THE MINISTRY OF FINANCE-MINISTRY OF HEALTH
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
Ha Noi , October 11, 2005
Guiding the financial management mechanism and a number of spending norms of the Project on "HIV/AIDS prevention and control in Vietnam" funded with non-refundable aid of the World Bank
Pursuant to Aid Agreement No. 152-VN of May 26, 2005, between the Socialist Republic of Vietnam Government and the International Development Association on non-refundable aid for Project on "HIV/AIDS Prevention and Control in Vietnam";
Pursuant to the Government Decree No.17/2001/ND-CP of May 4, 2001, on promulgation of the Regulation on management and use of official development assistance sources;
Pursuant to Circular No.06/2001/TT-BKH of September 10, 2001, of the Ministry of Planning and Investment, guiding the implementation of the Regulation on management and use of official development assistance capital sources, issued together with the Government Decree No.17/2001/ND-CP of May 4, 2001;
Pursuant to Circular No.78/2004/TT-BTC of August 10, 2004, of the Finance Ministry, guiding the management and disbursement of official development assistance capital sources;
Pursuant to the Finance Ministers Decision No.112/2001/QD-BTC of November 9, 2001, promulgating a number of spending norms applicable to projects funded with official development assistance (ODA) loans;
The Finance Ministry and the Health Ministry hereby jointly guide the financial management mechanism and the spending level of the Project on "HIV/AIDS Prevention and Control in Vietnam" in the 2005-2011 period as follows:
I. GENERAL PROVISIONS
The Health Ministry shall have to manage the Project on "HIV/AIDS Prevention and Control in Vietnam," ensuring the use of capital for the right purposes and contents of the approved project and in compatibility with commitment to the donors and relevant documents.
1. Abbreviations and term interpretation
In this Circular (including Appendices), the following abbreviations and terms are interpreted as follows:
a/ The Health Ministry is the agency managing the Project on "HIV/AIDS Prevention and Control in Vietnam."
b/ CPMU means the Central "HIV/AIDS Prevention and Control in Vietnam" Project Management Unit.
c/ PPMU means the Provincial Project Management Unit.
d/ NBA means non-business and administrative
e/ Project-service banks are commercial banks selected to serve the project.
f/ SB means the state budget.
g/ LB means local budgets of provinces under the project.
h/ CB means the central budget.
i/ ODA means Official Development Assistance.
j/ C means central.
k/ EF means external finance.
l/ PC means Peoples Committee.
m/ USD means US dollar.
n/ VAT means value added tax.
o/ VND means Vietnam dong.
p/ WB means the World Bank.
2. Capital sources of the Project
The total fund and structure of funding sources of the Project on "HIV/AIDS Prevention and Control in Vietnam" (hereinafter called the Project) were provided in the Health Minister's Decision No. 260/QD-BYT of February 4, 2005, approving the Project on "HIV/AIDS Prevention and Control in Vietnam," Aid Agreement No. 152-VN of May 26, 2005, between the Socialist Republic of Vietnam Government and the International Development Association, specifically:
2.1. The WBs non-refundable aid: USD 35,000,000.
2.2. The Socialist Republic of Vietnam Governments reciprocal capital: USD 3,500,000, including:
a/ Capital contributed with material foundations, technical facilities, existing partnership personnel of the project beneficiary units, valued at USD 500,000;
b/ Money contributed with sources of allocation from central and local budgets for spending on procurement of goods and on activities of PMUs and for reserve, valued at USD 3,000,000.
The whole amount of non-refundable aid of the World Bank and the reciprocal capital of the Project shall be the administrative and non-business capital sources; the aid capital shall be allocated by the central budget to the Health Ministry and provinces under the Project for execution of the approved Project.
3. Management principles
3.1. The Health Ministry and the PCs of the provinces participating in the Project shall have to allocate adequate reciprocal capital for the Project from their budgets for materialization of the project contents according to the provisions in Decision No. 260/QD-BYT of February 4, 2005, of the Health Minister.
3.2. The CPMU set up by decision of the Health Ministry shall have the responsibility to manage the expenditures and carry out procedures for capital withdrawal to pay for the Projects activities carried out by the CPMU; to disburse aid capital to the provinces under the Project according to the current regulations on disbursement of ODA capital and the specific regulations in this Joint Circular.
