Circular No. 86/2011/TT-BTC stipulates the management and settlement of investment capital and operational funds with investment characteristics from the state budget.

CIRCULAR

Regulations on management and settlement of investment capital and public service capital with investment characteristics from state budget sources

Pursuant to the State Budget Law No. 01/2002/QH11 dated December 16, 2002; Government Decree No. 60/2003/NĐ-CP dated June 6, 2003 detailing and guiding the implementation of the State Budget Law;

Pursuant to the Construction Law dated November 26, 2003; Pursuant to the following Government Decrees: No. 12/2009/NĐ-CP dated February 12, 2009 on project management for construction works; No. 83/2009/NĐ-CP dated September 15, 2009 amending and supplementing certain articles of Government Decree No. 12/2009/NĐ-CP on project management for construction works; No. 85/2009/NĐ-CP dated October 15, 2009 guiding the implementation of the Bidding Law and selection of construction contractors under the Construction Law; No. 112/2009/NĐ-CP dated December 14, 2009 on management of construction work investment costs; No. 48/2010/NĐ-CP dated May 7, 2010 on contracts in construction activities;

Pursuant to the Investment and Construction Management Regulations promulgated together with Government Decrees: No. 52/1999/NĐ-CP dated July 8, 1999, No. 12/2000/NĐ-CP dated May 5, 2000, No. 07/2003/NĐ-CP dated January 30, 2003;

Pursuant to Government Decree No. 71/2005/NĐ-CP dated June 6, 2005 on management of special construction investment projects;

Pursuant to Government Decree No. 118/2008/NĐ-CP dated November 27, 2008 stipulating functions, tasks, powers, and organizational structure of the Ministry of Finance;

The Ministry of Finance hereby regulates the management and settlement of investment capital from state budget sources (hereinafter referred to as state budget) as follows:

Part I
GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. These Circular applies to investment projects funded by development investment capital and public service capital with investment characteristics from state budget sources (hereinafter collectively referred to as projects) managed by Ministries, agencies at the level of ministries, government agencies, political organizations, political-social organizations, social organizations, social-professional organizations, economic groups, state-owned corporations (hereinafter collectively referred to as Ministries), provinces directly under the central government (hereinafter collectively referred to as provinces), and districts, counties, towns, cities directly under provinces (hereinafter collectively referred to as counties). It also includes projects funded by multiple sources where if the state budget investment capital constitutes the largest proportion of the total investment capital of the project, or where the state budget investment capital does not constitute the largest proportion but the parties agree to manage according to the state budget capital in accordance with the provisions of this Circular.

2. This Circular does not apply to infrastructure construction investment projects of poor counties implementing Resolution 30a/2008/NQ-CP dated December 27, 2008 of the Government on the Program for Rapid and Sustainable Poverty Reduction in 61 Poor Counties; nor does it apply to investment projects funded by commune budgets (including communes implementing the National Target Program on New Rural Development); investment projects of Vietnam's representative offices abroad; and projects to purchase ownership rights.

For other development investment expenditures from the state budget (state reserves, working capital support for enterprises, equity joint venture contributions, foreign loans and aid, and contributions to development support funds), they shall be implemented in accordance with separate guidance documents for each type of expenditure.

For investment projects funded from other state sources outside the state budget, it is encouraged to apply the settlement principles stipulated in this Circular.

The subjects to which these regulations apply are organizations and individuals related to the management and settlement of investment capital and public service capital with investment characteristics from state budget sources.

Article 2. State budget capital for development investment and capital of public services with an investment nature include

- Domestic capital of state budgets at all levels;

- Foreign loans of the Government and foreign aid to the Government, local authorities, and state agencies (the state budget portion).

Article 3. The agency responsible for disbursing state budget investment capital

- The State Treasury is assigned the task of supervising the disbursement of state budget investment capital.

- Some other agencies and units are assigned the task of supervising the disbursement of state budget investment capital for certain special projects according to the Prime Minister's decision.

- Commercial banks are banks serving projects using official development assistance (ODA) funds.

Part II
SPECIFIC PROVISIONS

A. ALLOCATION AND AUDIT OF INVESTMENT CAPITAL ALLOCATION

Article 4. Conditions and principles of capital allocation

1. Investment projects are allocated annual investment capital plans from the state budget when they meet the following conditions:

- For investment preparation projects: must be consistent with approved industry and territorial development plans according to the authority.

- For implementation investment projects: must have an investment decision made before October 31 of the previous year. The time and capital allocation for implementing group B projects shall not exceed five years, and for group C projects, it shall not exceed three years.

2. For centrally-managed investment capital: After being assigned the annual state budget estimate by the Prime Minister, ministries allocate investment capital plans for each project under their management that meets the required conditions, ensuring alignment with the total investment target; domestic and foreign capital structure; economic sector structure; state-important project capital, group A projects, and in accordance with the National Assembly Resolution, the Government's directives on economic and social development plan management and the annual state budget estimate.

3. For locally-managed investment capital: People's Committees at all levels develop investment capital allocation plans to submit to the same-level People's Councils for decision. According to the People's Council Resolution, the People's Committee allocates and decides on the investment capital plan for each project under their management that meets the required conditions, ensuring alignment with the total investment target; domestic and foreign capital structure; economic sector structure; state-important project capital, and in accordance with the National Assembly Resolution, the Government's directives on economic and social development plan management and the annual state budget estimate. Specifically, projects funded by retained sources according to the National Assembly Resolution and the Prime Minister's Decision (if applicable), and supplementary targeted capital from the central budget to local budgets must also comply with regulations on investment targets and usage purposes for each source of investment capital.

