Circular No. 92/2024/TT-BTC guides certain provisions of Government Decree No. 37/2023/NĐ-CP dated June 24, 2023 on the establishment, organization, and operation of the Farmer Support Fund.

CIRCULAR

Guidelines for certain provisions of Decree No. 37/2023/NĐ-CP

dated June 24, 2023, of the Government on the establishment, organization, and operation of the Farmer Support Fund

The Farmer Support Fund

___________

Pursuant to the State Budget Law dated June 25, 2015;

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

On the basis of Decree No. 37/2023/NĐ-CP dated June 24, 2023, of the Government on the establishment, organization, and operation of the Farmer Support Fund;

Pursuant to Decree No. 14/2023/NĐ-CP dated April 20, 2023, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Department of Banking and Financial Institutions;

The Minister of Finance issues this Circular to guide certain provisions of Decree No. 37/2023/NĐ-CP dated June 24, 2023, of the Government on the establishment, organization, and operation of the Farmer Support Fund.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides certain contents regarding financial management mechanisms; effectiveness assessment and classification; debt classification, provision accrual, and usage for loan risk management as stipulated in Decree No. 37/2023/NĐ-CP dated June 24, 2023, of the Government on the establishment, organization, and operation of the Farmer Support Fund (hereinafter referred to as Decree No. 37/2023/NĐ-CP).

Article 2. Applicability

1. The Farmer Support Fund as prescribed in Decree No. 37/2023/NĐ-CP (hereinafter referred to as the Fund).

2. The Vietnam Farmers' Union.

3. Other agencies, organizations, and individuals related to the implementation of this Circular.

Article 3. Responsibility Regime

The Management Board and the Executive Board of the Fund shall be responsible under the law and before state management agencies for managing the safety of capital and assets, using capital for its intended purpose in accordance with the law, and complying with financial systems, assessing operational effectiveness, classifying; debt classification, provision accrual, and usage for loan risk management of the Fund as stipulated in Decree No. 37/2023/NĐ-CP, this Circular, and relevant laws.

Chapter II

CERTAIN CONTENTS ON THE FUND'S FINANCIAL MANAGEMENT

Article 4. Management and use of assets

1. At all levels, the Fund shall be responsible for developing and submitting to the Management Board at the same level for approval the Regulation on investment activity management, procurement, and fixed asset management (excluding office premises and other fixed assets already allocated by the Farmers' Union according to the law) after obtaining the consent of the Standing Committee of the Farmers' Union at the same level.

2. The Regulation on investment activity management, procurement, and fixed asset management stipulated in Clause 1 above of the Fund must ensure the following principles:

a) Compliance with the provisions of Decree No. 37/2023/NĐ-CP, the Charter on Organization and Operation of the Fund, and other business activity regulations of the Fund;

b) Decision-making authority for investment and procurement of fixed assets shall be carried out in accordance with the Charter on Organization and Operation of the Fund;

c) Procedures and formalities for investment, procurement, management, use, depreciation accrual, leasing, mortgage, pledge, liquidation, sale, inventory of fixed assets of the Fund shall be applied in accordance with the regulations applicable to State-owned Joint Stock Companies with 100% state-owned charter capital.

Article 5. Principles of income recognition

1. All revenues of the Fund must be determined in accordance with Vietnamese accounting standards and relevant laws, with complete invoices or valid and reasonable supporting documents, and must be fully recorded in the Fund's income.

2. For interest income from lending activities, the Fund has the responsibility to classify debts in accordance with the provisions of the law as the basis for recording receivable interest and shall record as follows:

a) The Fund records receivable interest arising during the period into income for debts classified as standard loans not requiring specific risk provisions under the law;

b) For receivable interest of debts maintained in the standard category due to the implementation of state policies and receivable interest arising during the period for the remaining debts, no income is recorded; the Fund monitors these off-balance-sheet items and records them into income when collected.

