Circular No. 86/2006/TT-BTC guides the management of supplementary targeted capital from the central budget to local budgets.

CIRCULAR

Guidelines for Managing Targeted Additional Capital from the Central Budget to Local Budgets

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

The Ministry of Finance guides the management of targeted additional capital from the central budget to local budgets as follows:

PART I. GENERAL PROVISIONS

1. These guidelines direct the preparation, allocation, decision-making on transfer, organization of implementation, inspection, and supervision of targeted additional capital from the central budget to local budgets, including:

- Targeted additional capital from the central budget allocated to local budgets at the beginning of the year by the Prime Minister for implementing national target programs, the five million hectare new forest planting program, the socio-economic development program for particularly difficult communes in ethnic minority and mountainous areas during the 2006-2010 period (Program 135 Phase II), and other important programs, projects, and tasks.

- Targeted additional capital from the central budget allocated to local budgets decided upon during the implementation of the budget from the central budget reserve, increased revenue from the central budget, and other sources according to prescribed regulations.

In cases where targeted additional capital from the central budget to local budgets is provided to implement programs, projects, and tasks with guidance documents issued by the Inter-Ministerial Office or the Ministry of Finance, such guidance shall be followed along with the reporting procedures stipulated in these guidelines.

2. These guidelines do not apply to targeted additional capital from the central budget to local budgets for implementing new policies and regimes with annual regularity during the budget stabilization period (such as additional funding for salary reform, targeted additional funding for other policy and regime implementations) and targeted additional capital in the form of recorded income and expenditure from foreign sources.

3. Targeted additional capital from the central budget to local budgets must be used strictly for the specified purposes and may not be used for other purposes.

4. The preparation, allocation, and decision-making on the budget for targeted additional capital from the central budget to local budgets shall be carried out in accordance with the provisions of the State Budget Law and related guiding documents.

5. Based on the targeted additional budget allocated by the Prime Minister at the beginning of the year to each province and centrally-administered city (referred to collectively as provincial level); based on decisions on targeted additional capital from the central budget to local budgets made by authorized bodies during the implementation of the budget; and based on the results achieved, the Ministry of Finance will regularly transfer funds to localities monthly according to the progress of the specified objectives and tasks.

6. Targeted additional capital from the central budget to local budgets shall be accounted for and settled in the local budget's revenue and expenditure according to the State Budget Law, Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing the implementation of the State Budget Law, Circular No. 59/2003/TT-BTC dated June 23, 2003 of the Ministry of Finance guiding Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government, and the provisions of these guidelines.

7. Publicly disclose the budget estimates and settlement of targeted additional capital from the central budget to local budgets as required.

PART II. SPECIFIC PROVISIONS

Chapter I. Establishment, Allocation, and Decision on Granting Supplementary Budget Estimates with Specific Purposes from the Central Budget to Local Budgets:

1. For supplementary budget funds with specific purposes from the central budget allocated to local budgets at the beginning of the year by the Prime Minister:

The establishment, allocation, and decision on granting budget estimates shall be carried out in accordance with the provisions of the State Budget Law and guiding documents for the Law; guiding documents on managing and implementing national target programs; guidelines on managing and disbursing state budget funds for the project of planting five million hectares of new forests; guidelines on managing investment and construction under Program 135 Phase II, and other related documents; at the same time, the following points shall be implemented:

- Based on the budget estimate assigned by the Prime Minister, the Department of Planning and Investment shall take the lead in coordinating with relevant agencies to develop plans for allocating and granting supplementary budget estimates with specific purposes from the central budget to local budgets for each program, project, and task for each agency, unit, and lower-level budget for development expenditure, and send them to the Department of Finance for consolidation; the Department of Finance shall take the lead in coordinating with relevant agencies to develop plans for allocating and granting supplementary budget estimates with specific purposes from the central budget to local budgets for each program, project, and task for each agency, unit, and lower-level budget for recurrent expenditure, and consolidate plans for allocating supplementary budget estimates with specific purposes from the central budget to local budgets for each program, project, and task for each agency, unit, and lower-level budget (including both development and recurrent expenditures), and report to the People's Council at the provincial level for approval; the Provincial People's Council shall decide on the local budget, allocate the provincial budget before December 10 of the previous year.