- The Department of Finance is responsible for coordinating with the Department of Planning and Investment to propose investment capital allocation plans for each provincial-managed project before reporting to the Provincial People's Committee for decision.

- The District Financial Planning Office is responsible for coordinating with district functional agencies to advise the District People's Committee on allocating investment capital for each district-managed project.

4. Ministries and People's Committees at all levels detail the allocation of development investment capital for each project according to the investment project code and economic sector (type, item) as per Appendix No. 02 issued by Decision No. 33/2008/QD-BTC dated June 2, 2008, of the Ministry of Finance on the State Budget Classification System and subsequent amendments and supplements (if any).

5. Principles for allocating capital to projects in the annual plan:

- Ensuring the conditions of the project as stipulated in Point 1 and the provisions of Points 2 and 3 of Article 4 of this Circular.

- Concentrating capital allocation for projects according to the National Assembly and Government's directives on economic and social development plan management and the annual state budget estimate; ensuring sufficient capital for payment to projects already put into use and approved final investment settlement but still lacking capital; allocating capital for auditing, verification, and approval of final settlement for completed projects yet to be paid due to lack of final settlement approval.

- In cases where projects are allocated capital in the implementation investment plan but only for investment preparation and project implementation preparation, this should be clearly noted in the capital allocation plan.

6. The allocation and assignment of the state budget estimate for projects must be completed before December 31 of the previous year.

(Capital allocation plan model according to Appendix No. 01 attached).

7. After allocating the investment capital plan

- Ministries send the investment capital plan to the Ministry of Finance and the State Treasury (central level). The State Treasury transfers the detailed project capital plan (by chapter code, project code, and economic sector (type, item)) of ministries to the local State Treasury for supervision and payment control;

- Provincial People's Committees send the investment capital plan to the Ministry of Finance, simultaneously sending it to the Department of Finance and the State Treasury (provincial level) for monitoring and as a basis for supervision and payment control;

- District People's Committees send the investment capital plan to the Department of Finance, simultaneously sending it to the District Financial Planning Office and the State Treasury (district level) for monitoring and as a basis for supervision and payment control.

- At the same time as sending the plan to the aforementioned agencies, ministries and People's Committees at all levels assign plan targets to investors for implementation.

Article 5. Examination of Capital Allocation

1. For projects managed by Ministries:

1.1. After receiving the capital allocation plan from the Ministries, the State Treasury implements payment control work according to regulations. In cases where the project does not have sufficient investment procedures, the State Treasury will not make payments.

1.2. The Ministry of Finance shall provide comments on the examination of capital allocation to the Ministries within five working days after receiving the capital allocation plans from the Ministries. In cases where the capital allocation does not comply with regulations, the Ministry of Finance shall provide comments for the State Treasury to stop payments. If payments have already been made, they must be recovered. The Ministries are responsible for directing the project sponsors to return the state budget for the paid capital if the allocation does not comply with regulations, and bear responsibility for the consequences caused by non-compliant allocation.

2. For projects managed by provinces and districts:

During the process of participating with relevant units regarding the annual capital investment plan, the Department of Finance and the Planning and Finance Office simultaneously perform the task of examining the capital allocation plan before submitting it to the provincial or district People's Committee for decision. Based on the decision on the capital investment plan of the provincial or district People's Committee, the State Treasury implements payment control according to regulations. In cases where the project does not have sufficient investment procedures, the State Treasury will not make payments and notify the Department of Finance and the Planning and Finance Office to submit to the provincial or district People's Committee for handling.

3. Documents accompanying the capital allocation plan for the examination of capital allocation include:

- For preparatory investment projects, only one of the following documents is required:

+ Decision of the competent authority allowing preparatory investment activities;

+ Approval document for the budget estimate of preparatory investment work;

+ Decision assigning the plan index by the competent authority.

- For implementation investment projects: Investment decision (or economic and technical report approval decision for projects that only prepare economic and technical reports) of the competent authority, adjustment decisions (if any).

Article 6. Adjustment of Capital Investment Plan

1. Principles:

- Periodically, Ministries and localities review the progress and investment objectives of projects in the year to adjust the capital investment plan according to their authority or request the Prime Minister to adjust the capital investment plan, transferring capital from projects without the ability to implement to projects exceeding progress, still having workload debts, and projects capable of completing ahead of schedule in the year.

- Before sending the adjusted capital investment plan for each project to the Ministry of Finance, the Ministry of Planning and Investment (for central budget projects), and the financial agency, Planning and Investment (for local budget projects), the Ministries and localities direct the project sponsors to finalize the payment time and work with the State Treasury to confirm the amount of capital under the annual plan that has been paid for the project, determine the surplus capital due to unimplemented work, ensuring that the project plan after adjustment is not lower than the amount of capital the State Treasury has paid. Ministries and localities are responsible for disbursement figures and the adjusted capital plan.

- In cases where there is still surplus capital after adjustment compared to the assigned plan, the surplus capital will be reallocated to other units according to the decision of the competent authority.

2. Ministries and provinces implement the adjustment of the capital investment plan, send to the same-level financial agency and the State Treasury as the basis for payment. The deadline for adjusting the annual capital investment plan ends no later than December 25 of the planning year. The examination of the adjustment of capital allocation follows Article 5 of the Circular.

(Model form for adjusting the capital investment plan allocation according to Appendix No. 02 attached).

B. CAPITAL INVESTMENT PAYMENT

Article 7. Opening an Account

1. For domestic capital:

The investor or the Project Management Board (hereinafter referred to collectively as the investor) may open an account at the State Treasury that is convenient for the investor's transactions and facilitates the State Treasury's payment control, in accordance with the regulations of the Ministry of Finance on the system of opening and using accounts at the State Treasury.

