Joint Circular No. 86-LB/TT guiding the financial management regime for the POD project funded by the Swedish Government's aid to the healthcare sector.

CIRCULARJOINT

OF THE MINISTRY OF FINANCE AND HEALTH

Guidelines for financial management of the POD project

funded by Swedish government aid to the health sector

Pursuant to Decision No. 142/HĐBT dated May 10, 1990 of the Council of Ministers and the conclusion of the Chairman of the Council of Ministers in Notification No. 01/TB dated January 10, 1992 of the Council of Ministers' Office (now the Government's Office) on the centralized management of foreign currency revenues and aid sources into the State Budget. In order to effectively utilize the aid from the Swedish Government through the SIDA organization for the Essential Drugs Supply Project (referred to as the POD project) under the National Essential Drugs Program of the Health Sector, the Ministry of Finance and Health hereby issue guidelines for the financial management of the POD project as follows:

II- SUPPORT MEASURES FOR STATE-OWNED AGRICULTURAL FARMS AND FORESTRY COMPANIES IN THE FIELD OF SCIENCE AND TECHNOLOGY

1. The aid from the Swedish Government through the SIDA organization for the POD project under the National Essential Drugs Program aims at purchasing essential drugs and critical medicines to serve the primary healthcare strategy in Vietnam, particularly for difficult regions and priority groups. Therefore, it must be organized for strict, unified, and highly effective management.

2. Annually and quarterly throughout the year, the Head of the POD Project must prepare plans for receiving, supplying, and using the POD aid funds to report to the Ministry of Health and the Ministry of Finance (International Aid Management and Reception Department) to incorporate them into the State Budget plan.

3. The revenue from selling drugs under the POD project (after deducting allowable management fees) shall be considered as additional budgetary funding for the Health Sector. The Ministry of Health is responsible for managing and using it according to the purpose agreed upon between the Governments of Vietnam and Sweden.

II - SPECIFIC PROVISIONS

1. Based on orders prepared by Central Pharmaceutical Companies 1 and 2 and approved by the Head of the POD Project and the Swedish Advisor, based on purchase confirmation letters from the two companies (for imported raw materials and finished products). Based on payment notification letters (for domestically purchased drugs). The Ministry of Health will confirm so that Central Pharmaceutical Companies 1 and 2 can go to the Ministry of Finance (International Aid Management and Reception Department) to complete the procedures for confirming the aid goods payment. The Ministry of Finance will make payments into the State Budget.

Based on the quantity of goods received and the amount spent on purchasing drugs in the domestic market, the Ministry of Health will approve the overall plan for purchasing and selling drugs, the financial income and expenditure plan built by Central Pharmaceutical Companies 1 and 2 to supply drugs according to the requirements of each participating locality in the POD Project.

2. Drugs (including raw materials and finished products) purchased from the SIDA-Swedish aid source, in the first round, will be used to supply key provinces participating in the project, supporting difficult areas and priority groups.

3. After receiving the drugs, within no more than 60 days, the first-level pharmaceutical companies must pay and deposit the money into a separate account of the POD Project under the name of the Ministry of Health. Payment receipts must send an additional copy to the International Aid Management and Reception Department of the Ministry of Finance.

4. The revenue from selling the first round of drugs, the Ministry of Health and the Ministry of Finance will discuss and agree on the following purposes for use:

* Replenishing drugs to supply key provinces participating in the project, difficult areas, and priority groups covered by social policy nationwide.

* A portion will be used to address urgent health needs such as epidemics, natural disasters, etc.

5. All revenue from selling drugs and raw materials for drugs (after deducting allowable management costs) will be used for the purposes specified in Item 4 of Part II of this Circular. In cases where part (or all) of this revenue is used to replenish drugs, all activities from purchasing raw materials and finished products to production processing must be carried out under market mechanisms and fully accounted for to be included in the annual budget plan of the Health Sector.

6. Drugs of the POD Project will be supplied through the existing drug supply system of the Health Sector, from central to local levels. Pharmaceutical companies and units participating in the POD Project from central to local levels must record and report accounting separately on the implementation status and results of the POD Project according to current accounting regulations to ensure strict management and facilitate inspection, supervision, and urging to achieve the project's goals.

7. All management costs for implementing the POD Project, aimed at delivering drugs to grassroots health facilities and bases (communes, districts), units must prepare budgets for review by the Joint Ministries. These costs will be deducted from the revenue from selling drugs and must not exceed industry costs.

8. The selling price of drugs from the POD source is the market value at each locality, for each type of drug, at each time point. Payments from selling drugs of the POD Project must be deposited into a separate account of the POD Project under the name of the Ministry of Health including:

* The value of raw materials and finished products converted from the original currency listed on the import order, according to the buying rate announced by the foreign trade bank at the time of receipt.

* Interest earned (if any) from selling drugs and raw materials for drugs of the POD Project.

* In cases where the revenue from selling drugs and raw materials for drugs from the POD source is lower than the amount to be paid, Central Pharmaceutical Companies must prepare reports for submission to the Joint Ministries of Finance and Health for consideration and resolution.

9. In addition to the management costs allocated for implementing the POD Project for units executing the project, the Head of the POD Project may allocate 1% of the revenue from selling drugs for management purposes such as office expenses, telephone, fax, printing documents, training seminars, paying contractual salaries, allowances for concurrently assigned staff, regular and spot inspections, travel expenses, etc. The Head of the POD Project is responsible for preparing budgets and final accounts for approval by the Ministry.

10. Annually and quarterly during the year, units and localities participating in the POD Project must report on the situation of using and supplying POD drug sources, the collection, payment, settlement of money and goods with the Ministry of Health and the Ministry of Finance (International Aid Reception and Management Board). The Project Director Board is responsible for compiling a comprehensive report of the entire Project. The Joint Ministries of Health and Finance shall review and approve.

11. The Joint Ministries of Finance and Health shall be responsible for conducting regular or spot inspections of all activities of units participating in the POD Project.

III- IMPLEMENTATION PROVISIONS

This Circular takes effect for the POD Project. All previous regulations contrary to this Circular are abolished. During implementation, if there are any difficulties, the Project Director Board shall reflect them to the Joint Ministries for timely supplementation and amendment.