Joint Circular No. 21/2003/TTLT-BTC-BGDDT-BNV dated March 24, 2003 of the Ministry of Finance, the Ministry of Education and Training and the Ministry of Home Affairs guiding the financial management regime applicable to public education and training establishments operating with revenues

JOINT CIRCULAR

GUIDING THE FINANCIAL MANAGEMENT REGIME APPLICABLE TO PUBLIC EDUCATION AND TRAINING ESTABLISHMENTS OPERATING WITH REVENUES

To guide the implementation of the Government’s Decree No. 10/2002/ND-CP of January 16, 2002 on the financial regime applicable to non-business units with revenues; the Ministry of Finance already promulgated Circular No. 25/2002/TT-BTC of March 21, 2002.

To suit the specific activities of the education and training service, the Ministry of Finance, the Ministry of Education and Training and the Ministry of the Interior hereby further guide some contents of the financial management regime applicable to public education and training establishments operating with revenues as follows:

I. SUBJECTS

The subjects of application of this Circular are public education and training establishments belonging to the national education system, operating with revenues and having their regular activities partially financed with the State budget or fully financed by themselves (hereinafter referred collectively as education and training establishments with revenues), including:

- Pre-school education establishments (creches, kindergartens and preschools).

- Primary, junior and senior high schools.

- General technical and vocational centers, regular education centers and training centers.

- Intermediate vocational schools, job-training schools.

- Universities, colleges and academies.

The above-said non-business units with revenues shall implement the Government’s Decree No. 10/2002/ND-CP of January 16, 2002 when they meet all the following conditions:

- Having the establishment decisions made in writing by competent authorities.

- Having the legal person status and own seals.

- Having treasury or bank accounts.

- Having a financial and accounting apparatus.

- Having legal sources of revenue.

Competent agencies shall have to create favorable conditions for the education and training establishments to implement the Government’s Decree No. 10/2002/ND-CP of January 16, 2002.

The estimate-drafting units attached to education and training establishments with revenues, such as training centers, scientific and technological research and application centers, research institutes, publishing houses and magazines falling into the subjects of implementation of Decree No. 10/2002/ND-CP of January 16, 2002 shall be allowed to apply this Circular as well as guiding circulars in a way suitable to their respective operation domains (scientific research, culture and information…).

For education and training establishments with revenues, which have many independent-accounting attached units, such as national universities, Thai Nguyen University, Hue University, Da Nang University…, competent agencies shall allocate stable budget estimates to Grade -I or Grade-II estimate-drafting units in order to assign financial autonomy to the attached estimate-drafting units.

Education and training establishments without non-business revenues shall not be subject to the application of this Circular. The funding for their regular activities shall be allocated from the State budget and financially managed under the current mechanisms.

II. NON-BUSINESS REVENUE SOURCES OF PUBLIC EDUCATION AND TRAINING ESTABLISHMENTS

The public education and training establishments shall have the following non-business revenue sources:

1. Assorted charges and fees currently prescribed, including;

1.1 School fees collected from learners studying in the formal and non-formal education and training forms (diploma-granting system) at the rates prescribed by the State.

1.2. Charges collected for training services (certificate-granting system) at the rates decided by the unit heads and compatible with the service beneficiaries’ capability.

1.3. Enrollment fees in accordance with the Ordinance on Charges and Fees and guiding documents of the State.

2. Revenues associated with the units’ activities, including:

2.1. Revenues from training projects held jointly with organizations at home and abroad.

2.2. Revenues from production activities, sale of products made from practicing at school workshops, experimentation products…, from the provision of services closely associated with the units’ activities, exploitation of material foundations.

2.3. Revenues from scientific and technological contracts with organizations and individuals at home and abroad.

2.4. Revenues earned from the participation of the establishments’ officials, teachers and lecturers in the provision of services for external organizations and/or individuals or under the package payment mechanism.

