Circular No. 44/2009/TT-BNNPTNT dated July 21, 2009 of the Ministry of Agriculture and Rural Development guiding the financial management of foreign aid sources managed by the Ministry of Agriculture and Rural Development
THE MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT
SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom – Happiness
Hanoi, July 21, 2009
GUIDING THE FINANCIAL MANAGEMENT OF FOREIGN AID SOURCES MANAGED BY THE MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT
THE MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT
Pursuant to the Government's Decree No. 01/2008/ND-CP of January 3, 2008, defining the functions, tasks, powers and organization of the Ministry of Agriculture and Rural Development;
Pursuant to the Government's Decree No. 60/ 2003/ND-CP dated June 6, 2003, promulgating the Regulation detailing and guiding the implementation of the State Budget Law;
Pursuant to the Government's Decree No. 131/2006/ND-CP dated November 9, 2006, promulgating the Regulation on management and use of official development assistance (ODA) sources;
Pursuant to the Prime Minister's Decision No. 64/2001/QD-TTg dated April 26, 2001, promulgating the Regulation on management and use of foreign non-governmental aid;
Pursuant to the Ministry of Finance's Circular No. 82/2007/TT-BTC dated July 12, 2007, guiding the state financial management regime for foreign non-refundable aid belonging to state budget revenue sources; Circular No. 108/2007/TT-BTC dated September 7, 2007, guiding the mechanism for financial management of ODA programs and projects; Circular No. 116/2005/TT-BTC dated December 19, 2005, guiding the management and handling of assets of state budget-funded projects upon their completion.
The Ministry of Agriculture and Rural Development guides the financial management of foreign aid sources under its management, as follows:
Objectives and scope of regulation
This Circular aims to raise the effectiveness and efficiency of the financial management of foreign aid sources, including official development assistance (ODA) sources and foreign non-governmental organization (NGO) aid invested through programs or projects, non-project aid for administrative agencies or non-business units. Sector Support Partners Offices, Sector Trust Funds and Project Management Units managed by the Ministry of Agriculture and Rural Development.
Subjects of application
Administrative agencies, non-business units, Sector Support Partners' Offices, Sector Trust Funds and Project Management Units under the Ministry, which are tasked under the Ministry's decisions to act as program or project owners or to perform the coordination, to partially (for projects with many mini-projects or components) or fully implement programs or projects and non-project aid (referred collectively to as project owners) shall strictly comply with the provisions and guidance of this Circular.
Financial management principles
1. ODA capital sources and NGO investment or supports via programs or projects and non-project (referred collectively to as project) aid are all state budget capital sources, must be fully accounted and reflected through vouchers, books, records, reporting forms, and be managed and used under the State Budget Law as well as its guiding decrees and documents.
2. Except for special cases already approved by the Government or the Prime Minister, contributed domestic capital from the state budget as committed for ODA and/or NGO programs or projects managed by authorities at any level (central or local) shall be allocated, arranged, estimate-assigned, examined and settlement-approved by that level. However, all data must be reflected and synthesized in the financial statements and settlement reports of the entire programs or projects.
3. Project owners are answerable to law and the Minister for the fulfillment of commitments stated in international treaties and project documents; observe state regulations on implementation of programs or projects and on financial management; and observe the regimes of formulation of financial plans, accounting, audit, settlement, management of project assets, and reporting under current state regulations.
4. In case treaties, international pagreements or commitments to which Vietnam has signed or acceded contain provisions different from national regulations, such treaties, agreements or commitments will prevail. If donors or agencies or organizations authorized by donors to directly administer expenditures for programs or projects, the financial management complies with the treaties, agreements, commitments or project documents, memoranda of understanding, which have been signed with the donors.
Contents of financial management
1. The contents of financial management of foreign aid managed by the Ministry of Agriculture and Rural Development cover: formulation and synthesis of financial plans (also referred to as estimation of state budget revenues and expenditures); the regime of expenditure control and state budget accounting; the regime of procurement and spending norm setting; the regime of reporting, accounting, audit and final settlement; the regime of management of capital and assets formed from project funds, and tax policies.
2. In addition to the above-mentioned contents, for independent non-refundable aid programs or projects (not accompanied by loan capital projects), aid certification by the Ministry of Finance (the Foreign Debt and Finance Management Department) as provided for in the Ministry of Finance's Circular No. 82/2007/TT-BTC dated July 12. 2007, guiding the state financial management of foreign non-refundable aid being a state budget revenue source, and documents amending, supplementing or replacing this Circular, is also required.
FORMULATION AND APPROVAL OF FINANCIAL PLANS
Principles of formulation of financial plans
1. Financial plan means an investment capital plan (for capital construction projects) or administrative and non-business capital plan (for administrative and non-business projects), or credit-lending plan (for credit projects). A financial plan covers the following contents: ODA and NGO capital plan (loan capital, nonrefundable aid capital, classified according to aid-providing countries or organizations), contributed domestic capital (central budget capital, local budget capital, domestic credit capital, own capital of project owner, contributed capital of project beneficiaries, capital sources from value-added tax refund (if any) and other capital sources prescribed by Vietnamese law).
