JOINT CIRCULAR No. 85/2004/TTLT-BTC-BKHCN GUIDING THE FINANCIAL MANAGEMENT OF SCIENCE AND TECHNOLOGY PROJECTS SUPPORTED BY THE STATE BUDGET AND WITH FUNDS TO BE RECOVERED

JOINT CIRCULAR

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

that have been provided

______________________

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 regarding the abolition of regulations on reissuing and reinvesting 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 with recovery of funds, the Ministry of Finance and the Ministry of Science and Technology jointly issue the following guidelines:

I. GENERAL PROVISIONS

1. The funds recovered 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 sources of state budget revenue. Relevant units are responsible for directly remitting these funds to the state budget.

2. Starting from 2004, the state budget funds supporting the implementation of projects will be allocated within the annual state budget expenditure estimates of ministries and localities in accordance with the Law on State Budget.

II. SPECIFIC PROVISIONS

1. Support Objectives:

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

- Pilot production projects at all levels (including experimental implementation topics with commercialized products under national key science and technology programs during the period 1996-2000).

- Technology transfer projects from abroad.

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

2.1. Content of Support:

- Completing technology (including completing production lines, establishing optimal technological processes, supplementing or replacing machinery and measuring equipment).

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

- Purchasing foreign technological secrets and technical documents.

- Training managers and technicians both domestically and internationally, high-skilled workers directly serving the project.

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

2.2. Level of Support:

The maximum level of support from the state budget shall not exceed 30% of the total investment cost necessary for implementing the project approved by the competent authority (excluding existing equipment and facilities from the total investment cost). The specific level of support for each project is determined and the approving authority is responsible for its decision.

The financial department has the right to review and compare, and if the level of support does not comply with the provisions on total costs and expenditure items, it may 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 completion of the project.

- Other revenues after the completion of the project.

3.2. Recovery Levels:

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

- Recovery level from 60% to 70%: applicable to projects directly serving agriculture, rural areas, mountainous regions, and economically disadvantaged areas.

- Recovery level from 70% to 80%: applicable to:

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

+ Technology transfer projects from abroad.

- Recovery level from 80% to 100%: applicable to testing projects not falling into the above categories.

The specific recovery level for each project is determined by the approving authority and the authority is responsible for its decision.

The time frame for recovering funds for each project is decided by the approving authority, but shall not exceed 24 months after the project's completion.

For projects supported by local budgets, in cases where it is truly necessary, the Department of Science and Technology, in collaboration with the Department of Finance, may submit a proposal to the Chairman of the People's Committee of the province or centrally-administered city to consider and decide on a lower recovery rate than the general provisions set out in this Circular, but not less than 50% of the state budget support.

The financial department has the right to review and compare, and if the recovery level and timeframe do not comply with the provisions, it may request the approving authority to adjust accordingly.

3.3. Consideration for Waiver or Reduction of Recovery Funds:

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

When encountering the situations mentioned above, the main units of the projects must submit detailed written reports to the higher-level management authorities for inspection and confirmation of the implementation process and reasons for suspension of the projects, as well as their ability to repay state budget support funds, specifically:

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

- For ministry-level projects: Ministries make decisions on the level of waiver or reduction of recovery funds based on a written agreement with the Ministry of Finance.

- For provincial-level projects: The Department of Science and Technology, in collaboration with the Department of Finance, conducts inspections and confirmations and submits proposals to the provincial people's committee for decisions on the level of waiver or reduction of recovery funds.

4. Financial Management Work:

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

4.1. Preparation and Allocation of Annual Budget Estimates:

Annually, based on the project approved by the competent authority for the entire implementation period (including state budget support funds, recovered funds submitted to the state budget), the progress of implementing the project; units prepare revenue and expenditure budgets and submit them to their direct superior management agencies.

Ministries, national key science and technology programs, and localities consider and consolidate these revenues and expenditures into their own budget revenue and expenditure plans according to regulations; including recovery budget estimates and state budget expenditure estimates for experimental production projects with fund recovery (details according to national-level, ministry-level, and provincial-level projects).

Based on the state budget revenue and expenditure plan assigned by the competent authority, ministries, national key science and technology programs, and localities establish allocation plans and assign budgets to implementing units according to current regulations.

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

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

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

+ Submit 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 submit recovered funds according to regulations.

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

- Quarterly and annually: Implementing units report to the agency that assigns the budget about the situation of submitting 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 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 local science and technology departments aggregate and submit to the corresponding financial authorities.

Report content: Total and detailed amounts of recoverable funds, recovered funds, and remaining recoverable funds per project. For late-paying units, provide clear explanations of reasons and solutions.

4.3. Accounting for revenue and expenditure:

Units implement accounting 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".

- Item:

+ State revenue: Item 062 - Sub-item 99 "Other revenues".

+ State expenditure: Corresponding expenditure items for each content.

4.4. Issuance, settlement, and finalization of project funding 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 programs) cooperate with the Ministry of Science and Technology and the Ministry of Finance to inspect project implementation regarding progress, scientific and technological contents, etc., according to signed contracts and the use of allocated state budget funds.

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

- For provincial-level projects: Local science and technology departments cooperate with the managing authority and local finance departments to inspect project implementation regarding progress, scientific and technological contents, etc., according to signed contracts and the use of allocated state budget funds.

Units implementing projects are responsible for ensuring compliance with contract terms, mobilizing sufficient funds as committed, using funds for their intended purposes and according to established standards, reporting on fund usage, and submitting recovered funds to the state budget as required.

For units failing to mobilize sufficient funds for the project, misusing funds, not submitting recovered funds in full, or not submitting funds to the state budget on schedule, ministries, local science and technology departments, and financial authorities at the same level, along with the State Treasury where the unit has an account, will review and decide to stop payment of remaining funds and recover improperly used funds or unrecovered 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 plan.

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

III. IMPLEMENTATION

This Circular takes effect 15 days after its publication in the Official Gazette and applies from the 2004 fiscal year, replacing Circular Joint 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 financial management for recovered funds from science and technology 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. /