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THE
MINISTRY OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
27/2007/TT-BTC
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Hanoi,
April 03, 2007
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CIRCULAR
GUIDING THE MANAGEMENT AND PAYMENT OF INVESTMENT CAPITAL AND
NON-BUSINESS CAPITAL OF INVESTMENT NATURE BELONGING TO THE STATE BUDGET CAPITAL
SOURCE
Pursuant to the State Budget
Law No. 01/2002/QH11 of December 16, 2002;
Pursuant to the November 26, 2003 Construction Law and the Government's Decree No.
16/2005/ND-CP of February 7, 2005, on the management of investment projects on
the construction of works, and Decree No. 112/2006/ND-CP of September 29, 2006,
amending and supplementing a number of articles of Decree No. 16/2005/ND-CP of
February 7, 2005;
Pursuant to the Government's Decree No. 52/1999/ND-CP of July 8, 1999,
promulgating the Regulation on construction and investment management, Decree
No. 12/2000/ND-CP of May 5, 2000, and Decree No. 07/2003/ND-CP of January 30,
2003, amending and supplementing a number of articles of the Regulation on
construction and investment management, issued together with the Government's
Decree No. 52/1999/ND-CP of July 8, 1999;
Pursuant to the Government's Decree No. 71/2005/ND-CP of June 6, 2005, on the
management of investment in the construction of peculiar works;
The Finance Ministry guides the management and payment of investment capital
and non-business capital of investment nature belonging to the state budget
capital source as follows:
Part I
GENERAL PROVISIONS
1. This Circular applies to
investment projects funded with development investment capital or non-business
capital of investment nature belonging to the state budget capital source
(hereinafter collectively referred to as projects) managed by ministries,
ministerial-level agencies, government-attached agencies, political
organizations, socio-political organizations, social organizations,
socio-professional organizations, economic groups and state corporations
(hereinafter collectively referred to as ministries), provinces, centrally run
cities (hereinafter collectively referred to as provinces) and districts, towns
and provincial cities (hereinafter collectively referred to as districts).
This Circular does not apply to
projects funded with commune budgets, investment projects of Vietnamese
representative missions in foreign countries, and projects on the purchase of
copyright.
2. State budget capital
(including domestic capital of different state budget levels, foreign loans of
the Government and foreign aid capital for the Government, administrations at
various levels and state agencies) shall be paid only for investment projects
eligible for using state budget capital under the State Budget Law.
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4. Finance agencies at various
levels shall perform the financial management of investment capital and
non-business capital of investment nature belonging to the state budget
capital. State treasuries and units tasked to control investment capital
payment shall control and pay capital in a prompt, adequate and lawful manner
for projects meeting all conditions for capital payment.
Commercial banks acting as
service banks for projects funded with official development assistance (ODA)
capital shall, depending on their assigned functions and tasks, comply with the
Finance Ministry's regulations on financial management of ODA projects.
Part II
SPECIFIC PROVISIONS
A.
ELABORATION OF INVESTMENT CAPITAL PLANS, ALLOCATION OF INVESTMENT CAPITAL AND
VERIFICATION OF INVESTMENT CAPITAL ALLOCATION
I. PROJECTS
MAY BE INCORPORATED INTO THE STATE'S ANNUAL INVESTMENT CAPITAL PLANS ONLY IF
THEY SATISFY THE FOLLOWING REQUIREMENTS:
1. For planning projects: They
have planning outlines or tasks and cost estimates for planning work which have
been duly approved.
2. For investment preparation
projects: They are in line with approved branch or territorial development plannings
and have cost estimates for investment preparation work which have been duly
approved.
3. For investment execution
projects: They have investment decisions which are issued prior to October 31
of the year preceding the plan year and have designs, cost estimates and total
cost estimates which have been approved according to regulations.
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The duration for arrangement of
capital for execution of group-B projects in plans must not exceed four years,
or two years for group-C projects.
II.
ELABORATION OF ANNUAL INVESTMENT CAPITAL PLANS, ALLOCATION OF INVESTMENT
CAPITAL AND VERIFICATION OF INVESTMENT CAPITAL ALLOCATION:
1. Elaboration of plans:
- According to the provisions of
the State Budget Law regarding elaboration of annual state budget estimates,
investors shall elaborate investment capital plans of their projects on the
basis of the project execution progress and purposes and send them to superior
management agencies.
- Ministries shall synthesize,
consider and elaborate investment capital plans and send them to the Planning
and Investment Ministry and the Finance Ministry. Provincial-level People's
Committees shall estimate local budget amounts for investment capital plans and
submit them to the Standing Boards of provincial-level People's Councils for
comments before sending them to the Planning and Investment Ministry and the
Finance Ministry.
- The Planning and Investment
Ministry and the Finance Ministry shall synthesize and report investment
capital plans to the Prime Minister for submission to the National Assembly for
decision and assignment of investment capital plans to ministries and
localities.
- The time limits for
elaboration, submission, approval and assignment of investment capital plans
comply with the State Budget Law.
2. Capital allocation:
2.1. For centrally managed
investment capital: Ministries shall allocate investment capital as planned to
each of eligible projects under their management, ensuring compatibility with
the assigned total investment level, domestic and foreign capital structure and
economic structure and capital levels of the State's important projects and
compliance with the National Assembly's resolutions and the Government's directions
on the implementation of annual socio-economic development plans and state
budget estimates.
