Joint Circular No. 102/2007/TTLT-BTC-BLDTBXH dated August 20, 2007 of the Ministry of Finance and the Ministry of Labour, War Invalids and Social Affairs guiding the financial management mechanism applicable to some projects of the national target program on poverty reduction

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:

- 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.

1.4. Accounting and settlement:

- Units directly using the NTPPRs budget shall account and settle funds for implementation of projects according to corresponding chapters, categories and items in the state budget index; the NTPPRs code, the State Budget Law, the Accounting Law and their guiding documents.

- With regard to the Programs activities contracted by agencies and organizations to project management units, the documents serving as a basis for payment and settlement shall be kept at the project management units, including task performance contracts (enclosed with detailed cost estimates approved by project management units), minutes on test and take-over of works, minutes on contract liquidation, orders of payment and other related papers. Payment documents shall be kept by project implementation units according to current regulations.

1.5. Inspection, supervision and audit:

- Labor, war invalids and social affairs agencies shall coordinate with finance as well as planning and investment agencies of the same level in periodically or extraordinarily inspecting and supervising the performance of tasks and objectives of projects, ensuring the management and use of the programs funds in a thrift and effective manner for proper purposes.

- Units directly using the Programs budget shall observe current expenditure control regulations.

- All financial activities of the NTPPR must be audited in accordance with the Law on the State Audit.

- Peoples Councils at all levels, the Fatherland Front and mass organizations at all levels and communities shall supervise, and coordinate the supervision of, the implementation of the Program.

1.6. Information and reporting:

- Units directly using the NTPPRs budget shall report on the implementation of the Program to their managing agencies for sum-up and sending to finance, planning and investment, and labor, war invalids and social affairs agencies of the same level.

- Provincial/municipal Services of Labor, War Invalids and Social Affairs shall review and report on the implementation of projects under the NTPPR to the provincial-level steering committees for poverty reduction.

- Provincial level steering committees for poverty reduction shall review and report on the implementation of projects under the NTPPR to the project-managing ministries and branches, the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Planning and Investment, and the Ministry of Finance.

- Project-managing ministries and branches shall send sum-up reports on the implementation of projects to the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Finance, and the Ministry of Planning and Investment according to regulations.

- The Ministry of Labor, War Invalids and Social Affairs shall review and report on the assessment of the realization of objectives, contents and efficacy of the use of the NTPPRs funds to the central steering committee for poverty reduction.

Contents and forms of reports and the process of reporting comply with current regulations on management and administration of national target programs and this Circular. Monitoring and evaluation indicators shall comply with the guidance of the Ministry of Labor, War Invalids and Social Affairs.

2. Projects expenditure contents and levels:

2.1. Project on agricultural-forestry-fishery extension and support for production and trade development

2.1.1. Beneficiaries: Poor households (based on the poverty line defined in the Prime Ministers Decision No. 170/2005/QD-TTg of July 8, 2005, promulgating the poverty line applicable to the 2006-2010 period) with members in the working age range and production land but lacking knowledge, experience and conditions to apply technical advances to production. Priority is given to poor women and ethnic minority people.

2.1.2. Expenditure contents and levels:

a/ Expenses on training to provide production knowledge for poor households. Expenditure contents and levels comply with the States current regulations on the organization of conferences of state agencies and public non-business units, specifically:

- Expense in support of the organization of training courses, including renting training halls, rooms and equipment.

- Expense in support of payment for drinks, stationery and materials for poor people during training courses: not exceeding VND 20,000/person/day.

- Expense in support of payment for meals for poor people during training courses: not exceeding VND 20,000/person/day.

- Expense in support of technical instructors: VND 40,000/instructor/day.

- Expense in support of poor people to go on study or survey visits to successful models of agricultural or fishery extension in localities:

+ Support of train and bus fares at ordinary rates paid for study or survey visits.

+ Support of meal expenses during study or survey visits: not exceeding VND 50,000/person/day.