2.5. Other lawful revenues permitted to be retained for use according to the State’s regulations.

The levels of the above-said revenues shall be agreed upon under contracts between the units’ heads and the requesters on the principle that the education and training establishments can offset expenses, learners are able to pay and there is some amount for accumulation

3. The general education school-building contributions shall comply with the regulations of competent authorities.

4. Revenues from the attached units to support common activities: The attached estimate-drafting units may deduct a portion of their non-business revenues to support common activities, with the deduction rates decided by the unit heads.

5. Other revenues as prescribed by law, such as interests on bank deposits being revenues from production and service provision activities.

Apart from the above-said revenues, the education and training establishments with revenues shall be permitted to mobilize lawful capital from organizations and individuals at home and abroad to serve their production and service provision activities in accordance with the current law provisions.

III. EXPENDITURES ON REGULAR ACTIVITIES

The education and training establishments with revenues may use their State budget allocations and non-business revenues for spending on regular activities as follows:

1. For officials, teachers and contractual laborers: Payment of wages and remunerations; bonuses; wage-based allowances; collective welfare; social insurance and medical insurance premiums and trade union fees contributed according to the current regulations.

2. For pupils and students:

- Payment of scholarships, social relief, bonuses.

- Expenses for cultural, sport and physical training activities of pupils and students.

3. Administrative management: Expenses for electricity, water, petrol and oil, environmental sanitation, office supplies, public services, working-trip allowance, conferences, communication, public relations, telephone, fax…

4. Teaching and learning activities:

a/ Expenses for purchase of books, newspapers, magazines, textbooks, reference books, equipment and supplies for experiments and practicing, expenses for teachers and pupils on practicing field trips… according to the programs of the education and training establishments with revenues (including security and defense education).

b/ Expenses for hiring Vietnamese and foreign experts and lecturers (expenses for compilation of teaching materials and lecturing), expenses for extra teaching hours of teachers and lecturers of the establishments.

c/ Expenses for training and fostering teachers.

d/ Expenses for organizing entrance examinations, graduation examinations and tests of excellent pupils and students at all levels.

5. Expenses for grassroots-level scientific and technological researches conducted by officials, teachers and students.

6. Expenses for performing labor, production, scientific and technological contracts, training services, joint training projects and practicing, including wages and remuneration, costs of materials, raw materials, supplies, fixed asset depreciation, taxes paid according to the law provisions.

7. Expenses for procurement and regular repair: Expenses for procurement of spare parts, regular repair of fixed assets in service of professional activities and maintenance of infrastructural works.

8. Expenses for international cooperation: outbound and inbound delegations.

9. Regular expenses for the charge and fee collection according to the current regulations.

10. Expenses for training State officials and employees in the units (excluding re-training expenses according to the State’s norms).

11. Other expenses: Repayment of borrowings, both principal and interest, to organizations and individuals at home and abroad (if any); use of the non-business revenues for social charities, supports for poor pupils with outstanding learning results, order and security expenses…

Irregular expenditures shall comply with the Government’s Decree No. 10/2002/ND-CP of January 16, 2002 and the Finance Ministry’s Circular No. 25/2002/TT-BTC of March 21, 2002.

IV. PUBLIC EDUCATION AND TRAINING ESTABLISHMENTS WITH REVENUES SHALL ENJOY FINANCIAL AUTONOMY, MAKE DECISIONS AND BEAR RESPONSIBILITY AS FOLLOWS:

1. Regarding the use of State-budget allocations and non-business revenues:

1.1. For public education and training establishments with revenues, which self-finance all of their regular activities:

Their attached units shall be assigned by competent bodies budget estimates to be kept stable for three years as follows:

a/ Assigning the estimates of collected charges and fees belonging to the State budget, including:

- Total collected charge and fee amount.

- Charge and fee portion permitted to be retained by the units for use according to the competent State bodies’ regulations, determined for each type of charge or fee.

- Charge and fee portion to be remitted into the State budget.

For charges and fees to be retained and remitted into the State budget in the prescribed percentages (%), annually, the bodies competent to assign estimates shall adjust the estimates to suit the units’ activities.

