Circular No. 72/2017/TT-BTC dated July 17, 2017 on prescribing the management and use of revenues from project management activities of owners and management units of state budget-funded projects

CIRCULAR

Prescribing the management and use of revenues from project management activities of owners and management units of state budget-funded projects[1]

Pursuant to June 25, 2015 Law No. 83/2015/QH13 on the State Budget;

Pursuant to the Government’s Decree No. 32/2015/ND-CP of March 25, 2015, on the management of construction investment expenses;

Pursuant to the Government’s Decree No. 59/2015/ND-CP of June 18, 2015, on the management of construction investment projects;

Pursuant to the Government’s Decree No. 42/2017/ND-CP of April 5, 2017, amending and supplementing a number of articles of Decree No. 59/2015/ND-CP of June 18, 2015, on the management of construction investment projects;

Pursuant to the Government’s Decree No. 16/2016/ND-CP of March 16, 2016, on the management and use of official development assistance (ODA) and concessional loans of foreign donors;

Pursuant to the Government’s Decree No. 16/2015/ND-CP of February 14, 2015, prescribing the autonomous mechanism of public non-business units;

Pursuant to the Government’s Decree No. 141/2016/ND-CP of October 10, 2016, prescribing the autonomous mechanism of public non-business units in the non-business economic and other fields;

Pursuant to the Government’s Decree No. 130/2005/ND-CP of October 17, 2005, prescribing the regime of autonomy and accountability of state agencies in the use of administrative management funds;

Pursuant to the Government’s Decree No. 117/2013/ND-CP of October 7, 2013, amending and supplementing a number of articles of Decree No. 130/2005/ND-CP of October 17, 2005, prescribing the regime of autonomy and accountability of state agencies in the use of administrative management funds;

Pursuant to the Government’s Decree No. 215/2013/ND-CP of December 23, 2013, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Investment Department;

The Minister of Finance promulgates the Circular prescribing the management and use of revenues from project management activities of owners and management units of state budget-funded projects.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation and subjects of application

1. Scope of regulation: This Circular prescribes the management and use of revenues from project management activities of owners and management units of state budget-funded projects (including projects funded with official development assistance (ODA) capital or concessional loans of foreign donors which are incorporated in the state budget).

2. Subjects of application: Project owners and project management units (PMU), organizations and individuals involved in the management, use, inspection, examination, audit and control of payment of revenues from project management activities of owners and management units of state budget-funded projects (including projects funded with official development assistance (ODA) capital or concessional loans of foreign donors which are incorporated in the state budget).

3. For projects funded with official development assistance (ODA) capital or concessional loans of foreign donors, in case the provisions of this Circular on the management and use of revenues of project owners and PMUs are different from those of the agreements between the Vietnamese Government and donors or of treaties to which Vietnam is a contracting party, such agreements or treaties shall prevail.

4. This Circular neither applies to nor regulates:

a/ Consultancy firms when performing contracts on provision of project management consultancy signed with other project owners or PMUs.

b/ The management and use of revenues from project management activities of specialized PMUs and regional PMUs established under decisions of competent representatives of state economic groups or corporations under Clause 7, Article 1 of the Government’s Decree No. 42/2017/ND-CP of April 5, 2017, amending and supplementing a number of articles of Decree No. 59/2015/ND-CP of June 18, 2015, on the management of construction investment projects implemented under the enterprise mechanism, which are not regulated by this Circular.

Article 2.Revenues from project management activities

Revenues from project management activities of project owners and PMUs include:

1. Revenues from project management expenses in total investment amounts of projects assigned to these owners or PMUs for management and implementation under decisions of competent authorities. These funds shall be determined by estimation or based on project management expense norms set by the Ministry of Construction.

2. Revenues from deducted and retained charges for the performance of such project management tasks as appraisal of basic designs, construction designs and construction cost estimates and other activities under current regulations.

3. Revenues of specialized PMUs and regional PMUs from the provision of consultancy services to other project owners and PMUs, such as the management of projects as authorized or entrusted by other project owners under the Ministry of Construction’s Circular No. 16/2016/TT-BXD of June 30, 2016, guiding the implementation of a number of articles of Decree No. 59/2015/ND-CP of June 18, 2015, on forms of management of construction investment projects; organization of the selection of contractors, supervision of construction, installation of equipment, appraisal and verification of designs and cost estimates and other consultancy activities. These revenues shall be collected under signed contracts in accordance with law.

4. Revenues from the organization of compensation, support and resettlement work (excluding expenses for organization of ground clearance payable by project owners already included in assigned project management expenses under regulations of the Ministry of Construction);

5. Revenues from the management and maintenance of completed projects of regional PMUs and specialized PMUs under Decree No. 59/2015/ND-CP of June 18, 2015.

6. Other lawful revenues as prescribed by law, which are not included in investment expenses of projects assigned to project owners or PMUS for management.

