CIRCULAR

Guidelines for managing, settling, recovering, and finalizing advance budget appropriations for the following year's investment construction projects.

Pursuant to the State Budget Law No. 01/2002/QH11 dated December 16, 2002, and the Government Decree No. 60/2003/NĐ-CP dated June 6, 2003 detailing and guiding the implementation of the State Budget Law and current guiding documents;

Pursuant to the Government Decree No. 77/2003/NĐ-CP dated July 1, 2003 on the functions, tasks, powers, and organizational structure of the Ministry of Finance.

The Ministry of Finance hereby provides guidelines for managing, settling, recovering, and finalizing advance budget appropriations for the following year's investment construction projects as follows:

I- For projects managed by Ministries, agencies at the level of ministries, central agencies of social organizations, and General Corporation 91/TTg (hereinafter referred to collectively as "Ministry"):

1. Advance appropriation of the following year's state budget for investment projects shall be carried out in accordance with Clause 3, Article 57 of the State Budget Law No. 01/2002/QH11 dated December 16, 2002, and Article 61 of the Government Decree No. 60/2003/NĐ-CP dated June 6, 2003 detailing and guiding the implementation of the State Budget Law.

2. Notification of payment plan for advance appropriations:

After the competent authority has approved the advance appropriation for the investment project and all necessary procedures have been completed, the Ministry of Finance will notify the State Treasury of the payment plan for the advance investment funds, simultaneously sending it to the managing Ministry, including detailed information on the total amount of advance appropriation, sources of funds, fiscal year of appropriation, and recovery of advance funds.

3. Transfer of funds and settlement of advance appropriations:

The Ministry of Finance will notify the State Treasury to transfer the advance investment funds to settle the advance appropriations for the projects.

The mechanism for controlling and settling advance appropriations shall be implemented according to current regulations. The State Treasury will manage and monitor separately.

4. Payment deadline for advance appropriations:

The payment deadline for advance appropriations shall be consistent with the payment deadline for the following year's investment plan. (For example, in 2004, Project A was advanced the 2005 state budget estimate, then the payment deadline for the advance appropriation would be consistent with the payment deadline for the 2005 investment plan).

Upon expiration of the payment period, the State Treasury will process the cancellation of any remaining unused advance appropriation amounts.

5. Recovery of advance appropriations:

Ministries are responsible for allocating in the following year's state budget to repay the advance appropriations made for the projects.

When notifying the payment plan for the investment project, the Ministry of Finance will simultaneously notify the recovery of advance appropriations. The amount recovered must equal the amount of advance appropriation.

In cases where Ministries that received advance appropriations fail to allocate or inadequately allocate in the state budget to repay according to regulations, the Ministry of Finance will recover the advance appropriation by deducting from the allocated investment expenditure budget of the Ministry and issue a notification to inform the Ministry to coordinate in implementing this.

6. Accounting and finalization of advance appropriations:

Advance appropriations for a given year's budget shall be finalized within the fiscal year of that year; not finalized within the year in which the advance appropriation occurred. (For example, if advance appropriations were made for the 2005 plan in 2004, they should be finalized within the 2005 fiscal year, not within the 2004 fiscal year).

When compiling annual reports on the finalization of state budget expenditures, the State Treasury is responsible for compiling separate reports on advance appropriations for each Ministry and project according to indicators such as planned advance appropriations, settled amounts, finalized amounts, and unused amounts.

7. In certain specific cases, upon decision by the competent authority, the recovery of advance appropriations is determined periodically: the amount recovered annually equals the allocated investment expenditure budget for the project. The advance appropriation is finalized within the annual fiscal year based on the allocated investment expenditure budget for the project. Settled amounts that have not been allocated in the budget for recovery are transferred to the next year for appropriate finalization in line with the recovery plan.

Annually, the State Treasury is responsible for determining the actual settled amounts, the remaining amounts, and reporting to the Ministry of Finance to process the transfer to the next year to align with the recovery plan.

8. Handling outstanding issues: Some projects that were permitted by the competent authority to advance investment plans from previous years but had not yet recovered funds before this Circular took effect may continue to settle advance appropriations until December 31, 2004.

II- For investment construction projects managed by localities:

The advance appropriation of the state budget by local authorities at various levels shall be decided by the Chairman of the People's Committee of provinces and centrally-administered cities within their authority, in compliance with the law, and they shall be responsible for recovering the advance appropriations.

Based on the Government Decree No. 60/2003/NĐ-CP dated June 6, 2003 detailing and guiding the implementation of the State Budget Law, the Circular No. 59/TT-BTC dated June 23, 2003 of the Ministry of Finance guiding the implementation of the Government Decree No. 60/2003/NĐ-CP dated June 6, 2003, and the guidance provided in this Circular, the Chairman of the People's Committee of provinces and centrally-administered cities shall specify and guide accordingly.

III- Implementation Provisions:

This Circular shall take effect fifteen days after its publication in the Official Gazette.

During the implementation, if there are any difficulties, please promptly report to the Ministry of Finance for research, guidance, supplementation, and amendment.