- After the budget estimate has been decided by the Provincial People's Council, the same-level People's Committee shall decide on allocating and granting budget estimates to each agency, unit, and lower-level budget; simultaneously, consolidate the results of allocation and grant budget estimates and send them to the Ministry of Finance within five days from the date the Provincial People's Council decides on the local budget (details according to Annexes 01, 02, and 03).

2. For supplementary budget funds with specific purposes from the central budget allocated to local budgets decided by the competent authority during the implementation of the budget to address urgent tasks arising such as disaster prevention and mitigation, fire control, epidemic response, or other urgent and critical tasks (including both investment and recurrent funds):

- Determining the need for expenditure for the above contents must be based on the requirements of task implementation, the extent of damage caused by natural disasters, epidemics, budget expenditure regulations, and the financial capacity of the local budget; the Department of Finance shall report to the Provincial People's Committee to proactively use the local budget reserve and other legitimate financial sources to implement these tasks. In cases where the required expenditure exceeds the local budget's balancing capacity according to policy regulations, the Department of Finance shall coordinate with relevant agencies to develop a financial plan and report it to the Provincial People's Committee for submission to the Ministry of Finance and related ministries for consolidation and decision-making by the competent authority.

- Based on the amount of supplementary budget funds with specific purposes from the central budget allocated to local budgets decided by the competent authority, based on the regulations for implementing disaster prevention and mitigation, fire control, epidemic response, or other urgent and critical tasks; based on their functions and responsibilities, the Department of Finance, the Department of Planning and Investment, and relevant agencies shall develop plans for allocating and granting budget estimates to each agency and lower-level budget. The Department of Finance shall be responsible for consolidating and reporting to the Provincial People's Committee to unify opinions with the Standing Committee of the same-level People's Council before implementation. Specifically, for supplementary budget funds with specific purposes from the central budget allocated to local budgets from surplus revenue according to the State Budget Law, the Provincial People's Committee shall report to the same-level People's Council for decision.

In cases where the supplementary budget funds with specific purposes from the central budget allocated to local budgets decided by the competent authority clearly specify the objectives, tasks, and using units, the Provincial People's Committee shall decide on the allocation and granting of budget estimates to each agency, unit, and lower-level budget, report to the Standing Committee of the same-level People's Council and the same-level People's Council at the nearest session for supervision of implementation.

- After reaching a unified opinion with the Standing Committee of the Provincial People's Council, the Provincial People's Committee shall decide on granting additional budget estimates to each agency, unit, and lower-level budget for implementation, and simultaneously consolidate (details according to Annex 04) and send to the Ministry of Finance within five days from the date the Standing Committee of the Provincial People's Council reaches a unified opinion with the plan of the Provincial People's Committee.

Chapter II. On the Method of Transferring Targeted Additional Capital from the Central Budget to Local Budgets.

1. For additional targeted capital from the central budget to local budgets assigned by the Prime Minister at the beginning of the year:

Based on the budget estimate assigned by the Prime Minister at the beginning of the year, after receiving the decision to assign the budget for each program, project, and task to each agency, unit, and lower-level budget by the People's Committee of the province according to Points 1 and 2, Section I, Part II of this Circular, the report on the results of implementation of the previous quarter by the Department of Finance according to Subparagraph a, Point 4, Section II, Part II of this Circular and the progress of implementation of the previous quarter, the amount of transferred capital of the previous months, the Ministry of Finance shall transfer capital monthly for the locality to implement (the transfer of capital shall be carried out in total, not detailed by each program, project, and task). Specifically, for the first months of each quarter in the year (January, April, July, and October), due to the quarterly reporting system stipulated in this Circular being the latest 30 days after the end of the quarter, the Ministry of Finance shall transfer capital for the locality for these months based on the monthly budget estimate for the locality to implement.

In cases where the Department of Finance does not comply with the reporting system or reports inaccurately and incompletely as prescribed in this Circular and other guiding documents for managing national target programs, new forest planting projects of five million hectares, Program 135 Phase II, and other related projects and tasks, the Ministry of Finance will suspend the transfer of capital to the locality, including the first months of the remaining quarters of the year mentioned above until the locality provides complete reports.

2. For additional targeted capital from the central budget to local budgets arising during the organization and implementation of the budget to carry out tasks of preventing and mitigating the consequences of natural disasters, fires, epidemics, or urgent and important tasks decided by the competent authority, the Ministry of Finance shall transfer capital once to the locality and the locality shall implement the reporting system as prescribed in Subparagraph a, Point 4, Section II, Part II of this Circular.

