Joint Circular No. 91/1998/TTLT-BTC-BQP guiding the preparation, implementation, and settlement of the State budget in the field of National Defense.

MINISTRY OF NATIONAL DEFENSE-MINISTRY OF FINANCE ********	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ********
NUMBER: 91/1998/TTLT-BTC-BQP	HANOI, JUNE 29, 1998

 

JOINT CIRCULAR

JOINT CIRCULAR NO. 91/1998/TTLT-BTC-BQP OF THE MINISTRY OF FINANCE AND THE MINISTRY OF NATIONAL DEFENSE ON JUNE 29, 1998 GUIDING THE PREPARATION, IMPLEMENTATION, AND SETTLEMENT OF THE STATE BUDGET IN THE FIELD OF NATIONAL DEFENSE

Pursuant to the State Budget Law dated March 20, 1996 and Decree No. 120/1997/NĐ-CP dated December 27, 1997 of the Government on management and use of state budget and assets for certain activities in the field of national defense and security;
The Ministry of Finance and the Ministry of National Defense guide the tasks of expenditure; preparation; implementation and settlement of the state budget in the field of national defense as follows:

I. GENERAL PROVISIONS.

1. Agencies and units under the national defense sector managing and using the state budget and assets must comply with the provisions of the State Budget Law dated March 20, 1996, Decision No. 87/CP dated December 19, 1996, Decree No. 120/1997/NĐ-CP dated December 27, 1997 of the Government, and the guidance of this Circular.

2. Units under the national defense sector have the responsibility to complete their assigned revenue and expenditure tasks well; implement thrift, prevent embezzlement and waste; strictly adhere to current financial management systems and policies.

3. The head of each budget unit is responsible under the law for the revenue and expenditure tasks approved. No organization or individual other than the competent authority assigning the revenue and expenditure tasks may change these tasks. If changes to the revenue and expenditure tasks are necessary due to objective reasons, the head of the budget unit must report to the assigning authority for approval of the adjustment.

4. Revenue items that the Government permits units under the budget to retain for expenditure according to regulations (as stipulated in Article 2 of Decree No. 120/1997/NĐ-CP dated December 27, 1997) must be summarized and reported in the annual revenue and expenditure budget of the unit and can only be implemented after being approved by the competent authority.

5. Budget units, project sponsors, project leaders, etc., within the national defense sector using the state budget must be subject to inspection by authorized agencies and units during the process of preparing budgets, allocating limits, disbursing funds, accounting, and settling the state budget according to general regulations consistent with the characteristics and nature of each item of expenditure in the defense sector.

6. All revenue and expenditure items of the state budget in the national defense sector must be recorded in Vietnamese Dong, in accordance with the fiscal year, level of budget, and the State Budget Item List. Revenue and expenditure items in foreign currency, goods, and labor days must be converted into Vietnamese Dong at the exchange rate for foreign currency, price of goods, and value of labor days as prescribed by the competent authority at the time of occurrence for accounting purposes.

II. CLASSIFICATION OF EXPENDITURE TASKS OF THE STATE BUDGET IN THE FIELD OF NATIONAL DEFENSE

1. Central government budget expenditure for national defense work:

1.1. Tasks of the Ministry of National Defense:

1.1.1. Recurrent Expenditure:

- Ensuring material and spiritual life, policies for regular forces, local forces, border guards;

- Training, exercises, mobilization, readiness checks, and combat duty;

- Education and scientific research;

- Production, procurement, improvement, repair, and maintenance of weapons and equipment;

- Construction and repair of combat facilities;

- Investment in technical support bases (stations, workshops) at campaign level and below;

- Construction and repair of barracks and facilities, hospitals, schools, research institutes, communication systems at campaign level and below;

- Construction and repair of storage facilities for regular reserves at campaign level and below;

- Construction and repair of infrastructure projects directly serving the living and daily activities of military units and border guards;

- Establishment and operation of the People's Militia and Reserve Forces in accordance with the law; - Reserve and preparation for industrial mobilization;

- Other expenditures.

1.1.2. Concentrated investment from the state budget for national defense.

1.1.3. Expenditures for state-assigned tasks;

- Expenditures for public services in areas managed by ministries, ministerial-level agencies, and government-affiliated agencies;

- Administrative management expenditures (Military Courts, Military Prosecutors, Civil Enforcement in the Military);

- Specialized state reserve expenditures;

- Investment and capital support for enterprises;

- Program-targeted national expenditures;

- Other activities.

1.1.4. Expenditures for special projects and works.

1.2. Tasks of ministries, ministerial-level agencies, and government-affiliated agencies:

- Expenditures for nationwide defense education including:

+ Propaganda and education on defense laws; dissemination of basic military knowledge to cadres, workers, and employees of affiliated agencies and units;

+ Organization of all-defense day activities; traditional day of the People's Militia, Border Guard Day, Martyrs' Day, etc.;

+ Participation in defense sports competitions at various levels;

+ Summarizing and rewarding units and cadres with outstanding achievements in defense work of the ministry, sector, or agency;

- Expenditures for building and mobilizing the Reserve Force in accordance with the law on the Reserve Force;

- Expenditures for building, training, and operating the People's Militia in accordance with the law on the People's Militia;

- Expenditures for economic mobilization for defense in accordance with the law and annual plans;

- Expenditures for building and coordinating defensive area exercises in accordance with the law and annual plans;

- Expenditures for other defense work (allowances for full-time or part-time defense cadres; sending cadres, workers, and employees to perform military service and welcoming them back upon completion; implementing rear-area military policies, policies for families of martyrs, etc.);

2. Local government budget expenditure for national defense work:

2.1. Provincial budget expenditure for national defense includes:

- Nationwide defense education work:

+ Propaganda and education on defense laws; dissemination of basic military knowledge to local cadres and people;

+ Organizing National Defense Day; traditional day of the People's Militia and Self-Defense Force, Border Guard Day, War Invalids and Martyrs' Day...;

+ Local defense sports meet;

+ Training for civil officials, party members, and mass organizations at the local level on defense work;

+ Summarizing and rewarding units and individuals with achievements for the defense cause of the locality;

- Building and mobilizing the Reserve Mobilization force according to the provisions of the Law on the Reserve Mobilization force;

- Building, training, and operating the People's Militia and Self-Defense Force according to the provisions of the Law on the People's Militia and Self-Defense Force;

- Building and operating the Border Guard force according to the provisions of the Law;

- Mobilizing the economy for national defense according to the provisions of the law and annual plans;

- Recruitment work;

- Ensuring the operation of People's Militia and Self-Defense Force units rotating regularly or ready for combat in certain special cases;

- Producing, purchasing, transporting, storing, repairing weapons, equipment, and technical military means to ensure for the People's Militia and Self-Defense Force and the Reserve Mobilization force; compensating for losses of means and other expenses incurred by the People's Committee at all levels for training, exercises, and readiness checks...

- Constructing and repairing combat works, support works, offices, camps, warehouses of the local armed forces;

- Constructing defense areas and works according to the分级限制词汇，请补充更多的内容以获得完整的无偏见回复。如果您有其他问题或需要进一步的帮助，随时告诉我！

- Protecting political, economic, social objectives and defense works, military zones according to the分级制度;

- Storing, repairing, and purchasing local military school equipment;

- Conducting provincial and municipal defense area exercises in accordance with the law and annual plans;

- Expenditure for other defense work (ensuring communication, administrative expenses... for local defense tasks);

2.2. The district-level budget (commonly referred to as the district-level budget) includes expenditure for defense work as follows:

- Nationwide defense education work:

+ Propaganda and education on defense laws; dissemination of basic military knowledge to local cadres and people;

+ Organizing National Defense Day; traditional day of the People's Militia and Self-Defense Force, Border Guard Day, War Invalids and Martyrs' Day...;

+ Local defense sports meet;

+ Training for civil officials, party members, and mass organizations at the local level on defense work;

+ Summarizing and rewarding units and individuals who have contributed to the defense cause of the locality;

- Building and mobilizing the Reserve Mobilization force according to the provisions of the Law on the Reserve Mobilization force;

- Building, training, and operating the People's Militia and Self-Defense Force according to the provisions of the Law on the People's Militia and Self-Defense Force;

- Constructing, repairing barracks, warehouses; transporting, storing, repairing, sealing weapons, ammunition, uniforms, equipment... for the Self-Defense Militia and Reserve Mobilization Forces;

- Constructing and conducting defense area exercises at the district level according to the分级制度;

- Expenditure for protecting political, economic, social objectives and defense works, military zones according to the分级制度;

- Expenditure for conscription work and welcoming servicemen completing their duties;

- Expenditure for other defense activities (ensuring communication, administrative expenses... for local defense tasks);

2.3. The commune-level budget (commonly referred to as the commune-level budget) includes expenditure for defense work as follows:

- Nationwide defense education work:

+ Propaganda and education on defense laws; dissemination of basic military knowledge to local cadres and people;

+ Organizing National Defense Day; traditional day of the People's Militia and Self-Defense Force, Border Guard Day, War Invalids and Martyrs' Day...;

+ Local defense sports meet;

+ Training for civil officials, party members, and mass organizations at the local level on defense work;

+ Summarizing and rewarding units and individuals who have contributed to the defense cause of the locality;

- Subsidies for commune-level specialized or concurrently serving cadres according to the Law on the Self-Defense Militia;

- Work on building and training the Self-Defense Militia;

- Work on registering military service obligations and sending young people to perform military service;

- Expenditure for other defense activities (ensuring workplaces for commune-level command offices; ensuring communication...);

3. Ministries, agencies equivalent to ministries, and government-affiliated agencies (except the Ministry of National Defense) and People's Committees at all levels shall establish, implement, and settle the state budget in the field of national defense according to Decree No. 87/CP dated December 19, 1996 of the Government and Circular No. 09 TC/NSNN dated March 18, 1997 of the Ministry of Finance.

III. ESTABLISHING THE ANNUAL STATE BUDGET PROJECTIONS OF THE MINISTRY OF NATIONAL DEFENSE.

A. GUIDANCE ON ESTABLISHING ANNUAL STATE BUDGET PROJECTIONS AND ANNOUNCING THE REVIEWED ANNUAL STATE BUDGET PROJECTIONS:

1. Based on the Prime Minister's directive on developing the socio-economic development plan and the annual state budget projection, the Ministry of Finance will guide and announce the reviewed annual state budget projection for the Ministry of National Defense.

The deadline for announcing the reviewed annual state budget projection for the Ministry of National Defense must be no later than June 30 of the previous year.

2. The Ministry of National Defense, based on the decision of the competent authority regarding defense tasks, the guiding circulars, and the reviewed annual state budget projection announced by the Ministry of Finance, will guide and announce the reviewed annual state budget projection for subordinate budgetary units. The deadline for announcing the reviewed annual state budget projection for second-level budgetary units must be no later than July 10 of the previous year.

3. Budgetary units under the Ministry of National Defense shall guide and announce the reviewed figures according to the principle that higher-level units guide and announce the reviewed annual state budget projection to directly subordinate units.

B. REQUIREMENTS FOR ESTABLISHING ANNUAL STATE BUDGET PROJECTIONS:

1. The annual state budget projection must fully reflect all revenue and expenditure items in accordance with policies, systems, standards, quotas, and prices issued by authorized agencies.

2. The annual state budget projection must be established according to the prescribed format, within the stipulated time frame, and detailed down to the Sub-item of the State Budget Classification.

3. The annual state budget projection of upper-level budgetary units must be established based on the annual state budget projections of lower-level budgetary units and analyzed according to sources of funds and areas of expenditure.

4. Annual state budget projections submitted by budgetary units at all levels to the Ministry of National Defense must be accompanied by explanatory reports clearly stating the basis and grounds for calculations and comparative analysis with actual figures (estimates) and reviewed figures.

The annual state budget projection submitted by the Ministry of National Defense to the Ministry of Finance must be accompanied by clear explanations of the basis and grounds for calculations. The following high-security expenditure items shall only be recorded in summary form without detailed explanations:

- Expenditures related to personnel strength, organization (salaries; various types of allowances, subsidies; various types of food expenses; expenditures for recruitment and discharge; expenditures calculated according to organizational and personnel quotas).

- Expenditures for purchasing, investing in construction, and maintaining and repairing specialized assets for defense purposes as stipulated in Clause 1, Article 25 of Decree No. 120/1997/NĐ-CP;

- Expenditures for purchasing specialized materials for defense purposes;

- Expenditures for training (infantry training, branch training), exercises, troop movements, military cargo transportation, and combat readiness preparation;

- Expenditures for implementing special projects; scientific research and technology programs serving military purposes;

- Intelligence and security secret service expenses;

C. BASIS FOR ESTABLISHING THE ANNUAL STATE BUDGET ESTIMATE:

The basis for establishing the annual state budget estimate of the Ministry of National Defense and subordinate budgetary units under the Ministry shall be carried out in accordance with Article 5 of Decree No. 120/1997/NĐ-CP dated December 27, 1997 of the Government. This document provides guidance on the following points:

1. The amount of the budget estimate notification issued to subordinate budgetary units must be consistent with the total amount and details of the budget estimate notification issued by higher authorities.

2. The issuance of new or amendments to systems, policies, norms, and standards related to state budget expenditures must be completed before the time of establishing the new budget estimate to serve as a basis for the budget estimate.

3. In cases where there are changes in systems, policies, norms, and standards, prices during the year as decided by competent authorities that affect the approved annual budget estimate, budgetary units must prepare a budget adjustment (increase or decrease) and submit it to the competent authority for approval.

D. ESTABLISHING THE ANNUAL STATE BUDGET ESTIMATE:

1. Budgetary units under the Ministry of National Defense review the budget estimates reported by subordinate units, consolidate them, and establish detailed revenue and expenditure budget estimates for the year down to the Subitem according to the State Budget Manual, and report to the direct superior budgetary unit.

The deadline for submitting the annual budget estimate report from level 2 budgetary units to the Ministry of National Defense is before August 1 of the previous year.

2. The Ministry of National Defense reviews the annual budget estimates reported by subordinate budgetary units, consolidates them, establishes the Ministry's annual budget estimate, and sends it to the Ministry of Finance (accompanied by the consolidated annual budget estimates of level 2 budgetary units), and simultaneously sends:

- The Ministry of Planning and Investment: the portion of the budget estimate for investment construction and development costs funded by centralized government investment capital.

- Ministries, agencies at the ministerial level, and government agencies managing sectors and fields: the portion of the budget estimate for expenditures according to sectors and fields.

The deadline for submitting the Ministry of National Defense's annual budget estimate report to the Ministry of Finance is before August 15 of the previous year.

E. TEMPLATE FOR ESTABLISHING THE ANNUAL STATE BUDGET ESTIMATE:

1. Budgetary units under the Ministry of National Defense establish annual revenue and expenditure budget estimates according to the system of templates prescribed in Appendix 2 attached to Circular No. 09 TC/NSNN dated March 18, 1997 of the Ministry of Finance and the guidelines of the Ministry of National Defense.

2. The Ministry of National Defense establishes the annual revenue and expenditure budget estimate of the Ministry and sends it to the Ministry of Finance according to the system of templates prescribed in Appendix 1 attached to this Circular.

IV. IMPLEMENTATION OF THE MINISTRY OF NATIONAL DEFENSE'S BUDGET:

A. ALLOCATION OF THE ANNUAL STATE BUDGET ESTIMATE:

1. Based on the annual state budget estimate assigned by the Government and the detailed state budget estimate notified by the Ministry of Finance, the Ministry of National Defense allocates and directs subordinate budgetary units to allocate the budget estimate to lower-level budgetary units in accordance with the total amount and details of each item of the allocated budget estimate.

2. The results of the budget allocation (including the allocation of remaining initial-year budget estimates not yet allocated) to level 2 budgetary units and the centralized expenditures of the Ministry of National Defense must be sent to the Ministry of Finance, the Central Treasury, and the local Treasury.

3. The allocation of the annual budget estimate and the allocation of the budget estimate to budget users must be completed before January 5 of the budget year.

B. ADVANCE FUNDS FOR THE MINISTRY OF NATIONAL DEFENSE:

1. To ensure regular living expenses for troops and other expenditures in the early days of the year, the Ministry of Finance advances salary, allowance, and food expenses for the Ministry of National Defense in December of the previous year.

