Thông tư 78/2004/TT-BTC hướng dẫn quản lý việc rút vốn đối với nguồn Hỗ trợ phát triển chính thức (ODA) do Bộ Tài chính ban hành

CIRCULAR

GUIDING THE MANAGEMENT OF WITHDRAWAL OF OFFICIAL DEVELOPMENT ASSISTANCE (ODA) CAPITAL

Pursuant to the Government’s Decree No. 17/2001/ND-CP of May 4, 2001 promulgating the Regulation on management and use of official development assistance (ODA) source;
Pursuant to the Government’s Decree No. 60/2003/ND-CP of June 6, 2003 detailing and guiding the implementation of the State Budget Law;
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 Finance Ministry;
The Finance Ministry hereby guides in detail the order and procedures for withdrawing ODA capital as follows:

Part I.

GENERAL PROVISIONS

I. SCOPE OF APPLICATION:

1. This Circular applies to the management of capital withdrawal and financial matters related to the withdrawal of capital from ODA loan and ODA aid sources provided by co-donors to the ODA loan programs and projects; or independent aid programs/projects with capital-withdrawing forms compliant with the provisions of this Circular. The withdrawal of reciprocal capital shall strictly comply with the order and procedures prescribed in the current legal documents.

2. For particular ODA programs and projects, depending on their management requirements, the Finance Ministry may promulgate specific guidance.

3. For a number of non-refundable aid projects requiring the application of the mode that the donors directly manage and administer the project implementation as prescribed in the aid agreements/documents, such agreements/documents signed with donors shall apply.

4. For aid amounts trusted to the Government for management, the Finance Ministry shall promulgate specific guidance.

II. INTERPRETATION OF TERMS

A number of terms and phrases referred to in this Circular shall be construed as follows:

1. “Programs and projects” mean those funded by ODA capital source.

2. “Program/project owners” mean organizations assigned with responsibilities to directly manage and use ODA capital and reciprocal capital sources for execution of programs and/or projects according to the already approved contents.

3. “Program/project management boards” (hereinafter referred to as the project management boards) mean the bodies representing the project owners and vested with the full power to exercise and perform on the project owners’ behalf the assigned powers and tasks from the commencement till the completion of the projects, covering the settlement, pre-acceptance test, handover and putting of projects into exploitation and use, as well as the performance of transactions of capital withdrawal and payment from the programs’ and/or projects’ capital sources.

4. “Service bank” means a commercial bank selected according to the current regulations or under separate agreements between the Government and donors in the signed international agreements, to service programs and/or projects in opening transaction accounts, carrying out the procedures for foreign capital withdrawal (if any transactions are performed), and effecting payment transactions.

5. “Expenditure-controlling agencies” mean:

- The State Treasury offices of all levels (as decentralized to implement each program or project) shall control expenditures of programs and projects (i) eligible for the State budget funding or of components of credit programs or projects eligible for the State budget funding (if any); and (ii) non-credit components of credit programs or projects.

- The Development Assistance Fund shall control expenditures of programs or projects eligible for loans sub-lent by the State budget through the Development Assistance Fund under the Finance Ministry’s authorization.

- For projects having both components eligible for funding allocated by the State budget and those eligible for loans sub-lent by the State budget and implemented by the same project management board: the Finance Ministry shall identify expenditure-controlling agencies, depending on the projects’ natures, ensuring the principle that two expenditure-controlling agencies must not concurrently control the same activity of a program or a project.

6. “Financial plans” mean investment capital plans (for capital construction investment projects) or annual budget estimates (for administrative and non-business projects) for implementation of programs and projects, covering ODA capital (provided by foreign countries) and reciprocal capital (domestic capital).

III. MANAGEMENT PRINCIPLES

1. ODA capital source for investment in programs and projects constitutes a source of the State budget and must be fully accounted into the budget and managed according to the provisions of the State Budget Law and the current legal documents guiding the Law.

2. The Finance Ministry shall perform the function of State financial management over the withdrawal of payment capital for programs and projects, conduct the State budget revenue-expenditure accounting of ODA capital sources, guide and inspect the observance of the financial management regimes, the final settlement of projects, guide and inspect the units in effecting the handover of assets, supplies and capital of projects upon their completion.

