THE MINISTRY OF FINANCE - THE MINISTRY OF LABOR, WAR INVALIDS AND SOCIAL AFFAIRS
SOCIALIST REPUBLIC OF VIET NAM
Independence Freedom Happiness
 
No. 102/2007/TTLT-BTC-BLDTBXH
Hanoi, August 20, 2007
 
JOINT CIRCULAR
GUIDING THE FINANCIAL MANAGEMENT MECHANISM APPLICABLE TO SOME PROJECTS OF THE NATIONAL TARGET PROGRAM ON POVERTY REDUCTION
Pursuant to the Prime Ministers Decision No. 20/2007/QD-TTg of February 5, 2007, approving the national target program on poverty reduction in the 2006-2010 period;
Pursuant to the Governments Decree No. 60/2003/ND-CP of June 10, 2003, detailing and guiding the implementation of the State Budget Law;
The Ministry of Finance and the Ministry of Labor, War Invalids and Social Affairs hereby jointly guides the financial management mechanism applicable to some projects and activities under the national target program on poverty reduction as follows:
I. GENERAL PROVISIONS
1. Governing scope:
a/ This Circular guides contents and levels of expenses and the financial management mechanism applicable to projects and activities funded directly with capital sources of the national target program on poverty reduction (below abbreviated to NTPPR), including:

>> See also:  Decision No. 190/2001/QD-TTg dated December 13, 2001 of the Prime Minister approving the national target program to prevent and combat some social diseases, dangerous epidemics and HIV/AIDS in the 2001-2005 period