The managing agencies shall not assign the estimates of production and service provision revenues to the education and training establishments with revenues; but the units shall make revenue plans for implementation in the whole year. Particularly for non-business units having only revenues from production and services but not charges and fees, the competent bodies shall assign them the estimates of production and service provision revenues, serving as a basis for revenue and expenditure administration.

b/ Assigning the expenditure estimates:

- Assigning the aggregate estimates of expenditures on regular activities, taken from the source of collected charge and fee amounts permitted to be retained by the units for use according to the regulations of competent State bodies.

- For irregular expenditures from the State budget: Funding for the State-level, ministerial- and branch-level scientific researches; for national target programs; funding for orders placed under the State regime; funding for payroll streamlining; reciprocal funding for foreign-funded projects; aid capital, borrowed capital, capital construction investment capital; funding for procurement and overhaul of fixed assets and other irregular expenditures, the managing ministries, for centrally run non-business units with revenues), and the local managing agencies (for locally run non-business units with revenues) shall assign the budget estimates to the non-business units according to the current regulations.

c/ Where the units collect charges and fees in excess of the stable assigned estimates, they may use all the excessive amounts (of the retained portions) to supplement the units’ wage funds and operation budgets according to regulations.

Where the units collect charges and fees less than the assigned estimates of collected charges and fees (the retained portions), they must reduce expenditures accordingly.

For non-business units assigned by competent bodies the estimates of production and service provision revenues, if they collect excessive revenues, they may use all the excessive amounts to increase incomes and consolidate material foundations, if they collect revenues less than the assigned revenue estimates, they must reduce expenditures accordingly.

1.2. For education and training establishments with revenues, which self-finance some of regular activities, they shall be assigned by competent bodies revenue estimates and expenditure estimates, which are kept stable for three years, as follows:

1.2.1. Assigning the estimates of collected charges and fees belonging to the State budget, including:

- The total collected charge and fee amount.

- The charge and fee portion permitted to be retained by the units for use according to the competent State bodies’ regulations.

- The charge and fee portion to be remitted into the State budget.

For charges and fees to be retained and remitted into the State budget in percentages (%), annually, the bodies competent to assign revenues estimates shall adjust the revenue estimates to suit the units’ activities.

The managing agencies shall not assign the estimates of production and service provision revenues to the education and training establishments with revenues; but the units shall make revenue plans for implementation in the whole year. Particularly for non-business units having only revenues from production and service provision but not charges and fees, the competent bodies shall assign them the estimates of production and service provision revenues, serving as a basis for revenue and expenditure administration.

1.2.2. Assignment of expenditure estimates:

a/ Expenditures on regular activities:

- Assigning the aggregate expenditures on regular activities, from the source of collected charge and fee portions permitted to be retained by the units for use according to the regulations of competent State bodies.

- Assigning the aggregate expenditures on regular activities, from the State-budget allocations for the first year of the stable period, which shall be increased annually by a percentage decided by competent authorities.

b/ For irregular expenditures from the State budget: The funding for the State-level, ministerial- and branch-level scientific researches; for national target programs; funding for orders placed under the State regime; funding for payroll streamlining; reciprocal funding for foreign-funded projects; aid capital borrowed capital, capital construction investment capital; funding for procurement and overhaul of fixed assets and other irregular expenditures, the managing ministries, for centrally run non-business units with revenues), and the local managing agencies (for locally run non-business units with revenues) shall assign the budget estimates to the non-business units according to the current regulations.

1.2.3. Where the units can save some regular expenditures or increase the charge and fee portions to be retained as compared with the assigned estimates, they shall be allowed to use all of the saved funding amount and the increased revenues to supplement their wage funds and operation budgets. If the units collect revenues less than the assigned estimates, they must reduce expenditures accordingly.

For non-business units assigned by competent bodies the estimates of production and service provision revenues, if they collect excessive revenues, they may use all the excessive amounts to increase incomes and consolidate material foundations; if they collect revenues less than the assigned estimates, they must reduce expenditures accordingly.

