CIRCULAR

 Guiding the management of cash revenues and expenditures made through the system of state treasuries

Pursuant to the Government’s 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 Prime Minister’s Decision No. 235/2003/QD-TTg of November 13, 2003, defining the functions, tasks, powers and organizational structure of the State Treasury under the Finance Ministry;

In order to enhance the management of state budget funds and to implement the state policies on monetary management, the Ministry of Finance hereby guides cash management through state treasuries as follows:

I. GENERAL PROVISIONS

1. All cash revenues and expenditures made through state treasuries shall be closely inspected and controlled so as to ensure efficient management of budget revenues and expenditures and at the same time step by step reduce the ratio of cash payment through the system of state treasuries and cut down expenses for vault operations.

2. All units funded by the state budget, units having transactions with state treasuries, communes, wards and townships (hereinafter referred collectively to as transaction units) which have cash payment shall strictly abide by current state regulations on cash management and the guidance in this Circular.

3. State treasuries shall conduct cash management within their internal system so as meet transaction units’ demands for cash settlement and payment; and at the same time, coordinate with the State Bank and state-owned commercial banks where they open accounts so as to satisfy their cash demands.

4. Based on the prescribed levels of cash fund balance, state treasuries may retain revenues collected in cash so as to meet transaction units’ demands for cash settlement and payment, and at the same time, make agreements with banks where they open accounts for units having transactions with state treasuries to withdraw cash amounts directly from these banks.

II. SPECIFIC PROVISIONS

1. Cash expenditures:

Transaction units may make the following payments in cash:

1.1. Payments to individuals such as wages; remuneration; wage allowances; scholarships for pupils and students; bonuses; collective welfare; payments to working commune, village and hamlet cadres; payments to persons with meritorious services to the revolution or society, pensions and social insurance allowances; payment of insurance to individuals; and other payments to individuals.

1.2. Payments for capital construction, including: payments for ground clearance made directly to people, payments for procurement of a number of supplies exploited and supplied by people under the approval of local administrations and investors (including payment for the purchase of supplies by investors for supplying to constructors); payments for the construction of works carried out by people themselves in communes; payments to project management units (wages, wage allowances, working-trip allowances, training expenses, expenses for conferences and guest reception, bonuses and other unexpected payments due to natural disasters or calamities).

In special cases, contractors that have opened deposit accounts at state treasuries under regulations of competent authorities and the units may make cash payment for such expenditure items as wages and salaries, payments for procurement of supplies and some other small expenditure items valued at under VND 5 million each.

1.3. Payment for some jobs performed by units under the Ministry of Defense, the Ministry of Public Security and the Government Cipher Committee, including: expenses for cipher work, expenses for feeding convicts and prosecuted offenders, and other regular cash expenses.

1.4. Payment of debts owed to people (including only expenses for payment of bonds and government bonds retailed via the state treasury system to individuals, cash payment made for sequestrated gold, silver, gem stones and properties to their lawful owners).

1.5. Payment for the purchase of reserve food (including only those purchased directly from people by national reserves agencies; excluding food purchased through food corporations and companies which shall be paid by bank transfer).

1.6. Other cash payments from the state budget and payments made from deposit accounts of transaction units to units and individuals that do not open accounts at state treasuries or banks.

State treasuries shall make non-cash payment for expenditure items defined in Clause 1, Section II of this Circular if transaction units so wish.

2. Registration of cash withdrawal at state treasuries:

2.1. Levels of cash withdrawal subject to prior registration: If units having transactions with state treasuries wish to withdraw a cash amount exceeding the levels prescribed below within one day (for one or more than one transaction), they shall make written registration of the cash amount and time of each withdrawal with the state treasuries where they open accounts one day in advance for the latter to prepare and supply cash amounts adequately and promptly.

The levels of cash withdrawal subject to prior registration with state treasuries are specified as follows:

- VND 200 million or more, for units having transactions with state treasuries of provinces or centrally-run cities (hereinafter collectively referred to as provincial-level state treasuries).

- VND 100 million or more, for units having transactions with state treasuries of districts, provincial capitals or cities (hereinafter collectively referred to as district-level state treasuries).

Transaction units may register cash withdrawal for each or different days of payment, but must clearly state the cash amount and time of each withdrawal on each day of payment.

In unexpected cases where transaction units wish to withdraw a cash amount exceeding the prescribed level within a day, they may make registration by telephone with competent officials of the state treasuries where they make transactions (directors or heads of vault sections of provincial-level state treasuries) for consideration and settlement, and shall make an official registration in writing afterwards.

2.2. The Minister of Finance hereby authorizes the General Director of the State Treasury to adjust the levels of cash transactions subject to prior registration with state treasuries specified at Point 2.1, Clause 2, Section II of this Circular so as to suit socio-economic development situation in each period.

3. Level of cash fund balance at state treasuries:

3.1. Level of cash fund balance means the level of cash balance necessary for meeting the demands for cash payment and settlement within a certain period of time at each state treasury unit.

3.1. Level of cash fund balance of state treasuries shall be determined according to the following formula:

                                 Total demands for cash payment and
      Level of                   settlement in the planned quarter                Prescribed
     cash fund    =     ———————————————     x       number
      balance                    Number of working days in the                   of days
                                                 planned quarter

In which:

- The number of working days in a planned quarter is prescribed to be 65.