The State Treasury has the responsibility to guide the investor in opening an account to facilitate payment.

2. For foreign capital:

The investor may open an account at a bank serving the project or at the State Treasury in accordance with the guidance of the Ministry of Finance.

Article 8. Basic Documents of the Project

To serve the management and control of investment capital payments, the investor must submit to the State Treasury where the payment account is opened the basic documents of the project (these documents must be original or certified true copies stamped by the investor, only submitted once until the completion of the project, except when supplementation or adjustment is required), including:

1. For projects under preparation:

- Approved budget estimate for investment preparation work;

- The document approving the results of the tender selection according to the provisions of the Bidding Law;

- The contract between the Project Owner and the contractor.

2. For projects being implemented:

2.1. For domestic-funded projects:

- The investment construction project (or economic-technical report for projects only preparing economic-technical reports) and the investment decision of the competent authority, and any project adjustment decisions (if applicable);

- The document approving the results of the tender selection according to the provisions of the Bidding Law (including bidding, direct assignment, direct purchase, competitive quotation, self-execution, and selection of contractors in special cases, selection of design consultancy contractors for architectural construction projects);

- The contract between the investor and the contractor and accompanying documents according to the law (excluding technical documents);

- The budget estimate and the decision approving the budget estimate by the competent authority for each work, sub-project, and project for direct assignment or self-execution and works carried out without contracts (except for projects only preparing economic-technical reports).

2.2. For ODA projects: In addition to the above documents, the following are also required:

- A Vietnamese translation signed and stamped by the investor: The international agreement on ODA signed between Vietnam and the donor and other related payment documents (if any). Specifically, the contract between the investor and the contractor must be a Vietnamese document or a Vietnamese translation signed and stamped by the investor (the part specifying payment conditions and terms and other contents directly related to payment in the contract). The investor bears legal responsibility for the accuracy and correctness of the Vietnamese translation.

- Temporary advance guarantee (if any) according to the specific provisions of the Contract (including cases of domestic-funded projects but executed by foreign contractors).

3. For preparatory work arranged with funds in the implementation plan:

- The approved budget estimate for preparatory work.

4. For preparatory work arranged with funds in the implementation plan:

- The investment construction project (or economic-technical report for projects only preparing economic-technical reports) and the investment decision of the competent authority, and any project adjustment decisions (if applicable);

- The approved budget estimate for preparatory work; Specifically, land clearance must be accompanied by the land clearance plan approved by the competent authority;

- The document selecting the contractor according to the provisions of the Bidding Law;

- The contract between the investor and the contractor and accompanying documents according to the law (excluding technical documents);

4. For preparatory work arranged with funds in the implementation plan:

5. For self-execution cases:

- Document from the competent authority allowing self-execution of the project (in cases not included in the investment decision of the competent authority);

- The budget estimate and the decision approving the budget estimate by the competent authority for each work, sub-project, and project (except for projects only preparing economic-technical reports);

Article 9. Capital Investment Payment

The State provides capital to the project owner for the project owner to pay to the contractor according to the contract or to pay for works of the project not carried out through contracts, including:

- Advance payment;

- Payment for completed volume.

Article 10. Advance Payment

The advance capital provided by the project owner to the contractor shall only be for necessary works that require advance payment and must be clearly specified in the contract regarding the object, content, and specific work. The level of advance capital, the time of advance payment, and the recovery of advance payment must comply with the regulations of the State for each specific type of contract as follows:

1. Level of advance capital:

1.1. For construction contracts:

- Contracts valued under 10 billion VND, the minimum advance payment is 20% of the contract value;

- Contracts valued from 10 billion VND to 50 billion VND, the minimum advance payment is 15% of the contract value;

- Contracts valued over 50 billion VND, the minimum advance payment is 10% of the contract value.

1.2. For equipment supply contracts, EPC contracts, turnkey contracts, and other types of construction contracts: the minimum advance payment is 10% of the contract value.

1.3. For consulting contracts:

The minimum advance payment is 25% of the contract value.

1.4. The maximum advance payment for the above types of contracts is 50% of the contract value. In special cases requiring higher advance payments, permission from the investment decision-maker is required.

1.5. For land clearance works:

The advance capital is paid according to the progress in the land clearance plan. Ministries and People's Committees at all levels must allocate sufficient capital for land clearance work.

1.6. In addition to the maximum advance capital mentioned above for the contracts, for certain large components, semi-finished products in construction that need to be produced in advance to ensure construction progress and certain materials that need to be stored seasonally, the advance capital is based on the actual needs and agreed upon by the project owner and the contractor.

1.7. The advance capital for all provisions from point 1.1 to point 1.6 above shall not exceed the annual capital plan allocated for the tender package or project.

1.8. Advance capital shall be provided after the contract becomes effective; if the contract stipulates that the contractor must provide a guarantee for the advance payment, then the contractor must provide such a guarantee.

2. Recovery of provisional advances:

2.1. The advance capital is recovered through payments for completed volumes of the contract, starting from the first payment and fully recovered when the total payment for completed volumes reaches 80% of the contract value. The amount recovered each time is agreed upon by the project owner and the contractor and specified in the contract.

2.2. For land clearance work:

- For compensation and support work: after paying to the beneficiaries, the project owner collects the documents, processes the payment, and recovers the advance capital within the latest period of 30 working days from the date of payment to the beneficiaries.

- For purchasing resettlement houses and other land clearance work: the advance capital is recovered in installments for completed volumes and fully recovered once the land clearance work is completed.

