Decision No. 10/2008/QD-BTC dated February 12, 2008 of the Ministry of Finance promulgating the regulation on financial management of social funds and charity funds

 DECISION

PROMULGATING THE REGULATION ON FINANCIAL MANAGEMENT OF SOCIAL FUNDS AND CHARITY FUNDS

THE MINISTER OF FINANCE

Pursuant to the Governments Decree No. 77/2003/ND-CP of July 1, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Governments Decree No. 148/2007/ND-CP of September 25, 2007, on organization and operation of social funds and charity funds,

DECIDES:

Article 1. To promulgate together with this Decision the Regulation on financial management of social funds and charity funds.

Article 2. This Decision takes effect 15 days after its publication in CONG BAO and replaces the Finance Ministers Decision No. 56/2000/QD-BTC of April 19, 2000, promulgating the Regulation on financial management of social funds and charity funds.

Article 3. Chairmen of fund management councils and directors of social funds and charity funds shall implement this Decision.

REGULATION

ON FINANCIAL MANAGEMENT OF SOCIAL FUNDS AND CHARITY FUNDS
(Promulgated together with the Finance Ministers Decision No. 10/2008/QD-BTC of February 12, 2008)

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Regulation applies to social funds and charity funds set up under the Governments Decree No. 148/2007/ND-CP of September 25, 2007, on organization and operation of social funds and charity funds (below referred to as funds for short) and legal documents guiding this Decree.

Article 2. Principles for operation and financial management of funds

1. A fund is set up and operates for non-profit purposes, on the principle of voluntariness, creating its own capital, self-financing and taking responsibility before law for its own activities.

2. A fund has the legal person status and its own seal and may open accounts at banks or state treasuries in order to conduct its transactions.

3. A fund shall collect revenues, make expenditures and conduct final settlement in accordance with the Accounting Law and documents guiding the implementation of the Law. A fiscal year of the fund starts on January 1 and ends on December 31 of a calendar year.

4. A fund must publicize the situation of fund raising, management and use and report on its observance of financial publicity in accordance with the Prime Ministers Decision No. 192/2004/QD-TTg of November 16, 2004, promulgating the Regulation on financial publicity applicable to state budgets at all levels, budget-estimating units, state budget-funded organizations, capital construction investment projects funded with state budget capital, state enterprises, funds originating from the state budget and funds originating from peoples contributions, and guiding documents of the Finance Ministry; Circular No. 03/2005/TT-BTC of January 6, 2005, guiding the implementation of the Regulation on financial publicity applicable to state budgets at all levels and the regime of reporting on the observance of financial publicity, and Circular No. 21/2005/TT-BTC of March 22, 2005, guiding the observance of financial publicity by budget-estimating units and state budget-funded organizations.

5. It is prohibited to abuse activities of a fund for self-seeking purposes or in contravention of this Decision and relevant provisions of law.

Chapter II

FINANCIAL MANAGEMENT OF FUNDS

Article 3. Capital sources of funds

1. Capital sources of a fund include:

a/ Individuals and organizations capital contributed in Vietnam dong and assets converted into Vietnam dong (including assets, foreign currencies, valuable papers, property rights and other assets) in the forms of contracts, donation, wills of estate leavers, or other contributions to the fund. Individuals and organizations that have contributed assets to the fund will no longer have ownership rights to and civil liability for those assets. Assets being offices, equipment, technologies, property rights, etc., must be evaluated by lawfully established evaluation organizations.

b/ Profits generated from capital contributed to the fund:

c/ Other lawful capital source.

2. Use of capital sources:

A funds capital sources must be used to ensure its initial activities, as domestic capital contributed to its projects upon its formation, and for the performance of tasks conformable with its charier.

Article 4. Revenue sources of funds

1. Voluntary contributions and lawful financial supports of domestic or foreign organizations and individuals, which are made in accordance with law.

2. Revenues from the provision of services or other activities in accordance with law.

3. Funding provided by the state budget (if any), including:

a/ Funding for the performance of tasks assigned by state agencies;

b/ Funding for the provision of public services, for scientific researches, target programs or projects ordered by the State;

c/ Interests arising from bank deposits or government bonds;

d/ Other lawful revenues (if any).