After the fundings are kept stable for three years, the non-business units with revenues must make sum-up reports and submit them to competent bodies for consideration and decision to assign stable fundings for the subsequent period.

2. The payroll serving as a basis for estimating the wage funds is the payroll assigned by competent bodies till December 31 of the preceding year.

In the course of operation, the heads of the education and training establishments with revenues shall be allowed to decide on the labor employment plans as follows:

2.1 Re-arranging the assigned number of State officials and employees (including those having signed labor contracts within the payroll limits) so as to raise the operation efficiency and quality of the units. Those who are subject to payroll streamlining shall enjoy policies and regimes according to the current regulations.

2.2. For the education and training establishments with revenues, which self-finance all of their regular activities, basing themselves on the working needs and financial capability of their units, the unit heads may sign labor contracts in accordance with the law provisions on labor; persons eligible for signing contracts with an indefinite term must meet all criteria, have professional titles as prescribed by the branch- or domain-managing agencies and be graded in the administrative and non-business wage scale provided for in the Government’s Decree No. 25/CP of May 23, 1993 and guiding documents, and enjoy interests and have obligations as prescribed by law.

2.3. For the education and training establishments with revenues, which self-finance some of their regular activities, basing themselves on the working needs and financial capability of their units, the unit heads may sign labor contracts in accordance with the law provisions on labor as well as with the payroll limits promulgated by competent bodies; persons eligible for signing contracts with an indefinite term must meet all criteria, have professional titles as prescribed by the branch- or domain-managing agencies and be graded in the administrative and non-business wage scale provided for in the Government’s Decree No. 25/CP of May 23, 1993 and guiding documents, and enjoy interests and have obligations as prescribed by law.

2.4. The unit heads may terminate labor contracts signed between the units and laborers. The order and procedures for terminating labor contracts shall comply with the law provisions on labor.

2.5. To implement the democracy and publicity regimes according to law provisions.

3. The wage and income funds: The wage and income funds of the education and training establishments with revenues can use two sources:

3.1. The State budget allocations for payment of wages, remuneration, wage-based allowances of State officials and employees on the payroll and under labor contracts (for the education and training establishments with revenues, which self-finance some of their regular activities) in accordance with in the Government’s Decree No. 25/ND-CP of May 23, 1993 and current guiding documents on wages and wage-based allowances.

3.2. On the basis of the financial operation results (the source of non-business revenues and saved regular expenditures) and the professional performance situation, the wage and income funds of the education and training establishments with revenues shall be determined under the provisions at Point 1, Section IV of the Finance Ministry’s Circular No. 25/2002/TT-BTC of March 21, 2002 guiding the implementation of the Government’s Decree No. 10/2002/ND-CP of January 16, 2002 on the financial regime applicable to non-business units with revenues. The units shall work out regulations on payment of wages and remuneration and discuss and reach agreement in the congresses of the units’ State officials and employees.

Basing themselves on the regulations on payment of wages and renumerations, the unit heads shall decide on the levels of wages and renumerations to be paid to State officials and employees and contractual laborers according to their monthly working results.

3.3. If the education and training establishments with revenues do not use up wage money at year end, they shall put the remainder into the reserve funds for income stabilization and spending in subsequent years.

4. Elaboration of the internal spending regimes:

- Within the limit of the units’ financial sources (including the State budget allocations and non-business revenues), the heads of the education and training establishments with revenues shall take initiative in elaborating the criteria, norms and regimes for internal spending on managerial and professional activities, which may be higher or lower than the State-prescribed spending levels and suitable to the units’ characteristics.

- In the internal spending regimes, the education and training establishments with revenues shall give priority to spending on professional activities with a view to ensuring the quantity and quality of the units’ teaching and learning activities, scientific researches and services.

- The above-said spending criteria, regimes and norms shall be publicly discussed in the units. The internal spending regimes shall serve as a basis for the unit heads to administer the use and settlement of the units’ fundings from the State budget and non-business revenues and as a legal basis for the State treasuries to control expenditures.