3. The project owner is responsible for calculating reasonable advance capital levels, managing the use of advance capital for its intended purpose, effectively, and ensuring full repayment of the advance capital according to regulations.

If the advance capital has not been recovered but not used, and exceeds the six-month period stipulated in the contract due to objective or subjective reasons for the contractor's failure to complete the work or misuse of the advance capital, the project owner is responsible for recovering and repaying the advance capital to the state budget together with the State Treasury. If the advance capital has not been fully recovered by the end of the plan year due to the contract not reaching the specified payment ratio, it will continue to be recovered in the following year's plan without being deducted from the next year's capital investment plan.

4. Documents for advance payment settlement:

To receive advance payment, the project owner sends the following documents to the State Treasury:

- A payment request for investment capital;

- Transfer vouchers;

- Contractor's guarantee for the advance payment (if the contract stipulates a guarantee for the advance payment), the project owner sends a certified copy to the State Treasury stamped by the project owner.

5. The State provides capital to the project owner to make advance payments during the plan year, no later than December 31 (except for advance payments for land clearance which can be made until January 31 of the following year). The project owner may receive advance payments once or multiple times for a contract based on the need for advance payment capital but not exceeding the advance payment level specified above; if the capital plan does not cover the advance payment level, the project owner may receive additional advance payments in the following year's plan.

Article 11. Payment for Completed Volumes

1. For works carried out through construction contracts:

Contract payments must be consistent with the type of contract, contract price, and conditions stipulated in the contract. The number of payments, payment stages, payment time points, payment deadlines, payment documents, and payment conditions must be clearly defined in the contract.

1.1. For lump-sum contracts:

Payments shall be made according to a percentage of the contract price or the project price, sub-project price, or volume of work corresponding to the payment stages recorded in the contract.

1.2. For fixed unit-price contracts:

Payments shall be based on the actual completed volume (including approved increases or decreases in volume, if any) accepted and the unit price specified in the contract.

1.3. For adjustable unit-price contracts:

Payments shall be based on the actual completed volume (including approved increases or decreases in volume, if any) accepted and the adjusted unit price due to inflation as agreed upon in the contract.

1.4. For time-based contracts:

- Expert fees shall be determined based on the agreed expert salary and related costs multiplied by the actual working time accepted (by month, week, day, hour).

- Other expenses outside the expert remuneration shall be paid according to the method prescribed in the contract.

1.5. For percentage-based contracts:

Payments shall be made according to a percentage of the contract price. The payment percentages for each payment shall be agreed upon by the parties in the contract. When the contractor fulfills all obligations under the contract, the employer shall pay the contractor an amount equal to the percentage of the value of the project or the completed volume of work as stipulated in the contract.

1.6. For contracts combining various types of prices:

Payments shall be made in accordance with the provisions of Clauses 1.1, 1.2, 1.3, 1.4, and 1.5 above.

1.7. For volumes of work arising outside the contract:

Payments for additional volumes (outside the contract) without unit prices in the contract shall be implemented according to supplementary agreements that the parties have agreed upon before execution and must comply with relevant legal regulations. In cases where additional work arises, the investor and contractor must sign supplementary contract appendices according to the following principles:

a) If the volume of additional work exceeds 20% of the corresponding volume recorded in the contract or there is no unit price for the additional volume in the contract, it shall be paid based on the new unit price agreed upon by the parties according to the principle of agreement in the contract regarding the unit price for additional volume;

b) If the additional volume is less than or equal to 20% of the corresponding volume recorded in the contract, the contract unit price shall be applied, including any adjusted unit price agreed upon in the contract (if applicable), for payment;

c) For fixed unit-price contracts and time-based contracts, when fuel, material, and equipment prices regulated by the state for price stabilization measures under the Price Ordinance fluctuate abnormally or when the state changes tax or wage policies directly affecting the contract price, the unit price may be adjusted for payment if permitted by the investment decision authority and agreed upon by the parties in the contract;

d) For adjustable unit-price contracts, the contract unit price shall be adjusted for those volumes of work for which, at the time of signing the contract, the employer and contractor committed to adjust the unit price due to inflation after a certain period from the date the contract becomes effective;

e) For lump-sum contracts and percentage-based contracts: in cases where reasonable additional work arises outside the scope of the signed contract (for construction contracts, this refers to volumes outside the scope of work required to be performed according to the design; for consulting contracts, this refers to volumes outside the scope of consulting tasks required to be performed). In such cases, when adjusting the volume does not change the investment objectives or exceed the approved total investment ceiling, the investor and contractor shall calculate, agree upon, and sign supplementary contract appendices; if it exceeds the approved total investment ceiling, it must be reviewed and decided by the authorized investment decision maker; if the agreement fails, the additional work volumes will form a new tender package, and the selection of contractors to implement this package shall be conducted according to current regulations;

1.8. Payment Documents:

When the completed volume is accepted according to the payment stages and conditions stipulated in the contract, the investor shall prepare a payment request document to send to the State Treasury, including:

- A table determining the value of the completed work volume proposed for payment, confirmed by representatives of the employer and consultant (if any) and the contractor (Appendix No. 03.a attached);

When there are additional volumes outside the contract, the investor shall submit a table calculating the value of the additional volume (if any) outside the scope of the signed contract proposed for payment, confirmed by representatives of the employer and consultant (if any) and the contractor (Appendix No. 04 attached);

- A payment request for investment capital or advance payment - Appendix No. 05 attached;

- Financial transfer documents issued in accordance with the accounting document system of the Ministry of Finance;

2. For works carried out without construction contracts:

- For works of the project carried out without construction contracts (such as some project management works directly executed by the investor, self-execution cases, etc.), payments shall be made based on a list of completed work volumes and approved estimates suitable for the nature of each type of work. Payment documents include: a list of completed work volumes and approved estimates for each work; a payment request for investment capital or advance payment (if any) and financial transfer documents.