3. Program or project owners shall be held responsible before law for the implementation of programs and projects in strict compliance with their commitments already made in international agreements, the strict observance of the State’s regulations on implementation of programs and projects, financial management, observance of the accounting, cost-accounting, auditing and financial settlement regimes according to the State’s current regulations.

4. Depending on the nature of each specific program or project (capital construction investment projects, administrative and non-business projects, mixed projects containing both capital construction components and administrative and non-business components, credit projects, etc.), the corresponding management processes related to elaboration of financial plans, control of expenditures, payment, accounting and settlement according to the current regulations shall apply.

IV. FINANCIAL PLANS

1. Financial plans of programs and projects already approved by competent authorities shall serve as basis for controlling the withdrawal of capital for such programs and projects. After the financial plans are approved, the project management boards shall send them to the Finance Ministry (the External Finance Department) and the expenditure-controlling agencies.

2. The elaboration of financial plans of programs and projects shall comply with the provisions of Joint Circular No. 02/2003/TTLT-BKH-BTC of March 17, 2003 of the Planning and Investment Ministry and the Finance Ministry guiding the elaboration of financial plans for ODA-funded programs and projects.

V. SERVICE BANKS AND ACCOUNTS

1. Accounts:

 1.1. Project management boards shall open transaction accounts at the service banks according to the current regulations. For projects having advance accounts/special accounts, of which the holders are the project management boards under agreements with donors, the project management boards shall open such accounts at the service banks and notify them in detail to the Finance Ministry (the External Finance Department) and the expenditure-controlling agencies.

1.2. Special accounts/advance accounts shall enjoy interests at interest rates which may be agreed upon between the service banks and the account holders. Interests on such accounts constitute a revenue source of the State budget, for programs and projects eligible for the State budget funding; and a revenue source of project owners, for programs and projects eligible for loans sub-lent by the State budget.

1.3. For mixed programs and projects containing both components eligible for funding allocated by the State budget and those eligible for loans sub-lent by the State budget, which jointly use the same special account/advance account (the time the State budget sub-lends capital is the time of withdrawal of capital from the special account/advance account), the interests on the account shall constitute a revenue source of the State budget.

2. Responsibilities of service banks

2.1. Service banks shall open relevant accounts of projects at the requests of the project management boards, effect payment or capital withdrawal transactions at the requests of the project management boards and according to the current regulations.

2.2. Monthly and upon requests of account holders, the service banks shall notify account holders and the Finance Ministry of interest amounts arising on special accounts/advance accounts of programs and projects; service charge amounts collected by service banks; differences between interests and charges; period-beginning and period-end balances.

2.3. Within 2 working days after receiving notices on withdrawal of capital from donors, service banks shall send credit notices to account holders.

2.4. Annually, within 6 months after the end of a fiscal year, the service banks shall return to the Finance Ministry interest balances on special accounts/advance accounts of programs and projects eligible for the State budget funding, after subtracting service charges, then notify such to the Finance Ministry.

3. Banking charges:

3.1. Service banks shall enjoy charges according to the current regulations on collection of charges for services provided to programs and projects.

3.2. Banking service charges shall be accounted into total expenditures of programs and projects.

Part II.

SPECIFIC PROVISIONS

A. CAPITAL WITHDRAWING PROCEDURES

I. EXPENDITURE CONTROL

1. Principles for expenditure control:

1.1. Expenditure control applies to all expenditures of programs and projects, except for payments in form of letters of credit (L/C) or direct payments in form of irrevocable letters of authorization for payment in bilateral aid projects. For these cases, the control of all vouchers for payment shall be effected by the L/C-opening bank (or L/C-announcing bank), or the agency bank/or another organization authorized by the donors (refer to the provisions in Part II, Section A, Item III, Points 3.3 and 3.5).

1.2. Expenditure control aims to ensure that the expenditures of programs and projects are compliant with the agreements/the project documents (valid expenditures, valid procurement modes, financing percentages strictly according to agreements, legally signed and approved contracts, assurance of prior inspection by donors (if any)), and the current regulations on domestic financial management.

1.3. ODA capital expenditure control may not be limited by financial plans of programs and projects in the following cases:

- Programs and projects have not yet had their financial plans approved but their managing agencies have already sent official dispatches to the Finance Ministry and the expenditure-controlling agencies, committing to approve financial plans for such programs and projects within two (2) months after signing the official dispatches.