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Provincial-level Finance
Services shall, together with provincial-level Planning and Investment
Services, propose the allocation of investment capital to each project under
provincial management to provincial-level People's Committees for decision.
District-level Finance Sections
shall, together with functional agencies, advise district-level People's
Committees on allocating investment capital to each project under their
management.
Particularly for projects to be
invested with capital amounts permitted to be retained under the National
Assembly's resolutions and the Prime Minister's decisions and capital amounts
allocated from the central budget to local budgets for specified purposes, they
shall also comply with regulations on investment objects and use purposes of
each source of investment capital.
2.3. Principles on allocation of
capital to projects included in annual plans:
- Assurance of conditions for
projects to be included in investment capital plans as specified in Item I,
Part A, Section II of Circular.
- Compliance with the provisions
of Points 2.1 and 2.2 above.
- Allocation of sufficient
capital for payment for projects which have been put into use and have the
approved investment capital settlements but are still in shortage of capital;
and allocation of capital to cover expenses for audit, verification and
approval of capital settlements of projects which have been completed but not
yet paid because their settlements have not yet been approved.
- When capital for a project is
incorporated into the investment execution plan but only for project execution
preparation, such must be noted in the capital allocation document.
3. After allocating investment
capital, ministries and provincial-level People's Committees shall send
investment capital plans to the Finance Ministry; and districts shall send
investment capital plans to provincial-level Finance Services.
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After the capital allocation is
verified and approved by finance agencies, ministries and provincial-level and
district-level People's Committees shall assign capital plans to investors for
implementation and, concurrently send them to the state treasuries where
projects' accounts are opened for monitoring and use as a basis for capital
control and payment.
5. Verification and notification
of lists of projects and their investment capital:
5.1. For projects managed by
ministries:
- The Finance Ministry shall
verify plans on allocation of investment capital according to Point 2.3 above
and notify the list of investment projects which have completed all investment
procedures and satisfied all conditions for capital allocation and their
capital levels to each ministry and, concurrently to the state treasuries for
use as a basis for control of capital payment.
- When the capital allocation is
incompliant with regulations, the Finance Ministry shall issue documents to
request ministries to make readjustment.
5.2. For projects managed by
provinces or districts:
- Based on the investment
capital plans decided by People's Committees, provincial-level Finance Services
or district-level Finance and Planning Sections shall examine construction
investment procedures required for the projects and send notices thereon to
various provincial- or district-level branches as well as state treasuries for
use as a basis for control of capital payment.
- When construction investment
procedures have not yet been completed or when the capital allocation is
incompliant with regulations, provincial-level Finance Services or
district-level Finance and Planning Sections shall make written reports to the
People's Committees of the same level for the latter to direct the completion
of procedures as prescribed.
5.3. Investors shall send to
finance agencies at various levels basic documents of projects already
incorporated into the plans for verification and notification of the list of
capital payments for investment projects (these documents need to be sent only once
until the projects' investment activities are completed, except where
supplementation and/or revision are required), including:
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- For investment preparation
projects: the document approving the cost estimate for investment preparation
work.
- For investment execution
projects: the document on the investment project on the construction of works
(or the techno-economic report, for projects for which only the techno-economic
report is required), enclosed with the investment decision of a competent
authority and decisions on readjustment to the project (if any), the decision
approving the technical design (for projects subject to three-step design) or
the decision approving the construction drawing design (for projects subject to
one-step or two-step design) and the decision approving the total cost
estimate.
III.
READJUSTMENT OF ANNUAL INVESTMENT CAPITAL PLANS
1. Principles:
- Ministries and localities
shall periodically review the execution progress and investment purposes of
projects in the year so as to readjust investment capital plans according to
their competence or submit them to the Prime Minister for readjustment, transfer
capital of projects which cannot be executed to projects executed ahead of
schedule with uncompleted volumes or to projects likely to be implemented ahead
of plan in the year.
- Before sending plans on
readjustment of investment capital of projects to finance agencies, ministries
and localities shall work with state treasuries to identify the amounts of
capital under the annual plans already paid for the projects and the amounts
unused due to non-implementation in order to ensure that the projects' planned
capital amounts, after the adjustment, are not lower than the capital amounts
already paid by the state treasuries.
- Surplus capital after the
readjustment of assigned plans shall be transferred to other units under
decisions of competent authorities.
2. Finance agencies at various
levels shall scrutinize and notify the list of projects with readjusted capital
levels according to above regulations.
3. The deadline for readjusting
annual investment capital plans is December 31 of the plan year.
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I. OPENING
OF ACCOUNTS:
1. For domestic capital:
Investors may open accounts at
state treasuries convenient for payment control and their transactions.
2. For foreign capital:
Investors may open accounts at service
banks under the guidance of the Finance Ministry and the banks.
II. Basic
documents of projects
In order to serve the management
and control of investment capital payment, investors shall send to the state
treasuries where they open accounts basic documents of their projects (these
documents must be originals or true copies, which need to be sent only once
till the projects' investment activities are completed, except where
supplementation and/or revision are required), including:
1. For planning projects:
- The competent authority's
document approving the outline or tasks of the planning project;
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- The document on the selection
of the contractor in accordance with the Bidding Law;
- The contract between the
investor and the contractor.
2. For investment preparation
projects:
- The approved cost estimate for
investment preparation work;
- The document on the selection
of the contractor in accordance with the Bidding Law;
- The contract between the
investor and the contractor.