- For compensation, indemnity, support, and resettlement costs, the payment file includes: a confirmation list of the quantity of compensation and land clearance work completed (Annex No. 03.b attached); contracts and handover certificates for houses (in cases where houses are purchased to serve relocation due to land clearance). Specifically, for expenses related to organizing compensation and land clearance work, there must be an approved budget estimate; a capital investment payment request or advance payment application (if applicable) and transfer documents.

For compensation, indemnity, support, and resettlement work involving construction projects (including construction of relocated housing due to land clearance): advance payments and payments shall be carried out according to procedures applicable to construction projects or construction contracts.

Article 12. Principles of Payment Control by the State Treasury

1. Based on the payment request files submitted by the project owner, the State Treasury will make payments based on the payment terms stipulated in the contract (number of payments, payment stages, payment deadlines, and payment conditions) and the value of each payment. The project owner is responsible for the accuracy and legality of the executed quantities, rates, unit prices, budgets for various works, and the quality of the works; the State Treasury is not responsible for these matters. The State Treasury will process payments based on the payment files and in accordance with the contract.

2. The State Treasury implements payment control according to the principle of "pay first, control later" for each payment and "control first, pay later" for the final payment of the contract. Based on this principle, the State Treasury provides specific guidelines for payment control within the State Treasury system, ensuring favorable conditions for the project owner and contractor while adhering to state regulations.

3. Within seven working days for the case of "control first, pay later" and three working days for the case of "pay first, control later" from the date all payment files are received in accordance with the project owner's requirements, based on the contract (or approved budget for works not conducted through contracts) and the amount requested for payment by the project owner, the State Treasury will control and provide capital for payment of the project and recover advance payments according to regulations.

4. The annual capital plan of the project only pays for the completed and accepted quantity up to December 31 of the planning year; the deadline for paying the completed quantity extends until January 31 of the following year (including payments to recover advance payments), except for projects permitted by authorized authorities to extend implementation and payment periods.

5. Projects using Official Development Assistance (ODA) funds, if international agreements signed by competent authorities of the Socialist Republic of Vietnam contain provisions on management and settlement of funds different from those in this Circular, such provisions shall be implemented according to the international agreements.

6. The amount paid for each work item, sub-project, or project may not exceed the approved budget or tender price; the total amount paid for the project may not exceed the approved total investment. The amount paid for the project in a year (including advance payments and payments for completed quantities) may not exceed the annual capital plan allocated to the project. For ODA projects, advance payments and payments for completed quantities are not restricted by the project's annual financial plan but must not exceed the overall financial plan of the entire project.

7. For certain particularly important projects requiring special mechanisms for advance payments and fund payments different from the above regulations, after obtaining the opinion of the competent authority, the Ministry of Finance will issue separate guidance documents.

Article 13. The management, settlement, recovery, and finalization of funds advanced from the next year's budget for projects shall be carried out as follows:

1. Advance of the next year's budget estimate shall be implemented in accordance with Clause 3, Article 57 of the State Budget Law No. 01/2002/QH11 dated December 16, 2002, and Article 61 of Decree No. 60/2003/NĐ-CP dated June 6, 2003, issued by the Government to provide detailed regulations and guidance on the implementation of the State Budget Law, and Circular No. 59/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.

2. After the competent authority permits the advance, ministries, sectors, and localities allocate according to the assigned list. The Ministry of Finance informs ministries, sectors, and localities about the list, total amount advanced, source of funds advanced, period of advance and recovery, and simultaneously notifies the National Treasury to settle accounts for the project. In cases where ministries, sectors, and localities allocate incorrectly according to the Ministry of Finance's notification, the National Treasury suspends payment and reports to the Ministry of Finance for examination and handling.

3. Payment deadline: carried out according to the capital investment payment deadline in the annual plan. Special cases are decided by the Prime Minister. After the payment deadline, the National Treasury will proceed with the cancellation of unused advanced funds.

4. Recovery of funds: ministries, sectors, and localities are responsible for allocating plans for project funding in the next year's budget to repay the advanced funds. When reviewing the allocation of annual investment capital, for central government budget funds, the Ministry of Finance simultaneously notifies the recovery of advanced funds, with the maximum amount recoverable being equal to the advanced amount, except in cases approved by the Prime Minister. If ministries fail to allocate or allocate insufficient amounts for recovery as prescribed, the Ministry of Finance recovers the advanced funds by deducting them from the allocated investment expenditure budget of the ministry and issues a notice to the relevant ministry for coordination. For local budgets and supplementary funds with specific purposes from higher-level budgets to lower-level budgets, if local People's Committees fail to allocate or allocate insufficient amounts for recovery as prescribed, the local National Treasury notifies the Department of Finance, Planning and Finance Office to report to the local People's Committees to allocate and recover the advanced funds as prescribed.

5. Finalization of funds: the deadline for finalizing advanced funds is based on the deadline for recovering funds. For projects that recover advanced funds over several years, the recovered funds of each plan year are finalized within the corresponding fiscal year, and funds paid but not allocated for recovery are transferred to the following year for finalization consistent with the recovery plan.