- Programs and projects withdraw capital in excess of the approved financial plans but their managing agencies make written commitments to supplement capital plans for such programs and projects. Within three (3) months after their expenditures outside the approved financial plans are controlled, programs and projects must complete the procedures for elaborating and approving supplementary financial plans.

2. Expenditure control dossiers

2.1. Expenditure control dossiers and procedures applicable to capital construction projects or capital construction expenditure components in mixed projects shall comply with the provisions of the Finance Ministry’s Circular No. 44/2003/TT-BTC of May 15, 2003 guiding the management and settlement of investment capital and non-business capital of investment and construction nature from the State budget capital source or the legal documents amending, supplementing or replacing this Circular.

2.2. Expenditure control dossiers and procedures applicable to administrative and non-business projects or administrative and non-business expenditure components in mixed projects shall comply with the provisions of the Finance Ministry’s Circular No. 79/2003/TT-BTC of August 13, 2003 guiding the regime of management, allocation and settlement of the State budget expenditures through the State Treasury and the legal documents amending, supplementing or replacing this Circular.

2.3. Expenditure control dossiers and procedures applicable to credit components of programs and projects shall be based on copied lists of loans of sub-lent credit institutions sent to the Finance Ministry (general lists of loans, not detailed dossiers). Sub-lent credit institutions shall be held responsible before law for the truthfulness and validity of copied lists sent to the Finance Ministry.

3. Certification of expenditure control

3.1. After effecting the expenditure control, the expenditure-controlling agencies shall give their certifications in payment price bills/payment lists/written advance requests (collectively called payment price bills).

3.2. The payment price bills (the originals) certified by the expenditure-controlling agencies shall serve as basis for the withdrawal of ODA capital from the donors.

3.3. ODA capital amount requested to be withdrawn from the donors must be compatible with the capital amount of foreign sources certified by the expenditure-controlling agencies in payment price bills. Each payment price bill shall be used only once for the purpose of expenditure control.

4. Post-expenditure control

4.1. Post-expenditure control means that the expenditure-controlling agencies inspect and certify the validity of expenditures after the project management boards withdraw capital for payment to beneficiaries.

4.2. Post-expenditure control shall apply to the following cases:

- Payments from special accounts/advance accounts for expenditures at the level directly managing such special accounts/advance accounts on the basis of the program/project owners’ written approvals of the application of post-expenditure control.

- Payments being money transfers upon the implementation of programs or projects funded by JBIC (except for case of final payments for all contracts, or for contracts with lump-sum payments which must be subject to pre-expenditure control).

- Direct payments in projects eligible for loans sub-lent by the State budget (except for case of final payments for all contracts, or for contracts with lump-sum payments which must be subject to pre-expenditure control).

4.3. Procedures for post-expenditure control:

- When having payment demand, the project management boards shall: (i) request the service banks to deduct money from special accounts/advance accounts (for the mode of payment through special accounts/advance accounts); or (ii) sign or request the Finance Ministry to sign applications for capital withdrawal and send them to the donors (for the mode of direct payment or money transfer payment) for payment to contractors/suppliers/consultants on the basis of valid volumes and vouchers.

- Within 5 working days after making payments from special accounts/advance accounts; or after sending applications for capital withdrawal for direct payment or money transfer payment to the donors, the project management boards shall send payment dossiers to the expenditure-controlling agencies for expenditure control. Expenditure control dossiers shall comply with the provisions in Part II, Section A, Item I, Point 2.

- Within 5 working days after receiving the complete and valid dossiers, the expenditure-controlling agencies shall give their comments on expenditure control (certification/refusal to certify), and at the same time settle the reciprocal capital portions (if projects or corresponding components are eligible to be allocated or borrow reciprocal capital).

- Payment price bills certified by the expenditure-controlling agencies (the originals) shall serve as basis for the project management boards to apply for subsequent withdrawals of capital from the donors. The Finance Ministry may refuse the subsequent capital withdrawals for payment for programs and projects if it detects  that such programs and projects are not compliant with the expenditure-controlling agencies’ regulations on post-expenditure control.

5. Pre-expenditure control:

5.1. Pre-expenditure control means that expenditure-controlling agencies inspect and certify the validity of expenditure before the project management boards withdraw capital for payment to beneficiaries.

