Circular No. 87-TC/VT guiding the financial management regime of the State for non-governmental organization (NGO) aid sources.

CIRCULAR

OF THE MINISTRY OF FINANCE NUMBER 87-TC/VT DATED OCTOBER 27, 1994 GUIDING THE MANAGEMENT REGIME OF STATE FINANCES FOR FUNDS FROM NON-GOVERNMENTAL ORGANIZATIONS (NGOs)

Implementing Decision No. 80-CT dated March 28, 1991 of the Chairman of the Council of Ministers (now the Government) on regulations in the relationship of aid with non-governmental organizations;

Implementing Decree No. 20-CP dated March 15, 1994 of the Government on the Management and Utilization Regime for Official Development Assistance;

After exchanging and reaching consensus with the State Planning Commission, the Office of the Government, and the Vietnam Association of Friendship Organizations, the Ministry of Finance guides the management regime of state finances for aid from non-governmental organizations (NGOs) as follows:

1- Combating counterfeit goods is the responsibility of all ministries, sectors, People's Committees at all levels, political and social organizations, enterprises, business households, and the entire population.

1- Aid from non-governmental organizations in all forms of goods, foreign currency, or Vietnamese dong must comply with the state budget management regime, be promptly and fully reflected in the state budget, used for the intended purpose, for the intended beneficiaries, in accordance with commitments to the donor organization, and in accordance with the current state financial management regime.

2- According to Decision No. 80-CT dated March 28, 1991 of the Chairman of the Council of Ministers, non-governmental aid is allocated and managed as follows:

- Value under US$50,000: decided by the Minister or the Chairman of the People's Committee of the province or city.

- From US$50,000 to US$200,000: decided by the Minister of Finance (after consultation with the Vietnam Association of Friendship Organizations).

- Value over US$200,000: the Ministry of Finance will consult with the State Planning Commission and the Vietnam Association of Friendship Organizations and submit for approval. the Prime Minister for decision.

All cases of receiving goods prohibited from importation must be approved by the Prime Minister before placing orders.

All development aid must have project documentation reviewed and approved by the competent authority. The contents of the project documentation should clearly specify:

- Project objectives.

- The steps of the project.

- Budget allocation plan for each item: experts, training, equipment, materials, goods, and counterpart funds (if applicable).

- The implementing unit and the supervising agency of the project.

3- The Vietnam Association of Friendship Organizations shall regularly coordinate closely with the Ministry of Finance and government agencies in providing information on the activities of non-governmental organizations, about aid projects and transfer of aid... to manage strictly, in accordance with policy, for the intended purpose, and in accordance with commitments to donor organizations.

4- Ministries, central agencies, and mass organizations (hereinafter referred to as Ministries), Provincial People's Committees shall be responsible for guiding, inspecting, and managing the portion of aid provided by their subordinate units and themselves as the project owner.

Provincial Finance Departments shall be responsible for assisting the Minister of Finance and Provincial People's Committees in managing aid directly provided by non-governmental organizations to localities and distributed by central ministries and sectors to localities.

II - SPECIFIC PROVISIONS

The management regime of state finances for aid from non-governmental organizations is specified as follows:

1- Plan for revenue and expenditure on aid

Each year, units responsible for establishing the aid plan together with their annual revenue and expenditure budget plans shall submit them to the same-level finance authorities (units under central management shall submit their plans to central ministries and agencies; units under local management shall submit their plans to provincial finance departments).

The revenue and expenditure plan on aid is based on:

- Commitment or agreement documents between non-governmental organizations and units regarding aid according to the project or ad hoc.

- Notification of distribution and utilization of aid from the supervisory agency to the unit.

- Decision on distribution and utilization of non-governmental aid by the competent authority as stipulated in Point 2, Section I of this Circular.

Sources of funding for project preparation, receipt, and management are defined for each type of unit as follows:

- Production and business units use their own capital.

- Administrative and service units establish and aggregate needs in their annual budget expenditure plan, except in cases where the project is directly assisted in preparation or money (foreign currency or Vietnamese dong) is transferred by the donor organization to the project preparation unit.

No unit may use aid funds to pay salaries or allowances to staff participating in the project without written approval from the competent authority.

2- Implementation of receipt and management

a) Confirmation of aid goods and foreign currency.

The confirmation certificate for aid goods and foreign currency is the basis for completing procedures for receiving goods, withdrawing money, and settling accounts with the state budget. The confirmation certificates for money and goods are uniformly issued by the Ministry of Finance.

When receiving notification of aid goods and foreign currency, units receiving and using aid must go to the Ministry of Finance (International Aid Management and Reception Board) or the International Aid Management and Reception Board in Ho Chi Minh City, or the Aid Reception Office in Da Nang to complete procedures, including cases where the donor organization directly purchases goods domestically and delivers them to the unit.

The basis for confirming aid goods or money includes:

- Documents prescribed in Document No. 254-TC/VT dated July 18, 1991 of the Ministry of Finance on procedures for receiving international aid goods and foreign currency, including:

+ Agreement (commitment) document on aid or aid notification from the organization or individual donor.

+ Documentation and evidence clearly identifying the source of foreign currency, quantity, and value of aid goods from the organization or individual donor.