Article 14. Extension of Implementation and Settlement Periods for Construction Investment Capital (including annual construction investment capital and advanced funds from the next year's budget estimate)

1. By January 31 of the following year, unspent or partially spent allocated capital for projects shall not be further expended and shall be canceled, except for cases approved for extension by the Minister of Finance (for central government budgets) or the Chairman of the People's Committee (for local budgets) in accordance with point a, Section 3, Clause I of Circular No. 108/2008/TT-BTC dated November 18, 2008, issued by the Ministry of Finance, guiding the handling of end-of-year budgets and the preparation and reporting of annual state budget finalization, and any subsequent amendments or supplements.

2. The process of transferring extended capital for projects shall be carried out as follows:

After the annual capital payment deadline (January 31 of the following year), based on the actual implementation and payment status of construction investment projects, the project sponsors propose, and the managing agencies compile and submit a written request accompanied by confirmation from the National Treasury branch where the project account is opened regarding the amount paid up to January 31 of the following year (as per Appendix 06 attached to this Circular) to the Ministry of Finance (for central government projects) and the Chairman of the People's Committee (for local projects).

3. Extended implementation and settlement period: not exceeding one year after the planned year. Other cases are decided by the Prime Minister.

4. Time limit for extending transfer:

- Written requests for extension from managing agencies must be submitted before February 15 each year, clearly stating the project name, annual capital plan, amount paid up to January 31 of the following year, requested extended implementation and settlement amount, extended period, and reasons for extension.

- Based on the written requests from managing agencies, the Minister of Finance (for central government projects) and the Chairman of the People's Committee (for local projects) decide on the list and period of projects permitted to extend.

- The decision on the list and period of projects permitted to extend must be completed before March 15 each year.

By March 15 of the following year, cases without approval from the competent authority for extension to continue implementation in the following year's budget will have their remaining funds canceled.

C. MANAGEMENT AND SETTLEMENT OF INVESTMENT CAPITALFOR SPECIAL PROJECTS

Article 15. State Secret Works

1. The type of state secret works as prescribed in Article 2 of Decree No. 71/2005/NĐ-CP dated June 6, 2005 of the Government on Management of Investment and Construction of Special Projects.

The management of investment and construction of state secret works shall be carried out in accordance with Decree No. 71/2005/NĐ-CP dated June 6, 2005 of the Government on Management of Investment and Construction of Special Projects.

Allocation and verification of allocation of investment capital; control, payment, and settlement of investment capital for state secret works shall be implemented according to regulations applicable to state budget investment capital. For state secret projects managed by the Ministry of Public Security and the Ministry of National Defense, the Ministry of Finance shall directly transfer capital to the Ministry of Public Security and the Ministry of National Defense for receipt, management, distribution, and settlement of investment capital for these projects.

2. Allocation and verification of allocation of investment capital:

- Allocation and verification of allocation of investment capital shall be carried out according to regulations applicable to state budget investment capital, including detailed project lists and corresponding capital amounts for state secret projects.

- For state secret projects managed by the Ministry of Public Security and the Ministry of National Defense, the Ministry of Finance shall verify the allocation and send it to the Ministry of Public Security and the Ministry of National Defense for management, control, and payment of capital for these projects.

3. Capital transfer and payment:

- Payment of investment capital shall be carried out according to regulations applicable to state budget investment capital.

- The Ministry of Public Security and the Ministry of National Defense shall open deposit accounts at the State Treasury Transaction Office to receive transferred capital from the Ministry of Finance for payment to state secret projects managed by them. Based on annual capital plans and project progress, the Ministry of Finance shall transfer capital to the Ministry of Public Security and the Ministry of National Defense through expenditure orders. Each batch of transferred capital shall be based on project progress reports and requests for capital transfer from the Ministry of Public Security and the Ministry of National Defense. Any remaining balance in the deposit account after January 31 of the following year must be repaid to the state budget.

- The Ministry of Public Security and the Ministry of National Defense shall perform functions of controlling and paying capital for state secret projects in accordance with regulations on capital control and payment.

- For state secret projects managed by other ministries, sectors, and provinces, the State Treasury shall only accept withdrawal documents and transfer funds upon request of the project owner without reviewing the content. The project owner shall bear full responsibility for content review during payment.

- At the end of the plan year, the Ministry of Public Security and the Ministry of National Defense shall report on implementation of the plan, receipt and use of capital; confirm the amount of capital paid in the year, cumulative capital paid from project commencement to the end of the fiscal year for each project; comment on implementation of the investment plan and compliance with financial policies and regulations.

Article 16. Emergency Order Construction Works

1. The type of emergency order construction works as prescribed in Article 2 of Decree No. 71/2005/NĐ-CP dated June 6, 2005 of the Government on Management of Investment and Construction of Special Projects.

The management of investment and construction of emergency order construction works shall be carried out in accordance with Decree No. 71/2005/NĐ-CP dated June 6, 2005 of the Government on Management of Investment and Construction of Special Projects.

2. Capital payment:

2.1- Advance payment: The level of advance payment and recovery of advance payment shall be carried out according to regulations applicable to state budget investment capital. Documents for advance payment include:

- Decision on urgent construction work issued by the authorized person;

- A payment request for investment capital;

- Transfer documents.

- Contractor's guarantee for the advance payment (if agreed upon in the contract between the project owner and the contractor);

2.2- Payment for completed volume: carried out according to regulations applicable to state budget investment capital.

Article 17. Temporary Works

1. Types of temporary works as prescribed in Article 2 of Decree No. 71/2005/NĐ-CP dated June 6, 2005 of the Government on Management of Investment Construction of Special Projects.

2. Capital payment:

The management of advance payments and capital disbursement for temporary works shall be carried out according to regulations applicable to state budget investment capital and supplemented as follows:

In cases where the costs of temporary shelters at the construction site for living and construction management are included in the budget estimate, the payment control shall be conducted according to the approved estimate; in addition to project documents, the payment dossier includes: Decision approving the estimate, value schedule of completed work, application for capital disbursement, and transfer vouchers.