5.2. Pre-expenditure control shall apply to all cases not subject to the post-expenditure control as prescribed in Part II, Section A, Item I, Point 4.2, concretely as follows:

- Direct payments (except for cases of direct payment and money transfer payment prescribed in Part II, Section A, Item I, Point 4.2 above).

- Retrospective payments.

- Payments/advances for expenditures at the project-implementing levels not directly managing special accounts/advance accounts.

- Payments/advances for expenditures at the project-implementing levels directly managing special accounts/advance accounts which are subject to the application of pre-expenditure control when so requested in writing by program/project owners.

- Final payments for all contracts, or for contracts with lump-sum payments (including payments from special accounts/advance accounts).

- Other cases.

5.3. Pre-expenditure control procedures:

- When having payment demands, the project management boards shall compile expenditure control dossier sets, then send them to the expenditure-controlling agencies requesting the expenditure control.

- Expenditure control dossiers shall comply with the provisions in Part II, Item A, Section I, Point 2.

- Within 5 working days, the expenditure-controlling agencies shall check the dossiers, then certify that the foreign capital portion is eligible for settlement and settle reciprocal capital portion (if projects or corresponding components are eligible for reciprocal capital allocations/borrowings).

- Basing themselves on expenditures already certified by the expenditure-controlling agencies as eligible for settlement, the project management boards shall send to the service banks expenditure accreditations enclosed with certified payment price bills (the originals) of the expenditure-controlling agencies for payment to beneficiaries.

- Where the project management boards do not directly manage special accounts/advance accounts, the subordinate project management boards shall send to the superior project management boards payment requests enclosed with certified payment price bills (the originals) of the expenditure-controlling agencies of the same level, so that the superior project management shall carry out the procedures for capital withdrawal from special accounts/advance accounts or from donors for beneficiaries.

- Service banks shall withdraw capital from special accounts/advance accounts only when the project management boards’ requests for payments to beneficiaries are enclosed with certified payment price bills (the originals) of the expenditure-controlling agencies.

II. WITHDRAWAL OF ODA CAPITAL SOURCE UNDER PROGRAMS ON QUICK DISBURSEMENT IN CASH

1.1. For ODA financial aids under programs on assistance for the budget and quick disbursement in cash for the performance of reform tasks committed by the Government with the donors, the ODA program-managing agencies shall materialize and coordinate the materialization of the already committed capital withdrawal conditions; coordinate with the Finance Ministry in withdrawing ODA capital on the basis of the Prime Minister’s directions and the State budget’s capital use demand in each period.

1.2. The Finance Ministry shall sign/jointly sign capital withdrawal applications in program loans. Particularly for program loans from WB and ADB, the State Bank shall sign capital withdrawal applications after reaching agreement with the Finance Ministry.

III. WITHDRAWAL OF ODA CAPITAL SOURCE UNDER PROJECTS

1. Depending on the provisions of international agreements/documents, the withdrawal of, and payment with, ODA capital source by mode of project financing shall be effected by one or several universal modes as follows: capital withdrawal for direct payment, capital withdrawal for payment in form of commitment letters, capital withdrawal-capital refund, retrospective capital withdrawal, payment through special accounts/advance accounts and some other special capital withdrawal modes according to specific agreements with donors.

2. Capital withdrawal dossiers sent for the first time: The project management boards shall send initial dossiers for use as basis for management of ODA capital withdrawal to the Finance Ministry (the External Finance Department). Such a dossier comprises the following documents:

- The investment decision of the competent authority;

- The international agreement on ODA already signed between Vietnam and the donor and project documents related to the project;

- The financial plan already assigned by the competent authority;

- The sub-lending agreement already signed between the investor and the authorized sub-lending agency (if the project eligible for sub-loans);

- The competent authority’s decision recognizing the bid-winning unit (or the contractor appointment decision) and/or decision approving the contract signed with the contractor (if any);

- The contract (on construction, installation, procurement, consultancy, etc.) between the investor and contractor or expenditure estimates approved by the competent authority (if expenditure activities are not of contractual form);

- Where the contracts require prior opinions of the donor, “no objection” opinion of the donor is required;

- Implementation guarantee of the contractor’s bank;

- Advance guarantee (for advance payment);

The project management board shall have to submit the above-mentioned documents only once for the whole project, particularly investment capital plan/financial plan shall be submitted annually. The above-mentioned documents are required only in form of copies. The project management board shall be held responsible before law for the truthfulness of copies supplied to the Finance Ministry.

