Joint Circular No. 85/2004/TTLT/BTC-BKHCN guiding financial management for scientific and technological projects supported by the state budget and with recovery of funds.

CIRCULAR

Guidelines for financial management of science and technology projects supported by the state budget and with recovery of funds

These guidelines aim to manage the finances of science and technology projects that are supported by the state budget and require the recovery of funds.

Pursuant to Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the Law on State Budget;

Pursuant to Decision No. 185/2003/QĐ-TTg dated September 10, 2003 of the Prime Minister on the abolition of regulations concerning the reissuance and reinvestment from state budget revenues starting from fiscal year 2004;

To unify the financial management of science and technology projects supported by the state budget and requiring the recovery of funds, the Ministry of Finance and the Ministry of Science and Technology hereby issue the following guidelines:

I. GENERAL PROVISIONS 

1. The recovered funds from pilot production projects and technology transfer projects from abroad, which are supported by the state budget (hereinafter referred to as projects) of ministries, ministerial-level agencies, government agencies, central agencies (collectively referred to as ministries), and localities are considered state budget revenues, and the relevant units shall directly remit them to the state budget.

2. Starting from 2004, the state budget funds allocated to support the implementation of these projects will be included in the annual state budget expenditure plan of the ministries and localities in accordance with the State Budget Law.

Chapter II. SPECIFIC PROVISIONS

1. Objectives of Support:

Projects must recover part of the funds provided by the state budget, including:

- Pilot production projects at all levels (including experimental projects with commercialized products under national key science and technology programs from 1996 to 2000).

- Technology transfer projects from foreign countries.

2. Content and Level of Support from the State Budget:

2.1. Content of Support:

- Completion of technology (including completion of production lines, establishment of optimal technological processes, supplementation or replacement of testing and measuring equipment).

- Trial production of project products (raw materials, energy, labor...).

- Purchase of foreign technical secrets and technical documents.

- Training of management staff, technical personnel both domestically and internationally, and high-skilled workers directly serving the project.

- Project management, inspection, evaluation, and acceptance work.

2.2. Level of Support:

The maximum level of state budget support shall not exceed 30% of the total necessary investment costs for implementing the project as approved by the competent authority (excluding existing equipment and facilities). The specific level of support for each project shall be decided and the responsible authority shall bear responsibility for its decision.

The financial department shall check and verify; if the level of support does not comply with the provisions regarding the total amount and content of expenses, it has the right to request the approving authority to adjust accordingly.

3. Sources of Revenue and Recovery Levels:

3.1. Sources of Recovery:

- Revenue from selling products resulting from the projects.

- Revenue from selling surplus labor tools, raw materials, and supplies remaining after the project ends.

- Other revenues after the project ends.

3.2. Recovery Levels:

The recovery rate for projects ranges from 60% to 100% of the state budget support, categorized as follows:

- A recovery rate of 60% to 70% applies to projects directly serving agriculture, rural areas, mountainous regions, and economically disadvantaged areas.

- A recovery rate of 70% to 80% applies to:

+ Projects producing industrial goods but at small scale or individual items.

+ Technology transfer projects from foreign countries.

- A recovery rate of 80% to 100% applies to pilot projects not falling into the above categories.

The specific recovery rate for each project shall be decided by the approving authority and the authority shall be responsible for its decision.

The time frame for recovering funds for each project shall be determined by the approving authority, but shall not exceed 24 months after the project ends.

For projects supported by local budgets, in cases where it is truly necessary, the Department of Science and Technology shall take the lead in coordinating with the Department of Finance to submit to the Chairman of the Provincial People's Committee for consideration and may decide on a lower recovery rate than the general provisions of this Circular, but not less than 50% of the state budget support.

The financial department shall check and verify; if the recovery rate and recovery period do not comply with the provisions, it has the right to request the approving authority to adjust accordingly.

3.3. Consideration for Waiver or Reduction of Recovery Amounts:

In cases where projects must be suspended due to objective reasons such as typhoons, floods, fires, causing damage to the project, they may be considered for waiver or reduction of recovery amounts.

When encountering the aforementioned situations, the main units of the projects shall report in writing to the higher management authorities for inspection and confirmation of the implementation process and reasons for suspension of the projects; the ability to repay state budget support funds, specifically:

- For national-level projects: After inspection and confirmation, the ministries and provincial people's committees shall report to the Ministry of Science and Technology for consideration and decision on the amount of waived or reduced recovery based on a written agreement with the Ministry of Finance.

- For ministry-level projects: The ministries shall consider and decide on the amount of waived or reduced recovery based on a written agreement with the Ministry of Finance.

- For provincial-level projects: The Department of Science and Technology shall coordinate with the Department of Finance to inspect and confirm and submit to the Provincial People's Committee for decision on the amount of waived or reduced recovery.

