Pursuant to the Prime Minister’s Decision No. 192/2001/QD-TTg of December 17, 2001 on expanding the experimental assignment of package payrolls and administrative management fundings to State administrative agencies;

The Ministry of Finance and the Government Commission for Organization and Personnel hereby guide the implementation as follows:

I. GENERAL PROVISIONS

1. Subjects of application of the provisions in this Circular are administrative agencies at the central and local levels and organizations (hereinafter collectively referred to as agencies) which directly use the State budget, meet all conditions specified in Article 4 of the Prime Minister’s Decision No. 192/2001/QD-TTg of December 17, 2001, are selected by the ministries and branches at the central level and by the provincial/municipal People’s Committees for experimenting package expenditures, which is approved in writing by the Ministry of Finance (after consulting with the Government Commission for Organization and Personnel).

The State management bodies of Ho Chi Minh City, which are implementing the Prime Minister’s Decision No. 230/1999/QD-TTg of December 17, 1999 on the experimental assignment of package payrolls and administrative management fundings to some agencies of Ho Chi Minh City, shall also have to implement this Circular.

2. Not subject to application of this Circular are non-business units, including non-business units attached to the agencies which experiment package expenditures.

3. The agencies experimenting package expenditures shall have to abide by all the package expenditure principles put forth in Article 3 of the Prime Minister’s Decision No. 192/2001/QD-TTg of December 17, 2001.

4. On the basis of the package payrolls assigned by competent authorities, the agencies experimenting package expenditures may decide on the re-arrangement of their internal organization and payrolls. Particularly for specialized agencies attached to the People’s Committees of urban districts, rural districts, towns and provincial cities and centrally-run cities, the provisions of Clause 3, Article 1 of the Government's Decree No. 12/2001/ND-CP of March 27, 2001 on the re-organization of a number of specialized agencies attached to the People’s Committees of the provinces and centrally-run cities and the People’s Committees of urban district, rural districts, towns and provincial cities shall be complied with.

II. SPECIFIC PROVISIONS

1. Package contents and levels:

1.1. Subject to package expenditures are:

1. Salaries;

2. Wages;

3. Salary allowance;

4. Cash bonuses (excluding cash bonuses determined according to the prescribed regime and included in the agencies’ annual cost estimates, used as rewards for outside individuals and agencies for their coordination);

5. Collective welfare;

6. Contributions (including social insurance, health insurance, trade union funding);

7. Payments to individuals;

8. Expenses paid for public services;

9. Office supplies;

10. Communication, propagation, liaison;

11. Meetings;

12. Working trip allowances;

13. Expenses for hiring;

14. Expenses for regular repair of fixed assets;

15. Expenses for professional operations;

16. Other expenses.

1.2. The package expenditure level shall be determined on the basis of :

1.2.1. The system of norms, criteria and regimes for regular use of the funding from the State budget as prescribed.

1.2.2. The actual situation of the use of funding by the agency in three consecutive years preceding the year of implementation of package expenditures, taking into account factors causing the unexpected increase or decrease therein.

1.2.3. Payrolls shall be assigned by competent State bodies on the basis of reviewing the functions, tasks and working positions of the agencies experimenting package expenditures, ensuring the principle that they must not be higher than the assigned payrolls of the year preceding the year of implementation of package expenditures. Payrolls eligible for package assignment shall be clearly divided into administrative management payroll and non-business payroll. The assigned package payroll consists of State management payroll and non-business payroll in service of the administrative management work of the units accepting to experiment package expenditures, but excludes the payrolls of non-business units (having legal person status and own accounts) attached to the units experimenting the package expenditures.

1.3. Levels of package payrolls and administrative management fundings shall be kept stable for 3 years and may be considered for adjustment in the following cases:

1.3.1. The State changes the salary and/or salary allowance policies.

1.3.2. There appears a change of at least 20% in the norms, criteria and regimes, which are being used as basis for making expenditure estimates and allocating fundings with regard to the assigned package expenditures.

