DECISION No. 232/1999/QD-TTg OF DECEMBER 17, 1999 ISSUING THE REGULATION ON FINANCIAL MANAGEMENT OF THE DEVELOPMENT ASSISTANCE FUND

THE PRIME MINISTER

DECIDES:

Article 1.- To issue together with this Decision the Regulation on Financial Management of the Development Assistance Fund.

Article 2.- The Ministry of Finance shall have to guide and inspect the implementation of the Regulation issued together with this Decision.

Article 3.- This Decision takes effect from January 1, 2000.

The ministers, the heads of ministerial-level agencies, the presidents of the People�s Committees of the centrally-run provinces and cities, the Chairman of the Managing Council and the General Director of the Development Assistance Fund shall have to implement this Decision.

For the Prime Minister
Deputy Prime Minister
NGUYEN TAN DUNG

REGULATION ON FINANCIAL MANAGEMENT OF THE DEVELOPMENT ASSISTANCE FUND

Chapter I

GENERAL PROVISIONS

Article 1.- This Regulation applies to the activities of financial management of the system of the Development Assistance  Fund (the Fund in short).

Article 2.- The Fund is a State financial organization operating not for profits, ensures capital recovery and expenditures clearance, has the legal person status, has its charter capital, its balance sheet, its own seal, can open its accounts at the State Treasury and banks in the country and abroad, and can organize payments with customers directly related to the activities of the Fund.

The Fund is a unit of concentrated accounting in the whole system; performs cash flow and cash flow settlement according to the regime stipulated in this Regulation; is exempted from tax and other remittances to the State budget in order to reduce the lending interest rate and the guarantee charge.

Article 3.- The Fund performs the task of mobilizing mid-term and long-term capital, receiving and managing capital sources of the State reserved for development investment credit in order to carry out the State policy of assistance to development investment.

Article 4.- The Ministry of Finance shall perform its State management function on finance and shall have to guide and inspect the activities in financial revenues and expenditures of the Fund.

Chapter II

CAPITAL, FUND AND ASSETS

Article 5.- Operating capital of the Fund

1. The capital of the Fund is under State ownership:

a/ Charter capital;

b/ The supplementary capital allocated each year by the State budget shall be used for the investment target.

In case of change of the charter capital, the Managing Council of the Fund shall report to the Minister of Finance and the change shall be submitted to the Prime Minister for decision.

2. The capital shall be mobilized in these forms: mid-term and long -term borrowings from organizations and individuals in the country and abroad, and borrowings from the Accumulation Fund for Foreign Debt Repayment, the Postal Savings Fund, the Vietnam Social Insurance Fund; capital from the issue of Government bonds; borrowings and foreign aid to the Government for sub-lending with assignment from the Ministry of Finance.

3. Capital consigned to development investment loans by organizations and individuals in the country and abroad.

Article 6.- The Ministry of Finance shall conduct the allocation of capital under State ownership and allocate the annual supplementary capital for the investment targets.

The Fund can use capital to make investment loans, post-investment interest rate assistance and guarantee investment credit according to regulations of the State. The Chairman of the Managing Council and the General Director of the Fund shall have to manage safely and use for the right purpose and effectively various capital sources of the Fund.

The Fund is entitled to change the structure of the capital and assets within the system of the Fund to expand its activities.

Article 7.- The Fund is entitled to make appropriation for the risk prevention reserve fund with professional expenditures to make up for losses due to objective factors in the process of carrying out projects borrowing development investment credit of the State. The appropriation shall represent 2% of the revenues from the annual lending interest. If it is not used up at the year�s end, this reserve shall be retained to make up for the risks in the following years. In case the risk prevention reserve fund cannot make up for the losses, the Fund Managing Council shall report to the Ministry of Finance which shall submit the case to the Prime Minister for consideration and decision.

The appropriation and use of the risk prevention fund and the competence in dealing with the risks shall be conducted as stipulated in Article 22 of Decree No. 43/1999/ND-CP of June 29, 1999 on development investment credit of the State. The Ministry of Finance shall provide concrete guidance on the implementation of this Regulation.

Article 8.- The Fund is allowed to set up the guarantee reserve fund to pay to credit organizations when the guaranteed investors fail to pay their debts in due time. The maximum level of the reserve fund is 5% of the total credit capital on development investment of the State (except the sub-lent ODA). If the fund is not used up at the year�s end, it shall be converted into capital for loans in the following year. In case the guarantee reserve fund is not enough to carry out the guarantee duty, the Fund Managing Council shall report to the Ministry of Finance and the case shall be submitted to the Prime Minister for decision.

The principle, object, interests, obligations and process of guarantee shall comply with the stipulations in Section III of Decree No. 43/1999 /ND-CP of June 29, 1999 on State credit for development investment and current regimes of the State.

