CIRCULAR

Guidelines for managing and using project management costs funded from the State Budget  for investment projects

from the state budget funds

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On the basis of  Decree  Decree No. 86/2002/NĐ-CP dated November 5, 2002 of the Government stipulating functions, tasks, powers, and organizational structure  of Ministries and Ministerial-Level Agencies; Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating functions, tasks, powers, and organizational structure of the Ministry of Finance.

On the basis of  Investment and Construction Management Regulations issued together with Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government; Decree No. 07/2003/NĐ-CP dated January 30, 2003 of the Government amending and supplementing certain provisions of the Investment and Construction Management Regulations issued together with Decree No. 52/1999/NĐ-CP dated July 8, 1999 and Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government;

The Ministry of Finance guides the management and use of project management costs funded from the State Budget  at the principal investor unit  as follows:

PART I

GENERAL PROVISIONS

1- Project management costs  include all necessary expenses incurred by the principal investor  to perform management tasks throughout the entire investment process of the project, including:

- Project management costs  during the investment preparation phase are expenses serving management work related to the contents of work in the investment preparation phase, determined based on the volume of work consistent with management requirements and the scale of the project, ensuring current financial regulations, approved by the competent authority.

- Project management costs  during the implementation phase and the completion phase of the project are expenses serving management work related to the contents of work in the implementation phase and the completion phase of the project, determined based on the project management board cost standards according to the guidelines of the Ministry of Construction.

2- All units assigned by the competent authority to manage investment projects, including Investment Project Management Boards tasked with being the principal investors  (hereinafter referred to as the Principal Investor) of the projects  funded by the State Budget must manage and use project management costs for their intended purposes, ensuring frugal and effective spending in accordance with current state financial regulations and specific provisions of this Circular.

3- Financial and investment management units  under Ministries, ministerial-level agencies, central agencies of mass organizations, state-owned enterprises; Military Regions, Corps, General Departments, Bureaus (in cases where they are authorized to decide on investments);  Provincial Departments of Finance and Prices under centrally governed cities;  District Finance Departments under districts, counties, centrally governed cities under provinces  (hereinafter referred to as Financial and Investment Management Units) shall manage project management costs for projects funded from the State Budget of principal investors within their jurisdiction from the stage of guiding the preparation, reviewing, approving budgets, inspecting compliance, and auditing and approving final accounts in accordance with the provisions of this Circular.  Add

PART II

SPECIFIC PROVISIONS

I/ Classification of project management:

 1- Based on the characteristics of current project management, it is divided into two groups as follows:  :

1.1-  Group I includes:

+ Specialized project management boards;

+ Regional project management boards;

+ Project management boards established according to the current Investment and Construction Management Regulations that directly  receive salaries from  project management funds;  Project management boards assigned to manage two or more Group B projects have some dedicated staff responsible for project management who receive salaries from project management funds according to the decision of the competent authority.  1.2- Group II: Includes other principal investors and project management boards not covered by Group I above.

+  2- Project management boards belonging to Group I must prepare annual project management cost budgets and final accounts for approval by the competent authority. Project management boards belonging to Group II must prepare project management cost budgets for each project for one-time approval before implementation and prepare final accounts for all project management costs along with the final accounts of completed investment projects for approval by the competent authority according to the specific provisions of this Circular.  3- Principal Investors at the commune level

and Principal Investors

managing only one project with a total investment amount of less than or equal to one billion dong do not need to prepare and approve detailed budgets but must manage and use project management costs in accordance with the provisions of Section II, Section III, and Specific Provisions of this Circular

and settle project management costs together with the final accounts of completed projects.  II/ Project management funds:  Project management funds are included in the total budget of the project approved by the competent authority, including:  1/ Expenses for project management activities during the investment preparation phase as approved by the competent authority.

2/ Project management board expenses during the project implementation phase and completion phase according to the prescribed standards of the Ministry of Construction.  3/ In cases where the principal investor

Funding  (Project Management Board) is permitted by the competent authority to concurrently undertake certain consulting tasks related to investment construction such as preparing tender documents, analyzing and evaluating tender documents, supervising technical construction, and supervising equipment installation, the relevant consulting expenses can be calculated according to the current regulations of the Ministry of Construction.

4/ In cases where the principal investor

(Project Management Board) undertakes compensation and land clearance work themselves, the expenses for compensation and land clearance can be calculated according to the budget approved by the competent authority.