In cases where the costs of temporary shelters, housing, and construction management offices on the construction site are calculated as a percentage in the construction contract, they shall be paid according to the stipulated ratio and not in accordance with the above regulations.

D. MANAGEMENT AND CAPITAL DISBURSEMENT OF ENTERPRISE FUNDS WITH INVESTMENT CHARACTERISTICS

Article 18. Use of Capital

Enterprise funds with investment characteristics in the state budget estimates of administrative and public institutions may only be used for investment in renovation, expansion, and upgrading of existing facilities (including new construction projects within existing facilities of administrative and public institutions). New investment projects shall not be allocated enterprise funds.

Article 19. Planning, Allocation, and Review of Allocation of Capital

Planning, allocation, and review of allocation of capital shall be carried out in accordance with the State Budget Law and guidelines issued by the Ministry of Finance for enterprise funds.

Article 20. Advance Payments and Capital Disbursements

1. Basis Documents:

- For projects with a capital amount of 1 billion VND or more, basis documents shall be similar to those for projects funded by development investment capital.

- For projects with a capital amount under 1 billion VND, basis documents include:

+ Economic and technical report and decision approving the economic and technical report or design estimate (approval before October 31 of the year prior to the planning year is not mandatory);

+ Tender selection document in accordance with the Bidding Law;

+ Contract between the investor and the contractor.

2. Advance Payments:

- For projects with a total capital amount of 1 billion VND or more, the level of advance payment and recovery of advance payment shall be implemented similarly to projects funded by development investment capital.

- For projects with a total capital amount under 1 billion VND, the minimum advance payment shall be 30% of the contract value or approved estimate. The advance payment shall be recovered gradually during each payment period for completed work volume and fully recovered when the payment reaches 80% of the contract value or approved estimate.

- Advance payment dossier includes: Application for capital disbursement, transfer voucher, and contractor's guarantee for the advance payment (if agreed upon in the contract between the investor and the contractor).

- Management of advance payments shall be conducted in accordance with the provisions of the aforementioned Article 10.

3. Capital Disbursements:

- For projects with a total capital amount of 1 billion VND or more, the control and disbursement of capital shall be carried out according to regulations applicable to state budget-funded projects.

- For projects with a total capital amount under 1 billion VND, the control and disbursement of capital shall be carried out according to the guidelines issued by the Ministry of Finance regarding the management, issuance, and disbursement of state budget funds through the State Treasury.

4. Reporting, Settlement, and Inspection System.

Implementation shall be in accordance with regulations for enterprise funds and guidance documents from the Ministry of Finance. Specifically, settlement for projects with a total capital amount of 1 billion VND or more shall be carried out according to regulations for investment capital as per guidance documents from the Ministry of Finance.

E. REPORTING, SETTLEMENT, AND INSPECTION SYSTEM

Article 21. Reporting

1. For project sponsors, Ministries, and provinces: implement the reporting system as prescribed in Decision No. 52/2007/QD-TTg dated April 16, 2007 of the Prime Minister on the Reporting System for the Implementation of State Investment Capital Plans, Circular No. 05/2007/TT-BKH dated August 9, 2007 of the Ministry of Planning and Investment on the issuance of reporting forms and guidance on implementing Decision No. 52/2007/QD-TTg dated April 16, 2007; Decision No. 803/2007/QD-BKH dated July 30, 2007 of the Ministry of Planning and Investment on the issuance of the reporting system for the implementation of ODA programs and projects.

2. For the State Treasury:

- Implement the reporting system as prescribed by the Ministry of Finance.

- At the end of the fiscal year, the State Treasury compiles payment data to report to the corresponding financial authority according to regulations on finalizing the state budget.

- At the end of the fiscal year, the State Treasury confirms the amount paid during the year, cumulatively calculates the total payments from the start of construction to the end of the fiscal year for each project initiated by the sponsor.

Article 22. Finalization of Investment Capital

The annual finalization of investment capital and the finalization of investment capital upon completion of the project shall be carried out in accordance with the guidelines of the Ministry of Finance regarding the finalization system for investment capital.

In cases where the finalization has been approved, if the finalized capital is lower than the capital already paid to the project, the sponsor shall be responsible for recovering the excess capital from the contractor to refund to the State; if the finalized capital is higher than the capital already paid, the sponsor shall be responsible for continuing to pay or allocate funds in the following year's plan to pay the contractor.

Article 23. Inspection

Ministries, People's Committees of provinces, financial authorities, and the State Treasury shall regularly or at random inspect project sponsors and contractors participating in projects regarding the use of advance capital, payment of completed work volume capital, and compliance with national financial policies and systems for development investment.

Financial authorities at all levels shall periodically or unexpectedly inspect the State Treasury regarding the implementation of the system for disbursing investment capital.

F. RESPONSIBILITIES AND LIMITATIONS OF RELATED AUTHORITIESOF THE RELATED AUTHORITIES

Article 24. For Project Sponsors

1. Perform functions and tasks assigned in accordance with regulations. Receive and use capital for the intended purpose, for the intended recipient, economically and effectively. Adhere strictly to legal provisions concerning financial management systems for development investment.

2. Conduct quantity acceptance, prepare settlement files, and request payment from contractors according to the time stipulated in the contract.

3. Allocate sufficient capital in the annual plan to purchase construction project insurance as prescribed.

4. Bear full responsibility for the accuracy and legality of the actual quantity performed, norms, unit prices, various types of estimates, quality of works, and proposed payment value; ensure the accuracy, truthfulness, and legality of all data and documents provided in the files submitted to the State Treasury and relevant state agencies.