Article 9.- Each year, the Fund shall have to balance its sources of capital and the need in credit capital for development investment of the State; the mobilization of capital source at high interest rates for loans on investment must ensure the principle that mobilization can be made only after maximum use has been made with capital sources without interest or with capital sources at low interest rates.

In implementing the task of investment credit assigned by the State, the Fund shall receive State compensations for the difference in interest rates. The allocation shall be determined on the basis of the difference between the average interest rate of the capital sources and the prescribed interest rate of loans plus the eligible management cost.

The management cost in the first five years after establishment of the Fund is set at 0.2% /month of the average debit balance on loans made with credit capital in the country and 0.3%/year of the debit balance of loans made with credit capital from foreign countries.

For the projects enjoying post-investment interest rate assistance stipulated by the Government, the Fund shall be allocated by the State budget a post-investment interest rate assistance. The level of assistance shall comply with the stipulations in Article 28 of Decree No.43/1999 /ND-CP of June 29, 1999 on development investment credit of the State.

The Ministry of Finance shall provide concrete guidance on the financial regime for the allocation to make up for the difference in interest rates and the post-investment interest rate assistance.

Article 10.- The Fund is allowed to use the sources of credit capital for development investment for the following aims:

1. Investment loans.

2. Post-investment interest rate assistance.

3. To secure guarantee for investment credit.

4. To repay the loans from organizations and individuals in the country and abroad.

5. To carry out other tasks stipulated by the Government.

Article 11.- Investment capital in capital construction and purchase of fixed assets.

1. The investment capital for capital construction and purchase of fixed assets of the Fund shall be formed from these sources: allocations by the State budget, depreciation of fixed assets, development investment fund and other legal sources.

2. The fixed asset depreciation rate; the management and use of the investment capital in capital construction and purchase of fixed assets; assignment and liquidation of assets; inventory and revaluation of assets of the Fund shall conform with the stipulations for State enterprises.

Article 12.- Guarantee of recovery of capital of the Fund.

The Fund shall have to manage and use the investment capital for the right purpose and objects, effectively, and guarantee recovery of capital and offsetting of expenditures.

The Fund shall assure recovery of capital according to the following regulations:

1. To buy insurance for assets and other insurances related to its capital as prescribed.

2. The Fund can use its idle capital:

a/ To invest in Government bonds and credit bills;

b/ To make assistance loans to the investment projects covered by the capital from the State budget which temporarily run short of capital;

c/ To make initial production capital loans to the investment projects eligible for loans from the Fund.

The use of idle capital for investment by the Fund must assure the security of capital and effectiveness and must not affect the tasks of development investment credit of the State. The level of capital used for lending shall conform with Clause 2 of this Article and shall not exceed 20% of the total of the temporary idle capital of the Fund.

3. The Fund is allowed to account into its expenditures the following items:

a/ Risk prevention reserve in the process of operation.

b/ Risk prevention reserve on exchange rate.

The Ministry of Finance shall provide concrete guidance on the appropriation and use of the above reserves.

Chapter III

FINANCIAL REVENUES AND EXPENDITURES

Article 13.- Revenues of the Development Assistance Fund.

1. Revenues from professional activities:

a/ Collection of loan interest ;

b/ Collection of deposit interest,

c/ Collection of guarantee service charge at the rate of 0.5% /year on the amount being guaranteed for the investor;

d/ Collection of assignment charge on sub-lending;

e/ Collection of compensations for difference of interest rates allocated by the State budget;

f/ Collection from professional and other service activities.

2. Revenues from financial operations:

a/ Revenues from the buying and selling of Government bonds and credit bills;

b/ Revenues from lease of assets.

3. Revenues from unexpected activities:

a/ Fines;

b/ Revenues from liquidation, assignment of assets (after exclusion of liquidation and assignment costs).

c/ Other unexpected revenues.

Article 14.- Expenditures of Development Assistance Fund

1. Expenditures for professional activities:

a/ Payment of interest on mobilized capital;

b/ Payment of loan interest;

c/ Payment of bond interest;

d/ Expenditures in payment activities;

e/ Payment of assignment and service charges;

f/ Payment for risk prevention reserve;

g/ Other expenditures for professional activities.