5/ In cases where the principal investor  (Project Management Board) undertakes the receipt, storage

(including protection and maintenance) of materials and equipment of the project, the labor costs and expenses serving these tasks can be calculated according to the budget approved by the competent authority.  6/ For ODA projects, if there are specific provisions regarding the management fund levels recorded in the Agreement, then

the aforementioned management fund level is the maximum amount for implementing project management tasks.  III/ Contents of Costs:  The contents of project management costs from the investment preparation phase to the completion phase include:

1/ Salary expenses including: Position-based salary according to the allocated salary fund, long-term contract salary  for individuals receiving salaries from the project according to the decision of the competent authority and current state regulations.  administrative expenses The administrative project management fee mentioned above is the maximum level for implementing project management work.

III/ Contents of Administrative Expenses  3/ In cases where the principal investor

The contents of administrative expenses for projects from the investment preparation stage to the completion stage include:

1/ Salary expenses including: Position-based salary according to the assigned salary fund, long-term contract salary  for individuals receiving salary from the project as decided by the competent authority and current State regulations.    ( At present, the level of salary expenditure is implemented according to Decree No. 28/CP dated March 28, 1997 of the Government, Decision No. 198/1999/QD-TTg dated September 30, 1999 of the Prime Minister on salaries for construction project management boards, Circular No. 32/1999/TT-LDTBXH dated December 23, 1999 of the Ministry of Labor - Invalids and Social Affairs guiding the implementation of Decision No. 198/1999/QD-TTg dated September 30, 1999 of the Prime Minister on salaries for construction project management boards ).

2/ Expenditure on allowances including: position, responsibility, region, attraction, high cost, overtime, hazardous, dangerous, mobility, special allowance of the industry for individuals receiving salaries from the project according to the decision of the competent authority. The level of expenditure is carried out according to current regulations on financial management in public institutions.

3/ Contributions to social insurance, health insurance, trade union fees, other deductions for individuals receiving salaries from the project according to the decision of the competent authority. The level of expenditure is carried out according to current regulations on financial management in public institutions.

4/ Expenditure on bonuses including: regular bonuses, ad hoc bonuses      ( if any ). Implemented according to current regulations on financial management in public institutions.

5/ Expenditure on overtime work: Only calculated for individuals not receiving overtime allowances under Point 2 above and cases where overtime work can be specifically calculated based on attendance records. The expenditure system is implemented according to the Labor Code provisions on working hours, rest periods, and related implementing regulations.

6/ Expenditure on labor remuneration includes: Remuneration under service contracts; Remuneration paid to individuals directly managing the project according to the decision of the competent authority but not receiving salaries from project management costs: The investor bases the budget estimate on the degree of time spent directly managing the project and the specific project management costs to calculate the maximum monthly payment equal to 50% of the individual's monthly salary and salary allowances.

7/ Expenditure on collective welfare includes: Payment for leave, benefit payments for regular difficulties, ad hoc hardship assistance; according  to current regulations on financial management in public institutions.

8/  Expenditure on public utility services includes: Payment for electricity, water, fuel purchases, environmental sanitation payments, other payments... according to current regulations on financial management in public institutions.

9/ Expenditure on office supplies includes: Office equipment, filing cabinets, desks and chairs, books and materials for professional use, stationery... according to current regulations on financial management in public institutions.

10/ Expenditure on communication services includes: Telephone charges, postal services, fax... according  to current regulations on financial management in public institutions.

11/ Expenditure on conferences, seminars, training: According to current regulations on financial management in public institutions.

12/ Expenditure on travel expenses: According  to current regulations on financial management in public institutions.

13/ Expenditure on rental fees includes: Renting transportation means, office space, equipment for various purposes; retraining staff, hiring experts (domestic, foreign)...

14/ Expenditure on group travel (if any) includes: Air tickets, accommodation expenses, petty cash, customs fees... According  to current financial management regulations in public institutions.

15/ Expenditure on regular maintenance and major repairs of assets of the project management board such as: Cars, motorcycles, specialized vehicles, office premises...

16/ Expenditure on professional activities: Consumables, specialized equipment that is not fixed assets, labor protection, others;

17/ Expenditure on purchasing assets for management includes: Firefighting equipment, computers, computer software. According to current financial management regulations.

18/ Allocation to higher-level management boards (if any).

19/ Other expenditures: Fees, fines, hospitality... According to current financial management regulations.

IV/ Preparation of Project Management Cost Budget:

1- For Group I : Annually, based on the investment plan assigned, the investor  prepares the project management cost budget according to the guidelines in Appendix I attached to this Circular, submitting it to the competent authority for approval.  2- For Group II

: When submitting the feasibility study report to the competent authority for approval, the unit tasked with preparing the investment simultaneously prepares and submits the project management cost budget for the preparatory phase of the investment  (If applicable). After receiving the investment decision, the investment project is recorded in the capital plan and the project is implemented, the investor proceeds to prepare the project management cost budget for submission to the competent authority for approval. The preparation and approval of the budget mentioned above is only carried out once throughout the entire project implementation process; any adjustments to the budget must be approved by the competent authority.

