Circular No. 85/1999/TT-BTC guides the implementation of the Regulation on organizing the mobilization, management, and utilization of voluntary contributions from the people for the construction of infrastructure in communes and towns.

 CIRCULAR

Guidelines for Implementing the Regulation on Organizing the Mobilization, Management, and Utilization of Voluntary Contributions from the People to Build Infrastructure in Communes and Towns

and using voluntary contributions from the people

to construct the infrastructure of communes and towns

_________________________

Pursuant to Decree No. 24/1999/NĐ-CP dated April 16, 1999 of the Government on the Issuance of the Regulation on Organizing the Mobilization, Management, and Utilization of Voluntary Contributions from the People to Build Infrastructure in Communes and Towns.

To ensure the implementation of democratic and voluntary principles in mobilizing contributions from the people for investment in building infrastructure projects in communes and towns (hereinafter referred to as communes); mobilizing contributions in accordance with the people's ability to contribute, managing and utilizing these contributions effectively and transparently, the Ministry of Finance provides guidance on certain provisions regarding the subjects of mobilization, forms of contribution, levels of mobilization, and the process of organizing mobilization, management, and utilization of contributions from the people for investment in infrastructure projects as follows:

I. SUBJECTS OF MOBILIZATION, FORMS OF CONTRIBUTION AND LEVELS OF MOBILIZATION:

1. Determination of Subjects of Mobilization:

Based on the maximum total level of mobilized contributions from the people, the subjects eligible for exemption or reduction as prescribed by the Provincial People's Councils, taking into account the nature and purpose of the project, and the capital requirements for mobilizing contributions for the project, the People's Committee of the commune shall determine the subjects of mobilization and calculate the level of mobilization for each subject. The calculation of the contribution level for each subject based on household and according to one of the following criteria:

- Number of population;

- Cultivated land area;

- Other criteria.

The selection of appropriate criteria for calculating the contribution level for each subject shall be decided directly by the people.

2. Forms of Contribution:

2.1. Depending on the construction characteristics and actual conditions of each project, the people may make contributions in the form of: money, materials, and labor days.

2.2. Method of converting contributions into value for accounting purposes:

The determination of the conversion rate of contributions in the form of materials and labor days into monetary value for accounting purposes must be based on the conversion rates agreed upon by the people.

For contributions in the form of materials and labor days, the communes must establish separate accounting books to track them.

2.3. In cases where the prices of materials and labor days at the time of contribution differ by more than 20% from the conversion rates, the People's Committee of the commune must organize discussions among the people to reach consensus on prices for converting materials and labor days into monetary value.

3. Determination of Contribution Levels for Each Subject:

Determination of Capital Requirements for Mobilization:

a. The determination of capital requirements for mobilization and the level of voluntary contributions from the people must be based on average income and the ability to contribute of the people.

b. The capital requirements for voluntary contributions from the people in the commune are determined by subtracting the total capital from other sources for investment in construction projects from the total capital required for investment in construction projects (project budget approved directly by the people).

- State budget: support from higher-level budgets, commune budget;

- Direct financial assistance and donations from domestic and foreign organizations and individuals for construction projects;

- Other sources of capital.

3.2. Calculation of Contribution Levels for Each Subject:

a. Calculate the total capital requirement for mobilizing contributions from the people for investment in construction projects as specified in point b, clause 3.1.

b. Determine the capital requirements for mobilization in each phase consistent with the construction progress and mobilization schedule for investment in construction projects. The determination is based on the following grounds:

- Construction progress (based on the construction project budget and actual construction conditions);

- Actual mobilization situation, reserve funds, inventory of materials, and capital for investment in construction projects.

c. Determine the exemption and reduction levels for each subject: Based on the subjects eligible for exemption or reduction as stipulated by the Provincial People's Councils, the People's Committee of the commune calculates the reduction level for each subject for discussion and decision by the people.

d. The calculation and determination of specific contribution levels for each subject must be conducted openly, democratically, and fairly. Based on the allocation criteria stated in Section I, Clause 1; the subjects eligible for exemption or reduction, the reduction levels for each subject, the communes propose methods and levels of contribution for each subject for discussion and decision by the people.

II. ORGANIZING MOBILIZATION, MANAGEMENT, AND UTILIZATION OF CONTRIBUTIONS FROM THE PEOPLE FOR INVESTMENT IN PROJECTS:

1. Organizing Mobilization:

1.1. Based on the approved policy and mobilization level, the Chairman of the People's Committee of the commune directs the Heads of Villages and Village Groups to cooperate with the Mass Front Organization Committees in villages and groups to mobilize the people to contribute to building infrastructure projects in the commune.

The communes have the responsibility to inform the people about the deadlines, locations, and contribution levels for each subject in each mobilization round.