3. For interest income from deposits, the Fund records receivable interest from deposits arising during the period into income.

4. For receivable interest from lending activities that have been recorded as income but remain uncollected by the due date, the Fund reduces income if it is within the same accounting period, records it as an expense if it is outside the accounting period, and monitors it off-balance-sheet to urge collection. When collected, the Fund records it into income.

5. For income from other activities, the Fund shall comply with relevant laws.

6. The determination of the Fund's income for the purpose of calculating corporate income tax shall be carried out in accordance with the law on taxation.

Article 6. Income

The income (revenue) of the Fund is receivables generated during the period, including:

1. Income from business operations:

a) Interest income from loans;

b) Fees for entrusted lending services,

c) Other income from business operations.

2. Revenue from financial activities:

a) Interest from deposits;

b) Exchange rate differences income (if any);

c) Other financial activity income.

3. Other revenues:

a) Income from sale and liquidation of assets;

b) Income from asset leasing activities;

c) Differences between insurance compensation received for property loss and actual losses compensated;

d) Recovered income from previously written-off debts;

đ) Income from debts transferred off-balance sheet and written off;

e) Reimbursement of provisions;

g) Penalties for breach of economic contracts;

h) Other lawful income as prescribed by law.

Article 7. Principles for Recording and Managing Expenses

1. Expenses recorded as operating expenses of the Fund must comply with the principle of matching income and expenses, supported by valid invoices and receipts as stipulated by law. The determination and accounting of expenses shall be carried out in accordance with Vietnamese accounting standards and relevant legal regulations.

2. Principles for managing expenses:

a) At all levels, the Fund shall establish and submit internal expenditure regulations to the Management Council at the same level for approval after obtaining consent from the Standing Committee of the Farmers' Association at the same level, which includes reasonable expenditure limits based on the actual operational situation of the Fund, ensuring compliance with this Circular and relevant laws;

b) For expenditures not in accordance with established procedures, exceeding prescribed limits under this Circular and internal expenditure regulations, the Fund must clearly identify the responsibility of related organizations and individuals and present a compensation plan to the competent authority as prescribed by law;

c) Expenditures already covered by the Farmers' Associations at various levels shall not be recorded as operating expenses of the Funds at those levels.

3. Determining the expenses of the Fund for the purpose of calculating corporate income tax shall be conducted in accordance with tax laws.

Article 8. Costs

Expenses of the Fund are expenditures incurred during the period related to the Fund's activities, including:

1. Business operation costs:

a) Entrusted lending fees;

b) Provisions for loan risk reserves as stipulated in Article 16 of this Circular;

c) Exchange rate differences expense (if any):

d) Insurance premiums for risk and other business-related insurances as prescribed by law;

d) Costs for recovery and handling of loan debts;

e) Other expenses from business operations as prescribed by law.

2. Administrative expenses:

a) Personnel and labor costs:

- Wages and allowances for employees and managers of the Fund as stipulated in Article 33 of Decree No. 37/2023/NĐ-CP and according to the internal expenditure regulations of the Fund;

- Contributions made from wages for employees, including mandatory social insurance, health insurance, unemployment insurance, trade union fees; midday meal expenses, labor protection expenses for those requiring protective equipment while working; expenses for female workers; overtime pay and other expenses applicable to state-owned limited liability companies holding 100% of the charter capital as prescribed by law;

- Uniform expenses for staff and employees of the Fund, not exceeding the uniform allowance for transactions to be deducted as expenses when determining taxable income for enterprises;

b) Management and public service expenses:

- Conference, seminar, reception expenses; training, research, survey, experience learning expenses; travel expenses for staff and employees of the Fund traveling domestically and internationally as prescribed; support expenses for lower-level representatives attending conferences, seminars, and training organized by higher-level funds (including food, accommodation, and transportation expenses) when these expenses are not covered by other agencies, organizations, or units as stipulated in the internal expenditure regulations of the Fund. These expense levels shall be implemented in accordance with legal provisions applicable to state agencies;