Article 5. Use of funds

1. A fund is used for the following activities:

a/ Providing financial supports, including:

- Financial supports for programs or projects for humanitarian or charity purposes, to encourage the development of culture, education, health, physical training and sports, sciences, and for other community development objectives in accordance with the charter of the fund;

- Financial supports made under individuals or organizations authorization for the implementation of specific projects in accordance with law;

- Financial supports for organizations and individuals to conduct activities suitable to the purposes of the fund;

b/ Funding the performance of tasks assigned by state agencies;

c/ Funding the provision of public services, for scientific researches, target programs or projects ordered by the State;

d/ Paving fund management expenses;

e. Buying government bonds, depositing as savings the funds idle money (excluding state budget allocations, if any)

2. All assets mobilized into a fund must be used thriftily and efficiently, for proper purposes and beneficiaries:

a/ Financial supports, contributions and donations provided for overcoming consequences of floods, natural disasters or fires, for people infected with acute diseases or for relief in other emergency cases, must be delivered by the fund to proper recipients immediately after receiving them.

b/ With regard to purposed or targeted financial supports, donors requirements must be met.

c/ With regard to capital sources not mentioned at Points a and b above, the fund must disburse at least 70% (seventy per cent) of the mobilized capital in a fiscal year for activities suitable to its targets; if unable to disburse this 70%, it must give explicit explanations in the yearly financial statement sent to the agency which has permitted its setting up and to the state agency of the same level which manages its finance. If the capital which has not been disbursed includes state budget capital, that capital amount may be considered for transfer to the subsequent year for use if it is so consented by the finance agency of the same level with the agency competent to permit the setting up of the fund.

d/ If the fund is set up with donated assets, or under a contract or will but fails to organize fund raising, receive donations or implement the donation purposes or objectives indicated in the contract or the will, it must annually reserve at least 5% (five per cent) of the total of its assets to support programs or projects suitable to the purposes of its activities.

Article 6. Expenditure for fund management activities

1. Contents of expenditure for a funds management activities:

a/ Expenses on salaries and allowances for the funds managerial apparatus;

b/ Expenses on social insurance, health insurance and other prescribed contributions:

c/ Expenses on the rent of working offices (if any);

d/ Expenses on procurement, repair of office supplies or assets in service of the funds activities;

e/ Expenses on payment of public service charges (electricity, telephone, internet, water, fuel, sanitation, environment....);

f/ Expenses on work travel allowances which arise in the course of mobilizing, receiving, transporting or distributing money and goods for relief;

g/ Expenses on activities related to the performance of common tasks in the course of mobilizing, receiving, transporting or distributing money and goods for relief (hiring storehouses or storing yards; packaging in containers and transporting goods: transferring money; other expenses related to the distribution of money and goods for relief...);

h/ Other expenses related to the operation of the fund.

2. Norms of expenditure for fund management activities:

Based on the current expenditure norms and quotas set by the State, a fund management council shall specify rates of expenditure for fund management, which must not exceed 5% (five per cent) of the funds total annual revenues (excluding supports in kind, supports provided by the State for the provision of public services, for scientific researches, target programs or projects ordered by the State). In case it is actually required to spend more than 5% of the funds total annual revenues for fund management, the fund management council shall set another rate of expenditure for fund management in the subsequent year after consulting the Peoples Committee of the same level (for a local fund) or the Finance Ministry (for a central fund).

Article 7. Financial management of funds

1. A fund must organize accounting and statistical work in accordance with the Accounting Law, the Statistics Law and current legal documents guiding their implementation, specifically:

a/ Observing regulations on accounting documents; cost-accounting of all arising economic and financial operations related to the fund;

b/ Opening accounting books to record, systemize and archive all arising economic and financial operations related to the fund (reflecting, monitoring details of revenues, expenditures in cash or kind, detailed to contributors and donors as well as recipients of supports.);

c/ Making and sending on time all quarterly and annual financial statements and final settlement reports to the agency competent to permit the setting up of the fund.

d/ Submitting to the supervision and inspection of its revenue, expenditure, management and use by the finance agency of the same level with the agency competent to permit the setting up of the fund.

2. The control board of a fund shall inspect and supervise the funds activities and report to the fund management council on the financial situation of the fund.

3. The management council of a fund shall promulgate regulations on management and use of revenues and expenditure norms of the fund; approve the rates of expenditure for fund management, ratify financial plans and consider and approve the funds annual financial settlement reports.