3.3. The PPMUs set up by decisions of provincial/municipal PCs shall have the responsibility to organize activities in their localities, carry out procedures for payment of reciprocal capital portion at the State Treasuries in the provinces and propose the CPMU to disburse the capital source of WB s aid.
3.4. The Project's reciprocal capital sources shall be allocated by the Health Ministry and the provinces under the Project in the budget and notified to the State Treasuries (ST). The central State Treasury (for CPMU) and the State Treasuries of the provinces under the Project shall control the payment of administrative and non-business capital sources for the expenditures involving reciprocal capital (procurement of goods in the country and added expenditures). The STs certification of valid expenditures should clearly identify the amounts of aid capital and reciprocal capital according to the donation percentage prescribed in the Aid Agreement. This written certification shall be the necessary docement in the dossiers of WB capital withdrawal and payment of reciprocal capital amounts.
3.4. Vietnam Bank for Industry and Commerce shall be the Project-Service Bank, carrying out procedures to withdraw capital for the project as provided for in Circular No. 78/2004/TT-BTC of August 10, 2004, of the Finance Ministry, and the specific provisions of this Joint Circular.
4. Spending principles
4.1. The Project's spending contents provided for in the Health Minister's Decision No. 260/QD-BYT of February 4, 2005, approving the Project on "HIV/AIDS Prevention and Control in Vietnam," including three components:
a/ Component 1: To support 20 provinces and cities to realize 8 national programs of action on HIV/AIDS prevention and control;
b/ Component 2: To support in policies and implementation of the national program on HIV/AIDS prevention and control nationwide;
c/ Component 3: To support in management of the project at the central level (including purchase of office equipment and automobiles for project supervision).
4.2. Determination of spending tasks
4.2.1. For CPMU
a/ To conduct procurement in form of bidding under the regulations of the WB, of medical equipment, office equipment, medicines, traffic means and other specialized facilities for supply to the provinces benefiting from the Project. If goods are imported or domestically purchased from workshops at the ex-works prices (exclusive of taxes and other expenses), then shall be covered 100% by the WBs aid source. Other cases of domestic procurement of goods shall be covered 90% by the WB aid source and 10% by the reciprocal capital.
b/ Expenditures on minor repair of therapeutic establishments in the Centers for Medical Treatment, Education, Labor and Social Affairs and district-level health centers (or other medical establishments selected by the Health Ministry) of Hanoi city, Khanh Hoa and Hai Phong. This spending content shall be covered 100% by the WBs aid source.
c/ Expenditures on information, education, communication activities as well as program-monitoring and -assessing activities. This spending content shall be covered 100% by the WBs aid source.
d/ Expenses for domestic and foreign consulting individuals or units. This spending content shall be covered 100% by the WB's aid source.
e/ Expenditures on seminars, conferences, study tours, training to raise personnel's capabilities. This spending content shall be covered 100% by the WB's aid source.
f/ Expenditures on organization of contests, development of innovations, rewards for innovations to encourage support for innovations. This spending content shall be covered 100% by the WB's aid source.
g/ Expenditures on added activities: including expenses for travel and allowances for personnel executing the Projects, expenses for office, communication and mail services, freight, tendering expenses and other reasonable operational expenses excluding wages and wage allowances for public servants. This spending content shall be covered 75% by the WB's aid source and 25% by the central reciprocal capital.
h/ Management of reserve funding of the Project.
i/ Other expenses for performance of CPMUs tasks.
4.2.2. For PPMUs
a/ Expenses for activities of 8 provincial-level programs of action, including: (1) Program on information, education and communication aiming to change behavior of preventing HIV/AIDS transmission; in coordination with projects on drug and prostitution prevention and combat in order to prevent the transmission of HIV/AIDS; (2) Program on intervention to minimize harms in prevention of HIV/AIDS transmission; (3) Program on care and support for HIV/AIDS-infected persons; (4) Program on HIV/AIDS supervision, monitoring and evaluating the program; (5) Program on approach to HIV/AIDS treatment; (6) Program on prevention of HIV mother-to-child transmission; (7) Program on management and treatment of sexually transmitted infections; (8) Program on raising the capability and international cooperation on HIV/AIDS prevention and control. This spending content shall be covered 100% by the WB's aid source.
b/ Expenditure on procurement through bidding of office equipment managed and used by PPMUs. If the goods are imported or domestically purchased at ex-works prices (exclusive of taxes and other expenditures), they shall be covered 90% by the WB's aid source and 10% by the reciprocal capital.
c/ Expenses for hiring consulting individuals or units. This spending content shall be covered 100% by the WB's aid source.
d/ Expenses for added activities: including expenses for travel and allowances for the project-executing personnel, expenses for offices, communication and mail services, tendering expenses, excluding wages and wage allowances for public servants... This spending content shall be covered 75% by the WB's aid source and 25% by the local reciprocal capital source.
e/ Other expenses for performance of PPMU's tasks.
