CIRCULAR guide financial management mechanism for the development of forestry industry in _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ based on credit agreement No. 3953-VN development signed between the Government of Vietnam and the International Development Association (IDA) on 4/4/2005 on the forestry sector development project;
The base agreement between the Government of Vietnam and IDA signed on 4/4/2005 on account of co-financing of Global Environment Fund (GEF) of TF 053397 Trustees through IDA to implement development projects in the forestry sector;
The base agreement between the Government of Vietnam and IDA signed on 4/4/2005 on account of co-financing (through multilateral trust fund-MTDF) of the Government of the Netherlands of TF 054523 and Government of Finland of TF 054524 mandated through IDA to implement development projects in the forestry sector;
Pursuant to Decree No. 77/2003/ND-CP dated 1/7/2003 by government mandate the functions, tasks and organization of the Ministry of finance;
Pursuant to Decree No. 17/2001/ND-CP dated 4/5/2001 of the Government issued regulations and use of official development assistance resources;
Pursuant to decision No. 331/QD-TTg on 6/4/2004 of the Prime Minister approving feasibility study report of the project of development of forestry industry;
Pursuant to decision No. 1067/QD-BNN LN on 27/4/2004 of the Minister of agriculture and rural development on the approved feasibility study report of development of forestry sector project;
After the reunification with the Ministry of agriculture and rural development, the Ministry of Finance shall guide financial management mechanism for the development of the forestry sector as follows: section I: GENERAL RULES 1. Scope: this circular guide problems on financial management of State for forestry sector development project. Can the problem of open accounts, financial planning, administrative costs, capital withdrawal procedures, testing, reporting, auditing, tax policy, applicable to property management and project from the project, and the responsibilities of the bodies involved in the financial management of the State for the project.
2. Explanation of terms: in this circular, the terms below are interpreted as follows: a) project: is the forestry sector development project approved in decision No. 331/QD-TTg on 6/4/2004 of the Prime Minister approving feasibility study report of the project of development of forestry industry.
b) governing body: the project is the Ministry of agriculture and rural development as defined in the decision of 332/QĐ-TTg of the Prime Minister;
c) Home project: is the Ministry of agriculture and rural development, the people's Committee of Thua Thien Hue, Quang Nam and Binh Dinh, Quang Ngai province, the social policy Bank. To perform the related projects, the project established the Project Management Committee as defined in point h-m.
d) The African component of credit: are the components of the project by the Ministry of agriculture and rural development and the people's Committee 4 the direct implementation of projects to provide support services for the afforestation project in production.
e) credit component: a component in the part 2 of the project by the social policy Bank made to give credit to the organizations and individuals that demand for loans to develop the forest produce in the region of the project, as specified in the decision of 332/QĐ-TTg of the Prime Minister;
h) Central project Coordination Committee: is the unit is the Ministry of agriculture and rural development, established to coordinate the overall operation of the project, and direct management of credit, non-component functions, duties and powers are specified in the decision.
I) Vietnam Conservation Fund management: Is unit is the Ministry of agriculture and rural development, established to manage the project Conservation Foundation components, functions, duties and powers are specified in the decision.
k) component project management credits: is the social policy Bank established to manage the project credit section, functions, duties and powers are specified in the decision.
l) project management unit (PMU) of the (4) committees by the provinces in the project of establishment, powers and responsibilities are specified in the form.
m) Project Board of district and communal task: is the project implementation unit was established by the decision of the district people's Committee, the people's Committee of the commune, which functions and powers are stipulated in the establishment decision.
n) control agency expenditures: is the State Treasury System (KBNN) for non-credit component, is the Ministry of Finance (Financial Services PR) with respect to a credit component.
Capital o): is the contribution of the Government of Vietnam deployed in GOVERNMENT EXCESSIVE spending estimates of the Ministry of agriculture and rural development and the projects under the current GOVERNMENT EXCESSIVE hierarchy, and the Bank's contribution to social policy in the project.
Bank lending: p) is the social policy Bank.
q) Bank: Agricultural Bank and rural development of Vietnam.
r) special account (s): as (the) account in us dollars (USD) by the central project coordination, management, conservation, project management component of the open credit in the Bank serves to advance the capital from sources of loans, aid for the project.
s) project management is foreign capital withdrawal: is the central project Coordination Committee, the Conservation Fund management, project management, the credit component is authorized to make loan withdrawal transactions, foreign aid, and has introduced a signature model with the Ministry of Finance (foreign financial Services).