7. In case PMUs are assigned by competent authorities to act as competent state agencies in charge of preparing and implementing investment projects in the form of public-private partnership (PPP), the estimation, payment and final settlement of expenses for investment preparation of PPP projects shall be carried out under the Ministry of Finance’s Circular No. 55/2016/TT-BTC of March 23, 2016, prescribing the financial management of PPP projects and investor selection expenses.

Article 3.Management principles

1. Project owners and PMUs shall manage and use revenues from project management activities in accordance with law, for proper purposes and eligible subjects and in an economical and efficient manner.

2. Payment agencies shall control and pay promptly and fully project management expenses to project owners and PMUs under this Circular.

3. Finance agencies at all levels shall, according to their assigned functions and tasks, inspect and guide project owners and PMUs in implementing this Circular.

4. Superior agencies of project owners and PMUs shall direct the latter in managing and using revenues from project management activities for proper purposes and in an economical, efficient, democratic, public and transparent manner; and in strict compliance with the financial management, investment and construction mechanisms prescribed by the State and with the provisions of this Circular.

Article 4.Groups of project management subjects

1. Group I: Project owners assigned by investment deciders (except where investment deciders assign specialized or regional construction investment PMUs to act as project owners), and construction investment PMUs of single projects established by project owners under Article 19 of the Government’s Decree No. 59/2015/ND-CP of June 18, 2015, on the management of construction investment projects.

2. Group II: Specialized and regional construction investment PMUs established by ministers, heads of central agencies or chairpersons of provincial- or district-level People’s Committees under Clause 7, Article 1 of the Government’s Decree No. 42/2017/ND-CP of April 5, 2017.

Specialized and regional PMUs shall work out plans on their financial autonomy to cover their regular expenses in conformity with their plans and practical conditions, then report these plans to persons who have decided on their establishment for approval under the Government’s Decree No. 16/2015/ND-CP of February 14, 2015, prescribing the autonomous mechanism of public non-business units, and Decree No. 141/2016/ND-CP of October 10, 2016, prescribing the autonomous mechanism of public non-business units in the non-business economic and other fields.

3. Group-I project owners and PMUs shall estimate and finalize their revenues and expenses under Section 1, Chapter II of this Circular. Group-II PMUs shall annually estimate and finalize their revenues and expenses under Section 2, Chapter II of this Circular.

Article 5.Accounting regime

Project owners and PMUs shall comply with the Circular guiding the accounting regime applicable to project owners, under which:

1. Revenues from the management of, and performance of construction investment consultancy jobs under, projects assigned to them for management under decisions of competent authorities, after paying directly related expenses, shall be added to these projects’ construction investment funds.

2. Revenues from the provision of services under economic contracts and other revenues shall be accounted as incomes of PMUs.

Article 6.Transaction accounts

1. Project owners and PMUs shall open transaction accounts to reflect revenues from and expenses for their project management activities in accordance with the Law on the State Budget and relevant laws. Project owners, specialized or regional PMUs that manage more than one project may open a single account at the State Treasury branch convenient for their transactions to receive revenues from the management of all projects assigned to them for management.

2. Investment capital payment agencies shall advance and pay project management expenses according to estimates approved by competent authorities, regulations on investment capital advance and payment, requests of project owners and PMUs, current financial management regulations and specific provisions of this Circular.

3. Regional and specialized PMUs engaged in service provision may open deposit accounts at banks or the State Treasury to reflect revenues from and expenses for their service provision. Regional and specialized PMUs entrusted to manage the implementation of state budget-funded projects shall open accounts at the State Treasury for entrusted projects.

Article 7.Performance of the obligation toward the state budget

Regional and specialized PMUs that have revenues from the provision of consultancy services to other project owners and PMUs and other lawful revenues which are not included into investment expenses of projects assigned to them for management, shall register and fully pay taxes, charges and fees under the current tax, charge and fee laws.

Article 8.Management and use of assets

The procurement, management and use of assets to serve project management activities shall be carried out in accordance with the Law on Management and Use of State Assets, Law on Bidding, norms and standards set by the State, and relevant laws. Group-I project owners and PMUs shall comply with the regulations on management and use of state assets applicable to corresponding assets of project owners prescribed in the Law on Management and Use of State Assets. Group-II PMUs shall comply with the regulations on management and use of state assets in autonomous public non-business units that cover their regular expenses and make fixed asset depreciation under regulations.

Chapter II

SPECIFIC PROVISIONS

Section 1

MANAGEMENT AND USE OF REVENUES OF GROUP-I PROJECT OWNERS AND PROJECT MANAGEMENT UNITS

Article 9.Estimation of annual project management revenues and expenses

1. The owner or PMU of a project with a total investment of under VND 15 billion is not required to make and approve project management revenue and expense estimates, but shall comply with the spending contents prescribed in Article 11 of this Circular and ensure the prescribed limits.

2. Based on specific conditions of a project, its owner may decide to make and approve a general project management revenue and expense estimate for both the project owner and PMU or make and approve 2 separate ones for the project owner and PMU for convenient use.