5. Report promptly and fully as required to the investment decision-making agency and related state agencies; provide complete files, documents, and situations as required to the State Treasury and financial authorities to serve management and capital payment; accept inspection by financial authorities and the investment decision-making agency regarding the use of investment capital and compliance with national financial policies and systems for development investment.

6. Regularly inspect the implementation of advance capital by contractors, must inspect before, during, and after providing advance capital to contractors.

7. Implement accounting for the project sponsor unit; finalize investment capital according to current regulations. At the end of the fiscal year, prepare a reconciliation table of investment capital payment data to send to the State Treasury where the sponsor conducts transactions for confirmation (according to the form in Appendix No. 06).

8. Request payment of capital when all conditions are met and demand the State Treasury to respond and explain unsatisfactory contents in the capital payment process.

Article 25. Regarding Ministries and People's Committees of provinces and districts

1. Guide, inspect, and urge investors under their management to implement investment plans, receive and use investment capital for the intended purposes in accordance with state regulations.

2. Within the scope of their assigned authority, be responsible before the Government and state laws for their decisions.

Article 26. Regarding financial agencies at all levels

1. Ensure sufficient sources of funds according to the regulations of the Ministry of Finance for the State Treasury to settle accounts for projects.

2. Implement regulations on reporting and finalizing investment capital.

3. Coordinate with competent agencies to guide and inspect investors, the State Treasury, contractors regarding compliance with financial policies and systems for development investment, management and use of investment capital, and settlement of investment capital to address violations and issue decisions to recover amounts and contents of expenditures that violate state regulations.

4. Have the right to request the State Treasury and investors to provide necessary documents and information to serve state management over financial development investment, including documents for project assessment and annual investment budget planning, reports on implementation of plans and investment capital usage according to reporting regulations, and documents for investment capital finalization audits as prescribed.

Article 27. Regarding the State Treasury

1. Guide investors to open accounts to receive investment capital settlements.

2. Control and settle investment capital promptly and fully for projects when conditions are met and within the stipulated time frame.

3. Issue procedures for settling investment capital and operational capital with investment characteristics to be uniformly implemented within the State Treasury system. Organize control and settlement work according to business procedures, ensuring timely, full, and convenient settlement for investors while simplifying administrative procedures and strictly managing state investment capital.

4. Provide clear written opinions to investors regarding reduced or refused settlements, and respond to investors' inquiries about capital settlements.

5. The State Treasury only controls settlements based on documents provided by investors and according to established payment principles, without bearing responsibility for the accuracy of quantities, rates, unit prices, or quality of works. In cases where decisions by authorized levels are found to contravene current regulations, they must submit written requests for reconsideration and propose recommendations. If no response is received within the stipulated timeframe, they may proceed with their own proposals; if a response is deemed unsatisfactory, they must still follow the opinion of the authorized level, while simultaneously reporting to higher authorities and the Financial Agency for review and handling.

6. Regularly urge investors and Project Management Boards to comply with regulations on advance payments and recovery of advance payments, coordinate with investors to check advanced payments to recover unused or improperly used amounts.

7. Urge investors to settle debts definitively when projects have been finalized and accounts closed.

8. Implement reporting and finalization systems for investment capital and operational capital with investment characteristics as prescribed.

9. Have the right to request investors to provide relevant files, documents, and information to serve capital settlement control work.

10. Conduct regular and ad hoc inspections of investors regarding project implementation, compliance with financial policies and systems for development investment, management and use of investment capital; They are permitted to temporarily suspend capital settlements or recover capital misused by investors, and report to the Ministry of Finance for handling.

11. Not participate in acceptance committees for construction works and projects.

12. At the end of the plan year, confirm the amount settled in the year, cumulative amount settled from the start of construction to the end of the state budget period for each project, or confirm the amount of capital settled according to management requirements (model form number 06).

13. Be responsible before the Minister of Finance and state laws for receiving and settling investment capital and operational capital with investment characteristics from state budget sources.

Part III
IMPLEMENTING PROVISIONS

Article 28. Transfer Processing

1. Matters related to provisional advance payments and recovery of provisional advances shall be implemented in accordance with the transfer processing provisions stipulated in Clause 1, Article 52 of Decree No. 48/2010/NĐ-CP dated May 7, 2010 of the Government on contracts in construction activities. Issues regarding provisional advances will be specifically defined in the contract, and the State Treasury shall make payments in accordance with the terms of the contract concerning provisional advance payments and payment.

2. Specifically, the issue of payment stipulated according to the type of contract and the payment documents and files under Decree No. 48/2010/NĐ-CP dated May 7, 2010 of the Government on contracts in construction activities and other amendments and supplements shall be uniformly implemented for all projects from the date this circular takes effect to ensure uniformity in the State Treasury's capital investment disbursement control work.

Article 29. Implementation Provisions

1. This Circular takes effect from August 5, 2011, replacing Circulars of the Ministry of Finance: No. 27/2007/TT-BTC dated April 3, 2007; No. 130/2007/TT-BTC dated November 2, 2007; No. 88/2009/TT-BTC dated April 29, 2009; No. 209/2009/TT-BTC dated November 5, 2009 guiding the management and payment of investment capital and operating funds with investment characteristics from state budget sources.

2. During implementation, if there are difficulties or obstacles, units are requested to promptly reflect them to the Ministry of Finance for research and appropriate amendments and supplements./.

SYSTEM OF FORMS ISSUED UNDER THE CIRCULAR

PROVISIONS ON MANAGEMENT AND PAYMENT OF INVESTMENT CAPITAL

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