3. Capital withdrawal procedures:

(See charts describing the capital withdrawal procedures in Appendix 1)

3.1. Capital withdrawal applications and capital withdrawal dossiers enclosed therewith (collectively called capital withdrawal applications): Capital withdrawal applications shall be compiled and signed by the project management boards before being sent to the Finance Ministry (the External Finance Department). The project management boards shall be held responsible before law for the legality and truthfulness of the capital withdrawal applications.

3.2. Procedures for direct payment/money transfer:

3.2.1. When wishing to withdraw capital for payment according to these procedures, the project management boards shall send the following documents to the Finance Ministry (the External Finance Department):

- The written request for capital withdrawal enclosed with the capital withdrawal application and copied lists, made according to the forms prescribed by the donor;

- The invoices/payment requests of the contractors;

- The payment price bills (the originals) certified by the expenditure-controlling agencies for cases where pre-expenditure control procedures apply; or the payment price bills (the originals) certified by the expenditure-controlling agencies for previous direct payments/money transfers for cases where post-expenditure control procedures apply.

- In special cases, the Finance Ministry may request the project management boards to supply additional documents proving the valid capital withdrawal;

3.2.2. Within 5 working days after receiving complete and valid dossiers, the Finance Ministry (the External Finance Department) shall consider and sign/jointly sign capital withdrawal applications, then send them to the donors.

- Particularly for projects financed by WB or ADB, within 5 working days after receiving complete and valid dossiers, the Finance Ministry (the External Finance Department) shall consider them and notify its written approvals or disapprovals to the project management boards and service banks. Within 2 working days, basing themselves on the Finance Ministry’s approvals, the project management boards and service banks shall jointly sign capital withdrawal applications, then send them to the donors.

3.2.3. Donors shall consider the capital withdrawal applications, then transfer money directly into the contractors’ accounts in cases where they approve the applications. Particularly for JBIC projects, the transfer of payment money into the contractors’ accounts shall be effected through the service banks.

3.3. Procedures for direct payment under irrevocable capital withdrawal authorization letters (usually applicable to equipment purchase contracts in a number of bilateral financing projects):

- On the basis of commercial contracts already signed and approved according to the current regulations, the project management boards shall send to the Finance Ministry (the External Finance Department) written requests for capital withdrawal and relevant dossiers.

- Within 5 working days after receiving complete and valid dossiers, the Finance Ministry (the External Finance Department) shall consider and send irrevocable capital withdrawal authorization letters to the agencies authorized by the donors to manage the capital withdrawal for payment to contractors/suppliers/consultants under contracts.

3.4. Commitment letter procedures

- When wishing to withdraw capital according to these procedures, the project management boards shall send to the Finance Ministry applications for issuance of commitment letters (capital withdrawal applications), enclosed with copied lists according the forms set by the donors (for JBIC projects, capital withdrawal applications and copied lists are not required), and draft L/C (or copies of opened L/C).

- Within 5 working days after receiving complete and valid dossiers, the Finance Ministry shall consider and sign/jointly sign capital withdrawal applications requesting the donors to issue commitment letters and send notices to the service banks.

- Particularly for projects financed by WB or ADB, within 5 working days after receiving complete and valid dossiers, the Finance Ministry (the External Finance Department) shall examine them and send its written approvals/disapprovals to the project management boards and service banks. Within 2 working days, basing themselves on the Finance Ministry’s approvals, the project management boards shall join the service banks in signing capital withdrawal applications requesting the issuance of letters of commitment, then send them to the donors.

3.5. The procedures for payment by L/C without commitment letters (applicable to a number of cases where bilateral donors authorize a bank to manage the capital withdrawal on their behalf and concurrently act as the seller’s bank)

- When wishing to make payments according to these procedures, the project management boards shall send to the Finance Ministry (the External Finance Department) written requests for L/C opening and relevant documents.

- Within 5 working days after receiving complete and valid dossiers, the Finance Ministry shall examine them and give its comments on the L/C opening to the project management boards and service banks, and send irrevocable payment authorization letters to donors for payment by L/C.

3.6. Procedures for capital refund/retrospection

3.6.1. Capital withdrawal according to the capital refund procedures: These procedures shall apply to payment for expenditures for which the borrowers/recipients have received advances from other capital sources of borrowers, after the loan agreement/aid agreement takes effect.