1.3.3. More tasks are assigned by competent agencies.

1.3.4. The State adopts policies to increase expenditures in the domains where package expenditures are being implemented.

1.3.5. The agencies which are implementing package expenditures are merged or separated by decisions of competent agencies.

2. Contents not subject to package expenditures include:

2.1. Expenses for overhauls, renovation, upgrading and construction of office buildings and public buildings, working equipment and facilities.

2.2. Expenses for procurement of fixed assets (both tangible and intangible).

2.3. Expenses for inbound and outbound delegations.

2.4. Expenses for training of officials and public employees.

3. Making of expenditure estimates:

The agencies implementing package expenditures shall make annual expenditure estimates in accordance with the provisions in Circular No. 103/1998/TT-BTC of July 18, 1998 of the Ministry of Finance, which guides the responsibility assignment, elaboration, execution and settlement of the State budget, and other guiding documents of the State. The expenditure estimation should specify two contents:

3.1. Estimates of package expenditures:

3.1.1. The units shall make the estimates of package expenditures for only the first year of accepting package expenditures and when the package level is adjusted. Such an estimate shall be elaborated on the following bases:

3.1.1.1. The payroll quotas assigned by competent State management bodies, which are:

- The ministries, ministerial-level agencies and agencies attached to the Government or authorized organizations, for the central level;

- The provincial/municipal People’s Committees or the administration’s Boards for Organization, which are authorized by the former, for the local level.

3.1.1.2. The total salary funds determined on the basis of the payroll quotas assigned by the competent agencies, the salary coefficients according to elected posts, salary coefficients according to salary scales and grades, and allowances (if any) of officials and public employees according to Resolution No. 35/NQ-UBTVQHK9 of May 17, 1993 of the National Assembly Standing Committee and Decree No. 25/CP of May 23, 1993 of the Government as well as the State’s regimes related to the current salary policies.

3.1.1.3. The provisions at Points 1.2.1 and 1.2.2, Section II of this Circular.

3.1.2. On the basis of the approved annual expenditure estimates, the agencies shall make quarterly expenditure estimates and send them to the State treasuries, serving as basis for management and allocation.

3.2. Estimate of non-package expenditures: The agencies shall make annual and quarterly expenditure estimates according to current regulations.

3.3. Expenditure estimates in cases of change in package level: For cases where the package level must be changed according to the provisions at Point 1.3, Section II above, the expenditure estimate-making agencies must give detailed written explanations about the factors that have caused any increase or decrease in the package expenditures and send them to the competent agencies for consideration and adjustment.

4. Allocation of expenditure estimates

Annually, the higher-level expenditure estimating agencies shall distribute and assign expenditure estimates to their attached units implementing package expenditures and, at the same time, forward the distribution dossiers to the finance offices and State treasuries of the same level, which shall serve as basis for the management and allocation of fundings. Their contents are specified in the following:

- For package fundings: To be allocated into item 134 and specified according to the spending contents suitable to the professional tasks of the agency.

- For non-package fundings: To be allocated into the spending items of the State budget index suitable to their use purposes.

For higher-level expenditure estimating units being recipients of package fundings and having many attached expenditure-estimating units, when distributing fundings to their attached units, they may retain a portion of undistributed funding, which shall not exceed 3% of total package funding. Such funding portion shall be further distributed and assigned to the attached units in the fourth quarter each year at the latest.

5. Allocation and payment of fundings:

5.1. On the basis of the expenditure estimates assigned by competent authorities to the package expenditure-implementing agencies, the finance offices shall allocate fundings through the State treasuries to the units for implementation. Fundings shall be allocated in the form of funding quotas:

5.1.1. For package expenditure fundings, they shall be allocated into the item Other Expenses (item 134).

5.1.2. For non-package expenditure fundings, they shall be allocated into the spending items of the State budget index according to their use contents and the assigned expenditure estimates.