- Electricity, water, telephone, internet, postal fees, materials, paper, ink, office supplies; purchase of documents, books; consulting expenses related to the Fund's activities, payment service expenses, auditing expenses; domestic and international expert rental expenses; cooperation expenses, scientific research expenses, technological innovation research expenses; productivity improvement award expenses, environmental protection expenses, agency protection expenses; medical expenses, fuel expenses, fire prevention and extinguishing expenses, transportation expenses, publicity, advertising, marketing expenses; reception and ceremonial expenses as prescribed by law;

c) Asset expenses: Depreciation of fixed assets; asset rental expenses; maintenance, repair, operation, and running expenses of assets; purchase of tools and equipment; asset insurance expenses; inspection and testing expenses; sale and liquidation expenses of assets, including residual values of liquidated and sold fixed assets (if any);

d) Other expenses related to administrative operations as prescribed by law.

3. Tax payments, fees, and charges (if any) as prescribed by tax, fee, and charge laws.

4. Other expenses:

a) Provisions for other reserves (excluding loan risk reserve provisions) as prescribed by law for enterprises;

b) Loss handling expenses after compensation from other sources as prescribed;

c) Expenses for revenues that were recorded but not actually collected;

d) Penalties for breach of economic contracts;

đ) Litigation fees, enforcement fees, and other litigation expenses as prescribed by law;

e) Support expenses for party and mass organization work of the Fund (expenses outside the budget of the party and mass organizations funded from designated sources);

g) Participation expenses in activities organized by the Farmers' Associations at various levels related to the Fund's activities;

h) Other expenses as prescribed by law.

5. The Fund shall disburse according to the specified expenditure standards for expenditures that have been specifically defined in this Circular; other expenditures shall be carried out in accordance with the provisions of the law on deductible expenses when determining taxable income for a limited liability company wholly owned by the State. In cases where there are no legal provisions or expenditure limits, the Fund shall base its expenditure standards on its financial capacity within its internal expenditure regulations, ensuring frugality, efficiency, and bearing responsibility under the law.

Article 9. Expenditures not to be recorded as expenses

1. Losses that have been supported by the State or compensated by insurance agencies, the party causing damage.

2. Administrative fines imposed on individuals according to the law.

3. Expenditures without valid invoices or supporting documents.

4. Expenses from other funding sources.

5. Expenditures supporting organizations, agencies, or individuals.

6. Expenditures exceeding the limits stipulated in this Circular and other relevant legal documents.

Article 10. Distribution of Financial Results

1. The Fund shall distribute financial results in accordance with Article 36 of Decree No. 37/2023/NĐ-CP.

2. The level of establishment of incentive funds and welfare funds of the Fund shall be based on the classification of the Fund's operational results as prescribed in Articles 12, 13, and 14 of this Circular.

a) For Class A Funds, the maximum allocation shall not exceed three months' average salary and allowances paid by the Fund for the reward and welfare funds;

b) For Class B Funds, the maximum allocation shall not exceed 1.5 months' average salary and allowances paid by the Fund for the reward and welfare funds;

c) For Class C Funds, the maximum allocation shall not exceed one month's average salary and allowances paid by the Fund for the reward and welfare funds.

3. In cases where the Fund’s management completes their tasks or better as guided by the Central Steering Committee of the Vietnam Farmers' Union, the level of incentive fund for management shall be determined based on the Fund's classification results as follows:

a) For Class A Funds, the maximum allocation shall not exceed 1.5 months' salary of the manager;

b) For Class B Funds, the maximum allocation shall not exceed one month's salary of the manager;

c) For Class C Funds, no allocation to the manager reward fund shall be made.

Article 11. Reporting System

1. The Fund shall implement reporting procedures as stipulated in Article 37 of Decree No. 37/2023/NĐ-CP.

2. Time for closing data:

a) For the mid-year report: From January 1st of the reporting year to June 30th of the reporting year;

b) For the annual report: From January 1st of the reporting year to December 31st of the reporting year.