3. For investment execution
projects:
3.1. For projects funded with
domestic capital:
- The investment project on the
construction of works (or the techno-economic report, for projects for which
only the techno-economic report is required), enclosed with the investment
decision of a competent authority and decisions on readjustment to the project
(if any);
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- The decision on the selection
of the contractor according to the Bidding Law (including bidding, designation
of contractors, direct procurement, competitive offers, self-implementation,
and selection of contractors in special cases);
- The contract between the
investor and the contractor (including documents enclosed with the contract:
the prospectus of the bidding dossier; the prospectus of the bid price,
enclosed with the contractor's detailed price list and conditions for price
changes (if any), general and specific terms of the contract).
- Approved detailed cost
estimates of each job and work item, for bidding packages carried out by a
designated contractor or by the investor itself.
3.2. For ODA projects: Apart
from the above documents, the following documents are required:
+ The Vietnamese versions of the
credit agreement and the disbursement manual (if any), which are signed and
sealed by the investor. Particularly, the contract between the investor and the
contractor must be in Vietnamese or translated into Vietnamese and signed and
sealed by the investor;
+ The advance capital guarantee
(if any) as specified in the contract (including projects funded with domestic
capital but executed by foreign contractors).
4. For investment preparation
work for which capital is arranged in the investment execution plan, the
approved cost estimate for investment preparation work is required.
5. For project execution
preparation work for which capital is arranged in the investment execution
plan:
- The investment project on the
construction of works (or the techno-economic report, for projects for which
only the techno-economic report is required), enclosed with the investment
decision of a competent authority;
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- The document on the selection
of the contractor in accordance with the Bidding Law;
- The contract between the
investor and the contractor.
III.
ADVANCE PAYMENT AND RECOVERY OF ADVANCE CAPITAL
1. Objects eligible for advance
payment and levels of advance capital:
1.1. For bidding packages for
the construction of works:
- For bidding packages valued at
under VND 10 billion, the advance capital level is equal to 20% of the contract
value.
- For bidding packages valued at
between VND 10 billion and under 50 billion, the advance capital level is equal
to 15% of the contract value.
- For bidding packages valued at
VND 50 billion or more, the advance capital level is equal to 10% of the
contract value.
1.2. For bidding packages for
procurement of equipment (including imported equipment and domestically
procured equipment):
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Capital shall be advanced
according to the schedule of payment by the investor to the contractor as
specified in the contract up to the time equipment is put into the investor's
warehouses (for equipment requiring no installation) or is completely installed
and tested before takeover (for equipment requiring installation).
1.3. For bidding packages or
projects executed under EPC contracts:
- Capital for the procurement of
equipment shall be advanced according to the equipment supply schedule
specified in the contract (similar to advance capital for equipment
procurement).
- For other jobs, the advance
capital level is equal to 15% of the contract value.
1.4. For consultancy and
planning contracts:
The advance capital level shall
be agreed upon in the contract between the investor and the contractor but must
be at least 25% of the contract value.
1.5. For compensation and ground
clearance work: Capital shall be advanced at a level dependent on the execution
progress but must not exceed the capital plan already approved for the whole
year. The advance of capital for the construction of resettlement quarters or
new residential quarters in service of compensation is in accordance with
regulations applicable to projects or bidding packages on the construction of
works.
1.6. For urgent projects such as
dyke building and consolidation, flood control and drainage works, seedling
projects, projects for immediately overcoming flood or natural disaster
consequences, the advance capital level is equal to 50% of the capital plan
decided by a competent authority.
1.7. For some structures and
semi-finished products used in construction which are of great value and need
to be manufactured beforehand in order to ensure construction schedule and some
special supplies and supplies which need to be reserved on a seasonal basis, if
it is necessary to advance capital at a level higher than the above-said level,
the advance capital level may be based on the manufacture, import and reserve
of these supplies but must not exceed the annual capital plan.
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2. Recovery of advance capital:
2.1. For bidding packages for
the construction of works: Advance capital shall be gradually recovered upon
payment for completed volumes according to the following regulations:
- The recovery starts:
+ When 30% of the contract value
is paid, for bidding packages valued at under VND 10 billion.
+ When 25% of the contract value
is paid, for bidding packages valued at between VND 10 billion and under 50
billion.
+ When 20% of the contract value
is paid, for bidding packages valued at VND 50 billion or more.
- Advance capital shall be fully
recovered when 80% of the contract value is paid for the completed volume under
the bidding package.
- If advance capital is not
fully recovered because the bidding package has not yet been received payment
up to the above said percentage but the project is not further incorporated
into the subsequent plan or is suspended, the investor shall explain to the
state treasury on the use of the advance capital amount not yet recovered and
concurrently report thereon to competent authorities for handling.
- If capital has been advanced
but construction under the bidding package cannot be executed according to the
schedule specified in the contract, the investor shall explain such to the
state treasury and repay the advance capital amount.
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- For equipment requiring no
installation, after equipment is tested and put into the investor's warehouse,
the investor shall send relevant vouchers to the state treasury for the latter
to carry out procedures for payment for the completed equipment volume and
fully recover the advance capital amount.
- For equipment requiring installation,
after equipment is completely installed, the investor shall send relevant
vouchers to the state treasury for the latter to carry out procedures for
payment for the completed equipment volume and fully recover the advance
capital amount.