3. Grounds for making a project management revenue and expense estimate:

a/ Decision to assign tasks to the project owner or decision to establish the PMU;

b/ Investment decision or estimate approval decision;

c/ Investment preparation expense estimate (for project management revenues and expenses arising in the stage of investment preparation);

d/ Written permission for the project owner and PMU to perform certain jobs such as receiving and preserving materials and equipment of the project and other jobs, enclosed with the estimates of expenses for such jobs approved by a competent authority;

dd/ Revenues specified in Article 2 of this Circular;

e/ Current regulations on limits of payable project management expenses and investment and construction consultancy charges;

g/ Annual salary payrolls of project management officers, made according to form 03/DT-QLDA promulgated together with this Circular, listing officers directly engaged in the project management in three categories: officers salaried by the project, officers salaried under contracts and part-time officers;

h/ Current regulations on financial management of state agencies and public non-business units;

i/ Competent state agencies-promulgated standard norms of procured assets and automobiles; standards and norms of working offices; standards and norms of official-duty telephones installed in private houses and mobile phones; overseas working mission allowances; and expenses for foreign guest receptions and international workshops in Vietnam.

k/ Other grounds of the project (if any).

4. A project management revenue and expense estimate must have 2 sections: revenue estimate and expense estimate.

Article 10.Contents of revenue estimates

1. Identification of revenues to be set aside for each project:

Funds to be set aside for each project assigned for management shall be identified and written in the Table of calculation of project management funding sources according to Form No. 01(i)/DT-QLDA promulgated together with this Circular. Such table shall be made for each project (i), with (i) being 1 to n in case the project owner is assigned to manage more than one project, specifically as follows:

a/ Based on the approved total investment of each project and project management expense limit stated in writing by a competent agency, to determine project management expenses of the project (G_QLDA). In case no project management expense limit is stated in relevant documents or only investment preparation work is carried out, project management expenses shall be paid according to the estimates approved by the task-assigning authority. For an ODA-funded project, if the project agreement or non-refundable aid agreement concluded between the Vietnamese Government and the donor specifies project management expenses, to comply with such agreement;

b/ Based on the approved total investment of each project and project management expense limit stated in writing by a competent agency, to determine expenses for construction investment consultancy provided by the project owner or PMU (G_TV) itself. In case there is no consultancy expense norm stated in relevant documents, an estimate for these expenses shall be made under regulations;

c/ To determine specific expenses for project management jobs which the project owner or PMU needs to hire consultants to perform (including the case where the project owner hires a specialized or regional PMU to manage the project under a project management entrustment contract) (G_TTV);

d/ Project management funds which the project owner or PMU may use for each project throughout the course of its management (G_{GLDA (CDT)}) shall be determined according to the following formula:

G_{GLDA (CDT)}=G_GLDA+G_TV- G_TTV

dd/ Project management expenses shall be divided between the project owner and PMU established by the project owner to manage a single project in proportion to the tasks and responsibilities divided between the project owner and PMU and stated in the PMU establishment decision or task assignment document.

In case the investment decider assigns the project owner to sign a contract with a specialized or regional PMU to manage the project, the division of project management expenses shall be based on the contents, volumes and characteristics of the project management jobs performed by the project owner and PMU and stated in the contract between the project owner and PMU after they are approved by the investment decider;

e/ To project the allocation of project management expenses throughout the years of project implementation.

2. Revenue estimates by plan year shall be made according to Form No. 02/DT-QLDA promulgated together with this Circular, specifying funds carried forward from the previous years; funds from projects assigned for management; revenues from the provision of consultancy services after deducting payable taxes (if any), and other lawful funds (if any); total usable fund, total funds used in the previous years, funds projected to be used in the plan year, and remaining fund for use in subsequent years.

Article 11.Contents of expense estimates

Contents of an expense estimate to be made by a project owner or PMU are specified in Form No. 04/DT-QLDA promulgated together with this Circular, covering the following specific expenses:

1. Salaries:

a/ Rank- and grade-based salaries covered by the allocated salary fund; salaries to be paid under labor contracts to individuals salaried by the project under decisions of a competent authority and the State’s current regulations on salaries paid to officers, civil servants, public employees and armed forces personnel;

b/ Overtime work and night shift pays under the Labor Code’s provisions on working time and rest time and its guiding documents (the Government’s Decree No. 45/2013/NQ-CP of May 10, 2013, detailing a number of articles of the Labor Code on working time and rest time; the Ministry of Home Affairs and Ministry of Finance’s Joint Circular No. 08/2005/TTLT-BNV-BTC of January 5, 2005, guiding the implementation of the regime of payment of salaries for night shift and overtime work of officers, civil servants and public employees, and amending, supplementing or replacing documents (if any)).