4.2.3. Imported goods and/or services paid for by the WB's aid source shall be exempt from taxes under the current regulations of the State (import tax, special consumption tax, VAT). Goods and services procured domestically shall be subject to tax payment according to regulations and be free from tax reimbursement procedures. The CPMU and PPMUs shall estimate reciprocal capital for tax payment according to regulations.
II. SPECIFIC PROVISIONS
1. Opening accounts
1.1. The CPMU may open the following accounts:
1.1.1. The special account: CPMU may open one special account in USD under the name of the Project at the service bank to receive the WB's non-refundable aids.
1.1.2. The deposit account: CPMU may open two deposit accounts at the service bank, including one USD deposit account and one VND deposit account for deposit of such revenues at the Project as proceeds from sale of tendering dossiers, money guaranteeing the tender participation, the contract performance and other floating revenues.
1.1.3. The budgetary account: CPMU may open one budgetary account at the State Treasury to receive the reciprocal capital allocated by the central budget for activities of the Project.
1.2. PPMU may open the following accounts
1.2.1. The provincial-level aid account: A PPMU may open two VND accounts to receive sources of non-refundable aid of the WB at a branch of the project service bank:
- One account for management of aid capital sources for 8 programs of action, which is hereinafter called the Account of provincial aid to Component 1.
- One account for management of aid capital sources for activities outside the above 8 programs of action, which is hereinafter called the Account of provincial aid to Component 1.
1.2.2. The deposit account: A PPMU may open at a commercial bank one VND deposit account for deposit of such revenues at the Project as the proceeds from sale of tendering dossiers, tender-guaranteeing, contract performance-guaranteeing money, contributions of beneficiaries (if any), etc.
1.2.3. The budgetary account: A PPMU may open at a branch of the provincial State Treasury one account of budget estimate for payment of administrative and non-business reciprocal capital.
The CPMU may use interests on the special account for payment of banking service charges; the remainder thereof shall be separately monitored and, upon the completion of the Project, may be used under joint decisions of the Finance Ministry and the Health Ministry.
The PPMUs may use interests on the aid capital accounts for payment of banking service charges (if any); the remainder thereof shall be separately monitored and annually at the end of the fiscal year be used to cover expenditures on the Projects activities under decisions of the Health Ministry.
The interests on the special account and the aid capital accounts constitute one of the capital sources of the Project and shall be settled in accordance with the provisions of this Joint Circular.
2. Making and notifying capital plans
2.1. At the beginning of July every year, the CPMU shall guide the PPMUs to make plans on the Projects capital, including aid capital and reciprocal capital, according to regulations.
2.2. The PPMUs shall base themselves on the approved Project and the practical implementation tempo to work out their respective action plans and budget plans and send them to the CPMU in July. The budget plans should be detailed to job items, aid capital sources according to regulations.
In the first year of the Project, the CPMU shall directly appraise the budget plans submitted by the PPMUs and synthesize them with its budget plan to be sent to the Health Ministry for submission to the WB for consideration and approval. From the second year on, the budget plans of the provinces shall be considered and commented within 10 working days by the Technical Review Team (TRT- set up by the Health Ministry and composed of experts with appropriate capability). Within 10 working days, the PPMUs shall adjust and amend their budget plans and send them to the CPMU for synthesis for submission to the Health Ministry then the WB for approval.
2.3. In August every year, the PPMUs shall submit their reciprocal capital plans to provincial/municipal Steering Committees for approval for synthesis into the provincial budget.
The CPMU shall submit the general budget plan of the whole Project (including plans on aid capital of the Project and reciprocal capital for activities to be carried out by the CPMU) to the Health Ministry for synthesis into the Health Ministry's budget for submission to the Government and the National Assembly for approval according to the current regulations.