+ Acceptance document of the distribution and utilization plan of foreign currency and aid goods from the main ministry or the People's Committee of the province or centrally-administered city.

+ Approval document from the competent authority according to the allocation and handling level of the Government as stipulated in Point 2, Section I above.

+ Sea or air waybill, detailed list, commercial invoice, and insurance certificate (for aid in the form of goods); explanation of the plan for utilizing foreign currency aid (for aid in the form of foreign currency).

In the case where an entity receives on behalf of multiple entities for distribution, there must be a specific distribution plan for each end user and a power of attorney from the aid organization (or the receiving entities).

- For cases where aid organizations purchase goods produced domestically for an entity, the basis for confirmation shall be the original copies of sales receipts, invoices combined with warehouse release forms issued by the seller, which are uniformly issued by the Ministry of Finance related to the consignment of goods received by the entity.

- In cases where aid organizations directly transfer funds or goods to an entity, the entity receiving must provide payment invoices or warehouse entry forms sent back to the International Aid Management and Reception Board or representatives to process state budget recording procedures.

b) Payment through the state budget.

The confirmation document of aid goods or money declared by the entity serves as the payment voucher through the state budget.

The payment value of aid money or goods is the foreign currency value, which is converted into Vietnamese Dong at the buying rate announced by the Foreign Trade Bank at the time of confirming the aid goods or foreign currency (or according to the selling price recorded on the invoice combined with warehouse release form in the case where the aid organization purchases domestically produced goods).

In cases where the actual received goods have discrepancies (excess, shortage, not matching the declared type and price...), or the actual received amount differs (increase or decrease) from the confirmed amount, the entity must submit an inspection report (or a report on the receipt of money) to the agency that confirmed the aid for review and adjustment of the confirmation document within 45 days from the date of the first confirmation.

In cases where aid goods do not have a nominal foreign currency value or exchange value to convert into Vietnamese Dong, the confirmation value of the aid will be temporarily calculated by the Ministry of Finance (International Aid Management and Reception Board) on the confirmation document. Within 45 days from the date of issuing the aid confirmation document, the entity must establish a valuation committee with the participation of the same-level financial authority to value the aid goods based on the prices of similar items and immediately send the minutes to the agency that initially confirmed the aid for adjustment according to the temporary value.

Beyond these deadlines, if the entities do not re-evaluate the prices and quantities, the Ministry of Finance will base the initial declaration confirmation document by the entity according to the temporary value as the voucher for recording income and expenditure and final settlement through the state budgets at various levels.

The Ministry of Finance (International Aid Management and Reception Board) will handle the payment through the state budget for the value of aid money and goods received by the entities according to the following principles:

- Record income in the state budget, record expenditure for the value of aid money and goods for central ministries, agencies, and provinces/cities with subordinate units that are public service entities or unable to recover capital.

- Record income in the state budget, record loans and issue loan agreements for development aid projects implemented by production and business units and revolving loan funds.

The management of this aid fund must comply with the contents committed in the documents with the aid organizations and the current management regulations of the Vietnamese State.

c) Accounting for aid sources

During the usage period, entities must timely and fully reflect all aid sources (money and goods) in their books and vouchers in accordance with the current regulations of the State as stipulated in the Accounting and Statistics Ordinance, Accounting Organization Regulations, as well as accounting treatment regulations for aid money and goods.

In cases where there are adjustments to the value of aid goods or money, based on the official payment vouchers transferred by the same-level financial authority, the entity will implement adjustment entries regarding the receipt of aid funds in its own books.

d) Final settlement and reporting.

Annually and upon completion of the project, entities receiving and using aid must prepare reports and settle accounts for aid money and goods with the project management agency and the same-level financial authority.

- The project management agency is responsible for summarizing by project and consolidating into the state budget funds to report to the same-level financial authority and relevant management agencies.

The report on the use of aid includes the following contents:

+ Results of receiving aid money and goods (quantity, value of each type).

+ Usage situation for each target and specific work.

+ Detailed use of project establishment and management funds.

+ Evaluation of the implementation results of project objectives and the effectiveness of aid use, recommendations for handling related issues.

- Upon project completion, if there is surplus funding, the entity must report to the project management agency. The project management agency will be responsible for coordinating with the same-level financial authority to examine and decide on the use.

3- Financial inspection and supervision work at all levels.

Financial authorities at all levels are responsible for regularly inspecting and supervising the receipt and use of non-governmental aid by entities.

During the inspection and supervision of entities implementing projects, financial authorities at all levels must firmly handle or recommend to the Ministry of Finance to promptly address any intentional violations of current financial management regulations. At the same time, they guide and assist entities to promptly resolve international disputes arising during the receipt and use of aid.

III- IMPLEMENTATION PROVISIONS

1- All violations of the Management and Use of International Aid Regulations must be handled according to current laws.

Entities using aid without reporting on implementation status and analyzing the effectiveness of use will not be considered for expansion or acceptance of new projects.

2- This Circular takes effect from the date of signature. Any financial management regulations contrary to this Circular are abolished.

During implementation, if there are difficulties, sectors, levels, and grassroots units need to promptly reflect them to the Ministry of Finance (International Aid Management and Reception Board) for research and submission to the competent authority for decision-making./.