3.6.2. Capital withdrawal according to retrospective procedures: These procedures shall apply to payments for expenditures arising before the loan agreement/aid agreement takes effect.   

3.6.3. When wishing to withdraw capital according to these procedures, the project management boards shall send to the Finance Ministry (the External Finance Department) the following documents:

- Capital withdrawal request, capital withdrawal application and payment list made according to set forms;

- Certification of the reception of payment capital of contractors/beneficiaries.

- Capital withdrawal application must clearly state the name and account number of each unit having advanced capital. For payments advanced by the State budget, names and account numbers of the State budget levels where capital has been advanced must be clearly stated. Such names and account numbers must be certified by the expenditure-controlling agencies.

- Payment price bill (the original) certified the expenditure-controlling agencies.

- In special cases, the Finance Ministry may request additional written explanations.

3.6.4. Within 5 working days after receiving complete and valid dossier sets, the Finance Ministry shall consider to sign/jointly sign capital withdrawal applications to be sent to the donors.

- Particularly for projects financed by WB or ADB, within 5 working days after receiving complete and valid dossiers, the Finance Ministry (the External Finance Department) shall examine them and give it written approvals/disapprovals to the project management boards and service banks. Within 2 working days, basing themselves on the Finance Ministry’s approvals, the project management boards shall join service banks in signing withdrawal capital applications, then send them to the donors.

3.6.5. For capital amounts withdrawn for capital refund/retrospection to the State budget of various levels where capital has been advanced (or from sources of budget origin), such withdrawn capital amounts must be promptly remitted into the budgets where capital has been advanced.

3.7. Special account/advance account procedures

3.7.1. First-time capital withdrawal to special accounts/advance accounts

- The first-time capital withdrawal to special accounts/advance accounts shall be based on the limit (or the ceiling level) of special accounts/advance accounts prescribed in the loan agreement/aid agreement. For ODA loan projects eligible for the State budget’s allocations, the Finance Ministry may refuse to allow the withdrawal of capital equal to 100% of the limit after considering the project’s actual expenditure demand for the next 3 months, interests to be paid to foreign countries, and interests to be paid by service banks.

- To withdraw capital, the project management boards shall send to the Finance Ministry (the External Finance Department) written requests for capital withdrawal, capital withdrawal applications enclosed with copied expenditure lists made according to forms set by donors.

- Within 5 working days after receiving complete and valid dossiers, basing itself on the signed international agreements, the Finance Ministry (the External Finance Department) shall consider and sign/jointly sign the capital withdrawal applications, then send them to the donors.

- Particularly for projects financed by WB or ADB, within 5 working days after receiving complete and valid dossiers, the Finance Ministry (the External Finance Department) shall consider and give its written approvals/disapprovals to the project management boards and service banks. Within 2 working days, basing themselves on the Finance Ministry’s approvals, the project management boards and service banks shall sign the capital withdrawal applications, then send them to the donors.

3.7.2. Supplements to special accounts/advance accounts

To withdraw capital to supplement special accounts/advance accounts, the project management boards shall send the following documents to the Finance Ministry (External Finance Department):

- Written requests for withdrawal of capital to supplement special accounts/advance accounts, capital withdrawal applications and copied lists made according to forms set by the donors.

- Copied expenditure lists drawn up by the project management boards clearly showing each expenditure from special accounts/advance accounts, detailed according to payment date, sum of money in original currency, sum of money converted into USD and VND, USD/VND exchange rate, payment contents, beneficiaries, places for control of payments, branches of the expenditure-controlling agencies, serial number/date of the expenditure-controlling agencies’s written certification of each payment. Such lists shall serve as basis for the Finance Ministry to carry out the procedures for mutual ceasing (or revenue/expenditure decreases (if any)) of the State budget for payments made for the projects;

- Payment price bills (the originals) certified the expenditure-controlling agencies. The already paid amounts on the copied lists must be consistent with those certified by the expenditure-controlling agencies in the payment price bills. Each certified payment price bill shall be used only once. For credit projects, copied lists must show sub-loans. The Finance Ministry may request the supply of detailed dossiers evidencing the sub-lending (if necessary).

- Records of special accounts/advance accounts of service banks, which clearly showing all transactions on such accounts during the period of requesting to withdraw for addition to spent amounts.