+ Support of accommodation rents (for overnight tours): not exceeding VND 100,000/person/day.

b/ Expenses in support of the building of demonstration models of application of new techniques to production, and hi-tech or technology transfer models in various ecological regions covered by projects already approved by competent authorities:

- For poor households in high mountain, deep-lying or remote regions, the maximum support level is 100% of expenses for varieties or breeds and major materials; for poor households in other regions, the maximum support level is 50% of expenses for a model.

- The support level for poor households to buy equipment, machinery or tools for post-harvest product processing and preservation shall be project-based and approved by competent authorities but must not exceed VND 3,000,000/household.

2.1.3. The process of planning, formulating, appraising and approving projects complies with the Ministry of Agriculture and Rural Developments guidance on implementation of projects on agricultural-forestry-fishery extension and support for production and trade development under the 2006-2010 national target program on poverty reduction.

2.2. Project in support of development of basic infrastructure in extreme difficulty-hit communes on costal alluvial banks or islands:

2.2.1. Investment localities: extreme difficulty-hit communes on costal alluvial banks or islands under the Prime Ministers decision.

2.2.2. List of works to be invested: the state budget shall provide support for project-based investments in the construction of basic infrastructures in service of peoples life and production development, depending on specific conditions of each commune, including: anti-flood banks, embankments, irrigation works, seawater pump stations for aquaculture and salt making; roads to fish wharves; fish markets.

2.2.3. Investment mechanisms and support levels are the same as for projects on infrastructure development in extreme difficulty-hit communes under the program on economic development in extreme difficulty-hit communes in ethnic minority and mountainous regions in the 2006-2010 period according to Joint Circular No. 676/2006/TTLT-UBDT-KHDT-TC-XD-NNPTNT of August 8, 2006, of the Nationalities Committee, the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Construction and the Ministry of Agriculture and Rural Development, guiding the implementation of the program on socio-economic development in extreme difficulty-hit communes in ethnic minority and mountainous regions in the 2006-2010 period.

2.3. Project on job training for the poor:

2.3.1. Job trainees: People in the working age range of poor households classified according to the poverty line defined in the Prime Ministers Decision No. 170/2005/QD-TTg of July 8, 2005 (below called poor people for short), with priority given to poor young people and women who have not yet received job training and fall in one of the following cases:

- Teaching jobs for poor people in ethnic minority or flooded regions;

- Teaching jobs for poor people to work in forestry farms or defense- economic zones in the Central Highlands and northern mountainous regions;

- Teaching and creating jobs for poor people in enterprises;

- Teaching jobs and providing orientation training for poor people to go to work overseas;

- Teaching jobs for poor people to switch from agriculture to other trades in areas where agricultural land is converted for industrial development or in urbanized areas;

- Experimenting effective job-teaching models for poor people.

2.3.2. Forms and duration of job training: To be decided by provincial-level Peoples Committees as suitable to poor peoples needs and job-training levels. A job-training duration must not exceed 12 months.

2.3.3. Support conditions:

- Poor people in the working age range who have good health, have not yet received job training or who have to change their jobs and wish to learn new jobs may be introduced by labor, war invalids and social affairs agencies to job training establishments or enterprises for free short-term job training (only once).

- Poor people shall submit to labor, war invalids and social affairs agencies for consideration and decision applications for job training, containing the certification by the Peoples Committee of the commune, ward or township where they register their permanent residence.

2.3.4. Expenditure moments and levels:

a/ For job training at job-training establishments:

- To provide support at a level of VND 300,000/person/month for job-training establishments (including enterprises with job-training establishments) to teach jobs for poor people under training contracts signed with labor, war invalids and social affairs agencies, to cover expenses on:

+ Enrolment, opening and closing of training courses and award of job certificates;

+ Remunerations for lecturers and instructors;

+ Raw materials, fuel and materials for job learning;

+ Renting of classrooms and necessary equipment (if any) for job training;

+ Modification and compilation of programs or curricula (if any);

+ Management of classes, at a level not exceeding 5% of their total job-training fund.

- To provide support directly to poor job trainees:

+ Meals during the job training time: VND 10,000/person/day.