1.2. The Financial Department of the commune has the responsibility to collect; implement accounting work during the collection, management, and utilization of contributions from the people for construction projects in accordance with current laws on commune budget accounting systems and guidelines for managing commune budgets issued by the Ministry of Finance such as Circular No. 01/1999/TT-BTC dated January 4, 1999 guiding the management of revenue and expenditure of commune and town budgets; Circular No. 76 TC/ĐTPT dated November 1, 1997 guiding the management and distribution of capital for basic construction projects under county and commune budgets; Circular No. 47/1999/TT-BTC dated May 5, 1999 guiding the management and distribution of capital for infrastructure projects in particularly difficult mountainous, remote, and far-flung communes.

1.3. In cases where the People's Committee of the commune delegates the Heads of Villages and Village Groups to collect contributions from the people:

- The Heads of Villages and Village Groups receive receipts for collection from the Financial Department of the commune to collect contributions from the people; the Financial Department of the commune is responsible for guiding the Heads of Villages and Village Groups on the management and use of receipts and collection vouchers.

- The Village Head and the Head of the Commune have the responsibility to submit the contributions collected from the people to the Financial Board of the commune on the same day such revenues are generated so that the Financial Board can promptly record the contributions made by the people.

1.4. Within five days from the date of receiving the contributions from the people, the Financial Board has the responsibility to deposit the amount of contributions into the State Treasury to ensure timely allocation for investment in construction projects.

2. Management and utilization of the contributions from the people for investment in infrastructure construction at communes and towns must comply with current laws and regulations concerning budget management and basic construction investment management.

3. Costs related to tendering, hiring design services for the project, organizing project appraisal, organizing project acceptance, and other costs agreed upon by the people shall be recorded as part of the project value. The budgeting, management, and utilization of these costs must comply with current laws while also being discussed and agreed upon by the people.

4. Compensation for damages and land clearance compensation:

During the implementation of construction works, if there are cases causing damage to the people's assets such as crops, land..., the People's Committee of the commune has the responsibility to:

4.1. Coordinate with the Fatherland Front and mass organizations to mobilize the people to view those damages as voluntary support for the construction of the project for the common good;

4.2. In cases where the level of damage is significant, the People's Committee of the commune needs to calculate compensation for the people and include it in the project budget to be included in the total capital requirements to be raised and allocated to all contributors.

4.3. For projects that may generate revenue upon operation, the People's Committee of the commune will develop a plan to use the revenue to compensate those who have suffered losses based on mutual agreement and consent of those entitled to compensation.

5. Project settlement:

5.1. After completing the construction work, the communes are responsible for settling the collection and use of the contributions from the people for investment in construction projects and must comply with current regulations on basic construction project settlement: Circular No. 76 TC/ĐTPT dated November 1, 1997 of the Ministry of Finance guiding the management and disbursement of basic construction investment funds under the commune and district budgets; Circular No. 47/1999/TT-BTC dated May 5, 1999 of the Ministry of Finance guiding the management and disbursement of investment funds for infrastructure projects in particularly difficult mountainous and remote areas.

5.2. In case of revenue-expenditure discrepancies:

a/ If there is a larger revenue than expenditure, the use of the surplus shall be decided by the people after discussion.

b/ If there is less revenue than expenditure, the people must organize discussions and decide on supplementary measures to cover the deficit in accordance with the following directions:

- Mobilizing other sources of funding: state budget at various levels, support from domestic and foreign organizations...

- Mobilizing additional contributions from the people.

6. Implementation of reporting and financial transparency:

6.1. Within fifteen days from the date of approved project settlement, the People's Committee of the commune prepares a report on the situation of collection, management, and use of contributions from the people and sends it to the People's Committee of the province, simultaneously presenting it to the People's Council of the commune at the nearest session. The reports include:

a/ A financial report on the situation of raising, managing, and using contributions for the project (according to Form 1, attached appendix).

b/ A report on compliance with the project design and construction budget;

c/ Minutes of acceptance and quality assessment report of the project;

d/ An effectiveness evaluation report of the raised capital usage for the project.

6.2. During the process of raising, managing, and utilizing contributions for investment in construction projects, the communes must implement financial transparency according to Circular No. 29/1999/TT-BTC dated March 19, 1999 of the Ministry of Finance guiding the implementation of financial transparency for funds with contributions from the people as sources of income and other current laws and regulations on financial transparency implementation.

7. In cases where people within a village, hamlet, or community (based on religion or lineage) of a commune voluntarily organize fundraising and self-manage the investment in construction projects serving directly the interests of their community, the People's Committee of the commune has the responsibility to guide the preparation of project budgets, settlement of accounts, implementation of financial transparency; prepare reports to higher authorities to record and aggregate the contributions made by the people for infrastructure development in the area.

III. IMPLEMENTATION:

1/ This Circular shall take effect fifteen days from the date of issuance.

2. The Chairman of the People's Committee of the province or centrally governed city is responsible for guiding and implementing the provisions of this Circular.

3. In the course of implementation, if there are difficulties, please reflect them to the Ministry of Finance for research and resolution.