2. For mixed capital construction and administrative and non-business projects, project owners shall formulate and submit for approval specific financial plans according to each spending item of the projects. For a project with many owners, each project owner shall formulate a financial plan for the project part it implements. If a project has many owners and a common body for coordinating the project implementation, the common coordinating body shall formulate a financial plan for activities it carries out and at the same time synthesize the common plan of the whole project.
3. Annual financial plans of projects must express expenditure details according to each component and principal operation of projects, according to source of aid, contributed domestic capital, own capital of project owners, contributed capital of beneficiaries, credit capital (if any), which must be enclosed with reports clearly explaining grounds and bases for calculation of each spending amount.
4. Annual financial plans of projects already approved or notified by competent bodies will serve as a basis for control of expenditure, withdrawal of contributed domestic capital and foreign capital for projects. After the financial plans are approved. Project Management Units shall send them to the Ministry of Finance (the Foreign Debt and Finance Management Department) and state treasuries with which their transactions are registered.
5. Annual financial plans of projects will be formulated under the guidance in the Ministry of Finance's Circular No. 108/2007/TT-BTC dated September 7, 2007, guiding the financial management mechanism for ODA programs and projects.
In order to meet the management requirements and practical conditions, forms for plan formulation and sum-up are guided and detailed in three appendices (not printed herein):
Appendix 1: Annual financial plan sum-up form. This form is synthesized from projects detailed in Appendices 2 and 3.
Appendix 2: Annual financial plan.
Appendix 3: Detailed annual budget expenditure estimates of projects.
Formulation and approval of financial plans
1. Annually before July 15, which coincides with the time of making state budget estimates, project owners being grade-II estimating units shall base themselves on current regulations, contents of project documents, master plans and project implementation progress to direct the Project Management Units and their subordinate units to formulate and sum up capital plans for the subsequent year, reach agreement with/obtain no objection of donors (if so requested), which serve as grounds for proposing the Ministry to consider and send them to the Ministry of Finance and the Ministry of Planning and Investment for state budget sum-up and submission to the Government and the National Assembly for approval.
2. For projects of investment nature (referred to as capital construction projects), the project owners shall formulate and send their financial plans to the Department of Planning for consideration, sum-up and reporting to the Minister before sending them to the Ministry of Planning and Investment. For projects of administrative and non-business expenditure nature (referred to as administrative and non-business projects), project owners shall formulate and send their financial plans to the Finance Department for consideration, sum-up and report to the Minister before submission to the Ministry of Finance.
3. In August, according to their assigned functions and tasks, the Finance Department (for administrative and non-business projects) and the Department of Planning (for capital construction projects) shall assume the prime responsibility for, and coordinate with relevant departments and authorities in. finalizing the state budget plan/ estimates of the Ministry for sum-up and submission to the Ministry of Finance and the Ministry of Planning and Investment. In the course of formulating annual state budget plans/ estimates, departments, authorities, other non-business units and authorized bodies shall base on their respective assigned functions and tasks to assume the prime responsibility for, or coordinate with one another in, organizing the appraisal and approval of financial plans/state budget expenditure estimates for projects under their respective management, which must be completed before October 31.
4. Immediately after the assignment of state budget revenue and expenditure estimates by the Prime Minister and the appraisal of capital distribution plans by competent authorities, the Finance Department shall propose the Minister to decide on the assignment of state budget expenditure estimates to administrative and non-business projects; the Department of Planning shall submit to the Minister the notification of capital plans for capital construction projects to grade-II estimating units, which all must be completed before December 31. Grade-II estimating units shall notify capital plans to their attached units within 5 working days after the receipt of the Ministry's decisions/notifications on assignment of plans/estimates.
5. Regarding ODA and NGO projects for which international treaties or agreements were already signed but have not yet taken effect or have taken effect but the procedures for domestic investment have not yet been completed, the agencies assigned to act as project owners shall submit to the Ministry (thrugh the Department of Planning, for capital of capital-construction nature; or the Finance Department, for capital of administrative and non-business nature) for sum-up and report to the Ministry of Planning and Investment and the Ministry of Finance (during the formulation of budget estimates) for inclusion in capital-construction or administrative and non-business expenditure reserves, and submit them to competent authorities for decision (if contributed domestic capital is supplied by the central budget).
Adjustment, supplementation of financial plans
For newly arising projects or projects already approved but requiring adjustment or supplementation after the formulation and assignment of budget plans, the Department of Planning (for capital-construction capital) or the Finance Department (for administrative and non-business capital) shall, at the proposal of project owners and depending on capital use, study and submit adjustments to the Minister for approval (in cases where the adjustments will not increase total capital amounts) and make sum-up reports on supplementation plans (for cases requiring capital addition) by the time of supplementation of annual budget plans, or report to the Ministry of Planning and Investment and the Ministry of Finance for handling on a case-by-case basis (in case of necessity or urgency).
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