2. Management costs:

a/ Payment of wages and wage allowances according to the regime proposed by the Ministry of Labor, War Invalids and Social Affairs to the Prime Minister for decision;

b/ Payment of social and health insurance, payment of trade union fee according to the State regime;

c/ Payment for meals between work-shifts. Allowance for each person shall not exceed the minimum wage prescribed by the State for workers and public employees;

d/ Hardships allowances according to law;

e/ Allowances for members of the Managing Council on half-time assignments.

f/ Allowances on transactions dresses;

g/ Expenditures on labor protection means according to prescriptions;

h/ Expenditures on depreciation of fixed assets. The level of appropriation shall be stipulated by the Ministry of Finance as for a State enterprise.

i/ Postal charge, expenditures on the repair and maintenance of fixed assets, purchase of work tools, office equipment, warehouses, portering and transport, electricity and water, healthcare, sanitation of the office, fuel, working trip allowance, expenditures on professional training and fostering, scientific research, technology, innovations and improvements;

j/ Expenditures on propaganda, press conferences, transactions, reception of guests and meetings. These expenditures must not exceed 7% of the total expenditure in the first two years after establishment, and not more than 5% in the following years;

k/ Other management costs as prescribed.

3. Expenditures in financial operations:

a/ Expenditures on purchase and sale of Government bonds and credit bills;

b/ Expenditures on property lease;

4. Unexpected expenditures:

a/ Expenditures on the recovery of remised debts;

b/ Expenditures on collection of fines as prescribed;

c/ Expenditures on insurance for assets and other insurances as prescribed.

d/ Other expenditures.

Article 15.- The Fund shall account the expenditures according to the prescribed regime and take responsibility before law for their accuracy and carry out all the regulations on the regime of accountancy receipts and vouchers.

Article 16.- The following expenditures must not be accounted for in the activities of the Fund:

1. Damage to which the Government has provided assistance or have been compensated by the insurance agency or the damage-causing party.

2. Payment of fines for administrative violations, environmental violations, debts left overdue for subjective reasons, fines occasioned by violations of the financial regime.

3. Expenditures on capital construction investment and purchase of fixed assets.

4. Expenditures paid for by other funding sources.

Chapter IV

DIFFERENCE IN FINANCIAL REVENUES AND EXPENDITURES AND SETTING UP OF VARIOUS FUNDS

Article 17.- The difference in financial revenues and expenditures in the year as a result of the financial activities of the Fund is determined by the difference between the total revenues and the total expenditures made in the year.

Article 18.- Distribution of revenues

The difference in financial revenues and expenditures in each year, after paying the fines for violations of the provisions of law, shall be distributed as follows:

1. Deduction of 10% for the professional risk prevention reserve fund. The deduction shall be made until the balance of the Fund is equal to 25% of its charter capital.

2. Maximum deduction for the development investment fund is 50%.

3. Deduction of 5% for the job severance reserve fund. The deduction shall be made until the balance of this fund is equal to six months of paid wages of the Development Assistance Fund.

4. Deduction for the reward and welfare funds. The level of deduction of these two funds shall be made as at a State enterprise. The rate of deduction for these two funds shall be determined by the Managing Council of the Fund.

5. The remainder after deduction for the above funds shall be added to the development investment fund.

Article 19.- In the first five years after the Fund commences operation, the Fund is allowed to spend according to the financial plan already approved by the Fund Managing Council and shall report it to the Ministry of Finance. The financial plan of the Fund shall be worked out on the basis of the Fund being allowed to enjoy the management cost representing 0.2%/month of the average debit balance of the credit capital in the country, and 0.3%/year of the average debit balance of the credit capital from foreign countries. In case the revenues cannot cover expenditures, the Fund shall report to the Ministry of Finance for handling according to its competence.

Chapter V

ACCOUNTANCY, STATISTICAL AND AUDIT REGIMES AND FINANCIAL PLAN

Article 20.- The Fund must apply the current regime on accountancy and statistics and the guiding documents of the Ministry of Finance.

The fiscal year of the Fund begins on the 1st of January and ends on the 31st of December of the solar calendar.

Article 21.- The Fund shall have to elaborate and send the following financial plans as currently prescribed:

1. The plan on the source and use of the capital.

2. The plan of assistance from the State budget for the preferential activities: compensation for difference in interest rates, post-investment interest rate assistance.

3. Plan of investment in capital construction.

4. Plan of financial revenues and expenditures.

5. Plan on staff personnel and wage fund.

Article 22.- The Fund shall have to draw up and send professional reports, statistical reports, accountancy reports, periodical and irregular reports as currently prescribed and at the request of the Ministry of Finance.

The report on final settlement of the annual revenues and expenditures of the Fund shall have to be approved by the Managing Council of the Fund and sent to the Ministry of Finance.

Each year, on the basis of the final financial settlement report of the Fund, the Ministry of Finance shall examine and inspect according to its function of a State management agency.

Article 23.- The Fund shall conduct the internal audit regime, publicize the result of it financial activities in each year under the guidance of the Ministry of Finance and take responsibility for the publicized data.

Chapter VI

IMPLEMENTATION ORGANIZATION

Article 24.- The Ministry of Finance shall assume the main responsibility and coordinate with the related ministries and branches in guiding the implementation of this Regulation.

For the Prime Minister
Deputy Prime Minister
NGUYEN TAN DUNG