3. For additional targeted capital from the central budget to local budgets to implement programs, projects, and tasks specified in this Circular, the State Treasury Agency has the responsibility to monitor and disburse payments for each program, project, and task decided by the competent authority in accordance with the State Budget Law and guiding documents.

4. Reporting System:

a) Quarterly Report:

- Quarterly, the State Treasury of provinces and centrally-administered cities (referred to collectively as the provincial State Treasury) shall report the amount of capital paid for programs, projects, and tasks implemented from additional targeted capital from the central budget to local budgets and from additional local budget sources (if any) to the Department of Finance no later than 15 days after the end of the quarter according to Appendices 05, 06, and 07 attached to this Circular.

- Quarterly, based on the report of the provincial State Treasury, the Department of Finance shall report the amount of capital paid from additional targeted capital from the central budget to local budgets and from additional local budget sources (if any) for each specific program and task (detailed according to Appendices 05, 06, and 07) to the Ministry of Finance no later than 30 days after the end of the quarter.

Specifically, for additional targeted capital from the central budget to local budgets arising during the organization and implementation of the budget to carry out tasks of preventing and mitigating the consequences of natural disasters, epidemics, fires, and urgent and important tasks, which the Ministry of Finance transfers once, the Department of Finance shall report the results of implementation (detailed according to Appendix 08) to the Ministry of Finance according to the time required by the Ministry of Finance, if no specific time is set, the Department of Finance shall report to the Ministry of Finance no later than 60 days after receiving the capital transferred by the Ministry of Finance to the locality so that the Ministry of Finance can promptly compile and report to the competent authority.

b) Annual Report:

- Annually, the provincial State Treasury shall report the volume of implementation and the amount of capital paid for programs, projects, and tasks implemented from additional targeted capital from the central budget to local budgets and from additional local budget sources (if any) to the Department of Finance no later than March 15 of the following year according to Appendices 09, 10, and 11 attached to this Circular.

- Based on the report of the provincial State Treasury, the Department of Finance shall report the results of the volume of implementation and the amount of capital paid from additional targeted capital from the central budget to local budgets and from additional local budget sources (if any) for each specific program, goal, and task (detailed according to Appendices 09, 10, and 11) to the Ministry of Finance no later than March 31 of the following year for the Ministry of Finance to compile and report to the competent authority.

Chapter III. On Accounting and Settlement:

1. Capital supplements with specific purposes from the central budget to local budgets by December 31 that have not been implemented or fully disbursed shall be handled as follows:

- For capital supplements from the central budget transferred to local budgets for programs, projects, and tasks that have not been disbursed or fully disbursed, if authorized to continue implementation during the settlement adjustment period, it shall be recorded as expenditure in the previous fiscal year's budget; if decided to disburse into the next fiscal year's budget, the financial agency shall transfer the funds to the next fiscal year for implementation.

- In cases where the Ministry of Finance has not fully transferred capital supplements from the central budget to local budgets due to localities not submitting reports or submitting incomplete and inaccurate reports according to regulations, or due to slow progress in implementing programs, projects, goals, and tasks, within the local budget settlement adjustment period (ending on March 31 of the following year), if localities submit accurate and complete reports according to established procedures or increase the volume of work completed, the Ministry of Finance will transfer the remaining funds to the locality for implementation. The accounting and settlement at the local level shall be carried out as stipulated for cases where the Ministry of Finance has transferred capital supplements from the central budget to local budgets.

After the local budget settlement adjustment period, if localities fail to submit reports according to established procedures or fail to complete assigned tasks according to the budget, the Ministry of Finance will stop transferring funds and reduce the budget estimate; in cases where failure or delay in implementation is due to objective reasons (such as late issuance of central guidelines for programs, projects, and tasks, natural disasters, fires, technical requirements necessitating specialized agencies' intervention, etc.), based on provincial People's Committee recommendations, the Ministry of Finance will transfer the funds to the next fiscal year for implementation and settlement in the next fiscal year's budget.