The overall project management cost budget is used to determine the annual allocation rate for project management boards belonging to Group I; The project management cost budget for each project for project management boards belonging to Group II, not exceeding the current state-prescribed ratio for project management costs.

V/ Implementation:

The annual project management cost budget

1- (For Group I); the total project management cost budget (For Group II) after being approved by the competent authority, the approving agency sends it to the investor, the capital disbursement agency  for implementation.  2-The disbursement control agency implements the disbursement control of project management costs according to the approved budget, in accordance with current financial management regulations and specific provisions in this Circular.

3- Handling of revenue from selling tender documents: The amount charged for selling tender documents is regulated by the current bidding regulation; the cost of organizing the bidding process cannot exceed the revenue obtained from selling tender documents; the remaining revenue obtained from selling tender documents after settling necessary costs for organizing the bidding process, the investor shall pay into the State budget.

4- Handling of certain cases for Group I:

a) At the beginning of the fiscal year, if conditions are not yet met to submit the project management cost budget for approval or the plan has not been announced, the investor may issue a letter requesting the disbursement control agency to temporarily advance funds for the following expenses:

+ Salary and other items with the nature of salary;

+ Expenses for activities serving the management of investment projects.

+ Operational expenses serving project management work.

The maximum monthly advance payment shall not exceed the expenditure level of the previous year. The project investor  is responsible for processing payment and refunding the advance payment immediately upon receiving the budget estimate.

b) In cases where the superior provides emergency funding for personnel or objectives, the project investor is permitted to supplement the funding to cover personnel costs or the supported objectives from the superior.

c) In cases where property of the Project Management Board is leased, 100% of the rental income must be remitted to the State Budget.

VI/ Inspection of management and use of project management costs:

Annually, financial and investment management units under Ministries, sectors, localities, and state-owned enterprises  organize inspections of the management and use of project management costs at the project investor units  within their jurisdiction to promptly correct any violations during the project management process by the investors and project management boards.

VII/ Settlement of project management costs:

1- Settlement of project management costs for the planned year:  After the end of the planned year, no later than January 31 of the following year, project investors (Project Management Boards) in Group I must prepare a settlement report on project management costs for the planned year to submit for approval by the competent authority. The deadline for reviewing and approving the annual settlement of project management costs shall not exceed 30 days from the date of receipt of complete documents as prescribed.

 2- Settlement of project management costs when the project is completed: When the project is completed and handed over for use (for both Groups), the project investor  must prepare a report on the settlement of project investment capital  including the settlement of project management costs, to submit for approval by the competent authority. The deadline for preparing the report on the settlement of project investment capital  and the deadline for reviewing and approving the settlement of project investment capital shall be in accordance with the Circular guiding the settlement of project investment capital issued by the Ministry of Finance.

 The method of preparation, review, and approval of the settlement of project management costs shall be carried out in accordance with the guidelines set forth in Appendix I attached to this Circular.

3- Allocation of the value of the annual settlement of project management costs: Annually, based  on the approved settlement report on project management costs for the planned year, project investors  in Group I shall implement the allocation of project management costs to component projects according to the following principles:

- For consultancy fees, compensation, acceptance, and preservation of materials and equipment directly related to a specific project, allocate these costs to that project;

- Common management costs will be allocated in proportion to the volume of work completed in the year  of each component project.

- The annual allocation value of project management costs is aggregated into the settlement value of project investment capital of each component project when settling project investment capital upon completion.  completed.

VIII/ Approval of project management cost estimates and settlements:

1- Heads of financial and investment management  units under Ministries, agencies equivalent to Ministries, agencies under the Government,  central agencies of mass organizations; Heads of management  units under Military Zones, Corps, General Departments, Bureaus (In cases where they are authorized to decide on investments) shall approve the estimates and settlements of project management costs for project investors  units under Ministries, agencies equivalent to Ministries, agencies under the Government,  within their jurisdiction.  2- Directors of Provincial Departments of Finance and Prices shall approve the estimates and settlements of project management costs for project investors

managed by their respective provinces or centrally-administered cities.  3- Heads of District Financial Departments shall approve the estimates and settlements of project management costs for project investors

managed by their respective districts or centrally-administered cities.  In cases where projects funded by the central budget are assigned to regional Project Management Boards under localities or lower-level Project Management Boards to manage part or all of the project, the competent authority deciding on the investment

of such projects must issue a decision assigning tasks and corresponding management cost levels to the regional Project Management Boards under localities or lower-level Project Management Boards for implementation. The approval of estimates and settlements of project management costs for the aforementioned Project Management Boards shall be carried out in accordance with Points 1, 2, and 3 above.  In cases where provincial-budget-funded projects are assigned to Project Management Boards under counties or equivalent levels to manage, the competent authority deciding on the investment  of such projects must issue a decision assigning tasks and corresponding management cost levels to lower-level Project Management Boards for implementation. The approval of estimates and settlements of project management costs for the aforementioned Project Management Boards shall be carried out in accordance with Point 3 above.