3. Reporting Forms:

a) Financial reports as specified in point a, Clause 3, Article 37 of Decree No. 37/2023/NĐ-CP, including the Balance Sheet, Statement of Financial Performance (including financial income and expenditure report), Cash Flow Statement, Notes to the Financial Statements (including changes in equity report); implemented in accordance with the accounting regulations for state financial funds outside the budget.

b) Reports on the distribution of surplus and deficit and the use of funds as specified in point a, Clause 3, Article 37 of Decree No. 37/2023/NĐ-CP:

- County-level Funds shall submit reports to Provincial Funds for consolidation using the form attached as Appendix Ia to this Circular;

- Provincial Funds shall submit reports to the Central Fund for consolidation using the form attached as Appendix Ib to this Circular;

- The Central Fund shall consolidate and submit reports to relevant authorities using the form attached as Appendix Ic to this Circular;

c) Comprehensive reports on business operations as specified in point b, Clause 3, Article 37 of Decree No. 37/2023/NĐ-CP:

- County-level Funds shall submit reports to Provincial Funds for consolidation using the form attached as Appendix IIa to this Circular;

- Provincial Funds shall submit reports to the Central Fund for consolidation using the form attached as Appendix IIb to this Circular;

- The Central Fund shall consolidate and submit reports to relevant authorities using the form attached as Appendix IIc to this Circular;

4. Methods of submitting reports:

The Fund shall submit the reports as stipulated in Clause 1 of this Article through one of the following methods:

a) Direct submission in paper form,

b) Submission via postal service in paper form,

c) Submission via specialized information reporting software in electronic form (if available);

d) Other methods as prescribed by law.

Chapter III

EVALUATION OF OPERATIONAL EFFECTIVENESS AND RANKING OF FUNDS

Article 12. Methods for Determining Evaluation Indicators of Operational Efficiency

1. The annual operational efficiency evaluation indicators of the Fund shall be implemented in accordance with Clause 2, Article 38 of Decree No. 37/2023/NĐ-CP and shall be determined as follows:

a) Indicator 1: Credit Balance

This indicator is the credit balance of the Fund (excluding entrusted loan balances), and is calculated as follows:

b) Indicator 2: Non-performing Loan Ratio

The non-performing loan ratio is the proportion between the Fund's non-performing loan balance and its total loan balance (excluding entrusted loan activities);

c) Indicator 3: Annual Financial Results

Annual financial results are the difference between total income and total expenses incurred during the year, as determined according to the annual financial report approved by the Standing Committee of the Farmers' Association at the same level;

d) Indicator 4: Compliance with Laws on Investment, Management, and Use of Capital, Fiscal Obligations, and Financial Reporting Systems: The Fund complies with regulations, without any acts of non-compliance, omission, incomplete implementation, untimely implementation, or failure to implement. Violating acts include those committed by the Fund, individuals under the name of the Fund, or the Fund manager when performing the Fund’s tasks.

2. When calculating the operational efficiency evaluation indicators stipulated in Clause 1 of this Article, the Fund may exclude objective factors in accordance with Clause 3, Article 38 of Decree No. 37/2023/NĐ-CP.

Article 13. Method for Classifying the Fund

The Fund evaluates and classifies operational efficiency based on the principle of comparing actual performance against assigned indicators in the Fund's financial plan, specifically as follows:

1. Indicator 1: Credit Balance

a) The Fund is classified as Category A if the actual performance reaches or exceeds 100% of the assigned plan;

b) The Fund is classified as Category B if the actual performance reaches from 90% to less than 100% of the assigned plan;

c) The Fund is classified as Category C if the actual performance is below 90% of the assigned plan.