- Project on agricultural-forestry-fishery extension and support for production and trade development;
- Project in support of development of basic infrastructure in extreme difficulty-hit communes on coastal alluvial banks and islands;
- Project on job training for the poor;
- Project on multiplication of poverty reduction models;
- Project on strengthening poverty reduction capacity (including training personnel involved in poverty reduction and communication);
- Policy on legal aid for the poor;
- Monitoring and evaluation activities.
b/ Other policies and projects of the NTPPR such as the policy on preferential credit for poor households; production land support for poor households of ethnic minorities; medical support for the poor; educational support for the poor; and housing and drinking water support for poor households, comply with current regulations of the Government and the Prime Minister and guiding documents.
2. Capital sources for implementation of the NTPPR:
- The NTPPR shall be implemented with the following funding sources: the central budget, local budgets, international financial aid and money raised from domestic and foreign organizations and individuals.
The Peoples Committee of a province or centrally run city (below referred to as provincial-level Peoples Committee for short) shall arrange at least 1% of the yearly total local budget for the program, to be submitted to the Peoples Council of the same level for decision, apart from additional allocations from the central budget and other local funding sources, for the achievement of the programs objectives.
- Funding sources must be included in plans and uniformly managed. The allocation of central budget supports must comply with the principle of prioritizing resources for communes in mountainous regions, on coastal alluvial banks or islands with a high percentage of poor households. Provincial-level Peoples Committees shall formulate budget allocation criteria based on the number of poor people and difficulty coefficient of each region (the conditions on local geographical position, area, population, socio-economic situation, budget distribution and capacity of mobilizing non-budget financial sources), ensuring the allocation of funds for proper purposes and to proper beneficiaries, avoiding equal division.
II. SPECIFIC PROVISIONS
1. Formulation, allocation and assignment of budget estimates; management, use, and settlement of the NTPPR budget
The formulation, allocation and assignment of budget estimates; the management, use and settlement of the NTPPR budget comply with the State Budget Law, its guiding documents, current regulations guiding the management of targeted additional capital allocated from the central budget to local budgets, and this Circulars provisions as follows:
1.1. Formulation of the NTPPR budget estimates:
- Annually, based on the local poverty reduction plan and objectives already approved by a competent authority, the provincial/municipal Service of Labor, War Invalids and Social Affairs shall assume the prime responsibility for, and coordinate with project-managing services and departments in formulating a budget estimate detailed by project, and send it to the provincial/municipal Finance Service and Planning and Investment Service for consideration, synthesization and submission to the provincial-level Peoples Committee, which will further send it to the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Finance and the Ministry of Planning and Investment.
- Ministries, branches, and central mass organizations involved in the NTPPRs activities and projects shall formulate budget estimates and send them to the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Finance and the Ministry of Planning and Investment.
- The Ministry of Labor, War Invalids and Social Affairs shall consider and synthesize budget estimates of ministries, branches, central mass organizations and localities, and send them to the Ministry of Planning and Investment and the Ministry of Finance for sum-up and arrangement of funds for the NTPPR and submission to a competent authority for decision.
1.2. Allocation and assignment of budget estimates:
Based on the total fund for the NTPPR notified by the competent authority, the Ministry of Labor, War Invalids and Social Affairs shall assume the prime responsibility for, and coordinate with project-managing ministries and branches in, making a detailed plan to allocate the Programs fund for each project to ministries, branches, central mass organizations, provinces and centrally run cities in conformity with the assigned objectives and tasks.
The Ministry of Labor, War Invalids and Social Affairs shall synthesize allocation results and send them to the Ministry of Finance and the Ministry of Planning and Investment for inclusion in budget estimates of ministries, branches and localities and submission to the Prime Minister for further submission to the National Assembly in accordance with the State Budget Law.
a/ Criteria for allocation of targeted central budget support estimates to localities:
Based on the annual amounts possibly allocated from the central budget for the NTPPR, budget support estimates shall be allocated to projects according to the following criteria:
- Project on agricultural-forestry-fishery extension and support for production and trade development: the major targets to be attained under the Prime Ministers Decision No. 20/2007/QD-TTg of February 5, 2007, and the number of poor households for consideration and allocation.
- Project in support of development of basic infrastructure in extreme difficulty-hit communes on costal alluvial banks or islands: the number of communes approved by the Prime Minister and the annual average investment capital level.
- Project on job training for the poor: the number of poor people in the working age range who have not yet received job training.
- Project on capacity strengthening:
+ Training of personnel engaged in poverty reduction: the number of personnel at all levels.
+ Communication: the number of poor communes.
- Project on multiplication of poverty reduction models: To allocate budget estimates to localities with models already approved by competent authorities (provincial-level Peoples Committees, ministries or centrally run branches).
- Policy on legal aid for the poor: the number of poor communes other than those covered by Program 135, the second phase.
- Monitoring and evaluation: The allocated amount is at most equal to 5% of the total central budget capital arranged for the NTPPR. The fund will be allocated to program- or project-managing agencies as well as localities as a percentage of the level of targeted central budget support for the implementation of the NTPPR in localities, and based on the number of poor communes in each locality.
- A poor commune referred to in this Circular means a commune with a poor household rate of 25%, counting from January 1, 2007.
b/ Allocation and assignment of budget estimates:
- For ministries, branches and central agencies: Based on the Programs budget estimate assigned by the Prime Minister, ministers and heads of agencies shall allocate it to units for realization according to specific objectives and tasks of each project, and send the allocation and assignment results to the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Planning and Investment, and the Ministry of Finance according to regulations.
- For a province or centrally run city: Annually, based on the targeted additional central budget expenditure estimate and the local budget amount possibly arranged for the NTPPR, the provincial/ municipal Service of Labor, War Invalids and Social Affairs shall assume the prime responsibility for, and coordinate with the provincial/municipal Planning and Investment Service and Finance Service in, formulating fund allocation criteria and plans for the implementation of the NTPPR so that the provincial-level Peoples Committee can submit them to the Peoples Council of the same level for decision and assignment according to regulations: and, at the same time, guide subordinate Peoples Committees to allocate funds to the Program, ensuring that the total fund for the program is not lower than 1% of the local budget.
After the provincial-level Peoples Council decides on the Programs budget estimate, the provincial-level Peoples Committee shall allocate and assign it for each project of the Program to each agency, unit and subordinate budget for realization. It shall, at the same time, sum up the allocation and assignment results and send them to the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Planning and Investment and the Ministry of Finance according to regulations.
- A budget-using unit shall, after receiving the budget estimate assignment decision, allocate the budget according to the prescribed expenditure contents, category and code of the program, then send the allocation results to the finance agency of the same level for evaluation before they can be used as the basis for cash withdrawal.
- After reaching agreement with the finance agency, the managing agency shall assign the budget estimate to budget-using units and concurrently send it to the finance agency, the state treasury of the same level and the state treasury where transactions are conducted for coordinated implementation.
1.3. Realization of budget estimates:
- Targeted additional capital shall be transferred from the central budget to local budgets according to current regulations guiding the management of this capital.
- Based on their state budget expenditure estimates assigned by a competent authority, the units shall withdraw money from state treasuries with which they have transactions.
- State treasuries shall control, allocate and make payment to each project of the NTPPR according to the Finance Ministrys circular guiding the management, allocation and payment of state budget expenditures via state treasuries; the current spending mechanisms and the provisions of this Circular.
- Units directly using the NTPPR budget shall manage and efficiently use funds for proper purposes and proper beneficiaries.
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