+ Travel expenses: Poor people who have to go 15 km or longer to learn jobs are eligible for support of mass transit fares not exceeding VND 200,000/person/training course.

b/ For job training in association with employment:

To provide direct supports to enterprises with schemes on job training through job passing, practice- based training and recruitment of poor people for at least 24 months in enterprises (applicable to enterprises not recognized as job-training establishments). Specific support levels depend on forms and duration of job training provided by enterprises and contracted with labor, war invalids and social affairs agencies, but do not exceed VND 1,200,000/person, covering expenses on:

+ Remunerations for lecturers and instructors;

+ Raw materials, fuel and materials for learning jobs;

+ Meals for job trainees.

Apart from the above contents and levels of support for job training, depending on specific conditions of each training course, job trainees, local budget limits and other mobilized sources, provincial/ municipal Peoples Committees shall consider and decide on additional pecuniary support for trainees accommodation. Localities shall integrate funding sources of the project on job training for the poor and the project on strengthening job-training capacity under the national target program on education and training so as to implement short-term job training projects according to the Prime Ministers Decision No. 81/2005/QD-TTg and Circular No. 06/2006/TTLT-BTC-BLDTBXH of January 19, 2006, guiding the implementation of the policy on short-term job-training support for rural laborers. If poor people registering to learn jobs are eligible for participating in various job-training courses under different state budget-funded programs or projects, they may choose to learn jobs under only one program or project.

2.3.5. The process, dossiers and procedures for implementation of the project on job training for the poor comply with the guidance of the Ministry of Labor, War Invalids and Social Affairs.

2.4. Project on multiplication of poverty reduction models:

2.4.1. Scope of model multiplication: Poor communes (other than those under Program 135, phase II) with conditions to develop raw material areas and ecological zones for economic development, and poor communes with conditions for development of traditional trades. Priority will be given to poor communes to create jobs and stable incomes for poor people.

2.4.2. Poverty reduction models: Based on the models already built and experimented in the 2001-2005 period, to draw experiences for their further application and multiplication.

2.4.3. Investment conditions: To be-multiplied models must be approved by a competent authority. The process of formulation, evaluation and approval of a model complies with the guidance of the Ministry of Labor, War Invalids and Social Affairs.

2.4.4. Expenditure contents and levels of support for models:

a/ Expenditure in support of poor households to develop production and create jobs after the models already approved by competent authorities, including:

- Expenses in support of plant varieties, animal breeds, fertilizers and plant protection drugs in service of production, to be paid at the following levels:

+ 100%, for poor ethnic minority households and 90%, for poor households in mountainous regions, on coastal alluvial banks or in submerged communes in the Mekong river delta;

+ 80%, for poor households in poor communes in other regions.

- Expenses for the purchase of essential hand-held production tools for poor households in poor communes covered by the project.

- Partial support of major materials (bricks, cement) for poor households covered by the project to build, repair and upgrade breeding facilities for husbandry development. Specific support levels shall be approved by competent authorities according to projects but must not exceed VND 2,000,000/household.

b/ Expenses in support of survey and identification of poor communes and households which have the need and conditions for applying a model.

c/ Expenses in support of research and formulation of model multiplication projects and detailed plans: not exceeding VND 2,000,000/model.

d/ Expenses on model application training, on assessment and review to draw application experience: Expenditure contents and levels comply with Item a, Point 2.1.2, Section II of this Circular.

2.5. Project on strengthening capacity of personnel engaged in poverty reduction at all levels

2.5.1. Training, strengthening capacity of personnel engaged in poverty reduction:

a/ Training and capacity strengthening will be provided for:

- Officials engaged in poverty reduction at all levels: Central, provincial, district and commune levels.

- Heads of hamlets and villages.

- Central and local mass organizations officials engaged in poverty reduction.

b/ Project management units shall organize and supply documents for training and capacity strengthening purposes, ensuring their relevance to qualifications of officials at each level (especially those of ethnic minorities).

c/ Contents and levels of expenditure for training of personnel engaged in hunger eradication and poverty reduction at all levels (central, provincial, district and commune):

- Paying remunerations to lecturers and foreign specialists (if any), at the levels set in the Finance Ministrys Circular No. 79/2005/TT-BTC of September 15, 2005, guiding the management and use of funds for training and re-training state cadres and employees.