2. Remuneration payable for specific jobs as agreed upon in labor contracts and in accordance with law.

3. Salary allowances:

a/ Extra-seniority allowance, position allowance, part-time leading position allowance, region-based allowance, special allowance, attraction allowance, itinerant work allowance, hazardous and dangerous job allowance and special allowances for professions or jobs specified in the Government’s Decree No. 204/2004/ND-CP of December 14, 2004, on the salary regime applicable to officers, public employees and armed forces personnel; Decrees No. 17/2013/ND-CP of February 19, 2013, and No. 117/2016/ND-CP of July 21, 2016, amending and supplementing a number of articles of Decree No. 204/2004/ND-CP and guiding circulars of the Ministry of Home Affairs;

b/ Part-time project management allowances:

- Officers, civil servants and public employees assigned to perform part-time project management jobs in a PMU are entitled to a project management allowance determined according to their time of working in such PMU. The monthly part-time project management allowance for a person must not exceed 50% of his/her monthly salary and salary allowance.

- For an officer, a civil servant or public employee assigned to perform part-time jobs in many PMUs, the part-time project management allowance shall be determined according to his/her time of working for each PMU, provided the total allowance for all part-time jobs in all of these PMUs does not exceed his/her rank salary and salary allowance.

- Persons enjoying salaries under Clause 1 of this Article may not enjoy a part-time job allowance under this Clause.

4. Salary-based deductions: Social insurance, health insurance and unemployment insurance premiums (if any), trade union dues and other deductible amounts for persons salaried by projects under decisions of competent authorities.

5. Rewards: Regular rewards and irregular rewards (if any) and expenses related to commendation and rewarding. Rewards shall be given to individuals and collectives under the Government’s Decree No. 42/2010/ND-CP of April 15, 2010, detailing a number of articles of the Law on Emulation and Commendation and the Law Amending and Supplementing a Number of Articles of the Law on Emulation and Commendation; the Ministry of Finance’s Circular No. 71/2011/TT-BTC of May 24, 2011, guiding the financial management for implementation of emulation and commendation regimes. The maximum estimated expense for payment of rewards is equal to 20% of the total fund of position-, rank- and grade-based salaries for officers, civil servants and public employees on the state payroll and remunerations approved for the whole year under Circular No. 71/2011/TT-BTC of May 24, 2011.

6. Welfare payments: Payment of allowances for annual leaves and other permitted leaves, regular and irregular difficulty allowances, and medicine cost allowance.

7. Public service charges: electricity, water, environmental sanitation, fuel and lump-sum travel expenses and other service charges.

8. Expense for office supplies: office tools and equipment, file cabinets, furniture, stationery, labor protection devices and other supplies.

9. Information and communications expense: Telephone, postal, facsimile and Internet access charges, purchase of books, newspapers and management materials.

10. Conference expense, which shall be paid under the Ministry of Finance’s Circular No. 40/2017/TT-BTC of April 28, 2017, prescribing the working mission allowance and conference spending, and amending and supplementing documents (if any).

11. Working mission allowances, which shall be paid under the Ministry of Finance’s Circular No. 40/2017/TT-BTC of April 28, 2017, prescribing the working mission allowance and conference spending, and its amending and supplementing documents (if any).

12. Expense for hiring vehicles, renting working offices, assorted service equipment, hiring experts and lecturers and retraining of officials, and other hires and rents.

13. Expense for overseas working delegations, which shall be paid under the Ministry of Finance’s Circular No. 102/2012/TT-BTC of June 21, 2012, prescribing the working mission allowance for state officials and civil servants travelling overseas for short working missions funded by the state budget, and its amending and supplementing documents (if any).

14. Expense for receptions of foreign delegations, which shall be paid under the Ministry of Finance’s Circular No. 01/2010/TT-BTC of January 10, 2010, prescribing the regime of spending for reception of foreign guests working in Vietnam, organization of international conferences and workshops in Vietnam and reception of domestic guests, and guiding, amending and supplementing documents (if any).

15. Expense for regular asset repairs: The expense for repair of assets to serve project management activities of the project owner and PMU must be included in the expense estimate approved under current regulations on management and use of state assets.

16. Procurement of assets for use for project management activities, such as houses, vehicles, fire prevention and fighting devices, computers, computer software, office machines and other assets to serve project management activities of the project owner and PMU must be included in the expense estimate approved under current regulations on management and use of state assets.

17. Payment of taxes, charges, fees, asset and vehicle insurance premiums, guest reception, application of scientific and technological advances, management of the work information system and other expenses.

18. Contingency provision, which must not exceed 10% of the expense estimate.

Spending limits of expenses which are specified in this Article must comply with current regulations applicable to state agencies and public non-business units.

Article 12.Appraisal and approval of project management revenue and expense estimates

1. Project owners shall appraise and approve project management revenue and expense estimates.

2. A dossier to be submitted for appraisal of a project management revenue and expense estimate must comprise:

a/ A written request for approval; the investment decision; the decision approving the work cost estimate; the PMU establishment decision;

b/ Table of calculation of revenues from project management activities, made according to Form No. 01(i)/DT-QLDA;

c/ Project management revenue estimate, made according to Form No. 02/DT-QLDA;

d/ Table of calculation of annual salaries, made according to Form No. 03/DT-QLDA;

dd/ Decisions assigning officers, civil servants and public employees to work on a part-time basis, determining the percentage in proportion to their time of working in the PMU;

e/ Annual project management expense estimate, made according to Form No. 04/DT-QLDA.

