Circular No. 97/2004/TT-BTC guiding the management, payment, and settlement of state budget expenditures in foreign currency through the State Treasury.

CIRCULAR

Guidelines for the management, payment, and settlement of budget expenditures in foreign currency through the State Treasury

State budget in foreign currency through the State Treasury

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

Pursuant to Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the Law on State Budget;

Pursuant to 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 provides guidelines for the management and payment of certain expenditures in foreign currency by budgetary units under the central budget at the State Treasury as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. Expenditures in foreign currency shall be carried out in the form of payment orders including:

- Payment of foreign debt.

- Aid to international organizations and foreign countries pursuant to the Decision of the Government.

- Funding for Vietnamese agencies abroad.

- Contributions to special international organizations (ADB, WB, IMF, etc.).

- Operational expenses, import of equipment and materials for regular tasks and reserves of the Ministry of Public Security and the Ministry of Defense.

- Subsidies and training for overseas Vietnamese students according to the decision of the Minister of Education and Training (including subsidies, tuition fees, air tickets, living expenses of students).

- Departure allowances for expenditure items authorized by payment orders (according to Decision No. 42/2004/QĐ-BTC dated April 22, 2004 of the Minister of Finance).

Other expenditures as decided by the Prime Minister, the Minister of Finance (defense, security, capital investment for construction projects under the state budget...).

2. Expenditures in foreign currency shall be carried out according to annual budgets (in the form of budget withdrawals) denominated in Vietnamese Dong including:

- Expenses for delegations traveling abroad (excluding those dispatched with payment orders as specified in Point 1, Section I of this Circular).

- Annual membership fees for international organizations paid by ministries and sectors.

- Purchase of information and payment of broadcasting fees.

- Other expenditures as decided by the Minister of Finance.

3. Responsibilities of budgetary units under the central budget:

a. Based on the annual state budget assigned by the Government, ministries, ministerial-level agencies, and government agencies (hereinafter referred to as budgetary units) allocate budgets according to current group categories, and provide detailed explanations of foreign currency expenditures to the Ministry of Finance as the basis for disbursement.

b. Budgetary units are responsible for managing, using, and settling accounts for foreign currency expenditures according to current regulations.

c. Budgetary units under the central budget open budget accounts at the State Treasury Branch if there is a need for foreign currency expenditures as specified in Point 2, Section I of this Circular.

II. SPECIFIC PROVISIONS

1. Preparation of foreign currency expenditure budgets:

- Foreign currency expenditure budgets are part of the state budget, and foreign currency expenditures are included in the annual budgets of units.

- Foreign currency expenditure budgets are calculated in US dollars converted to Vietnamese Dong according to the planned exchange rate set by the Ministry of Finance.

- Foreign currency expenditures must be detailed according to Forms No. 1 and Form No. 08- TT 59 attached to this Circular.

2. Allocation of annual budget:

Based on the decision to allocate the annual state budget of the Prime Minister, primary budget units allocate and assign budgets to subordinate budget-using units according to current budget categories.

3. Control, settlement, and finalization of foreign currency expenditures:

3.1. For foreign currency expenditures as specified in Point 1, Section I of this Circular, the Ministry of Finance issues payment orders specifying the amount of foreign currency expenditure and its conversion to Vietnamese Dong according to the accounting exchange rate set by the Ministry of Finance, which is then sent to the State Treasury Branch.

Based on the Ministry of Finance's payment order, the State Treasury carries out accounting for central budget expenditures in Vietnamese Dong; simultaneously, it draws from the centralized foreign currency fund of the state budget to settle foreign currency expenditures according to the content recorded in the payment order and the approved budget (according to Form No. 02 and 03 attached to this Circular).

a. Finalization of foreign currency departure allowances for expenditure items authorized by payment orders according to Decision No. 42/2004/QĐ-BTC dated April 22, 2004 of the Minister of Finance is carried out as follows:

Within 15 days after the delegation returns, the unit using the central budget is responsible for submitting the finalization of foreign currency expenditure for the delegation to the financial authority. Based on the finalized delegation expenditure report approved by the financial authority (according to Form No. 02-a attached to this Circular), the unit is allowed to offset excesses and shortages among delegations, specifically as follows:

- If there is excess (excess amount exceeds the shortage amount), the unit will deposit the excess into the centralized foreign currency fund of the state.

Based on the foreign currency deposit receipt and confirmation from the Commercial Bank about the deposited amount, the financial authority (Specialized Financial Department) will issue a finalization notice requesting the State Treasury to reduce the state budget expenditure of the budgetary unit according to Chapter - Type - Clause - Section - Subsection corresponding to the foreign currency deposited by the unit in Vietnamese Dong according to the accounting exchange rate set by the Ministry of Finance (according to Form No. 02-b attached to this Circular).

- If there is a shortage (shortage amount exceeds the excess amount), the financial authority will issue a supplementary payment order sent to the State Treasury Branch to make payments.

b) By the end of the year (December 31), the budgetary unit and the financial authority prepare a reconciliation statement as the basis for annual finalization.

