Circular No. 89/2006/TT-BTC guiding the management, use, and settlement of funds for severance pay and the recovery of training cost compensation.

CIRCULAR

Guidelines for managing, using, and settling accounts for funds allocated for termination benefits and recovery of training cost compensation

 for termination benefits and recovery of training cost compensation

______________________

Pursuant to Decree No. 54/2005/NĐ-CP dated April 19, 2005 of the Government on termination benefits and compensation for training costs for civil servants;

Pursuant to Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government stipulating the autonomy and responsibility for implementing tasks, organizational structure, staffing, and finance for public service units;

The Ministry of Finance hereby provides guidelines for managing, using, and settling accounts for funds allocated for termination benefits and recovery of training cost compensation for civil servants in state agencies and public service units as follows:

I. PAYMENT OF TERMINATION BENEFITS:

1. Funds for payment of termination benefits to individuals entitled to termination benefits shall be implemented in accordance with the provisions of Article 10 of Decree No. 54/2005/NĐ-CP dated April 19, 2005 of the Government on termination benefits and compensation for training costs for civil servants; specifically as follows:

a) State agencies pay termination benefits from the annual operating expenses allocated by the competent authority.

b) Public service units funded entirely by the state budget and those with income that self-fund part of their operating expenses pay termination benefits from the unit's operating expenses, including allocated operating expenses and income from service activities as prescribed by law.

c) Public service units with income that self-fund all operating expenses pay termination benefits from the unit's operating expenses.

2. State agencies and public service units settle accounts for termination benefit payments when settling annual administrative and public service expenses with the financial authorities in accordance with the Law on State Budget and guiding documents.

II. RECOVERY OF TRAINING COST COMPENSATION:

1. Within three (03) months from the date of the decision on compensation for training costs issued by the competent state agency or public service unit, civil servants and employees must complete the payment of the full amount required to be compensated (in accordance with the competent authority's decision) to the financial-accounting department of the agency or unit.

2. The procedure for handling recovered training cost compensation is as follows:

2.1. For training courses lasting three (three) months or more where the training costs (including travel expenses) are directly paid from the annual financial resources of the agency or unit (including direct allocations from the state budget by the competent authority to the agency or unit; income from service activities as prescribed by law):

a) The amount of compensation includes all expenses that the agency directly incurs for the civil servant or employee to attend the course.

b) For state agencies and public service units fully funded by the state budget for regular operating expenses:

The financial-accounting department, upon receiving the training cost compensation paid by civil servants and employees, must issue receipts in accordance with current regulations and prepare a list for submission to the National Treasury.

Training cost compensation paid by civil servants and employees managed by which level should be deposited into the corresponding level budget and recorded as follows:

- In cases where the agency or unit deposits the recovered training cost compensation for previous years: deposit according to the chapter, type, item, and sub-item corresponding to the training expenses incurred by the agency or unit; Section 062 "Other Revenue," Subsection 02 "Recovery of Expenditures of Previous Years."

- In cases where the agency or unit deposits the recovered training cost compensation for the current year: reduce the allocation according to the chapter, type, item, and sub-item already expended.

c) For public service units with income that self-fund regular operating expenses and those partially self-funding regular operating expenses:

Upon receiving the training cost compensation paid by civil servants and employees, the financial-accounting department must issue receipts in accordance with current regulations and reflect it in the accounting books as legitimate income from service activities in the year for the unit.

2.2. For training courses lasting three (three) months or more where the training costs (including travel expenses) are centrally funded from the state budget or foreign official development assistance to Vietnam (not directly from the annual financial resources of the agency or unit):

a) The amount of compensation is calculated for the entire course, specifically:

- For those who graduate from domestic educational training institutions: the amount of compensation includes scholarships and social allowances directly provided by the state budget to the student (if any); and the average regular expenses provided by the state budget to educational training institutions per student.

- For those who graduate from overseas training programs: the amount of compensation is the cost guaranteed by the state for education (tuition, living expenses, travel expenses as stipulated in the program, insurance costs, and other reasonable expenses of the course) or the full scholarship provided by the foreign side under an agreement.

b) Agencies and units with civil servants and employees required to compensate for training costs have the responsibility to contact educational training institutions and state agencies responsible for managing centralized training programs, projects, and plans to obtain necessary information about training costs funded by the state budget or scholarships provided by the foreign side under agreements, serving as the basis for calculating the recovery of compensation costs.

c) The financial-accounting department of the agency or unit, upon receiving the training cost compensation paid by civil servants and employees, must issue receipts in accordance with current regulations and prepare a list for submission to the National Treasury.

Training cost compensation paid by civil servants and employees managed by which level should be deposited into the corresponding level budget and recorded as follows:

- Chapter: the agency or unit deposits the compensation into the state budget.

- Type 14.

- Item: corresponding to the type of training.

- Section 062 "Other Revenue".

- Subsection 02 "Recovery of Expenditures of Previous Years".

In the case where the training cost compensation payment to the state budget within the same fiscal year, the accounting entry for the reduced state budget expenditure shall be recorded according to the chapter, type, item, sub-item that has been spent.

III. IMPLEMENTATION:

This Circular takes effect fifteen days from the date of publication in the Official Gazette.

This Circular replaces Circular No. 07/2000/TT-BTC dated January 18, 2000 of the Ministry of Finance guiding the issuance, management, accounting, settlement of severance pay expenses, and the payment of training cost compensation to civil servants and public officials.

The regulated subjects; the working period eligible for severance allowance and the calculation method of severance allowance; the service period required after training and the calculation method of training cost compensation shall be implemented in accordance with Circular No. 130/2005/TT-BNV dated December 7, 2005 of the Ministry of Home Affairs guiding the implementation of certain provisions of Decree No. 54/2005/NĐ-CP dated April 19, 2005 of the Government.

During the implementation process, if there are any difficulties, they should be promptly reported to the Ministry of Finance for study and resolution./.