3. Contents of appraisal of a project management revenue and expense estimate:

a/ Jobs, calculation methods and conformity of the allocation of funding sources to the years of project implementation in the table of calculation of revenues from project management activities made according to Form No. 01(i)/DT-QLDA;

b/ The conformity of the annual project management revenue estimate made according to Form No. 02/DT-QLDA;

c/ The conformity of expenses in the expense estimate made according to Form No. 04/DT-QLDA with the standards, limits and current financial regimes of the State.

4. The time limit for appraisal and approval of a project management revenue and expense estimate is 14 working days after the project owner receives the complete and valid estimate appraisal dossier as prescribed.

5. A decision approving an annual project management revenue and expense estimate made according to Form No. 01/QD-QLDA promulgated together with this Circular shall be sent to the PMU, settlement agency and related units for implementation.

6. In the course of use, project owners may take the initiative in adjusting expenses in the approved annual expense estimates and take responsibility for such adjustment. In case adjusted expenses exceed estimated expenses, additional appraisal and approval of adjustments are required.

Article 13.Use of saved funds

1. A project management funding amount saved at the end of a budget year means the difference between actual expenses and project management funding sources stated in the approved project management revenue and expense estimate after the construction investment project management tasks and jobs assigned in the year are accomplished.

Expenses for special management activities in the year and funds for procurement and regular repair of assets which have been approved in the estimate but not yet used in the year and are to be carried forward to the next year shall not be regarded as funding amount saved in the year.

2. Contents of use of saved project management funding amounts:

a/ Payment of additional income:

- Within the limit of the saved project management funding amount, the project owner and PMU shall determine the maximum addition to the salary fund which must not exceed the rank-, grade- and position-based salary prescribed by the State to pay an additional income to officers, civil servants, public employees and persons salaried by the project;

- The payment of additional income to laborers shall be based on their assigned work volume and tasks and level of job performance, ensuring attraction of highly skilled laborers and reasonable compatibility with the salaries of officials and civil servants in the same unit.

b/ Payment of rewards: Payment of regular and irregular rewards for collectives and individuals according to their work results and contributions (in addition to rewards currently provided in the Law on Emulation and Commendation);

c/ Payment of welfare activities:

- Support for activities of mass organizations;

- Support for public holidays, new year festival and anniversaries (Vietnam Women’s Day, War Invalids and Fallen Heroes’ Day, etc.);

- Mid-day meal, funeral, wedding, sickness, retirement and working capacity loss allowances;

- Support for supply of official and employee attire;

- Support payments for officials, civil servants and employees on the state payroll when they are laid off;

- Expenses for building and repair of welfare facilities.

d/ Saved project management funding amounts not yet used up at the year end may be carried forward to the next year for spending, which shall be reflected in Form No. 02/DT-QLDA (Section I - Project management funds carried forward from the previous year) for making estimates for the next year;

dd/ Project owners and PMUs shall draft regulations on use of saved project management funding amounts and report them to superior management agencies for decision and written approval before issuing them.

3. Temporary calculation of additional income

Based on project management funding amounts which may be saved in a plan year, a project owner or PMU shall decide on:

a/ Temporary additional income to be paid in the year on a quarterly or biannual basis depending on practical conditions of the project owner or PMU;

b/ The level of additional income to be temporarily paid each time which must not exceed 60% of the rank-, grade- and position-based salary fund of the project owner or PMU as prescribed by the State for 3 or 6 months;

c/ At the year end, after finalizing project management expenses, if saved project management funding amounts are smaller than amounts determined by the project owner or PMU, based on the project management expense finalization statement approved by a competent authority, the State Treasury office where expense payment transactions are conducted shall request the project owner or PMU to refund payable expenses or offsetting the difference against the project management funding amount expected to be saved in the next year.

Article 14.Finalization of project management revenues and expenses

1. At the end of every budget year, a project owner or PMU shall obtain certification by the payment agency in order to make a project management revenue and expense finalization statement according to Form No. 01/QT-QLDA no later than February 28 of the subsequent year. The project owner shall organize the verification and approval of the project management revenue and expense finalization statements.

The owner or PMU managing a project with a total investment of under VND 15 billion are not required to make and approve annual project management revenue and expense finalization statements. Upon the completion of the project, the project owner or PMU shall make a project management revenue and expense finalization statement enclosed with spending documents and a complete project finalization dossier, then send them to the agency verifying the finalization statement for approval under regulations on finalization of completed projects funded by the state budget.

2. The time limit for verification and approval of a project management revenue and expense finalization statement is 14 working days after the project owner receives a complete and valid dossier for verification of such statement as prescribed.

3. A finalization statement dossier must comprise:

a/ A written request for approval of the investment project management expense finalization statement;

b/ Form No. 01/QT-QLDA: Summary of the annual investment project management expense finalization statement, with paid capital amounts cross-checked and certified by the payment agency;

c/ Documents of related expenses arising in the year;

d/ Copies of the decision on assignment of annual estimates, decision(s) on adjustment(s) of estimates made in the year (if any) and notice of approval of the previous year’s finalization.