5.2. For package expenditure fundings, the State treasuries shall deduct and transfer them at the spending requests of the account owners who shall be responsible for the spending decisions of their agencies under the guidance in this Circular.

5.3. For non-package expenditure fundings, the State treasuries shall base themselves on the funding estimates of the agencies to effect the payment thereof according to the State’s current regulations.

5.4. For amounts spent on procurement and major repairs, the agencies must organize bidding therefor according to current regulations.

6. Accounting and settlement of fundings:

The agencies implementing package expenditures shall abide by the non-business administrative accounting regime as prescribed in Decision No. 999-TC/QD/CDKT of the Minister of Finance; effect the funding settlement according to the provisions of Circular No. 103/1998/TT-BTC of July 18, 1998 and Circular No. 21/2000/TT-BTC of March 16, 2000 of the Ministry of Finance.

For package expenditure fundings, the agencies shall settle them strictly according to the spending items of the State budget index, attaching therewith written explanations on the annual statements containing the situation analysis and the contents of use of fundings saved in the year.

For non-package expenditure fundings, if not used up at the end of the budget year, they must be returned to the State budget.

7. Regulations on the use of saved fundings:

On the basis of the package expenditure levels, the agencies shall streamline their payrolls, arrange expenditures in a rational way so as to save fundings. The saved fundings may be used as follows:

7.1. For amounts saved from the salary funds as a result of the payroll streamlining, they may be used wholly for increasing the incomes of officials and public employees in the agencies.

7.2. For amounts saved from administrative, professional and other expenses, they shall be used for the following purposes:

7.2.1. Addition to incomes of officials and public employees in the agencies: The agencies may use the funding from this sources and the source specified at Point 7.1 above to calculate the salary and wage funds according to coefficients, adjusting the minimum salary to no more than 2.5 times the common minimum salary prescribed by the State

- Within the total salary and wage fund determined according to Point 7.2.2 below, after reaching agreement with the trade unions and publicizing them in their agencies, the agency heads shall decide on the payment of incomes to officials and public employees on the principle of job quality and efficiency; those persons and sections that achieve merits in saving expenditures and increasing revenues (if any) and a high working productivity shall get higher incomes.

- The agency heads shall decide and select the salary payment methods according to the working durations or positions but must stick to the selected methods for at least 3 months and notify officials and public employees thereof.

- To ensure that the total amount of salaries paid to officials and public employees does not exceed the total salary fund actually obtained after settlement or avoid the situation of accumulated salary payment in year-end months, the agencies experimenting package expenditures shall pay salaries to their officials and public employees as follows:

+ The first two months of each quarter: Fixed salaries (according to current scales and grades as prescribed in Resolution No. 35-NQ/UBTVQHK9 of May 17, 1993 of the National Assembly Standing Committee, the Government’s Decree No. 25/CP of May 23, 1993) shall be paid monthly according to current regulations.

+ The last month of each quarter: On the basis of the results of the experimentation of package expenditures, the agencies implementing package expenditures shall decide on the minimum salary under the above-mentioned guidance so as to pay salaries to their officials and public employees.

- Where conditions permit the determination of the amounts saved from the administrative management expenditures each month, the monthly minimum salary may be set so that officials and public employees may get their salaries right in the first month of each quarter.

7.2.2. The annual salary and wage funds (called collectively salary funds) of the units shall be determined for use as basis for calculating salaries payable to laborers according to their working results as follows:

QTL = Lmin x (1+K1) x (K2 + K3) x L x 12 months

in which:

QTL means the annual salary and wage fund to be determined by the unit.

Lmin means the current common minimum salary (VND/person/month) prescribed by the State.

K1: The adjustment coefficient for increasing the minimum salary of the unit, which is determined according to the working result (not exceeding 1.5 times).

K2: The average grade-based salary coefficient of the unit.

K3: The average salary allowance coefficient of the unit.

L: The number of persons on the payroll and working under long-term contracts.

7.2.3. The salary paid to each person shall be calculated according to the following formula: