Joint Circular No. 91/1998/TTLT/BTC-BQP guiding the preparation, implementation, and settlement of the State budget in the national defense sector.

JOINT CIRCULAR

Guidelines for the preparation, implementation, and settlement of the state budget in the field of national defense
settlement of the State budget in the national defense sector

Pursuant to the State Budget Law on March 20, 1996, and Decree No. 120/1997/NĐ-CP dated December 27, 1997 of the Government on management and use of the state budget and state assets for certain activities in the fields of national defense and security;

The Ministry of Finance and the Ministry of National Defense provide guidelines for expenditure tasks; 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 state assets must comply with the provisions of the State Budget Law on March 20, 1996, Decree 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 at the local level have the responsibility to complete assigned revenue and expenditure tasks well; implement thrift, prevent embezzlement and waste; strictly adhere to current financial management systems and policies.

3. Heads of budgetary units are responsible under the law for approved revenue and expenditure tasks. No organization or individual other than the competent authority assigning revenue and expenditure tasks may change such tasks. If changes to revenue and expenditure tasks are necessary due to objective reasons, the head of the budgetary unit must report to the assigning authority for approval of adjustments.

4. Revenue items that the Government permits budgetary units 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 approval by the competent authority.

5. Budgetary units, project sponsors, project leaders, etc., in the field of national defense 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 context of national defense.

6. All revenues and expenditures from the state budget in the field of national defense must be recorded in Vietnamese currency, within the fiscal year, budget level, and the State Budget Item List. Revenues and expenditures in foreign currencies, in-kind, and labor days must be converted into Vietnamese currency based on the exchange rate for foreign currencies, prices for in-kind, and value of labor days as prescribed by the competent authority at the time of occurrence for accounting purposes.

II. CLASSIFICATION OF EXPENDITURE TASKS FROM 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 living standards and policies for regular forces, regional 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 reserve storage systems at campaign level and below;

Construction and repair of infrastructure projects directly serving the daily life and 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 expenditure from the state budget for national defense.

1.1.3. Expenditure for assigned state tasks;

Expenditure for public services under the management of ministries, ministerial-level agencies, and government-affiliated agencies;

Administrative management expenditure (Military Courts, Military Procuratorates, Civil Enforcement in the Military);

Specialized state reserve expenditure;

Investment and capital support for enterprises;

Program-target national expenditure;

Other activities.

1.1.4. Expenditure for special projects and works.

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

Expenditure for nationwide defense education including:

Propaganda and education on laws related to national defense; dissemination of basic military knowledge to cadres and staff of agencies and units under their jurisdiction;

Organization of all-level National 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 ministries, sectors, and agencies;

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

Expenditure for training and operation of the People's Militia in accordance with the law on the People's Militia;

Expenditure for economic mobilization for national defense in accordance with the law and annual plans;

Expenditure for building and coordinating defense area exercises in accordance with the law and annual plans;

Expenditure for other defense work (allowances for full-time or part-time cadres responsible for defense work; sending cadres and staff to perform military service and welcoming them back upon completion; implementing rear-area policies for the military and policies for families of martyrs and wounded soldiers, 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 laws related to national defense; dissemination of basic military knowledge to cadres and people in the locality;

Organization of National Defense Day activities; traditional day of the People's Militia, Border Guard Day, Martyrs' Day, etc.;

Local defense sports competitions;

Training for civil affairs cadres, party members, and local mass organizations on defense work;

Summarizing and rewarding units and individuals with outstanding achievements in the local defense cause;

Building and mobilizing the Reserve Force in accordance with the Law on the Reserve Force;

Building, training, and operating the Militia Self-Defense Force in accordance with the Law on the Militia Self-Defense Force;

Building and operating the Border Guard Force in accordance with the Law;

Mobilizing the economy for national defense in accordance with the law and annual plans;

Recruitment work;

Ensuring the operation of Militia Self-Defense Force units on rotational duty or ready to fight in certain special cases;

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

Constructing and repairing combat facilities, support facilities, office buildings, barracks, warehouses for local armed forces;

Construction and repair of defense areas and facilities in accordance with the分级指令未提供，直接处理下一条：

Protecting political, economic, social targets and defense works, military zones according to the分级指令未提供，直接处理下一条：

Storing, repairing, and purchasing military school equipment for the local area;

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

Expenditure for other defense work (ensuring communication, administrative expenses... for the local defense mission);

2.2. The district-level state budget includes expenditure for defense work as follows:

Nationwide defense education work:

Propaganda and education on laws related to national defense; dissemination of basic military knowledge to cadres and people in the locality;

Organization of National Defense Day activities; traditional day of the People's Militia, Border Guard Day, Martyrs' Day, etc.;

Local defense sports competitions;

Training for civil affairs cadres, party members, and local mass organizations on defense work;

Summarizing and rewarding units and individuals with outstanding achievements in the local defense cause;

Building and mobilizing the Reserve Force in accordance with the Law on the Reserve Force;

Building, training, and operating the Militia Self-Defense Force in accordance with the Law on the Militia Self-Defense Force;

Constructing and repairing barracks, warehouses; transporting, storing, repairing, and sealing weapons, equipment, ammunition, uniforms, supplies, and other equipment for the Militia Self-Defense Force and the Reserve Force;

Constructing and conducting defense area exercises for districts and counties according to the分级指令未提供，直接处理下一条：

Expenditure for protecting political, economic, social targets and defense works, military zones according to the分级指令未提供，直接处理下一条：

Expenditure for recruitment work and welcoming servicemen returning from their duties;

Expenditure for other defense activities (ensuring communication, administrative expenses... for the local defense mission);

2.3. The commune-level state budget includes expenditure for defense work as follows:

Nationwide defense education work:

Propaganda and education on laws related to national defense; dissemination of basic military knowledge to cadres and people in the locality;

Organization of National Defense Day activities; traditional day of the People's Militia, Border Guard Day, Martyrs' Day, etc.;

Local defense sports competitions;

Training for civil affairs cadres, party members, and local mass organizations on defense work;

Summarizing and rewarding units and individuals with outstanding achievements in the local defense cause;

Subsidies for commune-level militia self-defense team staff who are full-time or part-time according to the Law on the Militia Self-Defense Force;

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

Registration of military service obligations and sending young people to perform military service;

Expenditure for other defense activities (ensuring workplace for commune-level defense command; 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 prepare, implement, and settle the state budget in the field of national defense in accordance with 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. PREPARATION OF THE MINISTRY OF NATIONAL DEFENSE'S ANNUAL STATE BUDGET ESTIMATE.

A. GUIDANCE ON THE PREPARATION OF THE ANNUAL STATE BUDGET ESTIMATE AND ANNOUNCEMENT OF THE BUDGET ESTIMATE CHECKING NUMBER FOR THE YEAR:

1. Based on the Prime Minister's directive on the development plan and the preparation of the next year's state budget estimate, the Ministry of Finance will guide and announce the budget estimate checking number for the Ministry of National Defense;

The announcement of the budget estimate checking number for the Ministry of National Defense must be completed 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 circular guidance, and the budget estimate checking number announced by the Ministry of Finance, will guide and announce the budget estimate checking number for subordinate budgetary units. The announcement for second-level budgetary units must be completed no later than July 10 of the previous year;

3. Budgetary units under the Ministry of National Defense will guide and announce the budget estimate checking number according to the principle that higher-level units guide and announce the budget estimate checking number for directly subordinate lower-level units;

 B. REQUIREMENTS FOR THE PREPARATION OF THE ANNUAL STATE BUDGET ESTIMATE:

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

2. The annual state budget estimate must be prepared in the prescribed format, within the specified time frame, and detailed to the Sub-item level of the State Budget Item List;

3. The annual state budget estimate of upper-level budgetary units must be prepared based on the annual state budget estimates of lower-level budgetary units and analyzed according to sources of funding and spending areas;

4. Annual state budget estimates 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 calculation and comparative analysis with actual figures and checking numbers;

The annual state budget estimate submitted by the Ministry of National Defense to the Ministry of Finance must be accompanied by a report clearly stating the basis and grounds for calculation. The following expenditure items requiring high confidentiality shall only be recorded in summary form without detailed explanation:

Expenditures related to personnel strength, organization (salaries; various allowances and subsidies; various food expenses; expenditures for recruitment and discharge; expenditures calculated based on organizational and personnel quotas);

Expenditures for procurement, construction investment, and maintenance and repair of specialized assets serving defense purposes as stipulated in Clause 1, Article 25 of Decree No. 120/1997/NĐ-CP;

Expenditures for procurement of specialized materials for defense purposes;

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

Expenditures for implementing special projects, programs; scientific and technological research programs and projects serving military purposes;

Expenditures for secret services (intelligence, security).

C. BASIS FOR ESTABLISHING THE ANNUAL STATE BUDGET PROJECTIONS

The basis for establishing the annual state budget projections 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 guides the following points:

1. The number of checks regarding the state budget projection reported to lower-level budgetary units must be consistent with the total amount and details of the state budget projection number reported by higher authorities.

2. The issuance of new or amendment, supplementation of systems, policies, norms, and standards related to state budget expenditures must be implemented before the time of establishing the new state budget projection to have value as a basis for establishing the state budget projection.

3. In cases where there are changes in systems, policies, norms, standards, and prices during the year according to decisions of competent authorities that affect the approved annual state budget projection, budgetary units must establish adjustments to the state budget projection (increase or decrease) and submit them to the competent authority for approval.

D. ESTABLISHING THE ANNUAL STATE BUDGET PROJECTIONS

1. Budgetary units under the Ministry of National Defense consider the state budget projections reported by subordinate units, consolidate and establish detailed annual revenue and expenditure state budget projections down to Subitem according to the State Budget Item List, and report to their direct superior budgetary units.

The deadline for submitting the annual state budget projection 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 considers the annual state budget projections reported by subordinate budgetary units; consolidates and establishes the annual state budget projection of the Ministry, sends it to the Ministry of Finance (accompanied by the consolidated annual state budget projection of level 2 budgetary units), and simultaneously sends:

The Ministry of Planning and Investment: the portion of the state budget projection for investment construction and development expenses funded by centralized investment capital from the state budget.

Ministries, agencies equivalent to ministries, and government agencies managing sectors and fields: the portion of the state budget projection for sectoral and field-specific expenditures.

The deadline for submitting the annual state budget projection report from the Ministry of National Defense to the Ministry of Finance is before August 15 of the previous year.

E. SAMPLE FORMS FOR ESTABLISHING THE ANNUAL STATE BUDGET PROJECTIONS

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

2. The Ministry of National Defense sends the annual revenue and expenditure state budget projections of the Ministry to the Ministry of Finance according to the system of forms prescribed in Appendix No. 1 attached to this Circular.

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

A. ALLOCATION OF THE ANNUAL STATE BUDGET PROJECTIONS

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

2. The results of allocating the state budget projection (including the allocation of remaining initial state budget projection amounts 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 where transactions take place.

3. The allocation of the state budget projection and the allocation of the state budget projection to budgetary units using funds must be completed before January 5 of the budget year.

B. ADVANCE PAYMENT OF EXPENSES FOR THE MINISTRY OF NATIONAL DEFENSE

1. To ensure regular living expenses for troops and other expenditures at the beginning 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 payment amount is equivalent to the average monthly expenditure of the previous year.

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

C. QUARTERLY STATE BUDGET PROJECTIONS

1. Budgetary units under the Ministry of National Defense base on the approved annual revenue and expenditure state budget projections and tasks to be executed in the quarter, establish quarterly state budget projections (divided by month) detailed to Section according to the State Budget Item List, and submit them to their direct superior units for review and consolidation in sequence from grassroots units upwards.

Level 2 budgetary units' quarterly state budget projections 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 quarterly state budget projections (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 state budget projections are divided into three parts:

Part of the quarterly budget estimate for regular expenditures (excluding construction investment) detailed according to the items of the State Budget Classification and down to the second-level budget entity (excluding expenditures funded from retained revenue).

Part of the quarterly budget estimate for regular expenditures with construction investment characteristics detailed according to the items of the State Budget Classification and down to the second-level budget entity (excluding expenditures funded from retained revenue).

Part of the quarterly budget estimate for expenditures on state programs and tasks assigned and other special expenditures detailed according to the items of the State Budget Classification and down to the second-level budget entity or state budget using units (excluding expenditures funded from retained revenue).

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

4. The Ministry of National Defense, based on the quarterly expenditure limit announced by the Ministry of Finance, distributes and announces the distribution of the quarterly expenditure limit to the second-level budget entities and centralized expenditures at the Ministry (divided by month) and sends it to the Ministry of Finance, simultaneously sending it to the Central Treasury and the Treasury where transactions take place.

D. PRINCIPLES FOR ISSUING FUNDS

1. The Ministry of Finance issues funds to the Ministry of National Defense through the budget allocation limit or by payment order.

The Ministry of National Defense issues state budget funds to the second and third-level budget entities under its jurisdiction through the distribution of budget allocation limits, withdrawal of budget allocation limit certificates, checks, or payment orders.

The second-level budget entity issues state budget funds to subordinate units through withdrawal of budget allocation limit certificates, checks, or payment orders.

Third-level budget entities issue state budget funds to subordinate budget entities 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.

When distributing the quarterly expenditure limit to subordinate budget entities, the Ministry of National Defense must ensure the total and detailed monthly expenditure items align with the quarterly expenditure limit announcement by the Ministry of Finance.

3. If the quarterly expenditure limit is not fully utilized, it may be carried over to the next month or quarter; however, it only retains its value until December 31. If it is not used or not fully used by December 31, it will be canceled.

4. The budget allocation limit for a specific expenditure item can only be issued and paid for that specific expenditure item; the budget allocation limit for one expenditure item cannot be used to pay for another expenditure item. In cases requiring adjustments between expenditure items, reports must be made and approved by the competent authority according to the following principles:

The Ministry of Finance decides to adjust the budget allocation limit for expenditure items for the Ministry of National Defense if such adjustment changes the total amount and detailed items announced by the Ministry of Finance.

The Ministry of National Defense decides to adjust the budget allocation limit for expenditure items for subordinate budget entities if such adjustment does not change the total amount and detailed items announced by the Ministry of Finance. - Decisions to adjust the budget allocation limit for the Ministry of National Defense and for second-level budget entities must be sent to the Ministry of Finance, the Central Treasury, and the Treasury where transactions take place.

All budget entities under the Ministry of National Defense must open at the Treasury a budget entity deposit account to manage and use state budget funds and another account to manage and use funds not sourced from the state budget.

Second-level budget entities, in addition to opening a deposit account, must also open a budget allocation limit account at the Treasury to manage and use state budget funds.

E. PRE-EXTRACTION AND PAYMENT CONTROL OF STATE BUDGET EXPENDITURES

When there is a need for expenditure, the state budget using unit sends the chief executive's standard expenditure order (withdrawal of budget allocation limit certificate, check, payment order) and related settlement documents, files, and vouchers to the Treasury where transactions take place.

The Treasury implements the following control measures:

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 Treasury where transactions take place provides payment to the state budget using unit without controlling regulations, standards, quotas, and related vouchers. The Ministry of National Defense and the state budget using unit bear full 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 Treasury where transactions take place 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 of the Government, it provides advance payments or payments to the state budget using unit.

3. The Treasury does not control regulations, standards, quotas, and related vouchers when higher-level budget entities issue state budget funds to lower-level budget entities through budget allocation limit accounts or budget entity deposit accounts opened at the Treasury via withdrawal of budget allocation limit certificates, checks, or payment orders.

G. ISSUANCE OF REGULAR EXPENSE FUNDS, EXCEPT FOR CONSTRUCTION INVESTMENT EXPENSES

1. Issuance 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 of the Government.

2. The Ministry of Finance issues 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 issues funds to the Ministry of National Defense through payment orders.

The Ministry of National Defense issues regular expense funds to second-level budget entities through the distribution of quarterly budget allocation limits and issues funds to directly subordinate third-level budget entities through detailed withdrawal of budget allocation limit certificates.

3. Second-level budget entities base their withdrawal of budget allocation limit certificates on the quarterly expenditure limits distributed by the Ministry of National Defense and send them to the Treasury where transactions take place.

To allocate state budget funds for level 3 (or directly subordinate level 4) budget entities, detailed to the Item of the State Budget Schedule,

To request advance payment or settlement of expenditures for unit tasks, accompanied by relevant vouchers according to the nature of each expenditure item specified in Point E, Section IV of this Circular.

4. Level 3 budget entities issue Checks or Payment Orders to send to the State Treasury at the transaction location to allocate state budget funds for level 4 budget entities.

5. Level 3 and level 4 budget entities issue Checks or Payment Orders, accompanied by all relevant vouchers according to the nature of each expenditure item specified in Point E, Section IV of this Circular, to send to the State Treasury at the transaction location to request advance payment or settlement of expenditures for unit tasks.

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

1. Allocation of investment construction funds (belonging to items 147, 148, 149) in the regular expense budget of the state budget for the Ministry of National Defense shall be carried out in accordance with Article 15 of Decree No. 120/1997/NĐ-CP dated December 27, 1997 of the Government.

2. The Ministry of Finance allocates investment construction funds in the regular expense budget for the Ministry of National Defense on a quarterly budget limit basis, detailed to the item level.

3. The Ministry of National Defense allocates investment construction funds in the regular expense budget for level 2 budget entities on a quarterly budget limit distribution basis and issues Limit Withdrawal Certificates to directly subordinate level 3 budget entities, detailed to the item level.

4. Level 2 budget entities review construction project quantity reports sufficient for payment or advance payment requests (as stipulated by current management regulations) proposed by directly subordinate budget entities and based on the allocated quarterly spending limits, issue Limit 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 Limit Withdrawal Certificates from level 2 budget entities, implements the withdrawal of state budget funds, transfers money, and pays into the bank accounts of budget beneficiaries or pays contractors and suppliers.

I. ALLOCATION OF FUNDS FOR NATIONAL TASKS ASSIGNED

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

1. For national tasks assigned with expenditure content having administrative service characteristics, the fund allocation process shall be implemented as prescribed in Section G, Part IV of this Circular.