When capital has been advanced
but, past the time limit specified in the contract, equipment has not been
received, the investor shall explain such to the state treasury and repay the
advance capital amount.
2.3. For bidding packages or
projects executed under EPC contracts: Advance capital for each job is
recovered according to regulations on the recovery of advance capital for
corresponding work.
2.4. For consultancy and
planning contracts:
Advance capital is recovered
upon each payment for completed consultancy or planning volume on the following
principles:
- Recovery starts upon payment
for completed volume.
- The recovered capital amount
is equal to the paid capital amount multiplied by (x) the advance capital rate.
2.5. For ground clearance and
compensation work, advance capital is recovered upon payment for the completed
work volume.
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2.7. For some structures and
semi-finished products used in construction which are of great value and need
to be manufactured beforehand in order to ensure the construction schedule and
some special supplies and supplies which need to be reserved on a seasonal
basis, advance capital is recovered upon payment for the completed volume and
fully recovered when the paid capital reach 80% of the contract value.
2.8. The recovery levels of
advance capital for contracts may be higher than those prescribed above if
investors and contractors so agree.
2.9. When advance capital for
some works (such as compensation for ground clearance) is, for some force
majeure reasons, not yet paid to beneficiaries, the investor shall deposit
such amount in a state treasury or credit institution. The total interest
amount, if any, shall be fully remitted into the state budget.
2.10. If the plan year has
expired but advance capital has not yet been fully recovered because the
bidding package has not yet received payment up to the prescribed percentage,
the remainder shall be further recovered in the subsequent year's plan and not
be deducted from the subsequent year's investment capital plan.
3. Documents on advance payment:
Apart from basic documents
specified in Section II above, the investor shall send to the state treasury a
written request for advance payment of investment capital and the investment
capital withdrawal voucher.
For some structures and
semi-finished products used in construction which are of great value and need
to be manufactured beforehand in order to ensure the construction schedule and
some special supplies and supplies which need to be reserved on a seasonal
basis, the following documents are also required: the contract between the
contractor and the unit that processes, manufactures or imports structures or
supplies or the record between the investor and the contractor certifying the
structures, semi-finished products, special supplies and supplies to be
reserved on a seasonal basis which have been transported to construction sites.
4. The advance payment of
capital shall be made within the payment time limit under the capital plan one
or several times, depending on the demand for advance capital, with the advance
capital amounts not exceeding the levels prescribed above.
IV. PAYMENT
FOR COMPLETED VOLUMES
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1.1. The completed volume of
construction works performed by a designated contractor or by the investor
itself which is eligible for payment is the value of the work volume which has
been executed and passed the takeover test under the signed contract and
satisfies the following conditions:
- The volume is compatible with
the construction drawing design already approved and included in the assigned
annual investment plan;
- Its detailed cost estimate has
been approved in accordance with the State's current regulations on unit price
limits.
1.2. The completed volume of
construction works performed in the form of bidding or under EPC contracts
which is eligible for payment is the work volume which has been executed and
passed the takeover test according to schedule and included in the signed
contract and the assigned annual investment plan.
Based on the implementation
duration and nature of the contract, the payment shall be made by the following
modes:
- Payment based on package
prices (package payment): The investor shall make payment to the contractor
according to the package price specified in the contract when the contractor
fulfills his/her/its contractual obligations.
- Payment based on fixed unit
prices: The investor shall make payment to the contractor for completed works
according to the unit prices already set in the contract.
- Payment based on adjusted
prices: To be applied to bidding packages of which the quantity and volume of
works cannot be determined at the time of signing contracts or which see large
price fluctuations made by the State and are performed under contracts of over
12 months.
If there is any arising volume
which is either larger or smaller than the contractual volume but within the
scope of the bidding dossier and not through the fault of the contractor, the
increased or decreased volume must meet specific conditions defined in the
contract, be approved in writing and calculated according to contractual unit
prices. The adjusted contract value must not exceed the cost estimate, total
cost estimate or price of the bidding package stated in the approved bidding
plan, unless so agreed by competent persons.
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On the basis of the volume which
has been tested before takeover, the investor and the contractor shall
determine the contract performance progress of the contract and make requests
for payment therefor.
1.3. After the completed volume
is tested before takeover, the investor shall make and send a payment request
dossier to the state treasury, comprising:
- The record on the takeover
test of the completed part of the construction work or the construction stage
or the record on the takeover test of the completed construction item or work
before use, enclosed with the statement on the calculation of the value of the
volume taken over;
- The written request for
investment capital payment;
- The written request for
advance payment of investment capital (if any);
- The investment capital
withdrawal voucher.
For completed volumes of
construction works performed through bidding, the state treasury shall make
payment based on the execution progress determined by the investor and the
contractor in their contract and the volume taken over.
2. Payment for completed
equipment volume:
2.1. The completed equipment
volume eligible for payment is the equipment volume satisfying the following
conditions:
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- It is included in the contract
between the investor and the contractor;
- It has been warehoused by the
investor (for equipment requiring no installation) or completely installed and
tested before takeover (for equipment requiring installation).
