Thông tư 36/2002/TT-BTC

CIRCULAR

GUIDING THE FINANCIAL MANAGEMENT REGIME APPLICABLE TO THE PEASANT ASSISTANCE FUND OF VIETNAM PEASANTS’ ASSOCIATION

Materializing the Prime Minister’s direction in Document No.4035/KTTH of July 26, 1995 on the setting up of the Peasant Assistance Fund; the Prime Minister’s Official Dispatch No.492/CP-KTTH of May 19, 2000 on transferring a capital amount of VND 40 billion to the Peasant Assistance Fund for management, the Finance Ministry hereby guides the financial management regime applicable to the Peasant Assistance Fund of Vietnam Peasants Association in replacement of Circular No.73-TC/TCNH of October 9, 1995, as follows:

I. GENERAL PROVISIONS

1. The Peasant Assistance Fund (hereinafter referred to as the Fund for short) shall operate not for the profit-making purpose, support and assist peasants in developing the rural production.

2. The Fund shall take self-responsibility for its operations before law, enjoy the financial autonomy, ensure the capital safety and not have to pay taxes to the State budget.

3. The financial revenue and expenditure activities of the Peasant Assistance Fund shall be subject to the direction and management by the Executive Board of the Vietnam Peasants Association Central Committee.

4. The Fund shall effect financial revenues and expenditures and conduct accounting and settlement thereof according to the Ordinance on Accounting and Statistics, the State’s general financial regime and contents guided in this Circular.

The Fund’s fiscal year shall be calculated from January 1 to December 31 each calendar year.

II. FINANCIAL MANAGEMENT CONTENTS

1. Regarding capital sources:

Operation capital of the Fund shall be formed from the following sources:

- Capital allocated by the State: VND 40 billion.

- Capital mobilized from domestic and foreign organizations and individuals as supports, interest-free or low-interest rate loans.

- Capital received from financial aid sources of international organizations, foreign organizations and individuals, to assist the socio-economic development of Vietnam’s rural areas.

- Capital entrusted by the State or provided by the domestic and foreign organizations as financial support for agricultural and rural development.

- Annually self-supplemented capital.

The Fund must not mobilize and borrow capital in forms of savings, promissory notes, bills, commercial loans, etc., like credit institutions engaged in monetary trading.

2. Regarding capital use:

The operation capital source of the Fund shall be used to assist peasants, especially poor family households, in acquiring funds for production development. Capital shall be provided as assistance to peasants in form of interest-free refundable assistance loans (within given limits and terms), and with fee collection.

The Fund shall have to manage and use capital for the right purposes, the right subjects and with efficiency, promptly and fully recover capital amounts lent as assistance to peasants in order to preserve its capital, and then refund fully and promptly financial aids to organizations and individuals in form of refunding.

The Fund must not use its operation capital for the business purpose of earning profits from monetary trading.

3. Regarding fee collection:

The Peasant Assistance Fund shall be entitled to collect fee for the capital amounts lent as assistance to peasants. The fee levels shall be collected on the following principles: Ensuring the defrayal of necessary expenses for the Fund’s operation, including fee and interest paid to individuals and organizations that provide financial aids (with collection of fee or interest with preferential interest rates); the payment of wages, working trip allowance, stationery expenses and other necessary expenses for the Fund’s operation; at the same time, the fee levels must suit each type of households, each region and each period. More concretely:

- The lending fee level applicable to poor households shall be lower than that applicable to non-poor households.

- The lending fee level applicable to households in mountainous regions or islands shall be lower than that applicable to households in delta and midland regions.

- The highest lending fee level must not exceed 80% of the lending interest rate applicable to loans of the same term provided by local credit institutions at the same time.

Basing itself on the above-said principle, the Executive Board of the Vietnam Peasants Association Central Committee shall direct and guide the Fund to formulate a fee table. The former shall sign a decision to promulgate the fee table for implementation by the latter.

The alteration of the above-said principles shall be effected only after it is so approved in writing by the Finance Ministry.

4. The Fund’s financial revenues and expenditures:

a/ The Fund’s revenues shall include the following:

- Collected fee for provision of assistance loans to its member;

- Collected charge for entrusted lending service;

- Other revenues: contributions of domestic and foreign organizations and individuals for the Fund’s operations (if any).

The Fund shall have the responsibility to correctly, fully and promptly collect revenues.

b/ The Fund’s operation expenses:

- Professional operation expenses include:

+ Fee paid to domestic and foreign organizations and individuals that provide financial aids to the Fund with collection of fee.

+ Interest paid for capital amounts received as financial aids and entrusted loans from domestic and foreign organizations and individuals at preferential interest rates.

+ Other expenses (if any).

- Managerial expenses:

+ Wages paid to the Fund’s officials (for those not on the payrolls of the Peasants Association chapters at all levels). The wage payment shall be decided by the Executive Board of the Peasants Association Central Committee according to the State’s current regulations.

+ Allowances paid to the Association’s officials assigned to manage and administer the Fund. Basing himself/herself on the actual revenue sources, the Chairman of the Vietnam Peasants Association shall specify the appropriate allowance levels. The maximum allowance level shall not exceed 50% of the wage level of the Association’s officials assigned to manage and administer the Fund.