2.4. After being assigned the annual budget plan by the Prime Minister, the Finance Ministry shall notify the Health Ministry of its capital estimate, including estimate of the Projects capital (the aid capital of the CPMU/PPMUs and the reciprocal capital of the CPMU included). After consulting with the Finance Ministry, the Health Ministry shall proceed with detailed allocations to the Project and notify the CPMU and the PPMUs thereof.
The State Treasury system shall be notified by the Health Ministry and the provincial PCs of the reciprocal capital of the CPMU and the PPMUs for use as a basis for capital control and settlement in the plan year.
2.5. In November every year, the CPMU and PPMU shall submit to the Health Ministry or provincial Project Steering Committee their respective detailed activity plans for approval.
2.6. In December every year, based on the detailed activity plans of the PPMUs and the budget allocation notification of the Health Ministry, the CPMU director shall sign responsibility contracts for project execution with the PPMU directors. A contract shall specify the aid capital amount to be transferred to a PPMU in the plan year, the capital allocation tempo, the detailed activities carried out by the PPMU and the conditions for capital addition in the year. The responsibility contract form shall be elaborated by the CPMU, accepted jointly by the Finance Ministry and the Health Ministry and approved by the WB, which shall also be guided in detail in the Operation Manual.
3. Competence to adjust the detailed aid capital source activity plans
Within the scope of approved budget estimates, if the contents of activity in the detailed activity plans must be adjusted, the competence to decide on the adjustment shall be as follows:
3.1. For minor activity adjustment being smaller than or equal to 10% of the total annual budget, the PPMU directors shall be competent to decide.
3.2. The activity adjustments of between 10% and 20% of the total annual budget shall be approved by the CPMU director.
3.3. The activity adjustments of between 20% of the total annual budget or higher shall be considered by the CPMU and submitted to the WB and the Health Ministry for approval.
Any capital plan adjustment that changes the approved reciprocal capital estimate should be adopted by the managing agencies and the finance agency and notified to the Finance Ministry (The EF Department) so that they have ground to monitor and disburse capital to the Project.
4. Process of controlling expenditures and paying reciprocal capital
4.1. Single supply of dossiers and documents
The CPMU and PPMUs shall send the following documents (for one time only) to the State Treasuries of their respective transactions:
a/ Development non-refundable aid agreement No. 152-VN of May 26, 2005 between the Socialist Republic of Vietnam Government and the International Development Association.
b/ The document on the Project on "HIV/AIDS Prevention and Control in Vietnam," funded with non-refundable aid of the WB.
c/ Decision No. 260/QD-BYT of February 4, 2005, of the Health Minister.
d/ The Operation Manual (OM).
e/ The notification on annual estimates of aid capital/reciprocal capital and the responsibility contract signed between the CPMU and the PPMU.
f/ The expenditure estimates enclosed with the approving decision of the competent authority.
4.2. Bases, dossiers and process of expenditure control at the State Treasury
4.2.1. The Finance Ministry s Circular No. 79/2003/TT-BTC of August 13, 2003, guiding the regime of management, allocation, payment of state budget expenditures via the State Treasuries and documents amending, supplementing or replacing this Circular.
4.2.2. Within 5 working days as from the date of receiving the valid payment dossiers, the State Treasuries where transactions are made shall examine the dossiers, certify the capital amounts eligible for advance/payment according to the prescribed aid capital percentage and pay the reciprocal capital amounts. The State Treasuries certification of the valid capital amounts shall be addressed to the CPMU for sum-up and submission to the Finance Ministry (the External Finance Department) and use as ground for withdrawal of WB capital.
5. Aid capital management and use process
5.1. Dossiers and documents supplied for one time only:
The CPMU shall send to the Finance Ministry (the External Finance Department) the documents mentioned in Section 4.1 above and the following documents:
a/ The tender dossiers, the decisions approving the tendering results/the contractor designation by competent authorities; the WBs written approval of the tendering results (in cases where the WBs prior opinion is required).
b/ The economic contract with contractor.
5.2. The principles for management and control of expenditures and disbursement of capital from the WB:
5.2.1. The External Finance Department shall act as the expenditure-controlling body, for expenditures covered 100% by the WBs aid source.
5.2.2. The payment from the WBs non-refundable aid source must strictly comply with the financing percentage for each activity of the Project provided for in Aid Agreement No.152-VN of May 26, 2005, and the legal documents of the Project.