2.2. After the completed
equipment volume is tested before takeover, the investor shall compile and send
a payment request dossier to the state treasury, comprising:
- The record on the takeover
test according to regulations. For equipment requiring no installation, the
record on the takeover test between the investor and contractor under the
contract is required;
- Invoices (for domestically
purchased equipment) in case of contractor designation (true copy signed and
sealed by the investor);
- Transport, insurance, tax and
warehousing charge vouchers (if these charges are not yet included in the
equipment prices);
- The written request for
payment of investment capital;
- The written request for
advance payment of investment capital (if any);
- The investment capital
withdrawal voucher.
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3.1. The completed consultancy
volume eligible for payment is the performed volume already tested before
takeover, which is included in the contract and the assigned investment plan.
3.2. After the completed volume
is tested before takeover, the investor shall compile and send a payment
request dossier to the state treasury, comprising:
- The record on the take test or
delivery of the completed consultancy volume or the report on performance
results. For contracts with time-based payment, a list of expenses made by the
investor is required.
- The written request for
payment of investment capital;
- The written request for
advance payment of investment capital (if any).
- The investment capital
withdrawal voucher.
4. Payment for other completed
volumes:
Apart from jobs for which
consultants have been hired, other jobs are eligible for payment when they
acquire all the following grounds to prove that they have been completed:
- For construction land
allocation fees and land use right transfer tax: lawful invoices and receipts
issued by collecting agencies are required.
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For compensation and ground
clearance work involving the construction of works (including the building of
houses for relocation in service of ground clearance): the advance payment and
payment shall be made as in the case of projects or bidding packages on the
construction of works.
- For expenses for construction
commencement, takeover, trial operation and inauguration, a written permit of a
competent authority (except for trial operation), the approved cost estimate
and a list of expenses made by the investors are required.
- For expenses for specialists,
training of technicians and production managers: the contracts, the approved
cost estimates and a list of expenses made by the investor are required.
- For construction insurance
premiums: The insurance policy is required.
- For project management
expenses:
+ Expenses must comply with the
prescribed payment percentage (%).
+ Contractual expenses
(including cases of hiring consultants for project management) shall be paid
according to the terms of the contracts.
+ Expenses subject to
elaboration of cost estimates shall be paid according to the approved cost
estimates.
- For expenses for planning,
investment preparation and project execution preparation, the approved cost
estimate, the contract and the record of the takeover test of the completed
work volume or the report on performance results are required.
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5. Time limits and forms of
payment:
- Basing themselves on the
investors' payment request dossiers, within seven working days after receiving
valid and complete dossiers, state treasuries shall examine dossiers, allocate
capital to investors and concurrently make payment on behalf of investors
directly to contractors, and recover the advance capital amounts according to
regulations.
- For annual capital plans
already assigned to projects, payments shall be made only in the plan year
according to the State Budget Law. Past that time limit, work volumes which
have been completed but not yet paid shall be incorporated into the subsequent
year's plan for payment.
6. For projects funded with
foreign capital or bidding packages subject to international bidding under
credit agreements between the Vietnamese Government and the donors, which
contain provisions on advance payment of capital (objects eligible for advance
payment, conditions for and levels of advance payment, recovery of advance
capital) and payment of capital different from the above provisions, these
agreements will be applied.
7. Investors shall arrange
enough capital in the annual plans for the purchase of insurance for
construction works. The State does not make payment for damage and risk
expenses which fall under the insurance scope if the investors fail to purchase
insurance for construction works according to current regulations.
8. The capital amounts paid for
each job, construction item and work must not exceed the cost estimates or
winning bid prices; the total capital amounts paid for the projects must not
exceed the approved total investment levels.
The capital amount paid in the
year for the projects (including advance capital and capital paid for completed
volumes) must not exceed the annual capital amount already planned for the
project.
9. For some special important
projects which need a mechanism for advance payment and payment of capital
different from the above regulations, the Finance Ministry shall issue separate
guiding documents after obtaining opinions of competent authorities.
10. The management, payment,
recovery and settlement of advance capital amounts allocated under the
subsequent year's cost estimates for projects shall be effected as follows:
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- The advance payment of capital
must comply with the provisions of Clause 3, Article 57 of the December 16,
2002 State Budget Law and Article 61 of the Government's Decree No.
60/2003/ND-CP of June 6, 2003, detailing and guiding the implementation of the
State Budget Law.
- After the advance payment of
capital for the projects is permitted by competent authorities, the Finance
Ministry shall notify the managing ministries of the total advance capital
level, source of advance capital and time limit for advance payment and
recovery and concurrently notify such information to state treasuries for payment.
- Payment time limit: The time
limit for payment of advance capital under a year's plan coincides with the
time limit for payment of investment capital under such year's plan. Past the
payment time limit, state treasuries shall carry out procedures to cancel
advance capital amounts that remain unused.
- Recovery: Ministries shall
incorporate the projects' capital plans into the subsequent year's budget
estimates for repayment of advance capital. When publicizing the list of
projects and their annual investment capital plans, the Finance Ministry shall
concurrently notify the recovery of capital amounts which are exactly equal to
the advance capital amounts. When ministries fail to arrange or fully arrange
the to-be-recovered amounts, the Finance Ministry shall recover advance capital
amounts by deducting them from the assigned investment expenditure estimates of
ministries and issue written notices to ministries for coordination.
- Capital settlement: Advance
capital under a year's plan shall be settled with that year's budget but not
with the budget of the year when the advance payment is made. When advance
capital for a project is recovered once every several years, the recovered
capital amount of one year's plan shall be settled with that year's budget, the
capital amounts already paid but not yet arranged for recovery shall be
forwarded to the subsequent year for settlement in accordance with the capital
recovery plan.