- Supporting meal, accommodation and travel expenses for trainees during the training time according to the Finance Ministrys Circular No. 23/2007/TT-BTC of March 21, 2007, providing for working travel allowances and expenses for organization of conferences of state agencies and public non-business units. Particularly, full-time and commune-level public employees and part-time officials in high mountain, deep-lying, remote, border or island communes or villages do not have to pay all study, meal, accommodation and travel expenses according to Article 8 of the Governments Decree No. 121/2003/ND-CP of October 21, 2003, on benefits and policies for commune, ward and township officials.

- Organizing training courses: Renting halls, classrooms: buying learning equipment, stationery, teaching materials, textbooks; organizing field visits for trainees; paying meal, accommodation and travel expenses for lecturers and administrators of training establishments in case it is necessary to organize classes far from those establishments.

- Printing documents, compiling lecture notes for training sessions: Expenditure levels comply with current regulations guiding contents and levels of expenditure for compilation of framework training programs and curricula.

- Managing training courses: not exceeding 5% of the total training fund for those courses.

2.5.2. Communication:

- Publicizing on the mass media (radio, television, newspapers) state mechanisms and policies on poverty reduction for people in high-mountain, deep-lying and difficulty-hit regions; to introduce effective poverty reduction models for multiplication and, at the same time, disseminate good experiences in hunger eradication and poverty reduction for provinces to study and apply. Expenditure levels are as contracted between agencies in charge of public information work and mass media agencies.

- Developing, producing, multiplying and distributing communication products to localities. Expenditure levels are based on actual products and market prices.

- Organizing contests on poverty reduction, as approved by competent authorities.

2.6. Policy on legal aid for the poor:

2.6.1. Beneficiaries: Poor communes other than those covered by the Program on socio-economic development in extreme difficulty-hit communes in ethnic minority and mountainous regions in the 2006-2010 period.

2.6.2. Contents and levels of expenditure for legal aid for the poor:

a/ The implementation of the policy on legal aid for the poor complies with the Law on Legal Aid; the Governments Decree No. 07/2007/ND-CP of January 12, 2007, detailing the implementation of a number of articles of the Law on Legal Aid and documents guiding this Law.

b/ The NTPPR will provide support for some contents of legal aid for the poor as follows:

- Supporting communes to disseminate state policies and laws at the grassroots (communes, hamlets, villages) in order to improve the poor peoples knowledge about law;

- Organizing legal aid clubs in communes in order to popularize laws, provide legal consultancy and handle simple cases in communities;

- Organizing mobile legal aid teams in communes;

- Providing free leaflets and cassettes with legal information to the poor.

Support levels shall be decided by presidents of provincial Peoples Committees as suitable to each commune but must not exceed VND 2,000,000/commune/year.

2.7. Expenses on monitoring and evaluation activities, including:

- Building a system of monitoring and evaluation indicators applicable to the NTPPR at four levels (from central to commune levels).

- Formulating information collection and processing methods at all levels.

- Making a software for management of the program beneficiaries at district, provincial and central levels.

- Organizing annual, mid-term and final self-monitoring and evaluation of the program at all levels.

- Inspecting, monitoring and evaluating the implementation of the programs policies and projects.

- Reviewing, analyzing and evaluating the implementation of the program at all levels.

- Supporting communes and wards to oversee the implementation of the program.

- Contents and levels of expenses on monitoring and evaluation activities comply with the States current financial regulations. Particularly for poor communes, the minimum support level for program monitoring is VND 450,000/month/commune.

- Based on the above expenditure contents and the Labor, War Invalids and Social Affairs Ministrys guidance on the monitoring process, provincial-level Peoples Committees shall decide on specific support levels for each administrative level as suitable to their assigned tasks.

III. IMPLEMENTATION PROVISIONS

1. This Circular takes effect 15 days after its publication in CONG BAO. All previous regulations contrary to this Circular are annulled.

2. Concerned units are requested to report all problems arising in the course of implementation to the ministries for study and solution.