- Debt acknowledgement contract signed between the project management boards and the sub-lending agencies (for sub-lent projects).

Within 5 working days after receiving complete and valid dossiers, the Finance Ministry (the External Finance Department) shall consider to sign/jointly sign capital withdrawal applications, then send them to the donors.

- Particularly for projects financed by WB or ADB, within 5 working days after receiving complete and valid dossiers, the Finance Ministry (the External Finance Department) shall consider and give its written approvals/disapprovals to the project management boards and service banks. Within 2 working days, basing themselves on the Finance Ministry’s approvals, the project management boards and service banks shall sign the capital withdrawal applications, then send them to the donors.

3.8. Withdrawal of capital from special accounts of JBIC projects

The withdrawal of capital from special accounts of JBIC projects shall comply with the Finance Ministry’s Circular No. 129/1999/TT-BTC of November 5, 1999 guiding the mechanism of management of loan capital for specialized credit programs.

B. REPORTING, INSPECTION, AUDITING AND FINAL SETTLEMENT

I. REPORTING

1. Quarterly, the project management boards shall have to make copied lists of capital amounts allowed by the donors to be withdrawn according to each capital withdrawal mode, detailed according to capital sources, beneficiaries, expenditure-controlling agencies, localities where mini-programs and projects register for opening of accounts, then report them to the Finance Ministry (the External Finance Department) and the expenditure-controlling agencies. Such reports shall serve as basis for accounting and comparing the mutual ceasing of the State budget for programs and projects.

2. Monthly, the expenditure-controlling agencies shall make copied lists of amounts already certified as fully eligible for payment, (detailed according to the certified capital amounts, operations, capital sources, beneficiaries, localities where capital is allocated), then send them to the Finance Ministry (the External Finance Department and the State Budget Department) for carrying out the procedures for accounting the State budget’s revenues/expenditures for ODA programs and projects.

II. INSPECTION

The Finance Ministry shall conduct regular and irregular inspections and examinations of ODA capital use by organizations and units, especially the inspection of the use of special accounts/advance accounts of programs and projects.

III. AUDITING

1. The Finance Ministry shall promulgate specific guidance on schemes on auditing of ODA programs and projects.

2. The project management boards shall select auditing companies by mode of bidding or contractor appointment according to the provisions of the agreements/documents of programs and projects and the current domestic regulations. Auditing schemes, decisions on selection of auditing companies and auditing contracts must comply with the provisions of the projects’ agreements/documents and be submitted for approval according to the State’s current regulations.

3. Auditing reports must be sent to the Finance Ministry within 15 days after the auditing is completed.

IV. FINAL SETTLEMENT

Project owners shall direct the project management boards in making reports on implementation of investment capital plans or final settlements of quarterly/annual administrative and non-business expenditures of ODA programs and projects, and report the final settlements of completed works according to the current regulations.

Part III. 

ORGANIZATION OF IMPLEMENTATION

This Circular takes effect 15 days after its publication in the Official Gazette. The previous regulations which are contrary to this Circular hereby cease to be effective.

APPENDIX 1

CHARTS DESCRIBING PROCEDURES FOR ODA CAPITAL WITHDRAWAL

(Promulgated together with the Finance Ministry’s Circular No. 78/2004/TT-BTC of August 10, 2004)

Chart 1.a- Procedures for direct payment and capital refund payment with pre-expenditure control

1. Contractors supplying goods or providing services/units advancing capital send vouchers to request payment

2. Project management boards send dossiers to expenditure-controlling agencies for certification of valid expenditures

3. Expenditure-controlling agencies certify payment price bills

4. Project management boards send capital withdrawal applications to the Finance Ministry

5. The Finance Ministry considers and signs/jointly signs capital withdrawal applications

6. Donors pay to beneficiaries

Chart 1.b- Procedures for direct payment and capital refund payment with pre-expenditure control, for projects financed by WB or ADB

1. Contractors supplying goods or providing services/units advancing capital send vouchers to request payment

2. Project management boards send dossiers to expenditure-controlling agencies for certification of valid expenditures

3. Expenditure-controlling agencies certify payment price bills

4. Project management boards send capital withdrawal dossiers and applications to the Finance Ministry

5. The Finance Ministry examines them and sends its written approvals of capital withdrawal to the project management boards