4. Financial Management:

The preparation and allocation of annual budget estimates, settlement, and finalization of accounts from recovered funds shall be carried out in accordance with the provisions of the State Budget Law and guiding documents; this Circular provides additional specific guidance as follows:

4.1. Preparation and Allocation of Annual Budget Estimates:

Annually, based on the project plan approved by the competent authority for the entire implementation period of the project (including state budget support funds and recovered funds to be remitted to the state budget), the progress of the project implementation; units prepare the revenue and expenditure budget and submit it to their direct superior management agency.

Ministries, national key science and technology programs, and localities shall consider and consolidate the revenue and expenditure budget of their level according to regulations, including the budget for recovered funds and the state budget expenditure for trial production projects with recovery of funds (details according to national-level, ministry-level, and provincial-level projects).

Based on the state budget revenue and expenditure budget assigned by the competent authority, ministries, national key science and technology programs, and localities shall develop allocation plans and assign budgets to implementing units in accordance with current regulations.

4.2. Revenue collection, remittance, and reporting of recovered funds:

- Units primarily responsible for implementing projects have the responsibility to register revenue remittance to the local tax authority where the unit is headquartered and to remit state budget revenues accurately as committed in the contract. Specifically:

+ Remit to the central government budget for recovered funds from projects supported by the central government budget;

+ Remit to the local government budget for recovered funds from projects supported by the local government budget and national-level projects supported by the central government budget for localities;

- Ministries, national key science and technology programs, and localities have the responsibility to monitor and urge implementing units to remit recovered funds according to regulations.

For national-level science and technology programs, when the Program Steering Committee has been dissolved as prescribed, the Ministry of Science and Technology shall coordinate with the Ministry of Finance to urge implementing units to remit recovered funds to the state budget.

- Quarterly and annually: Implementing units report to the budget assignment agency on the situation of remitting state budget revenues from recovered funds of projects.

For national-level projects: Ministries, national key science and technology programs, and local science and technology departments shall aggregate reports to the Ministry of Science and Technology for consolidation and submission to the Ministry of Finance.

For ministry-level and provincial-level projects: Ministries and provincial science and technology departments shall aggregate and submit to the financial agencies at the same level.

Report content: Total and detailed amounts of recoverable funds, recovered funds, and remaining recoverable funds by each project. For units that delay payment, provide clear reasons and solutions.

4.3. Accounting for revenue and expenditure:

Units shall account for state budget revenue and expenditure for projects supported by the state budget with fund recovery as follows:

- Chapter: The chapter of the unit.

- Type: 11 "Science and technology activities".

- Clause: 03 "Other science and technology activities".

- Section: + State revenue: Section 062 - Subsection 99 "Other revenues".

+ State expenditure: Corresponding sections for various expenditure items.

4.4. Issuance, settlement, and final accounting of funds for project implementation in accordance with the provisions of the State Budget Law and current guiding documents.

4.5. Inspection of project implementation:

- For national-level projects: Ministries, localities, and steering committees of national key science and technology programs (for projects under these programs) shall cooperate with the Ministry of Science and Technology and the Ministry of Finance to inspect the implementation of projects regarding progress, scientific and technological contents, etc., as stipulated in the signed contracts and the use of allocated state budget funds.

- For ministry-level projects: Ministries shall cooperate with the Ministry of Finance to inspect the implementation of projects regarding progress, scientific and technological contents, etc., as stipulated in the signed contracts and the use of allocated state budget funds.

- For provincial-level projects: Provincial science and technology departments shall cooperate with the supervisory agencies and provincial finance departments to inspect the implementation of projects regarding progress, scientific and technological contents, etc., as stipulated in the signed contracts and the use of allocated state budget funds.

Units implementing projects shall ensure compliance with the terms of the signed contracts, mobilize sufficient sources of funding as committed to implement the projects; use funds for their intended purposes in accordance with standards and regulations, report on the use of funds, and remit recovered funds to the state budget as prescribed.

For units that fail to mobilize sufficient funding to implement the projects, misuse funds, fail to remit sufficient recovered funds, or remit the state budget funds not in accordance with the schedule, the ministries, provincial science and technology departments, and the State Treasury where the unit has an account shall cooperate to decide to stop payment of remaining funds and recover misused funds or insufficiently remitted recovered funds, specifically:

- For units primarily responsible for implementing projects that are budgetary units guaranteed state budget funds for regular operations: Deduct from the unit's regular state budget expenditure.

- For units that self-fund regular operations or are not budgetary units: Suspend funding for other science and technology tasks until the unit remits all required recovered funds.

Chapter III. IMPLEMENTATION

This Circular takes effect 15 days after its publication in the Official Gazette and is implemented from the 2004 fiscal year, replacing Joint Circular No. 12/2001/TTLT/BTC-BKHCN dated February 13, 2001, issued by the Ministry of Finance and the Ministry of Science, Technology, and Environment on "Guidelines for Financial Management of Recovered Funds from Scientific and Technological Tasks."

During implementation, if there are difficulties or obstacles, please reflect them to the Ministry of Finance and the Ministry of Science and Technology for research and appropriate amendments./.