5.2.3. The CPMU shall act as the unit directly carrying out procedures for capital withdrawal from the WB. The CPMU may consider the application of forms of withdrawing capital from the Special Account, supplementing the Special Account, refunding capital, making direct payment and commitment letter according to the provisions of the Finance Ministrys Circular No. 78/2004/TT-BTC of August 10, 2004, guiding the management of capital withdrawal with regard to the ODA sources.
The CPMU shall have the responsibility to guide and supervise the financial management at the PPMUs.
For activities carried out by the PPMUs, the CPMU shall advance aid capital for the PPMUs under the responsibility contracts. The subsequent capital transfers shall be based on the reports on implementation progress and expenditures of the PPMUs.
5.2.4. The PPMUs shall have the responsibility to carry out activities specified in the plans accepted by the CPMU and approved by the provincial/municipal Project Steering Committee; to propose the transfer of additional capital and expenditure activities at the PPMUs; to archive dossiers and documents according to the provisions of the Accounting Law and the WB (the specific guidance in the Operation Manual); to supply all documents requested by the CPMU and competent agencies.
The PPMUs shall have the responsibility to supervise and inspect the activities of units participating in the Project within the areas in their charge in order to ensure that the project activities are carried out for the right purposes and with efficiency.
5.2.5. Annually, simultaneously with notifying the plan distribution, the Health Ministry must report to the Finance Ministry (the External Finance Department) on the capital amount used in the preceding year and the credit balance on the special account as compared with the plan (if any) of the entire Project on HIV/AIDS Prevention and Control in Vietnam.
5.2.6. During the period the Project is operating, the year-end credit balance of the CPMU and the PPMUs, which are not used up, shall be transferred to the following year for further use (excluding the reciprocal capital balance on the budgetary accounts at the state treasuries). The PPMUs shall have the responsibility to report to the CPMU thereon in the annual financial statements so that the CPMU shall make adjustment in the capital plan of the following year.
6. Aid capital-withdrawing process
6.1. First-time withdrawal of capital into the special account
In order to withdraw capital for the first time into the special account of the CPMU, apart from the documents sent for only one time provided for in Section 5.1, the CPMU shall forward the following documents to the Finance Ministry (the External Finance Department), the Service Bank:
a/ The official letter requesting the first-time capital withdrawal.
b/ The capital withdrawal application made according to form set by the WB.
The Finance Ministry (the External Finance Department) shall send the written approval to the CPMU and the Service Bank. Based on the approval of the Finance Ministry, the CPMU and the Service Bank shall jointly sign the capital withdrawal application to be sent to the WB. After considering and examining it, the WB shall approve and transfer money from the aid account into the special account of the CPMU.
6.2. Transfer of capital to the PPMUs
6.2.1. For expenditures allocated to the provinces for implementation of 8 programs of action (Component 1): The CPMU shall base on the responsibility contracts signed with the PPMUs to make the first-time transfer of 50% of the total funding to the PPMUs; the second-time transfer shall represent 25% of the total funding based on the first report on implementation progress of the PPMUs, which is approved by the CPMU; the third-time money transfer shall be the remaining 25% based on the second report on the implementation tempo of the PPMUs. Annually, the transfer of money to the PPMUs shall be effected in three times. The first time shall be in January, the second time shall be in June or July and the third time shall be in September.
The year-end credit balances on the accounts of the PPMUs shall be transferred to the following year for further spending but must be subtracted from the first money transfer of the following year. In cases where the year-end credit balance on the account of the PPMU is larger than 25% of the total estimated budget of activities for the following year, the CPMU shall not transfer the first advance to the PPMU.
6.2.2. For regular expenditures on consultancy services (wage payment to PPMU staff) and expenditures on added activities of the PPMUs (not included in the above-mentioned Component 1), the CPMU shall base itself on the PPMUs approved annual plans detailed to months to transfer money to the PPMUs monthly. For the first transfer of money, the CPMU shall base on the approved annual plans and the PPMUs money transfer requests to transfer the amount for expected activities in a month. The subsequent money transfers shall be based on the list of expenditure vouchers of the preceding month and expenditure estimate of the following month.