5. Allocations from the State budget:

Basing themselves on the assigned State budget estimates, the financial agencies shall grant State budget allocations for regular expenditures (for units self-financing part of their expenditures) through the State treasuries in Section 134 "Other expenditures" according to each corresponding class and clause of the State Budget Index.

If allocations have been granted according to the sections of the State Budget Index, the heads of the units assigned the financial autonomy shall be entitled to adjust expenditure items in the total funding allocated for regular expenditures.

For irregular expenditure fundings, the financial agencies shall make allocations according to the current State Budget Index.

6. If the education and training establishments with revenues engage in production activities and/or services involving the use of fixed assets, they shall depreciate such fixed asset at levels prescribed in the Finance Minister’s Decision No. 166/1999/QD-BTC of December 30, 1999 promulgating the regime of management, use and depreciation of fixed assets and the current guiding documents of the State.

In special cases, the unit heads may decide on the application of a higher depreciation percentage in order to recover capital quickly, which must be, however, compatible with the life and technical renovation of the assets as well as with the service beneficiaries’ payment capability.

All the fixed-asset depreciation amounts shall be accounted into the prices of service products inscribed in the contracts between the education and training establishments with revenues and the production or service requesters.

7. For the education and training establishments with revenues, which wish to liquidate their assets: To set up a Property Liquidation Council under the Finance Minister’s Decision No. 55/2000/QD-BTC of April 19, 2000 promulgating the Regulation on management of State properties at administrative non-business agencies. The money amounts collected from the liquidation of properties formed from the State budget source or originated from the State budget, minus liquidation expenses (for weighing, measuring, counting, transporting, determining technical parameters, overtime pay (if any)…) shall be put into the units’ development funds. Where the liquidated properties are formed from borrowed capital, the units shall use the money collected from the liquidation, minus liquidation expenses, to repay the borrowed capital, and put any remaining amount into the funds for development of non-business activities.

8. Non-business revenues belonging to the State budget (school fee, other fees) shall comply with the provisions of the Ordinance on Charges and Fees and the Government’s Decree No. 57/2002/ND-CP of June 3, 2002 detailing the implementation of the Ordinance on Charges and Fees. Pending the issuance of guiding documents, the education and training establishments shall collect school fees according to the Prime Minister’s Decision No. 70/1998/QD-TTg of March 31, 1998 and current guiding documents. The education and training establishments may open accounts exclusively for revenues at the State treasuries where they have transactions for managing expenditures and revenues.

Quarterly and annually, the education and training establishments shall make reports on revenues and expenditures, have them certified by the State treasuries, and send them to their managing agencies for summing up and sending to the financial agencies of the same level.

9. At year-end, if the education and training establishments with revenues have not yet spent up their State budget allocations for regular expenditures and non-business revenues, they can spend and settle them in the next fiscal year. Basing themselves on the comparisons made with the units at the end of December 31, the State treasuries shall carry out procedures to transfer the unspent amounts to the education and training establishments with revenues for use in the subsequent year under the provisions of the Finance Ministry’s Circular No. 81/2002/TT-BTC of September 16, 2002 and concurrently notify in writing the financial agencies of the same level thereof for management.

10. The education and training establishments with revenues shall apply cost-accounting under the Finance Ministry’s Circular No. 121/2002/TT-BTC of December 31, 2002 guiding the accounting at non-business units with revenues.

V. IMPLEMENTATION PROVISIONS

This Circular takes effect as from January 1, 2003.

Other financial management-related contents shall comply with the Finance Ministry’s Circular No. 25/2002/TT-BTC of March 21, 2002 guiding the implementation of the Government’s Decree No. 10/2002/ND-CP of January 16, 2002 on the financial mechanism applicable to non-business units with revenues.

If facing any problems in the course of implementation, the ministries, ministerial-level agencies, localities and education and training establishments with revenues should report them to the three ministries for appropriate amendments and supplements.