10.2. For projects managed by
localities:
- The advance of capital from the
budget estimates of local administrations shall be decided by provincial-level
People's Committee presidents according to their competence in accordance with
State Budget Law No. 01/2002/QH11 of December 16, 2002, the Government's Decree
No. 60/2003/ND-CP of June 6, 2003, detailing and guiding the implementation of
the State Budget Law, and the Finance Ministry's Circular No. 59/2003/TT-BTC of
June 23, 2003, guiding the implementation of Decree No. 60/2003/ND-CP of June
6, 2003.
- The management, payment,
recovery and settlement of advance capital shall be effected under the
provisions of Point 10.1 above.
C.
MANAGEMENT AND PAYMENT OF INVESTMENT CAPITAL FOR PECULIAR WORKS
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1. Works of state secret are
those defined in Article 2 of the Government's Decree No. 71/2005/ND-CP of June
6, 2005, on management of investment in the construction of peculiar works.
The management of investment in
the construction of works of state secret shall be performed under the
Government's Decree No. 71/2005/ND-CP of June 6, 2005, on management of
investment in the construction of peculiar works.
The elaboration of plans,
allocation and notification of investment capital; control, payment and
settlement of investment capital for works of state secret shall be made
according to regulations applicable to investment capital from the state
budget. Particularly for projects of state secret managed by the Public
Security Ministry or the Defense Ministry, the Finance Ministry shall transfer
capital directly to the Public Security Ministry or the Defense Ministry for
management, allocation, payment and settlement for projects.
2. Elaboration of investment
capital plans, allocation and notification of investment capital:
- The elaboration of investment
capital plans, and allocation and notification of investment capital shall be
made according to regulations applicable to investment capital from the state
budget, in which the list of works of state secret and their capital levels
shall be clearly determined.
- For projects of state secret
managed by the Public Security Ministry or the Defense Ministry, the Finance
Ministry shall verify the allocation of capital and notify the list of eligible
projects and their capital levels to the Public Security Ministry or the Defense
Ministry for management, control and payment of capital for projects.
3. Capital transfer, allocation
and payment:
- The transfer, allocation and
payment of investment capital shall be made according to regulations applicable
to investment capital from the state budget. For works of state secret managed
by the Public Security Ministry or the Defense Ministry, the Public Security
Ministry or the Defense Ministry shall open deposit accounts at transaction
bureaus of state treasuries to receive capital transferred from the Finance
Ministry.
- Based on the annual capital
plans and the execution progress of the projects, the Finance Ministry shall
transfer capital to the Public Security Ministry and the Defense Ministry in
the form of money order. The amount of capital to be transferred each time
shall be based on the reports on the execution progress of the projects and the
written request for capital transfer of the Public Security Ministry or the
Defense Ministry. After January 31 of the subsequent year, the credit balance
on the deposit accounts shall be remitted to the state budget.
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- For works of state secret
managed by other ministries, branches and localities, state treasuries shall
only receive capital withdrawal vouchers and transfer money at the request of
investors without controlling payment contents. Investors shall take full
responsibility for controlling payment contents.
- At the end of the plan year,
the Public Security Ministry and the Defense Ministry shall report on the
implementation of capital plans, the receipt and use of capital; certify the
capital amounts paid in the year and the total capital paid to each project
from construction commencement till the end of the state budget year; and give
comments on the implementation of investment plans and the observance of
financial regimes and policies.
II. WORKS
BUILT ON URGENT ORDERS
1. Works built on urgent orders
are those defined in Article 2 of the Government's Decree No. 71/2005/ND-CP of
June 6, 2005, on management of investment in the construction of peculiar
works.
The management of investment in
the construction of works under urgent orders shall be performed under the
Government's Decree No. 71/2005/ND-CP of June 6, 2005, on management of
investment in the construction of peculiar works.
2. Advance payment and payment
of capital:
2.1. Advance payment of capital:
- A dossier for advance payment
of capital comprises:
+ The decision on the building
of an urgent work, issued by a competent person;
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+ The investment withdrawal
voucher.
- Advance capital level and
recovery of advance capital:
+ The level of advance capital
is equal to 50% of the assigned investment capital plan.
+ The advance capital shall be
gradually recovered upon payment for completed volumes and fully recovered upon
completion of works.
2.2. Payment for completed
volumes
The control and payment of
capital shall be based on current norms and unit prices. A payment dossier
comprises:
- The approved cost estimate.
- The record of the takeover test
of the completed construction stage, construction part, item or work, enclosed
with the statement on the calculation of the value of the volume taken over.
- The written request for
payment of investment capital;
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- The investment capital
withdrawal voucher.
State treasuries shall make each
payment at the request of the person assigned to manage the construction of the
urgent work, which, however, must not exceed the value of the completed volume
taken over and the assigned capital plan.
III.
MAKESHIFT WORKS
1. Makeshift works are those
defined in Article 2 of the Government's Decree No. 71/2005/ND-CP of June 6,
2005, on management of investment in the construction of peculiar works.
2. Management, advance payment
and payment of capital:
The management, advance payment
and payment of capital for makeshift works shall be performed under the
provisions of Part B of this Circular and the following additional provisions:
- For cases of package payment
specified in the Construction Ministry's Circular No. 04/2005/TT-BXD of April
1, 2005, capital for makeshift works may be accounted as payment for the
completed volume of the project: Apart from the project's documents, the
payment dossier also comprises a written request for payment of investment
capital and the investment capital withdrawal voucher.