6. Project management boards and service banks jointly sign capital withdrawal applications, then send them to donors

7. Donors pay to beneficiaries

Chart 2.a- Procedures for direct payment and money transfer payment with post-expenditure control (Direct payment for programs/projects eligible for loans sub-lent by the State budget through the Development Assistance Fund and money transfer payment for JBIC projects)

1. Contractors supplying goods or providing services/ units advancing capital send vouchers to request payment

2. Project management boards check them and send capital withdrawal applications and dossiers for requesting payment to the Finance Ministry

3. The Finance Ministry considers and signs/jointly signs capital withdrawal applications, then sends them to donors

4. Donors transfer capital to contractors

5. Project management boards send dossiers to expenditure-controlling agencies for certification of valid expenditures

Chart 2.b- Procedures for direct payment with post-expenditure control for projects financed by WB or ADB (direct payment for programs/projects eligible for loans sub-lent by the State budget through the Development Assistance Fund)

1. Contractors supplying goods or providing services send vouchers to request payment

2. Project management boards check them and send capital withdrawal applications and dossiers for requesting payment to the Finance Ministry

3. The Finance Ministry examines them and sends its written approvals of capital withdrawal to project management boards

4. Project management boards and service banks jointly sign capital withdrawal applications, then send them to donors

5. Donors pay to contractors

6. Project management boards send dossiers to expenditure-controlling agencies for certification of valid expenditures

Chart 3.a- Payment according to commitment letter procedures

1. Project management boards and contractors sign goods supply contracts

2. Project management boards request service banks to open L/C

3. Project management boards send to the Finance Ministry capital withdrawal applications and dossiers in form of special commitments

4. The Finance Ministry considers and signs/jointly signs capital withdrawal applications, then sends them to donors

5. Donors issue special commitment letters to contractors’ banks for L/C payment

6. Contractors’ banks transfer payment money to contractors and request donors to refund capital

Chart 3.b- Payment according to commitment letter procedures, for projects financed by WB or ADB

1. Project management boards and contractors sign goods supply contracts

2. Project management boards request service banks to open L/C

3. Project management boards send to the Finance Ministry L/C copies and capital withdrawal dossiers in form of special commitments

4. The Finance Ministry considers and sends its written approvals of capital withdrawal to project management boards

5. Project management boards and service banks jointly sign capital withdrawal applications then send them to donors

6. Donors issue special commitment letters to contractors’ banks for L/C payment

7. Contractors’ banks transfer payment money to contractors and request donors to refund capital

Chart 4.a- Procedures for capital withdrawal to special accounts/advance accounts

1. Project management boards gather vouchers, send capital withdrawal applications and dossiers requesting account supplements to the Finance Ministry

2. The Finance Ministry considers, signs/jointly signs capital withdrawal applications, then sends them to donors

3. Donors transfer money to special accounts/advance accounts opened at service banks

Chart 4.b- Procedures for capital withdrawal to special accounts/advance accounts, for projects financed by WB or ADB

1. Project management boards gather vouchers, send capital withdrawal applications and dossiers requesting account supplements to the Finance Ministry

2. The Finance Ministry examines them and send its written approvals of capital withdrawal to project management boards

3. Project management boards and service banks jointly sign capital withdrawal applications, then send them to donors

4. Donors transfer money to special accounts/advance accounts opened at service banks

Chart 5.a- Expenditures from special accounts/advance accounts with post-expenditure control

1. Contractors request project management boards to make payment

2. Project management boards request service banks to make payments to contractors

3. Service banks transfer money to contractors

4. Project management boards send payment dossiers to expenditure-controlling agencies, requesting certification of valid expenditures

Chart 5.b- Expenditures from special accounts/advance accounts with pre-expenditure control (applicable to project management boards not directly managing special accounts/advance accounts)

1. Contractors request project management boards (not directly managing special accounts/advance accounts) to make payment

2. Project management boards (not directly managing special accounts/advance accounts) send dossiers to expenditure-controlling agencies for certification of valid expenditures

3. Expenditure-controlling agencies certify payment price bills

4. Project management boards (not directly managing special accounts/advance accounts) send dossiers to superior project management boards (directly managing special accounts/advance accounts) to request payment to contractors

5. Superior project management boards request service banks to transfer money to contractors

6. Service banks transfer money to contractors