2. Indicator 2: Non-performing Loan Ratio

a) The Fund is classified as Category A if the actual performance equals or is lower than the assigned plan;

b) The Fund is classified as Category B if the actual performance is higher than the assigned plan but not exceeding 110% of the assigned plan;

c) The Fund is classified as Category C if the actual performance exceeds 110% of the assigned plan.

3. Indicator 3: Annual Financial Results

a) The Fund is classified as Category A if the actual performance equals or exceeds the assigned plan;

b) The Fund is classified as Category B if the actual performance is lower than the assigned plan but not less than 90% of the assigned plan;

c) The Fund is classified as Category C if the actual performance is below 90% of the assigned plan.

4. Indicator 4: Compliance with Laws on Investment, Management, and Use of Capital, Fiscal Obligations, and Financial Reporting Systems.

a) The Fund is classified as Category A if, during the classification assessment year, the Fund does not receive recommendations from competent authorities regarding improper investment, management, and use of capital, or fiscal obligations; or receives a written reminder from competent authorities only once for failing to comply with financial reporting regulations;

b) The Fund is classified as Category B if, during the classification assessment year, the Fund does not receive recommendations from competent authorities regarding improper investment, management, and use of capital, or fiscal obligations; or receives written reminders from competent authorities twice for failing to comply with financial reporting regulations;

c) The Fund is classified as Category C if, during the classification assessment year, the Fund receives recommendations from competent authorities regarding improper investment, management, and use of capital, or fiscal obligations; or receives written reminders from competent authorities three times or more for failing to comply with financial reporting regulations; The Fund Manager violates laws during the execution of the Fund’s tasks related to compliance with laws on investment, management, and use of capital, fiscal obligations, and financial reporting systems as announced and concluded by competent authorities. The Fund's classification evaluation will only count once for the same violation by the Fund Manager;

d) Violations of tax procedures are not considered for the purpose of evaluating and classifying the Fund.

Article 14. Classification of Funds

1. The Fund is classified as Class A if it does not have any criteria classified as Class C, where Criteria 1 and Criterion 2 are both classified as Class A.

2. The Fund is classified as Class C if Criterion 1 and Criterion 2 are not classified as Class A and the remaining criteria are all classified as Class C.

3. The Fund is classified as Class B in all other cases.

4. Based on the evaluation criteria for operational effectiveness stipulated in this Circular, the Fund reports the results of the assessment and classification to the Executive Board of the Farmers' Association at the same level for the Executive Board of the Farmers' Association at the same level to review and approve the classification of the Fund within no more than thirty working days from the date the financial report is approved by the Executive Board of the Farmers' Association at the same level.

Chapter IV

CLASSIFICATION OF DEBTS, PROVISION FOR AND USE OF BAD DEBT RESERVES

LOANS FROM THE FUND

Article 15. Classification of Debts

The Fund implements debt classification according to Article 21 of Decree No. 37/2023/NĐ-CP and the provisions of this Circular. Debt classification is carried out into five (5) groups as follows:

1. Groups 1, 2, 4, and 5 are classified according to the legal regulations applicable to microfinance organizations.

2. Group 3 (Substandard Debts) includes:

a) Overdue debts from 30 days up to less than 90 days;

b) Debts restructured with overdue periods under 30 days based on the initial restructuring repayment schedule;

c) Debts exempted or reduced in interest due to the borrower's inability to pay full interest as agreed (excluding debts exempted or reduced in interest due to implementation of state policies).

Article 16. Provision for and Use of Bad Debt Reserves for Loans

The Fund implements provision for and use of bad debt reserves for loans subject to risk according to Articles 21, 22, 23, and Clause 3 of Article 53 of Decree No. 37/2023/NĐ-CP and the provisions of this Circular.

Article 17. Periodic Implementation of Debt Classification and Provision for Bad Debt Reserves

1. At least once every quarter, within the first fifteen working days of the month following the start of the next quarter, the Fund conducts debt classification and provision for bad debt reserves up to the end of the last working day of the previous quarter.