3.2. For foreign currency expenditures as specified in Point 2, Section I, which are carried out according to annual budgets denominated in Vietnamese Dong, the State Treasury will implement control over state budget expenditures. In cases where foreign currency expenditures occur at the State Treasury, it will draw from the centralized foreign currency fund of the state budget to settle payments for the unit while accounting in Vietnamese Dong equivalent to the foreign currency amount, according to the accounting exchange rate set by the Ministry of Finance and deducting from the annual budget, specifically as follows:

3.2.1. Payment of foreign currency for delegations traveling abroad:

a. Budgetary units are responsible for managing delegation funds from the budget preparation stage, advance payments, and finalization for each delegation and individual.

b. BASED ON THE PROVISIONS OF Circular No. 79/2003/TT-BTC dated August 13, 2003 guiding the management, allocation, and payment of state budget expenditures through the State Treasury; current regulations of the Ministry of Finance regarding travel expenses for state officials on short-term missions abroad; and the actual situation of the outgoing delegation, the allocation process is divided into two steps as follows:

- Advance payment: based on the state budget expenditure estimate in foreign currency (converted to Vietnamese Dong) approved by the competent state agency and the withdrawal form for the state budget expenditure in foreign currency (clearly marked as advance payment) of the state budget using unit (according to Appendix No. 06- TT 79 attached to this Circular), the State Treasury shall proceed with the procedure to withdraw from the Centralized Foreign Currency Fund of the State Budget to provide an advance payment to the unit; simultaneously, record the advance payment of the central state budget expenditure in Vietnamese Dong according to the accounting exchange rate prescribed by the Ministry of Finance.

When making advance payments to units, the State Treasury shall immediately deduct from the annual budget estimate of the unit.

- Settlement payment: within 15 days after the delegation returns, the central state budget using unit is responsible for submitting the settlement report on foreign currency expenditures of the outgoing delegation to the State Treasury for settlement of the advance payment. Based on the settlement report of the outgoing delegation, which has been approved by the managing authority for foreign currency expenditure settlement and the unit's request for advance payment settlement (according to Appendix No. 07-TT 79 attached to this Circular), the State Treasury shall proceed with the procedure to convert the advance payment to a settlement payment; simultaneously, settle the foreign currency advance payment according to the accounting exchange rate prescribed by the Ministry of Finance. The settlement process will offset excesses and shortages between delegations within the same unit. After offsetting between delegations, if there is still a difference, it will be handled as follows:

+ In the case where the advance payment is less than the amount settled, the unit must issue a withdrawal form for the state budget expenditure in foreign currency to send to the State Treasury to obtain additional foreign currency and deduct from the approved state budget estimate.

+ In the case where the advance payment is more than the amount settled, the unit is responsible for returning the Centralized Foreign Currency Fund of the State Budget the difference. When the unit makes the return, the State Treasury shall record the recovery of the budget estimate account when reducing the expenditure for the unit.

c. The budgetary unit is responsible for settling foreign currency expenditures corresponding to Vietnamese Dong together with the quarterly and annual settlements of the unit.

3.2.2. Payment of foreign currency for annual subscription fees, purchase of news, and broadcasting charges:

a. For expenditures on annual subscriptions to international organizations (item 157); purchase of news (item 119) of ministries and sectors: based on the foreign currency expenditure estimate accompanied by relevant payment documents (payment contracts, demand notices from international organizations) and the withdrawal form for the state budget expenditure in foreign currency, the State Treasury shall proceed to withdraw from the foreign currency fund of the state budget to make direct payments and settlements to the beneficiaries; simultaneously, record the central state budget expenditure in Vietnamese Dong according to the accounting exchange rate prescribed by the Ministry of Finance, deducted from the state budget estimate of the unit;

b. For broadcasting and communication charges (item 111) serving high-level delegations of the Party, Government, and National Assembly on overseas missions, these are implemented similarly to the payment of foreign currency for overseas mission delegations.

3.3. Purchase of foreign currency from banks: purchasing foreign currency from banks is carried out in cases where the Centralized Foreign Currency Fund of the State Budget does not have sufficient foreign currency to meet the needs of state budget payments or for budgetary units requiring foreign currency payments but conducting transactions at local State Treasuries.

Based on the allocated state budget estimate, the withdrawal form for the state budget (advance payment or settlement) of the state budget using unit, the State Treasury shall provide an advance payment or settlement to the state budget using unit in Vietnamese Dong according to the bank's announced foreign currency selling rate (at the location where the unit purchases foreign currency) at the time of foreign currency expenditure for the unit to directly purchase foreign currency from the bank.

3.4. In the event of exchange rate differences (actual exchange rate higher than the notified exchange rate), the budgetary unit will be guaranteed by the budget to provide sufficient foreign currency already allocated in the unit's annual budget estimate.

4. Settlement of foreign currency expenditures:

The budgetary unit consolidates foreign currency expenditures in the annual settlement report of the unit.

Financial authorities are responsible for reviewing the foreign currency expenditure settlement reports of budgetary units according to the current regulations of the Ministry of Finance.

III. IMPLEMENTATION

This Circular takes effect 15 days from the date of publication in the Official Gazette. The provisions set forth in this Circular shall be implemented from the 2004 fiscal year, replacing Circular No. 40/2001/TT-BTC dated June 5, 2001 of the Ministry of Finance.

During implementation, if there are difficulties or obstacles, please promptly reflect them to the Ministry of Finance for research and resolution.