4. Contents to be verified:

a/ The use of revenues from project management activities in the plan year;

b/ The consistency between figures requested to be finalized in the project management revenue and expense finalization statement of the plan year, made according to Form No. 01/QT-QLDA, with the deduction limits and spending regime prescribed by the State and the approved or adjusted project management expense estimate (if any);

c/ The legality and validity of spending documents under current regulations of the State;

d/ The conformity of the finalization value allocated to specific projects implemented in the plan year.

5. Decisions approving project management expense finalizations:

a/ Decisions approving project management expense finalizations in plan years shall be made according to Form No. 01.QD/QT-QLDA;

b/ A finalization statement of management expenses for the whole project upon its completion shall be approved in the decision approving the completed project’s finalization statement.

6. Handling of the outstanding annual funding balance: Any positive revenue-expense difference or expenses in the approved estimate which have not yet been used up (saved amounts not yet used up) may be carried forward to subsequent years for spending and shall be reflected in Form No. 02/DT-QLDA (Section I - Project management funds carried forward from the previous year).

7. Annual allocation of project management expenses: A project owner that directly manages multiple projects shall allocate management expenses to these projects on the following principles:

a/ Expenses for consultancy, receipt and preservation of materials and equipment and other direct expenses of each project shall be allocated to such project;

b/ General management expenses shall be allocated in proportion to the total investment of each project.

8. Upon completion of a project, to be-finalized project management expenses shall be the annually approved total value of project management expenses of such project.

9. Particularly for the PMU of a construction investment project: After the project assigned for management is completed, if the annually advanced and paid project management funds are larger than the finalized value of project management expenses in the completed project’s finalization statement approved by a competent authority, the PMU shall remit the difference into the state budget. Otherwise, the State Treasury shall pay to the PMU the difference at the latter’s request and in accordance with current regulations. After the PMU fulfills its tasks and is disbanded, its assets shall be handled in accordance with law.

Section 2

MANAGEMENT AND USE OF REVENUES OF GROUP-II PROJECT OWNERS AND PROJECT MANAGEMENT UNITS

Article 15.Principles of exercising financial autonomy and accountability

1. Fulfillment of assigned tasks. The provision of construction investment consultancy services must conform to the assigned functions and tasks and suit the professional and financial capability of units, exerting no impacts on their main tasks.

2. Publicity and democracy in accordance with law.

3. Exercise of autonomy in association with responsibility for their own decisions before immediate superior management agencies and law; and submission to inspection and supervision by competent state agencies.

4. Assurance of interests of the State and rights and obligations of organizations and individuals as prescribed by law.

Article 16.Autonomous use of financial sources

1. Financial sources of a group-II PMU are revenues specified in Article 2 of this Circular.

2. Based on the assigned tasks and financial sources, regarding regular expenses specified in Clause 1, Article 17 of this Circular, the director of a group-II PMU may decide on a number of expenses for professional operations and management activities as follows:

a/ For expenses with spending limits set by a competent state agency: Based on the financial capability, the PMU may decide on expenses higher or lower than these spending limits and prescribe them in its internal spending regulation;

b/ For expenses with no spending limits set by a competent state agency: Based on its practical conditions and spending needs, the unit shall set appropriate spending limits in its internal spending regulation and take responsibility for its decisions.

3. PMUs shall strictly comply with the State’s regulations on expense limits, official-duty automobile, working office and home telephone and mobile phone spending norms; overseas working mission allowances; and expenses for receptions of foreign guests and international workshops in Vietnam.

4. Based on work characteristics, the director of a group-II PMU may decide on the method of allocation of package expenses to each of its attached section or unit; and decide on construction investment and asset procurement and overhaul in accordance with current laws.

5. PMUs shall draft their internal spending regulations and approve them after obtaining written opinions of superior management agencies.

Article 17.Specific expenses

1. Regular expenses, including salary or remuneration to be paid to employees under contracts; salary allowances; rewards; salary-based contributions; charges for public services, office supplies, information and communications services; expenses for conferences; working mission allowances; expenses for hires and rents; expenses for reception of foreign guests and overseas working delegations; fixed asset depreciation; asset repair; taxes payable in accordance with law and other prescribed expenses.

2. Irregular expenses, including capital construction investment, procurement of equipment and assets to be used for project management and overhaul of fixed assets; expenses for staff downsizing under the State’s current regulations (if any) and other related expenses.

Article 18.Salary, remuneration and income

1. Salary and remuneration: Salaries and wages of employees shall be calculated according to rank- or position-based salaries prescribed by the State. Remuneration shall be paid for specific jobs as agreed upon.

2. Additional income: The State shall encourage PMUs to increase revenues and save expenses and reduce their employees, thereby increasing income for their employees and  fulfilling assigned tasks after fulfilling obligations toward the state budget. Depending on results of financial activities in a year, a PMU may decide on total additional income to be paid in the year to its employees which must not exceed 3 times the rank-, grade- and position-based salary fund and salary allowances for its officials, civil servants and public employees under the State’s regulations.