The advance amount is equivalent to the average monthly expenditure of the previous year.

2. In cases where the annual budget estimate and budget allocation have not been decided by the Government at the beginning of the year, the Ministry of Finance temporarily allocates funds to the Ministry of National Defense as stipulated generally.

C. QUARTERLY BUDGET ESTIMATE:

1. Budgetary units under the Ministry of National Defense base their quarterly budget estimates on the approved annual revenue and expenditure budget estimates and the tasks to be performed in the quarter, establish detailed quarterly budget estimates (divided by month) down to the Section according to the State Budget Manual, and send them to the direct superior budgetary unit for review and consolidation in sequence from the grassroots unit upwards.

Level 2 budgetary units' quarterly budget estimates must be submitted to the Ministry of National Defense before the 5th day of the last month of the quarter.

2. The Ministry of National Defense consolidates and establishes detailed quarterly budget estimates (divided by month) and submits them to the Ministry of Finance before the 10th day of the last month of the quarter. The Ministry of National Defense's quarterly budget estimate is divided into three parts:

- The part of the quarterly budget estimate for regular expenditures (non-construction and development nature) detailed according to the expenditure items of the State Budget Manual and down to level 2 budgetary units (excluding expenditures funded by retained revenue).

- The part of the quarterly budget estimate for regular expenditures with construction and development nature detailed according to the expenditure items of the State Budget Manual and down to level 2 budgetary units (excluding expenditures funded by retained revenue).

- The part of the quarterly budget estimate for program and special task expenditures assigned by the State detailed according to the expenditure items of the State Budget Manual and down to level 2 budgetary units or state budget users (excluding expenditures funded by retained revenue).

3. The Ministry of Finance reviews the Ministry of National Defense's quarterly budget estimate and based on the state budget capacity, notifies the quarterly expenditure limit to the Ministry of National Defense.

4. The Ministry of National Defense bases its quarterly expenditure limit on the notification from the Ministry of Finance, distributes and notifies the quarterly expenditure limit to level 2 budgetary units and centralized expenditures at the Ministry (divided by month) and sends it to the Ministry of Finance, simultaneously sending to the Central Treasury and the local Treasury.

D. PRINCIPLES OF FUNDS DISTRIBUTION:

1. The Ministry of Finance distributes funds to the Ministry of National Defense either through the Fund Limit or by Payment Order.

The Ministry of National Defense allocates budget funds to secondary and tertiary budgetary units under its jurisdiction through budget allocation limits, Budget Withdrawal Limit Certificates, Checks, or Payment Orders.

Secondary budgetary units allocate budget funds to their subordinate units through Budget Withdrawal Limit Certificates, Checks, or Payment Orders.

Tertiary budgetary units allocate budget funds to their subordinate budgetary units through Checks or Payment Orders.

2. The quarterly budget expenditure limit (divided by month) announced by the Ministry of Finance is the highest amount that the Ministry of National Defense can spend in that quarter.

The Ministry of National Defense distributes quarterly expenditure limits to its subordinate budgetary units ensuring the total and detailed monthly expenditure items align with the quarterly expenditure limit announcement by the Ministry of Finance.

3. Unspent quarterly expenditure limits may be carried over to the next month or quarter; however, they only retain their value until December 31. If not utilized by December 31, they will be nullified.

4. Budget allocation limits for specific expenditure items can only be allocated and paid out for those specific expenditure items; they cannot be used for other expenditure items. In cases where adjustments between expenditure items are necessary, reports must be submitted and approved by the competent authority according to the following principles:

- The Ministry of Finance decides on adjusting the expenditure item limits for the Ministry of National Defense if such adjustments change the overall limit and detailed items announced by the Ministry of Finance.

- The Ministry of National Defense decides on adjusting the expenditure item limits for its subordinate budgetary units if such adjustments do not alter the overall limit and detailed items announced by the Ministry of Finance. - Decisions to adjust expenditure item limits for the Ministry of National Defense and for secondary budgetary units must be sent to the Ministry of Finance, the Central State Treasury, and the State Treasury where transactions take place.

All budgetary units under the Ministry of National Defense must open at the State Treasury a budgetary unit deposit account to manage and utilize state budget funds and another account to manage and utilize funds not sourced from the state budget.