2. Budget-using units, budgetary units, and units entrusted with managing capital supplements from the central budget for local budgets to implement programs, projects, and tasks must carry out accounting records, ensuring management according to each specific program, project, and task as per current regulations. For capital supplements from the central budget for local budgets to implement programs, projects, and tasks that have been assigned codes, they must be recorded according to the specified codes.

Expenditures funded from capital supplements from the central budget for local budgets shall be settled against local budget revenues and expenditures, and localities are responsible for reporting and analyzing the situation and results of implementation in detail. National Target Program expenditures, new forest planting project expenditures of five million hectares, and Phase II of Program 135 shall be reported according to the forms prescribed in Circular No. 59/2003/TT-BTC dated June 23, 2003, issued by the Ministry of Finance to guide the implementation of Decree No. 60/2003/NĐ-CP dated June 6, 2003, of the Government detailing and guiding the implementation of the State Budget Law.

Specifically, for the settlement of capital supplements from the central budget for local budgets to implement important programs, projects, and tasks assigned by the Prime Minister at the beginning of the year and additional capital supplements from the central budget for local budgets decided by competent authorities during the budget implementation process, these shall be settled against the local budget (excluding those capital supplements from the central budget for local budgets for which the Ministry of Finance has made other provisions) and localities are responsible for reporting and analyzing the situation and outcomes in detail (as detailed in Appendices 12, 13, and 14) submitted to the Ministry of Finance along with the annual budget settlement report.

PART III. IMPLEMENTATION ORGANIZATION

1. The People's Committee of the province shall be responsible before the Government and the law for managing and using the additional targeted funds from the central budget for the local budget to ensure compliance with objectives, policies, regulations, economy, and effectiveness.

2. The Department of Finance shall be responsible for:

- Coordinating with relevant agencies to establish and consolidate plans for allocating the budget expenditure from the additional targeted funds from the central budget for the local budget and supplementary local budget funds (if any) for each agency, unit, and lower-level budget to report to the People's Committee of the province for submission to the Standing Committee of the People's Council or the People's Council for consideration, decision, and supervision according to their authority.

- Managing and inspecting the use of these funds by agencies, units, and lower-level budgets to ensure compliance with the prescribed objectives and regulations.

- Compiling and reporting on the implementation results of the additional targeted funds from the central budget for the local budget as stipulated and sending them to the Ministry of Finance.

- Reviewing the final accounts reports of agencies, units, and lower-level budgets regarding the use of the additional targeted funds from the central budget for the local budget according to the prescribed regulations.

3. Agencies, units, and lower-level budgets assigned the task of managing target programs at the local level shall be responsible for managing and using these funds in accordance with the prescribed regulations and objectives, implementing accounting, final accounts, and compiling reports on the use of supplementary targeted funds as stipulated and sending them to the Department of Finance for consolidation.

4. The State Treasury Agency shall be responsible for controlling expenditures from the additional targeted funds from the central budget for the local budget and supplementary local budget funds (if any) in accordance with policies, regulations, and spending standards, and ensuring compliance with the prescribed objectives. The provincial State Treasury shall consolidate the results of payments of the additional targeted funds from the central budget for the local budget and send them to the Department of Finance for consolidation and reporting to the Ministry of Finance as stipulated in this Circular.

5. Ministries, agencies equivalent to ministries, government agencies, and other central agencies according to their functions and tasks shall be responsible for inspecting the implementation of the additional targeted funds from the central budget for the local budget. During inspections, if violations are discovered, they must be promptly addressed or reported to the competent authority for handling in accordance with the provisions of the law.

6. The Vietnam Fatherland Front, political-social organizations, mass organizations within agencies and units, and the people shall supervise the implementation of the additional targeted funds from the central budget for the local budget and monitor the public disclosure of the allocation, use, and final accounts of the additional targeted funds from the central budget for the local budget as stipulated.

PART IV. EFFECTIVE PROVISIONS

1. This Circular shall take effect fifteen days from the date of publication in the Official Gazette.

2. Ministries, agencies equivalent to ministries, government agencies, and other central agencies, People's Committees of provinces, and centrally-administered cities shall be responsible for implementing this Circular.

3. Based on the provisions of this Circular, People's Committees of provinces and centrally-administered cities shall specify the management and use of additional targeted funds from higher-level budgets for lower-level budgets in their respective localities.

4. In the process of organizing implementation, if there are difficulties, they should be promptly reflected to the Ministry of Finance for coordination in resolution./.