3. principles of management: a) The source of the loan, which sponsored the aid project is the capital of the State budget and be managed according to the rules of State budget management and the regulation of sponsors.
b) KBNN system where allocated for the project are responsible for implementing the control, inspection and confirmed the value of eligible capital/advance payment for the project implementation unit of foreign capital withdrawal, at the same time allocate directly part of capital for the project (except credit component due to bank lending undertaken).
c) project are arranged funding from two sources, domestic and foreign capital. Domestic capital are arranged according to the current rules of the State. Foreign capital is allocated/lending back to beneficiaries under the provisions of this circular, in accordance with the regulations in the country of the sponsor.
d) Ministry of agriculture and rural development, the implementation of the project and the Bank lending is responsible for using the correct capital purpose, properly approved and project content match condition has committed to in the agreement, and the associated text attached to the agreement.
e) Ministry of agriculture and rural development, the implementation of the project and the Bank lending is responsible for management, monitoring of the assets of the project, of the management of projects according to the current mode of the State.
f) in the process of implementing the withdrawal of loans and aid, the Bank served enjoying bank service fee according to the current rules on fee payment services through the Bank. The said service charge on included in the total cost of the project.
SECTION II: SPECIFIC PROVISIONS 1. Open account: a) at Bank-central project Coordination Committee to open a special account for receiving the IDA capital component for non-credit and 1 special account for receiving aid under the capital TF 054523 for technical assistance activities for non-credit component;
-Management of the Conservation Fund open 2 accounts, one for GEF assistance funds, a capital source for aid under the TF 054524;
-Bank loans open 1 special account for receiving the IDA capital for credit component of the project.

b) In provincial management KBNN project the open account to allocate capital to receive, allocate capital and monitor the payment application, and foreign capital for projects in the province.
c) The management of the project can open deposit accounts at KBNN system as defined in the water current to receive payment for capital spending of project management.
2. financial planning project (not applicable to credit component) a financial plan) approved the project year (for non-credit component) is the basis for controlling disbursements. The content of the financial plan of the project need to detail the work will be done in the years of planning, the reciprocal capital, capital, capital aid, details follow you, follow main activities and project implementation units.
b) financial planning in project implementation in accordance with circular No. 02/2003/TTLT-BKH-BTC on 17/3/2003 of the Ministry of planning and investment and the Ministry of finance financial planning guide for the program, projects using funds official development assistance (ODA).
c) based on the estimation of budget year was announced, the Ministry of agriculture and rural development, the people's committees of the province allocated estimation for the project/project sections made in the details according to the content outlined in point a) of this Clause.
d) after having approved year financial plan, the Board of the central project coordination/management of Conservation Fund registered financial planning with the Ministry of Finance (Financial Services PR) and KBNN where control of the expenditure of the project to verify it and make the muscle size tracking, control spending , capital allocation; Project management the project management committee, the reserve register financial plan for the spending-control place KBNN base track, allocate capital.
e) for credit component made via bank lending, Bank lending actively built and approved financial plans, reciprocal capital disposition to make match schedule draw loans.
3. single payment price, norms in the use of loans, equity capital, reciprocal aid: a) the administrative costs-apply the norms stipulated in decision No 112/2001/QD-BTC dated 9/11/2001 of the Minister of Finance issued a number of costs apply for projects using ODA debt; Circular No. 118/2004/TT-BTC on 08/12/2004 of the Ministry of Finance of the diem regime regulations, the regime spent on the Conference for administrative bodies and public business units throughout the country (part payment of rent rooms in the place to the work payments and securities diem); Circular No. 91/2005/TT-BTC dated October 18, 2005 of the Ministry of finance work fee regulations for public servants, short-term assignments abroad due to the State budget to ensure the funding, and the revised text, additional decisions, this circular.
-Particularly for the use of 100% of aid funds, the Ministry of agriculture and rural development agreed with donors to enact on the basis of uniform opinion with the Finance Ministry.
b) economic norms, techniques-applying the norms under the guidance of the Ministry of agriculture and rural development, and the current rules of the State.
-Case level, price, project management related components in the Ministry of agriculture and rural development (or bank lending to credit component) to apply for the project, on the basis of unanimous opinions to the Ministry of finance.
c) costs for consultants-recruitment consultants follow the laws and regulations of the donors. Bidding results or specify the bid, the contract must be approved by the authorized custom cases, consistent with the provisions of the schedule, the payment terms of the contract ... the base domestic regulations and rules of the sponsor.
-Expert advice in water: the case of the rental of personal consultants use the loan funds, or capital aid that use reciprocal capital, apply the provisions of decision 112/2001/QD-BTC and decided to modify the decision. The case of the rental of personal consultants to use 100% of aid funds (no reciprocal capital participation), project management related components in the Ministry of agriculture and rural development (or bank lending to credit component) to apply for the project on the basis of unanimous opinions to the Ministry of finance.
d) norms for capital credit: apply the provisions of the manual of credit loan Bank, pursuant to the principles defined in this section.