The payment of income to employees in a unit must adhere to the following principle: Persons with higher working efficacy and greater contributions to increasing revenues and saving expenses shall be paid higher income. In their internal spending regulations, PMUs shall prescribe the payment of additional income based on assigned work volume and jobs and performance quality, ensuring attraction of highly qualified employees and reasonable compatibility with salary levels of officials, civil servants and public employees in the same unit. The additional income of a leading position holder must not exceed two times the average additional income payable to an employee in the same unit and shall also be paid on the basis of work volume, quality and efficiency. Incomes of a PMU’s directors shall be paid according to the unit’s internal spending regulations.

When the State amends salary regulations or increases the basic salary level, rank or position-based salary increases shall be covered by financial sources of PMUs.

Article 19.Use of annual results of financial activities

Every year, after paying expenses, taxes and other remittances as prescribed, a PMU may use the positive difference between revenues and regular expenses (if any) in the following order:

1. Setting aside at least 25% of such difference for the fund for development of non-business activities.

2. Setting aside the income addition fund which must not exceed 3 times of the rank, grade and position-based salary fund and salary allowances for officials, civil servants and public employees as prescribed by the State.

3. Setting aside the reward fund and welfare fund which must not exceed 3 months’ average salary or remuneration paid in the year.

4. The remaining difference (if any) after setting aside the above funds shall be added to the fund for development of non-business activities.

Article 20.Use of funds under internal spending regulations

1. The fund for development of non-business activities shall be used for investment in building physical facilities, purchase of working equipment and tools, development of project management capacity, application of scientific, technical and technological advances, and professional training of employees of the unit.

2. The income addition fund shall be used to:

a/ Pay in advance regular expenses at the beginning of a year when no capital plan is assigned yet, there is no revenue or the revenue estimate is not yet approved. When a capital plan is assigned, the revenue estimate is approved or there is a revenue, advanced amounts shall be refunded to the income addition fund;

b/ Pay additional income to employees in a year and set aside a provision for payment of additional income in the following year in case income sources decrease.

3. The reward fund shall be used to give regular and extraordinary rewards to collectives and individuals inside and outside the unit (in addition to rewards under the Law on Emulation and Commendation) according to their work performance and contributions to activities of the unit. The reward level shall be decided by the director of the PMU according to its internal spending regulation.

4. The welfare fund shall be used to build and repair welfare facilities, pay for welfare activities of employees of the PMU, pay extraordinary difficulty allowances to employees, including those who retire on pension or due to working capacity loss, and pay severances to laid-off employees. The director of the PMU shall decide on the use of this fund according to its internal spending regulation.

5. The specific levels at which the funds specified in Article 19 are set aside and the use of these funds shall be decided by directors of PMUs according to their internal spending regulations and publicized within these units.

Article 21.Making and implementation of project management revenue and expense estimates

1. Making of revenue and expense estimates of PMUs:

Every year, based on its functions and tasks assigned by a competent authority, tasks of the plan year and current financial spending regulations as well as results of service provision activities and financial revenues and expenses of the previous year, a PMU shall prepare revenue and expense estimates of the plan year according to Forms No. 01(i)/DT-QLDA, No. 02/DT-QLDA, No. 03/DT-QLDA and No. 04/DT-QLDA, then send them to their direct superior management agency (the agency that has decided on the PMU’s establishment or the agency authorized by such agency) for approval.

The agency in charge of approving a revenue and expense estimate shall assign a relevant unit to appraise such estimates before approving it. Appraisal dossiers, appraisal contents and the time limit and process of appraisal of revenue and expense estimates must comply with Article 12 of this Circular. Decisions approving annual project management revenue and expense estimates shall be made according to Form No. 02/QD-QLDA.

2. Implementation of revenue and expense estimates:

a/ In the course of implementation, a PMU may adjust regular operation expenses and expense groups in the expense estimate in conformity with its practical situation, and at the same time send the adjusted estimate to the superior management agency and the payment agency where the unit opens its account for monitoring, management, settlement and finalization. Expenses in the estimate which are neither paid yet nor used up may be carried forward to the following year for further payment;

b/ For irregular operation expenses: The adjustment of expense groups and spending tasks and carrying forward of expenses which are neither paid yet nor used up at the end of the year must comply with the Law on the State Budget and current guiding documents.

Article 22.Project management revenue and expense finalization statements

1. At the end of a plan year, within 90 days after the end of the annual accounting period as prescribed by law, a PMU shall make a financial statement according to the accounting regime applicable to the project owner, and at the same time make a revenue and expense finalization statement and submit it to the competent agency specified in Clause 1, Article 21, for use as a basis for preparing the subsequent year’s estimates:

An annual revenue and expense finalization dossier must comprise:

a/ A written request for approval of the finalization statement;

b/ Annual revenue and expense finalization statement made according to Form No. 02/QT-QLDA;

c/ Spending documents made in the year.