2. For national tasks assigned with expenditure content having development investment characteristics, the fund allocation process shall be implemented as prescribed in Section H, Part IV of this Circular.

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

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

1. Based on the announced state budget estimate and the project or work volume sufficient for payment or advance payment, the project or work sponsor submits payment or advance payment application documents to the Ministry of National Defense.

2. The Ministry of National Defense reviews the payment or advance payment applications of each special project or work sponsor, compiles them, and requests the Ministry of Finance to allocate funds.

3. The Ministry of Finance checks the allocation request of the Ministry of National Defense and if it meets the conditions stipulated in Article 12 of Decree No. 120/1997/NĐ-CP dated December 27, 1997, it allocates funds through a cash payment order to the Ministry of National Defense.

4. The State Treasury, based on the cash payment order from the Ministry of Finance, implements the withdrawal of state budget funds and transfers money into the account of the Ministry of National Defense.

5. The Ministry of National Defense allocates payments or advance payments 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, allocate budgets to level 2 and level 3 directly subordinate budget entities; responsible before the state for organizing and implementing accounting and budget settlement work at its own level and at subordinate levels; reviewing budget settlement reports of directly subordinate level 2 and level 3 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 directly subordinate budget entities; organize and implement accounting and budget settlement work at their own level and at subordinate levels; review budget settlement reports of directly subordinate level 3 and level 4 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; organize and implement accounting and budget settlement work at their own level and at subordinate levels; review budget settlement reports of directly 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 expending, they must carry out accounting and budget settlement work with the budget entity allocating funds.

B. CLOSURE OF STATE BUDGET ACCOUNT BOOKS

At the end of the accounting period (month, quarter, year), budget entities at all levels under the Ministry of National Defense must complete the closure of state budget account books and prepare financial statements in accordance with the current accounting system and guidance from the Ministry of National Defense.

In case there is a balance in the budget entity's deposit account at the end of December 31, budget entities must submit a letter with detailed explanations of remaining funds (with confirmation from the directly superior budget entity) to the State Treasury requesting the transfer of the balance to be used 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 THE PREPARATION OF THE FINAL ACCOUNTS REPORT OF THE STATE BUDGET

1. The figures in the final accounts report for the year must be accurate and truthful. The contents of the final accounts report for the year must correspond to the contents recorded in the approved state budget estimate and must be detailed down to the Section according to the State Budget Index.

2. The final accounts report for the year must be prepared in accordance with the prescribed form and time limit.

3. The final accounts report for the year of budgetary units and the Ministry of National Defense shall not settle expenditures exceeding revenues.

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

1. Lower-level budgetary units prepare the final accounts report for the year and submit it to higher-level budgetary units; within a maximum period of 20 days from the date of receipt of the final accounts report, the higher-level budgetary unit shall have the responsibility to examine and approve the final accounts and notify the result of the examination and approval to the lower-level budgetary unit. If, 10 days after receiving the notification of the final accounts from the higher-level budgetary unit, the lower-level budgetary unit does not express any different opinion, it shall be deemed to have accepted.

2. The Ministry of National Defense compiles and submits the final accounts report for the year to the Ministry of Finance.

The Ministry of Finance examines and approves the final accounts report for the year and notifies the result of the examination to the Ministry of National Defense within a maximum period of 30 days from the date of receipt of the final accounts report.

3. During the process of the Ministry of National Defense examining the final accounts of second-level budgetary units, depending on the conditions and specific content, the Ministry of Finance may participate in examining the final accounts of some units.

4. Units and agencies responsible for examining the final accounts have the right to cancel, recover expenditures that are not in accordance with regulations and are not included in the approved budget estimate; at the same time, they issue orders to immediately pay any amounts due to the state budget according to the prescribed regulations.

5. Second-level budgetary units send their final accounts report for the year to the Ministry of National Defense no later than 60 days after the end of the year.

The final accounts report for the year of the Ministry of National Defense sent to the Ministry of Finance shall be no later than 120 days after the end of the year.

E. FORMS FOR THE SETTLEMENT OF THE STATE BUDGET FOR THE YEAR

1. Budgetary units under the Ministry of National Defense prepare the final accounts report for the state budget for the year 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 prepares the final accounts report for the state budget for the year and sends it to the Ministry of Finance in accordance with the form specified in Appendix No. 2 attached to this Circular and provides explanations for reasons for achieving, failing to achieve, or exceeding the assigned budget estimate, along with any recommendations if applicable.

VI. IMPLEMENTATION

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

2. Ministries, ministerial-level agencies, 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./.