6.2.3. Conditions for subsequent transfer of capital to PPMUs
a/ The PPMUs must send their reports to the CPMU according to the regulation in the Operation Manual.
b/ The CPMU shall base on the register sheet of the Service Bank, the financial statements and implementation progess reports of the PPMUs to evaluate the progess of aid capital disbursement in localities. The CPMU shall continue with the subsequent transfer when the total paid expenditures reach 50% or more of the funding amount transferred previously.
c/ The PPMUs that have disbursed capital within 6 months at the level lower than 50% of the capital amount allocated for the first time shall have their funding regulated by the CPMU director (with the approval of the Health Ministry and the WB) for other provinces with demands therefor and with higher capital disbursement rates. This provision shall apply as from 2007 to the date of closing the special account of the Project (December 31, 2011).
6.3. Supplement to the special account of the CPMU
The CPMU shall send dossiers of application for capital withdrawal to the External Finance Department (the Finance Ministry), including:
a/ The written request for withdrawal of capital for supplementation to the special account.
b/ The capital withdrawal application and the list and registered sheet of expenditures made according to the form set by the WB.
c/ The State Treasurys certification of the added expenditure items, expenditure vouchers, registered sheet of account of the Service Bank (the original) for the amounts directly spent by the CPMU.
d/ The documents shall serve as basis for the CPMU to transfer capital to the PPMUs under the responsibility contracts, the State Treasurys certification of added expenditure items, expenditure vouchers, registered sheet of accounts of the Service Bank for expenditures from aid capital accounts of the PPMU.
Within 5 working days after the receipt of complete dossiers, the Finance Ministry (the External Finance Department) shall consider and send its written approval of capital withdrawal to the CPMU and the Service Bank. The CPMU and the Service Bank shall jointly sign and send the application for capital withdrawal for supplementation to the special account to the WB. The WB shall consider and transfer money from the aid account into the special account of the CPMU.
7. The project accounting regime
7.1. System of accounting vouchers
The accounting voucher system applicable to the PMUs at all levels using the non-refundable aid of the WB shall cover two types:
- The system of Vietnamese accounting vouchers applicable under the current accounting voucher system of Vietnam.
- Accounting vouchers and documents required by the WB's management and specified in the Operation Manual.
7.2. Forms of accounting books
For the unified application to the entire project, the Health Ministry requests the CPMU and the PPMUs to use the accounting book form of general journal in service of the financial inspection of the project, sum-up of annual settlement reports and general project settlement, which is also convenient for the use of computers in the project accounting.
7.3. Book-keeping account system
7.3.1. Based on the expenditure items, spending contents of each expenditure component in the Aid Agreement, the Project on HIV/AIDS Prevention and Control in Vietnam must use the book-keeping account system after the model set by the PMU under management decentralization.
7.3.2. The accounting documents and vouchers (including electronic vouchers) of any units (CPMU, PPMU, the Central Hygiene and Epidemiology Institute, the Central Highland Hygiene and Epidemiology Institute, Ho Chi Minh city Pasteur Institute, Nha Trang Pasteur Institute and other central units) must be archived by such units under the provisions of the Accounting Law and legal documents guiding the implementation of the Accounting Law.
7.3.3. The Project shall comply with the administrative and non-business accounting regime specified in the Finance Minister s Decision No. 999/TC/QD/CDKT of November 2, 1996, promulgating the system of administrative and non-business accounting regulations.
8. Management of the project's assets
8.1. The projects assets shall be managed in strict accordance with the regime of public property management. The PMUs and units participating in the project shall open books to monitor and amortize fixed assets, stipulate the regime of using assets for the right purposes and with efficiency. For transport means, the project must not change their utility. Annually, the PMUs at all levels shall organize the inventory of assets, determining the conditions of the assets and the observance of the regime of periodical maintenance of assets.
8.2. For the projects assets which, in the course of being used, are broken and cannot be repaired or can be repaired but without economic efficiency and use effectiveness, the PMUs at all levels shall set up councils for asset liquidation and make records thereon. When obtaining the written approval of the asset liquidation from the competent authorities, the PMUs shall enter property reduction into the accounting books.
9. The reporting regime, inspection, audit and settlement of the project
9.1. The reporting regime
9.1.1. For the CPMU
- Quarterly, the CPMU shall have to make and sum up reports according to regulations of Vietnam (to be sent to the Health Ministry and the Finance Ministry) and financial management reports to be sent to the WB, made according to the form prescribed in Appendix No.7 of Development Non-Refundable Aid Agreement No.152-VN (guided in detail in the Operation Manual). The reports must be sent within 45 days after each quarter.
