling, management, storage, wharfage, etc., the levels of the Red Cross Association shall prepare budgets to submit to the People's Committee and the financial authorities at the same level for consideration and support of these expenses.

- If the costs for management, storage, wharfage, etc., have been agreed upon in the project by the relief and assistance organizations, the levels of the Red Cross Association must fulfill their commitments with the donors. During the implementation process, if there are savings from the committed management costs, the saved portion shall be supplemented into the administrative budget of the Association and rewards shall be given to units and individuals serving the project.

3. The levels of the Red Cross Association are responsible for preparing budgets, managing, executing, and settling accounts for non-repayable foreign government, organization, and individual financial or material aid in accordance with the detailed regulations on decentralization, management, preparation, execution, and settlement of state budget revenues and expenditures stipulated in Decree No. 87/CP dated December 19, 1996 of the Government Chairman, and Circular No. 30/TC-VT dated June 12, 1997 of the Ministry of Finance guiding the financial management system for non-repayable aid sources.

IV. IMPLEMENTATION PROVISIONS

This Circular takes effect fifteen days after the date of signature. All previous provisions that conflict with the contents of this Circular are hereby abolished.

In the course of implementation, any difficulties encountered should be promptly reported to the Ministry of Finance for study and amendment.