of such projects must issue a decision assigning tasks and corresponding management cost levels to the regional Project Management Boards under localities or lower-level Project Management Boards for implementation. The approval of estimates and settlements of project management costs for the aforementioned Project Management Boards shall be carried out in accordance with Points 1, 2, and 3 above.  IX / Responsibilities:  1- Responsibilities of  project investors:  - Prepare project management cost estimates and settlements in accordance with the timeframes and contents stipulated in this Circular; and bear responsibility for the accuracy of the figures and the legality of the documents; Provide all relevant documents relating to the estimates and settlements as required by the approving authority;

- Adhere fully to the contents of the budget estimate assignment decisions and the approved settlement notifications issued by the approving authority;

- Reconcile with the payment oversight agency regarding the amount of funds already paid;  - Conduct periodic self-assessments every six months and annually on the implementation and use of project management costs at their units, thereby drawing lessons to effectively manage.

2- Responsibilities of

the reviewing and approving agencies:

- Manage project management costs funded from the state budget for project investors

within their jurisdiction, from the guidance on preparing estimates through to the review and approval of settlements;  - During the review and approval process, the reviewing and approving agency has the right to recover, reclaim, or hold accountable for compensation for expenditures that violate regulations or are not included in the approved estimate; and simultaneously require project investors to comply with the submission of state revenues as prescribed.

- Bear responsibility for the results of the review of estimates and the examination of project management cost settlements;  3- Responsibilities of the payment oversight agency:

- Oversight and  payment of project management costs in accordance with the approved estimates, in compliance with current state financial management regulations and specific provisions in this Circular;

- During the examination and approval of final accounts, the examining and approving bodies have the right to deduct, recover, or hold accountable for compensation for expenses that violate regulations and are not included in the approved budget; at the same time, they require investors to comply with the submission of national budget revenues according to regulations.

- Bear responsibility for the results of the examination of project management cost estimates and the examination of final accounts.

3- Responsibilities of the payment oversight body:

- Oversight,  payment of project management costs according to the approved budget, in accordance with current State financial management regulations and specific provisions in this Circular;  from state budget funds under its management. Appropriate disciplinary measures shall be taken against individuals and units seriously violating the implementation of management, payment, and use of project management costs.

- Verify, reconcile, and confirm the amount of capital already paid to the project investors when reporting the final settlement;  - Provide comments, evaluations, and recommendations to the auditing agency and the approving authority regarding the compliance and management by the project investors;

- Have responsibilities towards the project investors:

4- Responsibilities of the supervising entity of the project investor:

- Guide the project investors under their jurisdiction to manage and utilize the project management costs in accordance with this Circular;  - Coordinate with the auditing agency to conduct audits on the final settlement of project management costs for project investors under their jurisdiction;

- Create legal conditions for project investors to recover the excess capital paid beyond the approved final settlement value;  5- Responsibilities of Ministries, sectors, and localities:

- Regularly inspect the management and utilization of project management costs from state budget funds within their jurisdiction. Take appropriate disciplinary measures against individuals and units that seriously violate regulations on management, settlement, and utilization of project management costs;

This Circular takes effect fifteen days after its publication in the Official Gazette and replaces Circular No. 23/2002/TT-BTC dated March 20, 2002, issued by the Ministry of Finance, guiding the management and utilization of project management costs from state budget funds;

Project investors who have been authorized to approve the project management cost estimates before the effective date of this Circular shall continue to implement according to the approved estimates until the end of the plan year for project investors in Group I and until the completion of the project for project investors in Group II.  This Circular takes effect 15 days after publication in the Official Gazette and replaces Circular  

PART III

IMPLEMENTING PROVISIONS

guiding the management,  use of project management costs from state budget funds number 23/2002/TT-BTC dated March 20, 2002, issued by the Ministry of Finance.  Investors who have been approved by the competent authority for project management cost budgets before the effective date of this Circular may continue to implement the approved

budget until the end of the plan year for investors  in Group I and until the completion of the project  for investors  in Group II ./  belongs to Group II. / .