Secondary budgetary units, in addition to opening deposit accounts, must also open a budget allocation limit account at the State Treasury to manage and utilize state budget funds.

E. PRE-ALLOCATION AND PAYMENT CONTROL BEFORE EXPENSES ARE ISSUED AND PAID FROM THE STATE BUDGET

When there is a need for expenses, budgetary units send the chief executive's payment authorization (Budget Withdrawal Limit Certificate, Check, Payment Order) and related settlement documents, files, and vouchers to the State Treasury where transactions occur.

The State Treasury performs the following checks and controls:

1. For expenditure items 100, 102, 108, 113, 117, 118, 119, 139, 145, 147, 148, 149, and sub-items 03, 15 of item 105; sub-item 03 of item 109; sub-item 10 of item 111; sub-item 15 of items 129, 134 in the state budget classification, the State Treasury where transactions occur issues payments to budgetary users without controlling regulations, standards, quotas, and related vouchers. The Ministry of National Defense and budgetary users bear responsibility for the contents of these expenditure items and sub-items.

2. For other expenditure items (excluding expenditure items 100, 102, 108, 113, 117, 118, 119, 139, 145, 147, 148, 149, and sub-items 03, 15 of item 105; sub-item 03 of item 109; sub-item 10 of item 111; sub-item 15 of items 129, 134 in the state budget classification), the State Treasury where transactions occur verifies the legality of the expenditure documents. If they meet the conditions specified in Article 12 of Decree No. 120/1997/NĐ-CP dated December 27, 1997, issued by the Government, it will issue provisional payments or payments to budgetary users.

3. The State Treasury does not control regulations, standards, quotas, and related vouchers when higher-level budgetary units allocate state budget funds to lower-level budgetary units through budget allocation limit accounts or budgetary unit deposit accounts opened at the State Treasury using Budget Withdrawal Limit Certificates, Checks, or Payment Orders.

G. ALLOCATION OF REGULAR EXPENSE FUNDS, EXCEPT FOR CONSTRUCTION PROJECT EXPENSES:

1. Allocation of regular expense funds from the state budget to the Ministry of National Defense is implemented according to the provisions of Article 14 of Decree No. 120/1997/NĐ-CP dated December 27, 1997, issued by the Government.

2. The Ministry of Finance allocates regular expense funds to the Ministry of National Defense through quarterly budget allocation limits detailed to expenditure items. For unexpected expenses, the Ministry of Finance allocates funds to the Ministry of National Defense through payment orders.

The Ministry of National Defense allocates regular expense funds to secondary budgetary units through quarterly budget allocation limits and provides tertiary budgetary units under its jurisdiction with detailed Budget Withdrawal Limit Certificates for expenditure items.

3. Secondary budgetary units base their budget allocation limits distributed by the Ministry of National Defense to prepare detailed Budget Withdrawal Limit Certificates and send them to the State Treasury where transactions occur:

- To allocate state budget funds to tertiary (or quaternary) budgetary units under their jurisdiction, detailed to expenditure items in the state budget classification,

- To request provisional payments or payments for unit tasks, accompanied by relevant vouchers as stipulated in Point E of Section IV of this Circular.

4. Tertiary budgetary units prepare Checks or Payment Orders and send them to the State Treasury where transactions occur to allocate state budget funds to quaternary budgetary units.

5. Tertiary and quaternary budgetary units prepare Checks or Payment Orders, accompanied by all relevant vouchers as stipulated in Point E of Section IV of this Circular, and send them to the State Treasury where transactions occur to request provisional payments or payments for unit tasks.

H. ALLOCATION OF INVESTMENT AND CONSTRUCTION FUNDS IN THE REGULAR EXPENSE BUDGET (EXHAUSTIVE ITEMS 147, 148, 149) OF THE MINISTRY OF NATIONAL DEFENSE:

1. Allocation of investment and construction funds (exhaustive items 147, 148, 149) in the regular expense budget of the state budget to the Ministry of National Defense is implemented according to the provisions of Article 15 of Decree No. 120/1997/NĐ-CP dated December 27, 1997, issued by the Government.