- The prescribed number of days shall be specified by directors of provincial-level state treasuries depending on cash payments in the quarter and the number of times of cash remittance and withdrawal transactions between state treasuries and banks where they open accounts.

For state treasuries with great demands for cash payment and travel difficulties, the levels of cash fund balance shall be specified at a level suitable to local conditions.

3.3. The level of cash fund balance of district-level state treasuries and provincial-level state treasuries shall be determined and announced by directors of provincial-level state treasuries or authorized persons (deputy directors of provincial-level state treasuries).

4. Responsibilities of agencies and units for cash management and use

4.1. Responsibilities of transaction units:

4.1.1. When collecting state budget revenues (such as charges, fees, etc.) in cash, transaction units shall remit the collected cash amounts fully and promptly to the state treasuries where they have transactions according to regulations; transactions units must not retain cash amounts for payment, except for cases where they are allowed to retain such revenues for spending under regulations.

4.1.2. Transactions units shall make cash payment only for expenditure items specified in Clause 1, Section II of this Circular. In case of payment to goods-supplying or service-providing units or individuals that do not have bank or state treasury deposit accounts, transaction units shall make certification thereof in cash payment-requiring documents (such as budget drawing order-cum-cash receiving slip, commune budget spending order-cum-cash receiving slip, checks, etc.) and at same time, take responsibility for the accuracy of the contents written on such documents.

4.1.3. When making payment for goods and/or services purchased from other units, organizations or individuals that have bank or state treasury deposit accounts, transaction units shall make non-cash payment, except for small expenditure items not exceeding VND 5 million each.

4.2. Responsibilities of state treasuries:

4.2.1. State treasury units (district-level state treasuries and provincial-level state treasuries’ offices) shall strictly abide by regulations on the levels of cash fund balance already announced. In cases where the levels of their cash fund balance exceed the announced ones, state treasury units shall remit the surplus amounts into banks where they open accounts early on the next working day, except where they have obtained written approval of directors of superior provincial-level state treasuries or authorized persons.

Heads of state treasury units shall inspect and oversee the observance of regulations on the levels of cash fund balance by their units; and bear responsibility before the heads of superior state treasuries if the levels of their cash fund balance exceed the prescribed levels or cash loss occurs in their units’ funds.

4.2.2. State treasury units shall coordinate closely with collecting agencies and finance agencies in order to endure the full and prompt remittance of budget revenues collected in cash into the state treasuries.

4.2.3. State treasuries shall control and effect cash payment and settlement for transactions units while controlling state budget expenditures on the basis of expenditure items allowed to be made in cash, units’ demands for cash withdrawal already registered (for units wishing to withdraw large amounts of cash within one day) and units’ lawful payment vouchers in strict accordance with regulations.

In case of cash shortage, state treasury units may apply the priority regime in cash payment. They first ensure payment of salaries, salary allowances, defense and security expenditures, social insurance, social allowances, debts owed to the people and certain necessary minimum expenditures in cash of transaction units.

4.2.4. State treasuries may refuse to make cash payment and settlement in the following cases, and at the same time notify transaction units thereof and bear responsibility for their decisions:

- Cash payment and settlement to goods-supplying or service-providing units which have bank or state treasury deposit accounts, including payment or settlement of expenditure items defined in Clause 1, Section II of this Circular; except for small expenditure items of under VND 5 million each.

- Cash payment and settlement for expenditure items other than those specified in Clause 1, Section II of this Circular.

- Cash payment and settlement in amounts in excess of the levels already registered with state treasuries (differences between the amounts requested to be paid and the registered amounts). 

4.2.5. State treasury units shall take initiative in coordinating with the State Bank’s provincial branches or state-owned commercial bank branches where they open accounts so that they shall be provided with adequate cash amounts in a timely manner.

In special cases where provincial-level state treasuries need to transfer capital amounts in cash with their subordinate district-level state treasuries, it is necessary to accurately identify demands for cash payment and settlement as well as bank transfer and the necessary levels of cash fund balance so as to work out plans for transfer of cash amounts to closely meet practical requirements, ensuring no capital amounts left idle and the solvency of each state treasury unit. The transfer of cash amounts between a provincial-level state treasury and its subordinate district-level state treasuries shall be effected under the mechanism on capital transfer within the system of state treasuries.

5. Inspection, and handling of violations

5.1. Provincial-level and district-level state treasuries shall inspect the management and observance of regulations on the levels of cash fund balance by their respective units.

Superior state treasuries shall inspect the management and observance of regulations on the levels of cash fund balance by their subordinate state treasuries.

5.2. In the course of implementation, if detecting acts of violating the regime of cash management and use such as violations of regulations on the levels of cash fund balance; cash payment for expenditure items other than those defined in Clause 1, Section II of this Circular; cash payment and settlement to units having bank or state treasury deposit accounts, heads of state treasury units shall apply handling measures according to their competence and report thereon to their superior state treasuries.

III. ORGANIZATION OF IMPLEMENTATION

1. This Circular takes effect 15 days after its publication in “CONG BAO” and replaces the Finance Minister’s Decision No. 21/1999/TT-BTC of February 24, 1999. Previous regulations concerning the management of cash revenues and expenditures made via the state treasuries which are contrary to this Circular are no longer effective.