+ Social insurance and medical insurance premiums and other payable wage-based amounts according to the regime prescribed by the State (for officials not on the payrolls of the Peasants Association chapters at all levels).

+ Working trip allowance.

+ Expenses for basic depreciation, repair and procurement of working tools (for assets under the Fund’s management).

+ Other necessary and reasonable expenses, such as those for professional training, conferences, guest reception, etc.

+ Deductions for setting up the risk reserve:

* The deduction level shall be 0.05%/month on the monthly lending debit balance.

* The deduction time shall be the ending day of each month.

* The reserve fund shall be at most equal to 10% of the debit balance by December 31 each year, the surplus (if any) shall be added to the operation capital.

The risk reserve fund shall be used to make up for irrecoverable debts from assistance loans. The Fund shall elaborate the regulation on deduction for setting up, management and use of the risk reserve fund, then submit it to the Chairman of the Vietnam Peasants Association for promulgation after reaching agreement with the Finance Ministry.

c/ Distribution of revenue-expenditure difference:

The positive annual revenue-expenditure difference shall be distributed as follows:

1.8%/year on the State capital at the Fund shall be deducted to supplement the State capital at the Fund.

The remainder (assumed 100%) shall be concretely distributed as follows:

- 50% shall be deducted to supplement the operation capital for provision of assistance loans.

- 20% shall be deducted to set up the fund for capital construction and procurement of assets in service of the Fund’s operation.

- The remaining 30% shall be deducted to set up two funds: reward fund and welfare fund. The deduction levels for these two funds shall comply with the regime prescribed by the State for State enterprises.

The remainder (if any) of the revenue-expenditure difference after deduction for setting up reward fund and welfare fund shall be added to the fund for investment in capital construction and asset procurement.

5. Accounting and book-keeping regime:

- Basing itself on the Ordinance on Accounting and Statistics, the State’s current accounting regime, the Executive Board of the Vietnam Peasants Association’s Central Committee shall formulate an accounting regime suitable to the Fund’s operation characteristics and send it to the Finance Ministry. After obtaining the Finance Ministry’s approval, the Executive Board of the Vietnam Peasants Association’s Central Committee shall sign a decision to promulgate it for implementation.

- The Fund shall have to open accounting books, make voucher recording and conduct the accounting and book-keeping in strict compliance with the regime prescribed in the Ordinance on Accounting and Statistics and the regulations on Executive Board of the Vietnam Peasants Association Central Committee and the Finance Ministry.

- The Fund shall have to make the financial settlement and send to the Finance Ministry and the Executive Board of the Vietnam Peasants Association Central Committee the following quarterly and annual reports:

+ Asset balance sheet;

+ Account balance sheet;

+ Financial settlement report (income and expenditure report);

+ Report on capital source and use (in which the annual capital increase on the State capital amount deducted from the above-said retained revenue-expenditure difference must be clearly stated).

Time limit for sending reports:

+ Quarterly settlement report must be sent within 40 days after the end of each quarter.

+ Annual settlement report must be sent on the 1st of March of the following year at the latest.

6. Financial inspection and supervision regime:

- The Fund shall have to organize and conduct the inspection and supervision of financial revenue and expenditure activities of the Fund and its grassroots units in strict compliance with the guidance in this Circular and other relevant financial regimes.

- The Executive Board of the Vietnam Peasants Association Central Committee shall have to inspect, supervise, consider and approve the annual financial settlements of the Fund; coordinate with the Finance Ministry in inspecting the Funds financial matters when necessary.

- The finance agency shall have to inspect the observance of the financial regimes by the Fund.

7. Elaboration of annual plans:

The Fund shall have to elaborate annual financial plans for consideration and approval by the Executive Board of the Vietnam Peasants Association Central Committee, and send to the Finance Ministry at the prescribed time the plan documents of the following year, including:

+ Plan on the source and use of peasant assistance capital.

+ Financial revenue and expenditure plan.

The approved plan norms shall serve as basis for the Fund’s implementation in the year.

III. ORGANIZATION OF IMPLEMENTATION

1. The Peasant Assistance Fund shall be held responsible before law for the management, use and preservation of the State’s capital and assets under the Fund’s management for providing assistance loans to peasants, and subject to the inspection of the State finance agency according to the Ordinance on Accounting and Statistics and regulations of the financial regime in this Circular.

Where the Fund uses capital not for the right purposes, the Finance Ministry shall report such to the Prime Minister for recovery of capital amount already allocated by the State to the Fund for management and use.

2. The Executive Board of the Vietnam Peasants Association’s Central Committee shall have to organize the monitoring and inspection of financial activities of the Fund, ensuring that the Fund’s capital is managed and used for the right objectives and in line with the Peasants Association’s policies, and the financial revenues and expenditures are effected in strict compliance with the prescribed financial policies and regimes.

On the basis of the financial management regime applicable to the Peasant Assistance Fund guided in this Circular, the Executive Board of the Vietnam Peasants Association Central Committee shall promulgate specific guiding documents for the Fund.

3. This Circular takes effect 15 days after its signing and replaces the Finance Ministry’s Circular No.73-TC/TCNH of October 9, 1995 guiding the financial management regime applicable to the Peasant Assistance Fund of the Vietnam Peasants’ Association.

Any problems arising in the course of implementation should be reported to the Finance Ministry for study and timely supplementation and/or amendment.