2. The Ministry of Finance allocates investment and construction funds in the regular expense budget to the Ministry of National Defense through quarterly budget allocation limits detailed to expenditure items.

3. The Ministry of National Defense allocates funds for construction investment within the regular expenditure budget for level 2 budget entities in the form of quarterly budget allocation limits and provides level 3 subordinate budget entities with detailed budget withdrawal certificates down to the item level.

4. Level 2 budget entities review payment settlement files or advance payment request files (as stipulated by current management regulations) proposed by subordinate budget entities and based on the allocated quarterly spending limit, issue detailed budget withdrawal certificates to send to the State Treasury at the transaction location to transfer funds to lower-level budget entities or pay contractors and suppliers.

5. The State Treasury, based on the detailed budget withdrawal certificates from level 2 budget entities, implements fund disbursement from the state budget, transfers money to the bank accounts of budget beneficiaries or pays contractors and suppliers.

I. ALLOCATION OF FUNDS FOR NATIONAL TASKS

(Outside the regular expenditure budget of the Ministry of National Defense):

1. For national tasks involving administrative public service expenditures, the process of allocating funds shall be carried out as prescribed in Section G of Part IV of this Circular.

2. For national tasks involving development investment expenditures, the process of allocating funds shall be carried out as prescribed in Section H of Part IV of this Circular.

3. The Ministry of National Defense and budget entities at all levels manage and utilize funds under national programs and targets in accordance with current regulations.

K. ALLOCATION OF FUNDS FOR SPECIAL PROJECTS AND CONSTRUCTIONS (OUTSIDE THE REGULAR EXPENDITURE BUDGET OF THE MINISTRY OF NATIONAL DEFENSE):

1. Based on the announced budget estimate and the quantity of projects and constructions eligible for payment or advance, the project and construction sponsors submit payment or advance request files to the Ministry of National Defense.

2. The Ministry of National Defense reviews each sponsor's payment or advance request file for special projects and constructions, compiles them, and requests the Ministry of Finance to allocate funds.

3. The Ministry of Finance checks the Ministry of National Defense’s funding request and if it meets the conditions specified in Article 12 of Decree 120/1997/NĐ-CP dated December 27, 1997, it will allocate funds through a cash payment order to the Ministry of National Defense.

4. The State Treasury, based on the Ministry of Finance's cash payment order, implements fund disbursement from the state budget and transfers money to the Ministry of National Defense's account.

5. The Ministry of National Defense allocates payments or advances to project sponsors or proceeds with payments to contractors and suppliers.

V. ACCOUNTING AND SETTLEMENT OF THE STATE BUDGET OF THE MINISTRY OF NATIONAL DEFENSE.

A. OBJECTS OF ACCOUNTING AND SETTLEMENT OF THE STATE BUDGET:

1. The Ministry of National Defense is a level 1 budget entity, directly relating to the Ministry of Finance to receive annual budget allocations and allocate budgets to level 2 and level 3 subordinate budget entities; it is responsible before the state for organizing and implementing accounting and budget settlement work at its own level and that of subordinate units, reviewing budget settlement reports of level 2 and level 3 subordinate budget entities.

2. Level 2 budget entities directly receive budget allocations from the Ministry of National Defense and allocate budgets to level 3 and level 4 subordinate budget entities; they organize and implement accounting and budget settlement work at their own level and that of subordinate units, reviewing budget settlement reports of level 3 and level 4 subordinate budget entities.

3. Level 3 budget entities directly receive budget allocations from level 2 or level 1 budget entities and allocate budgets to level 4 budget entities; they organize and implement accounting and budget settlement work at their own level and that of subordinate units, reviewing budget settlement reports of subordinate budget entities.

4. Level 4 budget entities and basic expenditure units directly receive budget allocations or funds from level 3 or level 2 budget entities for specific expenditures; when making expenditures, they must carry out accounting and budget settlement work with the budget entity providing funds.

B. CLOSING OF STATE BUDGET ACCOUNTS:

At the end of the accounting period (month, quarter, year), budget entities at all levels under the Ministry of National Defense must complete the closing of accounting books and prepare financial statements according to the current accounting system and guidelines issued by the Ministry of National Defense.