- Together with each application for capital withdrawal for supplementation to the special account, the CPMU shall make the list of expenditures in the period and send it to the Finance Ministry (the External Finance Department) for mutual ceasing of budgetary resources. The list must be detailed according to the serial numbers of vouchers, date and content of transactions, classification of expenditures according to state budget allocation, the equivalent amounts of USD and VND. The list must make classification according to the central level (the Health Ministry) and each benefiting locality.
9.1.2. For PPMUs
a/ Monthly on the 5th day, the PPMUs shall send flash reports to the CPMU on the situation of reception and use of capital sources of the project, including their proposals to competent authorities on handling of problems in the course of participation in the project.
b/ Quarterly, in addition to the special reports to be used as bases for transfer of money from the CPMU to PPMUs, the PPMUs shall have to make reports according to Vietnams regulations, financial management reports according to forms set in Appendix No. 7 of Development Non-Refundable Aid Agreement No.152-VN (detailed instructions in the Operation Manual). These financial management reports must be submitted to the CPMU within 30 days after the end of each quarter.
9.2.1. The functional bodies of the Health Ministry shall coordinate with the CPMU in conducting unexpected inspections at provinces involved in the project of the project contents and tasks, the project execution progess, difficulties in the administration of the project, the cause thereof and the solutions proposed to competent authorities.
9.2.2 Regularly and irregularly, the Finance Ministry and the Health Ministry shall inspect the project execution situation, the use of capital (non-refundable and reciprocal capital) of the project. If detecting cases of using capital at variance with the provisions of the Aid Agreement, the approving decision of the Health Minister and legal documents of the project, the Finance Ministry, after consulting the WB, shall stop signing the capital withdrawal applications so that the competent agencies shall handle the violations.
9.3.1. Annually, the entire financial activities of the project must be audited by an independent auditing agency according to the State s regulations and the provisions of the Aid Agreement. If the WB does not designate the auditing agency, the CPMU shall select an independent auditing unit according to regulations.
9.3.2. Upon the audit, the CPMU must fully observe the provisions of the Governments Decree No.105/2004/ND-CP of March 30, 2004, on Independent Audit, and Circular No.64/2004/TT-BTC of June 29, 2004, of the Finance Ministry, guiding the implementation of a number of articles of the above-said Decree No.105/2004/ND-CP.
9.3.3. The projects financial statement certified by the auditing agency must be addressed to the WB and concurrently to the Health Ministry and the Finance Ministry for use as a basis for consideration of the capital withdrawal for supplementation to the special account or direct withdrawal capital from the aid account for payment, and at the same time also as a basis for evaluation of the project execution progess.
At the end of a budget year, the CPMU, the PPMUs and the units benefiting from the project (the Central Hygiene and Epidemiology Institute, the Central Highland Hygiene and Epidemiology Institute, Ho Chi Minh City Pasteur Institute, Nha Trang Pasteur Institute and other central units) must make annual financial statements on activities of the project in the year according to the current regulations on implementation assignment and competence to appraise and approve the settlement report. The process of making reports, considering and approving and synthesizing the settlement shall be conducted according to each capital source as follows:
9.4.1. The WB's non-refundable aid capital source
a/ The PPMUs shall base on the spending contents to examine the vouchers, sum up the settlement according to the state budget contents and send them to the CPMU for synthesis.
b/ The CPMU shall synthesize vouchers of the activities at the CPMU, synthesize the settlements of the entire project (CPMU, PPMUs and beneficiary units) and send them to the Health Ministry for approval and sum-up for submission to the Finance Ministry.
9.4.2. Reciprocal capital source
a/ The PPMUs shall base on the actual expenditures according to percentages from the reciprocal capital sources allocated by the localities to activities of the project, sum up the settlement according to the state budget contents to be sent to the provincial Health Services for sum up, the Finance Services shall appraise them for submission to the provincial PCs for approval.
b/ The CPMU shall base on the actual expenditures from the reciprocal capital sources allocated by the Health Ministry to the projects activities to sum up the settlement according to the state budget contents for submission to the Health Ministry for approval and sum-up before being sent to the Finance Ministry.