4. procedure for withdrawal of capital and an advance payment from foreign sources of capital: capital withdrawal and advance payment from foreign capital source implementation as defined in circular No. 78/2004/TT-BTC dated 10/8/2004 of the Ministry of Finance shall guide the management of the funds for official development assistance sources , with some provisions may in the project are the following: a) foreign capital Withdrawal: this procedure is done at central level, by the project management unit is allowed to open and manage your account specific project documents (including the central project Coordination Committee, the Conservation Fund management , Project management credit component).
As for the credit component, to the exit of the special account, project management component of credit sent the Finance Ministry (foreign financial Service) the following documents:-suggest withdrawal of capital and funds according to the model of the donor;
-Lists have lent to the individual/unit of bank loans due to reforestation back up and confirmed by the Central Bank for lending;
-Form-statement of sponsors.
b) capital allocations from the special account for non-credit portion of The allocated from the special account is made on the basis of valid expenses: the true content of the project, have approved financial plan and was registered, the right mode, true hierarchy control and management of project expenditure.
-The confirmation of the payment for the project at central level (payment for the spending of the central project Coordination Committee or management Conservation Fund) made through this board where the KBNN open account capital allocation.
-The confirmation of the payment for the project at the provincial level made at the KBNN. For this case, after checking the volume of work to qualify for payment or eligible advance, writing to KBNN confirm valid payment claim submitted back to the project management committee. The project management committee sent the proposal to payment/advance confirmation of KBNN up central project Coordination Committee to the exit payment from the special accounts of the project. Within 2 working days from receiving the payment suggestion, the advance of the Project Management Committee of KBNN, Central project Coordination Committee remit payment/advance for project activities in the province.
-Where the layout is PPC funds to projects in the province, the base announced details of PPC on advance capital, the Finance Ministry will guide the process of checking, application level and payback in a separate text.
5. Allocate, pay for the management of the reserve: to disburse for conservation activities, management of the reserve account opening to receive capital in a State commercial bank in the area, and sent the proposal to advance funds for the Conservation Fund Management Committee.

For the project of management of the reserve was authorized and approved by the sponsors had made up to a year, suggested the advance base of management of protected areas, Conservation Fund Management Committee made the advance amount equal to 50% of the capital of the minor projects from the special account of the Conservation Fund component on your account of the management of the reserve.
For the project of management of the reserve was authorized and approved by the donors have made on a term of years, suggested the advance base of management of protected areas, Conservation Fund management make the advance to management the reserve into two waves from the special account of the Conservation Fund component into account of the management of the reserve. Phase 1 of the advance amount equal to 50% of the capital of the U.S. project. Phase 2 of the advance amount equal to 40% of the capital of the U.S. project.
Management of the reserve to be capital management and advance implementation of expenditure under the current financial regime (the correct price, content, limit spending, the proportion of funding from foreign capital). The addition of forward remaining capital pursuant to approved year financial plan, the actual progress of the project and the validity of expenses from the previous batch effects capital.
Genus KBNN's control for active spending of the management of the reserve is to control spending first.
To further complement the remaining capital financial plan years, management of the reserve fund, the conservation authority the following documents:-suggest replenishment;
-Lists the account was confirmed by genus KBNN same level;
-Progress report of the work already done and expected progress to the next stage, the details from time to time and each activity can be. With respect to the work performed under the contract from 20,000 USD or more, the management of the reserve enclosed a copy of the contract. With respect to the work performed under the contract under $20,000, the only conservation area management Committee must provide a detailed contract.
After reviewing the material on Conservation Fund Management Committee, suggested the Bank money transfer service from a special account on the account of the management of the reserve to supplement capital for projects of management of protected areas.
The residual foreign capital after the project end sub must be transferred to the special account returns in the Conservation Fund component within 2 months after the end of the project, except for minor donors and the Ministry of finance to renew disbursements.
6. Allocate capital payment, bad: on the basis of reciprocal capital plan year (there are allocated to the central level and local level) approved of the project, system implementation and management KBNN allocate reciprocal capital according to the progress of the project, in accordance with the regulations on the management of , the current capital allocation.
7. Statements of bank deposit interest rates, service: a) monthly, the Bank serves to send the Finance Ministry (foreign financial Service) special account-statement of Bank projects, showing the amount withdrawn in December; the number using the details under each use and exchange rates; Bank charges, interest rates, balance last month.
b) while the amount of the loan, the aid money on special account yet use have incurred interest deposits (non-term deposit interest rate), annually, within 6 months from the end of the financial year, the Bank money transfer service interest arises the leftovers (after deduction of bank charges in the States) on the account to the State budget (the Exchange Fund account of the The State at the State Bank of Vietnam). Account number 331.213.020.1, or another account by the Ministry of Finance announced.