- For large-scale and
complicated works with cost estimates formulated for the building of makeshift
houses at construction sites for accommodation and construction administration,
the payment shall be controlled based on the approved cost estimates: Apart
from the project's documents, the payment dossier also comprises the decision
approving the cost estimate, enclosed with the approved cost estimate, the
record of the takeover test, enclosed with the statement on the calculation of
the value of the completed volume, a written request for payment of investment
capital, the written request for advance payment of investment capital (if any)
and the investment capital withdrawal voucher.
D.
MANAGEMENT AND PAYMENT OF NON-BUSINESS CAPITAL OF INVESTMENT NATURE
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Non-business capital of
investment nature in the state budget estimates of administrative and
non-business agencies and units shall be used only for investment in the
upgrading and extension of existing material foundations (including
construction of work items in existing material foundations of administrative
and non-business agencies and units). Non-business capital may not be allocated
for new investment projects.
2. Elaboration of plans,
allocation and notification of capital:
The elaboration of plans and
allocation and notification of capital shall be performed under the provisions
of the State Budget Law and the Finance Ministry's guidance regarding
non-business capital.
3. Advance payment and payment
of capital:
3.1. Basic documents:
- For projects capitalized at
VND 1 billion or more, basic documents are similar to those of investment
projects funded with development investment capital sources.
- For projects capitalized at
under VND 1 billion, basic documents comprise:
+ The cost estimate and the
decision approving the cost estimate and design;
+ The document on the selection
of the contractor according to the Bidding Law;
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3.2. Advance payment of capital:
- For projects capitalized at
VND 1 billion or more, the level of advance capital and recovery of advance
capital comply with regulations applicable to investment projects funded with
investment development capital sources.
- For projects capitalized at
under VND 1 billion, the advance capital is equal to 30% of the assigned annual
plan. Advance capital shall be gradually recovered upon each payment for
completed volumes and fully recovered in the plan year. The capital amount to
be recovered each time is equal to the paid capital amount multiplied (x) by
the advance payment rate.
- A dossier of advance payment of
capital comprises a written request for advance payment of investment capital
and the investment capital withdrawal voucher.
3.3. Capital payment:
- Non-business capital of
investment nature shall be transferred from the state budget to state
treasuries for payment according to regulations on management and allocation of
non-business capital.
- For projects capitalized at
VND 1 billion or more, payments for completed volumes shall be made according
to the regime of payment for investment capital belonging to the state budget
capital source.
- For projects capitalized at
under VND 1 billion, after the completed volume is tested before takeover, the
investor shall compile and send a payment request dossier to the state
treasury, comprising:
+ The record of the takeover
test of the completed volume, enclosed with the statement on the calculation of
the value of the volume;
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+ The written request for
advance payment of investment capital (if any);
+ The investment capital
withdrawal voucher.
E.
REPORTING, SETTLEMENT AND INSPECTION REGIMES
I.
REPORTING:
1. For investors:
- Periodically on the 5th of the
first month every quarter, the investor shall make a report on the situation of
investment execution and capital payment of the project and send it to the
investment-deciding authority, state treasury and finance agency of the same
level (for projects managed by localities). Particularly for important national
projects and group-A projects, the investor shall send the report on the 20th
every month to the managing ministry or provincial-level People's Committee,
the Planning and Investment Ministry and the Finance Ministry for sum-up and
reporting to the Prime Minister.
- At the end of the plan year,
the investor shall make a report on the execution of investment capital in the
year and send it to the investment-deciding authority, state treasury and
finance agency of the same level (for projects managed by localities) on the
10th of February of the subsequent year.
Reports on the execution of
investment capital in the year must analyze and assess the situation of plan
execution and investment results in the year, point out existing problems and
propose solutions thereto.
- At the end of the plan year,
the investor shall draw up a table of comparison of data on payment of
investment capital to each project regarding the amounts paid in the year and
the total amounts paid from the construction commencement to the end of the
state budget year, then send it to the state treasury for certification.
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- On the 15th of the first month
every quarter, ministries and provincial-level People's Committees shall review
the execution of investment plans and payment of investment capital to projects
under their management and send review report to the Finance Ministry, the
Planning and Investment Ministry and the Construction Ministry according to
regulations.
- At the end of the plan year,
ministries and provincial-level People's Committees shall review the execution
of investment capital in the year and send review reports to the Finance
Ministry, the Planning and Investment Ministry and the Construction Ministry on
the 20th of February of the subsequent year.
Reports on the execution of
investment capital in the year must analyze and assess the execution of plans
and investment results in the year (material indicators), point out existing
problems and propose solutions thereto.
3. For state treasuries:
- To comply with the information
and reporting regime according to separate regulations of the Finance Ministry.
- At the end of the plan year,
state treasuries shall settle the used investment capital with finance agencies
of the same level in accordance with regulations on settlement of state budget.
- At the end of the plan year,
state treasuries shall certify the amounts paid in the year and the total
amounts paid from the construction commencement to the end of the state budget
year to each project formulated by investors.
II.
SETTLEMENT OF INVESTMENT CAPITAL:
The annual investment capital
settlement and the settlement of paid investment capital shall be made under
the Finance Ministry's guidance on the regime of investment capital settlement.