2. Verification of an annual revenue and expense finalization statement:

a/ The agency competent to approve such revenue and expense finalization statement shall assign a relevant unit to verify it before approving it;

b/ Verification contents:

Verifying the allocation of project management expenses and construction investment consultancy expenses by year and plan year.

Comparing the figures in the plan year’s project management revenue and expense finalization statement, made according to Form No. 02/QT-QLDA, with those in the approved or adjusted annual estimates.

Verifying the lawfulness and validity of spending documents against the State’s current regulations.

3. The time limit for verification and approval of a finalization statement is 14 working days after receiving a complete dossier. Decisions approving annual revenue and expense finalization statements shall be made according to Form No. 02/QD/QT-QLDA.

4. Every year, a PMU shall allocate management expenses to projects assigned to its for management on the following principles:

a/ Expenses for consultancy jobs, receipt and preservation of materials and equipment and other direct expenses of a certain project shall be directly allocated to such project;

b/ General management expenses shall be allocated in proportion to total investments of projects.

5. Once a project assigned for management is completed and handed over for operation, project management and construction investment consultancy expenses included in the project’s total investment shall be finalized according to their limit percentages or estimates approved within its total investment.

Chapter III

ORGANIZATION OF IMPLEMENTATION

Article 23.Responsibilities of related units

1. Responsibilities of group-I project owners and PMUs:

a/ To take full responsibility for the management and use of project management expenses;

b/ To make, verify and approve (for project owners) or make and submit (for PMUs of single construction investment projects) project management expense estimates to competent authorities for approval; to make project management expense finalization statements and obtain certification by payment agencies before submitting such statements to competent authorities for approval within the time limit prescribed in this Circular.

2. Responsibilities of directors of group-II PMUs:

a/ To take full responsibility for the management and use of project management expenses.

b/ To make and submit project management revenue and expense estimates and project management revenue and expense finalization statements to competent authorities within the time limits prescribed in this Circular;

c/ To take responsibility before their direct superior management agencies and before law for their decisions in exercising their financial autonomy;

d/ To make plans on the exercise of their autonomy and accountability under regulations and send them to superior agencies;

dd/ To make and implement their internal spending regulations under the provisions of Decree No. 16/2015/ND-CP applicable to public non-business units that self-cover their regular expenses;

e/ To organize the performance of accounting, statistics and asset management work under regulations, and fully and promptly reflect their revenues and expenses in accounting books. To comply with the current regulations on information and reporting on their activities;

g/ To implement the current regulations on grassroots democracy and financial publicity.

3. Responsibilities of payment agencies

a/ To control and pay revenues from project management activities of owners and PMUs of projects funded by the state budget under the regulations on payment of investment capital, the State’s current financial management regulations and relevant provisions of this Circular;

b/ To compare and certify funds already paid in the year and estimated remaining funds according to project management revenue and expense finalization statements made by project owners and PMUs according to Forms No. 01/QT-QLDA and
No. 02/QT-QLDA.

4. Responsibilities of ministries, sectors and localities

a/ To approve or authorize their attached bodies to approve project management revenue and expense estimates and finalization statements of specialized or regional PMUs that they have established;

b/ To decide plans on financial autonomy of specialized or regional PMUs that they have established;

c/ To regularly inspect the management and use of revenues from project management activities of owners and PMUs of projects funded by the state budget under their management; to take measures to handle in accordance with law individuals and units that commit illegal acts in the management and use of revenues from project management activities of owners and PMUs of state budget-funded projects.

Article 24.Transitional provisions

1. Project management expenses of project owners and PMUs, which are not yet finalized in the previous years due to the implementation of the provisions of the Ministry of Finance’s Circular No. 10/2011/TT-BTC of January 26, 2011, on the management and use of project management expenses of investment projects funded by the state budget, Circular No. 17/2013/TT-BTC of February 19, 2013, amending Clause 1, Article 6 of Circular No. 10/2011/TT-BTC of January 26, 2011, and Circular No. 05/2014/TT-BTC of January 6, 2014, replacing the above circulars, are not required to be finalized under this Circular.

2. For completed projects for which finalization statements have been made and sent to competent authorities before the effective date of this Circular, their project management revenue and expense finalization statements shall be made under Circular No. 05/2014/TT-BTC and their project management expenses are not required to be re-determined according to the allocated value mentioned in this Circular.

Article 25.Implementation provisions

1. This Circular takes effect on September 15, 2017, and replaces the Ministry of Finance’s Circular No. 05/2014/TT-BTC of January 6, 2014, prescribing the management and use of project management expenses of investment projects funded by the state budget.

2. In the course of implementation, should the legal documents referred to in this Circular for application be amended, supplemented or replaced by new ones, the new legal documents shall apply.

3. In the course of implementation, any arising problems shall be promptly reported to the Ministry of Finance for study and guidance or for appropriate revision.-

For the Minister of Finance
Deputy Minister
HUYNH QUANG HAI

* All the forms promulgated together with this Circular are not translated.