2. For the fourth quarter, within the first fifteen working days of December, the Fund performs debt classification up to November 30; the provision for bad debt reserves is made at the time of final settlement based on the results of debt classification as of November 30 of the accounting year.

Chapter V

IMPLEMENTING PROVISIONS

Article 18. Transitional Provisions

Loan fees from credit contracts signed by the Fund before the effective date of Decree No. 37/2023/NĐ-CP are considered loan interest as specified in Point a, Clause 1, Article 6 of this Circular.

Article 19. Effective Date

1. This Circular shall take effect from February 15, 2025.

2. This Circular replaces Circular No. 69/2013/TT-BTC dated May 21, 2013, issued by the Ministry of Finance regarding guidelines for financial management systems for Farmers' Support Funds under the Vietnam Farmers' Association system.

Article 20. Implementation

1. The Fund Management Board, the Fund Management Board, and related organizations and individuals are responsible for implementing the provisions of this Circular.

2. In the course of implementation, if there are difficulties or obstacles, relevant agencies and units are advised to reflect these issues to the Ministry of Finance for guidance in accordance with the law.

Appendix Ia:

SITUATION OF DISTRIBUTION OF INCOME AND EXPENSE DIFFERENCES AND USE OF FUNDS

(Attached to Circular No. 92/2024/TT-BTC dated December 31, 2024, issued by the Minister of Finance)

REPORT

On the situation of distribution of income and expense differences and use of funds for six months/year…

Respectfully submitted to: County Farmers' Support Fund...

Unit: dong

Appendix Ib:

SITUATION OF DISTRIBUTION OF INCOME AND EXPENSE DIFFERENCES AND USE OF FUNDS

(Attached to Circular No. 92/2024/TT-BTC dated December 31, 2024, issued by the Minister of Finance)

REPORT

On the situation of revenue-expenditure discrepancy distribution and fund utilization for six months/year...

Respectfully submitted to: Central Farmers' Support Fund

Unit: dong

Appendix Ic:

SITUATION OF DISTRIBUTION OF INCOME AND EXPENSE DIFFERENCES AND USE OF FUNDS

(Attached to Circular No. 92/2024/TT-BTC dated December 31, 2024, issued by the Minister of Finance)

REPORT

On the situation of distribution of income and expense differences and use of funds for six months/year…

Respectfully submitted to: ¹………………………………….

Unit: dong

____________________

¹ Sent to relevant agencies as stipulated in Clause 1, Article 37 of Decree No. 37/2023/NĐ-CP .

Appendix IIa:

COMPREHENSIVE REPORT ON OPERATIONAL ACTIVITY SITUATION

(Attached to Circular No. 92/2024/TT-BTC dated December 31, 2024, issued by the Minister of Finance)

REPORT

On the comprehensive report on operational activity situation for six months/year…

Respectfully submitted to: Provincial Farmers' Support Fund

I. Data

Unit: dong

II. Analysis of the situation, clearly stating reasons for increases or decreases during the reporting period and comments/recommendations (if any)

Appendix IIb:

COMPREHENSIVE REPORT ON OPERATIONAL ACTIVITY SITUATION

(Attached to Circular No. 92/2024/TT-BTC dated December 31, 2024, issued by the Minister of Finance)

REPORT

On the comprehensive report on operational activity situation for six months/year…

Respectfully submitted to: Central Farmers' Support Fund

I. Data

Unit: dong

II. Analysis of the situation, clearly stating reasons for increases or decreases during the reporting period and comments/recommendations (if any)

Appendix IIc:

COMPREHENSIVE REPORT ON OPERATIONAL ACTIVITY SITUATION

(Attached to Circular No. 92/2024/TT-BTC dated December 31, 2024, issued by the Minister of Finance)

REPORT

On the comprehensive report on operational activity situation for six months/year…

Unit: Equivalent USD²:………………………………

Unit: dong