The procedures for making, appraisal and approval of settlement shall comply with the Finance Minister's Decision No. 999/TC-QD-CDKT of November 2, 1996, and the Finance Ministry's Circular No. 10/2004/TT-BTC of February 19, 2004, guiding the consideration, approval, appraisal and notification of the annual settlement to administrative agencies, non-business units and budgets of all levels.
III. PROVISIONS ON A NUMBER OF SPENDING NORMS FOR THE PROJECT
1. Norm application principles
1.1. The capital amount paid for the projects activities from the source of the WBs aid capital shall apply the specific spending norms specified in this Joint Circular. The capital amount paid for the projects activities from the reciprocal capital source shall apply current domestic regulations.
1.2. As from the effective date of this Joint Circular, the funding amounts advanced or borrowed for expenditures from the time the project comes into force shall be paid according to the specific spending levels specified in 2 Appendices to this Joint Circular.
2.1. The project's personnel, collaborators recruited to work regularly or irregularly in the CPMU or PPMUs shall be covered 100% by the source of the WBs aid capital (consultancy items, Appendix 1 to the Aid Agreement). After consulting with the WB, these two ministries shall guide a number of spending levels of wage and remuneration for professional activities in Appendices No. 01 and 02 to this Joint Circular.
2.2. For public servants mobilized to work full time at the PMUs at all levels: They shall enjoy wages and subsidies from the aid capital source according to the spending norms specified in this Joint Circular and not enjoy salaries of their managing agencies.
2.3. The wages and subsidies paid to personnel and public servants mentioned above have already covered the social insurance, the medical insurance and personal income tax (if up to the level liable to tax). The wages are paid monthly and converted into Viet Nam dong at the buying rate of the commercial banks at the time of payment.
Subsidies shall apply to State officials, public servants appointed to work in the PMUs at different levels on a part-time basis. Subsidies shall be paid from the reciprocal capital source of the Project according to the provisions in the Finance Minister's Decision No. 112/2001/QD-BTC of November 9, 2001, promulgating a number of spending norms applicable to the Project funded with the ODA loan capital.
4. Project activity expenditures
For the project activity expenditures, the Project management units at different levels and units participating in the project can only spend within the approved plans, not exceeding the levels specified in Appendix 1 promulgated together with this Joint Circular.
IV. PROCUREMENT AND TENDERING
All procuring and tendering activities of the Project on "HIV/AIDS Prevention and Control in Vietnam" must comply with the provisions of Development Aid Agreement No.152-VN signed between the Socialist Republic of Vietnam Government and the International Development Association. The CPMUs tendering plan shall be approved by the Health Ministry; the PPMUs tendering plans shall be approved by provincial/municipal People's Committee presidents. The Health Ministry shall promulgate the regulations on decentralization of tendering result approval on the following principles:
1. For tendering packages of goods procurement valued at under USD 26,000: The Health Ministry/provincial People's Committees shall authorize the CPMU director or the PPMU directors to carry out steps of the tendering process and approve the tendering results.
2. For tendering packages of goods procurement valued at USD 26,000 or over:
a/ For the CPMU: The CPMU shall carry out steps of the tendering process and submit the tendering results to the Health Minister for approval.
b/ For the PPMU: The PPMU shall carry out steps of the tendering process and submit to provincial/municipal Peoples Committees or provincial/municipal Health Service directors the tendering results for approval.
3. For recruitment of individual consulting experts to work for the Project: The CPMU/PPMUs shall be authorized to approve reference provisions and results of expert selection. For the recruitment of foreign individual consultants, the CPMU shall carry out steps of the tendering process and submit to the Health Ministry the short-list and the tendering results for approval.
4. For tendering packages of selection of consulting companies valued at under USD 26,000: The Health Ministry or provincial/municipal Peoples Committees shall authorize the CPMU head or the PPMU directors to approve the tendering results.
5. For tendering packages of selection of consulting companies valued at USD 26,000 or more: The Health Minister or provincial Peoples Committees or the directors of provincial/municipal Health Services to approve the tendering results submitted by the CPMU or PPMUs.
V. IMPLEMENTATION ORGANIZATION
This Circular takes effect 15 days after its publication in "CONG BAO". If any problems arise in the course of implementation, the relevant agencies shall promptly report them to the Finance Ministry (the External Finance Department), the Health Ministry (the Planning and Finance Department) for further study and appropriate amendments.
Le Thi Bang Tam
Trinh Quan Huan