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III.
INSPECTION:
Ministries, provincial-level
People's Committees, finance agencies and state treasuries shall conduct
regular and irregular inspections of investors and contractors participating in
the projects regarding their use of advance capital and capital paid for
completed volumes and their observance of the State's development investment
financial policies and regimes.
Finance agencies at all levels
shall conduct regular and irregular inspections of state treasuries regarding
the implementation of the investment capital payment regime.
F.
RESPONSIBILITIES AND POWERS OF CONCERNED AGENCIES
I. INVESTORS:
- To perform their assigned
functions and tasks according to regulations. To receive and use capital for
proper purposes and proper objects in an economical and efficient manner. To
abide by the provisions of law on the development investment financial
management regime.
- To be answerable for the
quality of works, the accuracy and lawfulness of the projects' volumes or
progress upon payment; to assure the accuracy, truthfulness and validity of
data and documents in dossiers supplied to state treasuries and state
functional agencies.
- When the construction volume
satisfies the contractual conditions, to promptly conduct a takeover test,
compile a complete payment dossier and file a request for payment to the
contractor within the prescribed time limit.
- To send reports in time and
fully as prescribed to investment-deciding agencies and concerned state
agencies; to supply full dossiers, documents and facts according to regulations
to state treasuries and finance agencies in service of capital management and
payment; to submit to the inspection by finance agencies and
investment-deciding agencies regarding the use of investment capital and
observance of the development investment financial policies and regimes of the
State.
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- To request capital payment
when all conditions are met and request state treasuries to reply and explain
on matters they find unsatisfactory in capital payment.
II.
MINISTRIES AND PROVINCIAL- AND DISTRICT-LEVEL PEOPLE'S COMMITTEES:
- To guide, inspect and urge
investors under their management to execute investment plans, receive and use
investment capital for proper purposes in accordance with the state
regulations.
- Within the scope of their
assigned competence, to be responsible to the Government and law for their
decisions.
III.
FINANCE AGENCIES AT ALL LEVELS:
- To report on the execution of
investment plans according to regulations.
- To ensure sufficient capital
sources according to the Finance Ministry's regulations for state treasuries to
make payment for projects.
- To carry out the settlement of
investment capital under the provisions of the State Budget Law.
- To coordinate with functional
agencies in guiding and inspecting investors, state treasuries and contractors
participating in project execution regarding their observance of development
investment financial regimes and policies, the management and use of investment
capital and the settlement of investment capital so as to work out measures to
handle violations, issue decisions to recover amounts spent in contravention of
state regulations.
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IV. STATE
TREASURIES:
- To promulgate the process for
investment capital payment for uniform application nationwide.
- To guide investors to open accounts
for advance payment and payment of capital.
- To control and pay capital in
time and fully for projects which satisfy all conditions.
- To clearly explain in writing
to investors the reduced or rejected payment amounts, to reply to investors'
inquiries about capital payment.
- When detecting that decisions
of competent authorities are contrary to current regulations, to make written
proposals for re-consideration and put forward their recommendations. If past
the prescribed time limit, no reply is made, to settle the cases according to
their recommendations; if a given reply is unsatisfactory, to settle the case
according to competent authorities' opinions and, at the same time, to report
such to the authorities of higher competence and finance agencies for
consideration and handling.
- To urge investors to pay debts
after the projects have been settled and their accounts liquidated.
- To comply with the information
and reporting regime and settle investment capital and non-business capital of
investment nature belonging to the state budget capital source according to the
State Budget Law and the guidance of the Finance Ministry.
- To request investors to supply
dossiers, documents and information according to regulations in service of
capital payment control. When necessary, to inspect the practical situation at
construction sites.
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- Not to participate in takeover
test councils in works and projects.
- To organize the control and
payment of capital according to uniform professional processes, to simplify administrative
procedures while ensuring strict capital management and timely, adequate and
convenient payment to investors.
- At the end of the plan year,
to certify the amounts paid in the year and the total amounts paid from the
construction commencement to the end of the state budget year for each project,
give comments on the observance of management regimes, unit price limits and
policies and regimes as prescribed.
- To be responsible to the
Minister of Finance and law for the receipt and use of state budget capital and
payment in construction investment.
Part III
IMPLEMENTATION
PROVISIONS
1. This Circular takes effect 15
days after its publication in "CONG BAO" and replaces the Finance
Ministry's Circular No. 44/2003/TT-BTC of May 15, 2003, guiding the management
and payment of investment capital and non-business capital of investment and
construction nature belonging to the state budget capital source, Circular No.
45/2004/TT-BTC of May 21, 2004, amending and supplementing a number of points
of Circular No. 44/2003/TT-BTC of May 15, 2003, and Circular No.
96/2004/TTY-BTC of October 13, 2004, guiding the management, payment, recovery
and settlement of advance capital from subsequent year's budget estimates for
capital construction investment projects.
2. For other development
investment expenditures of the state budget (state reserve expenditures,
expenditures in support of enterprises' working capital, expenditures for
contribution to joint ventures, expenditures for loans to foreign counties and
foreign aid, expenditures for development assistance funds), they shall be
governed by separate guiding documents on each kind of expenditure.
3. Investment projects funded
with other capital sources of the State must also abide by the payment
principles prescribed in this Circular.
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THE
MINISTRY OF FINANCE
VICE MINISTER
Nguyen Cong Nghiep