-Special accounts for Own resources for IDA credit component, the interest rates of deposits arise on account of the Bank's lending is back.
8. Accounting, auditing, audit, reporting and settlement: a) accounting-The project management committee to open the books separately track the project's capital and do accounting, statistics by the current provisions of the State.
-The local KBNN perform accounting, statistics under the guidance of the Central KBNN.
b) test-the superior governing body of the project, the Agency management functions at Central, local and KBNN is responsible for checking the implementation of the plan, financial management mode and practical implementation of the project and reflect timely the existence and problems in management process with the Ministry of finance The Ministry of planning and investment to take measures to solve.
-Violations (if any) are detected during inspections, checks are processed under the current rules.
-The account allocated projects using improper purpose, wrongly detect mode through inspection, test and submit to the State budget.
c) annual audit, special accounts, financial reports, books and accounting records of the project must be the independent audit Agency perform an audit in accordance with the regulations of the State, the agreement. One of the main content of the audit is to examine whether the Executive project management the financial management regulations of the State, including the regulations of this circular. Audit documentation will be sent to the Ministry of finance and is one of the grounds for considering the withdrawal of additional capital for special accounts or funds from the special account to pay as well as a base for assessing the implementation of the project.
The Ministry of agriculture and rural development, the choice of the auditing firm to audit the financial activities of the General all the African component of credit according to the regulations.
d) monthly report-mode, the project management committee, the Board of management responsible for protected areas establishment and implementation report, financial statements for the Department of finance and the funding Council place KBNN send central project Coordination Committee; the Board of management responsible for protected areas establishment and implementation report for the Department of finance and KBNN district, province where funding, the Conservation Fund Authority. Report content need clear implementation of the project, the number of contracts signed, the payment situation which according to the contract, sources and uses of capital, procurement, property management, project and other content under the current rules.
-The provincial capital where KBNN is responsible for synthesizing KBNN report Central and Department of finance capital allocation and the situation in the capital. Quarterly, on the basis of the report of the provincial Central KBNN KBNN General Ministry of finance report.
-Quarterly, the central project Coordination Committee is responsible for reporting the details of expenses from special accounts, the general public and the report of the Board of management of the project in the component non-credit and credit sent the Ministry of agriculture and rural development, the Ministry of finance and the relevant authorities according to the provisions on the use of loans , which aid, which bad situation, procurement, property management, project and other content under the current rules.
-The central project Coordination Committee discussed with the management of the project to unify detailed guidance forms mode project's report.
e) annual capital and settlement at the end of the project (not applicable to credit component)-project management the establishment report according to the current rules for the local part of the province where the capital allocation KBNN reported people's Committee to consider , approved, and sent to the central project Coordination Committee.

-The central project Coordination Committee created the report according to the current rules for the genus in the component's Central Africa credits certified by the issuing agency in the capital, the Ministry of agriculture and rural development, review, approval; The Ministry of agriculture and rural development funds implementation and settlement settlement at the end of the project with the Ministry of finance; at the same time the entire sum of settlement projects to work with relevant agencies when necessary.
f) settlement credit component: to follow the current regulations of the State.
9. tax policy applicable to the project: tax policy applicable to project implementation as required by current legislation on taxation. The project was entitled to the tax incentives are as follows:-goods imported in ODA not refundable not subject to value added tax, special consumption tax and import tax.
-Goods imported by project's ODA is considering duty-free import, export tax as defined in clause 6, 10 and 15, section I, part D circular 113/2005/TT-BTC on December 15, 2005 of the Ministry of Finance shall guide the implementation of export tax, import tax.
-Value added tax refunds with respect to the use of ODA projects are implemented as defined in clause 6, section I, part D circular 120/2003/TT-BTC dated December 12, 2003 of the Ministry of finance guide to value added tax.
10. asset management emerged from the project: Ministry of agriculture and rural development, Bank lending is responsible management, property registration, declaration form from the project according to the regulations. The management and disposal of assets of the project when the project ends follow the provisions in circular No. 116/2005/TT-BTC on December 19, 2005 of the Ministry of Finance shall guide the management and disposal of assets of the projects using the State budget when the project ends.
SECTION III: IMPLEMENTATION of this circular effect after 15 days from the date The report. In the process, if there are problems the Ministry of agriculture and rural development, Bank lending and other related agencies should reflect timely to finance research, modified and supplemented.
The DEPUTY HEAD of Kt. (signed) Tran Xuan Ha