If there is a balance in the budget entity's deposit account on December 31, budget entities must prepare a letter accompanied by a detailed explanation of the remaining funds (with confirmation from the immediate superior budget entity) to send to the State Treasury requesting the balance to be transferred for use in the following year, and also send it to the Ministry of National Defense for consolidation and reporting to the Ministry of Finance.

C. PRINCIPLES FOR PREPARATION OF STATE BUDGET SETTLEMENT REPORTS:

1. Data in the annual budget settlement report must be accurate and truthful. The content of the annual budget settlement report must correspond to the approved budget estimate and detail to the item level as per the state budget structure.

2. Annual budget settlement reports must be prepared according to the prescribed format and time frame.

3. Annual budget settlement reports of budget entities and the Ministry of National Defense cannot show expenditures exceeding revenues.

D. PROCEDURE FOR SETTLEMENT OF THE STATE BUDGET FOR THE YEAR:

1. Lower-level budget entities prepare annual budget settlement reports and submit them to higher-level budget entities; within a maximum of 20 days from receiving the settlement report, the higher-level budget entity is responsible for reviewing the settlement and informing the lower-level budget entity of the review results. Ten days after receiving the settlement notification from the higher-level budget entity, if the lower-level budget entity has no further comments, it is considered accepted.

2. The Ministry of National Defense compiles and submits the annual budget settlement report to the Ministry of Finance.

The Ministry of Finance reviews the annual budget settlement report and informs the Ministry of National Defense of the review results within a maximum of 30 days from receipt of the settlement report.

3. During the process of the Ministry of National Defense reviewing the final accounts of second-level budget units, depending on specific conditions and contents, the Ministry of Finance may participate in reviewing the final accounts of some units for the year.

4. The unit or agency reviewing the final accounts has the right to cancel expenditures, recover amounts that are not in accordance with regulations and are not included in the approved budget; and at the same time order the immediate payment of amounts due to the State budget according to prescribed regulations.

5. Second-level budget units shall submit their annual final account reports to the Ministry of National Defense no later than 60 days after the end of the year.

The Ministry of National Defense shall submit its annual final account report to the Ministry of Finance no later than 120 days after the end of the year.

E. FORMS FOR THE FINAL ACCOUNTS OF THE STATE BUDGET FOR THE YEAR:

1. Budgetary units under the Ministry of National Defense shall prepare their annual final account reports of the State budget in accordance with the current administrative and public service accounting system and the guidance of the Ministry of National Defense.

2. The Ministry of National Defense shall prepare its annual final account report of the State budget to be submitted to the Ministry of Finance in accordance with the form specified in Appendix 2 attached hereto, along with an explanation of the reasons for achieving, failing to achieve, or exceeding the assigned budget, and any recommendations if applicable.

VI. IMPLEMENTATION ORGANIZATION:

1. This Circular takes effect from the fiscal year 1998. All previous documents and regulations inconsistent with the provisions of this Circular are hereby abolished.

2. Ministries, agencies equivalent to ministries, government-affiliated agencies, People's Committees at all levels, and agencies and units under the Ministry of National Defense are responsible for implementing this Circular. Any difficulties encountered during implementation should be promptly reported to the Ministry of National Defense and the Ministry of Finance for resolution.

Nguyen Trong Xuyen (Signed)

Pham Van Trong (Signed)

 

APPENDIX 1

Form 1: Summary of Annual Expenditure Budget...

(by expenditure category)

Form 2: Summary of Annual Expenditure Budget...

(by subordinate unit and expenditure category)

Form 3: Summary of Annual Expenditure Budget...

(by Item of Expenditure).

Form 4: Summary of Annual Expenditure Budget...

(by subordinate unit and Item of Expenditure).

Form 5: Revenue and Expenditure Budget Estimate...

(by retained revenue sources for expenditure according to regulations).

Form 6: Expenditure Budget Estimate in Foreign Currency...

Form 7: Investment Construction Expenditure Budget Estimate...

(within the regular expenditure budget estimate).

Form 8: Expenditure Budget Estimate for National Target Programs...

Form 9: Quarterly Expenditure Budget Estimate...

(by Item of Expenditure and broken down by month).

Form 10: Quarterly Expenditure Budget Estimate...

(by subordinate unit and Item of Expenditure).