4. The director of a fund shall observe regulations on management and use of the funds revenues and expenditure norms according to resolutions of the fund management council, on the basis of the operation tasks approved by the latter, and may not use the fund for activities contrary to its principles and purposes.

5. The standing member of the management council and the director of a fund shall quarterly and annually publicize the funds financial situation as follows:

a/ The list of organizations and individuals that have made contribution, support or donation in cash or kind to the fund; the amounts of those contributions, supports or donations.

b/ The list of organizations and individuals that have received the funds supports in cash or kind; the amounts of those supports.

c/ The funds quarterly and annual reports, detailed to each revenue or expenditure content under the Accounting Law and current legal documents guiding its implementation.

6. With regard to expenditures made in each fund raising drive, the results or mobilization and provision of relief shall be reported under current regulations on mobilization, receipt, distribution and use of voluntary contributions in support of people to overcome consequences of natural disasters or fires or people infected with acute diseases.

7. A fund must publicize its annual financial statements and final settlements of revenues and expenditures in accordance with current regulations.

Article 8. Persons in charge of accountancy of funds

1. Criteria for the person in charge of accountancy of a fund comply with Joint Circular No. 50/2005/TTLT-BTC-BNV of June 15, 2005, of the Ministry of Finance and the Ministry of Home Affairs, guiding the criteria, conditions and procedures for appointment, dismissal, replacement of, and allowance for, chief accountants and persons in charge of accountancy in accounting units within the state accounting domain.

2. The person assigned to take charge of accountancy of a fund shall assist the funds director in organizing and directing all accounting and statistical work of the fund.

A person with criminal records or who has been disciplined for corruption or appropriation of socialist property or for violation of economic and financial management polices and mechanisms and whose criminal records have not been remitted, shall not be appointed to take charge of accountancy of a fund.

The appointment, dismissal and transfer to another job of the person in charge of accountancy of a fund shall be decided by the fund management council at the proposal of the funds director. In case of merger, consolidation, division, split or dissolution of the fund or if the person in charge of accountancy of the fund moves to another job, he/she is required to complete financial settlement before taking the new job and is still held responsible for accounting figures and reports in the period during which he/she takes charge of accountancy until he/she completes the transfer of all accounting work to another person.

Chapter III

HANDLING OF ASSETS UPON CONSOLIDATION, MERGER, DIVISION, SPLIT, SUSPENSION AND DISSOLUTION OF FUNDS

Article 9. If a fund is permitted by a competent state agency to be merged, consolidated, divided or split up, all its money and assets must be inventoried accurately and promptly before the merger, consolidation, division or split; it is strictly prohibited to distribute assets of the fund.

Money and assets of the newly merged or consolidated fund must be equal to the total of money and assets of pre-merger or -consolidation funds.

The total of money and assets of newly divided or split up funds must be equal to the total of money and assets of the pre-division or -split fund.

Article 10. If a fund is suspended from operation, all its money and assets must be inventoried and kept intact. During the suspension time and pending a decision from a competent authority, the fund may only pay regular expenses for its own apparatus.

Article 11. If a fund is dissolved, its assets must not be distributed. The sale and liquidation of assets of the fund comply with the Governments Decree No. 137/2006/ND-CP of November 14, 2006, on decentralization of the state management of state assets in administrative agencies and public non-business units, and assets with state ownership rights already established, and the Finance Ministrys Circular No. 35/2007/TT-BTC of April 10, 2007, guiding this Decree.

All the funds available money and proceeds from the sale and liquidation of its assets shall be used to pay its debts in the following order of priority:

- Paying salaries, severance allowances, social insurance premiums and other benefits for laborers under the signed labor contracts;

- Paying debts and other payable amounts.

After paying all debts and dissolution costs, the remaining money amounts and assets of the fund shall be remitted into the budget of the agency which has permitted its setting up.

Article 12. The director of a fund shall take responsibility before the fund management council for all the funds activities. If the funds operation is suspended or banned due to violations, it shall, depending on the nature and severity of its violations, be subject to an additional administrative sanction, and pay compensations if it causes damage. Individuals committing financial violations which affect the operation of the fund shall, depending on the severity of their violations, be sanctioned in accordance with law.