Thông tư 86/2021/TT-BTC

CIRCULAR

 PROVIDING GUIDELINES FOR IMPLEMENTATION OF GOVERNMENT’S DECREE NO. 147/2020/ND-CP DATED DECEMBER 18, 2020 PRESCRIBING ORGANIZATION AND OPERATION OF PROVINCIAL DEVELOPMENT INVESTMENT FUNDS

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Decree No. 147/2020/ND-CP dated December 18, 2020 prescribing organization and operation of provincial development investment funds;

At the request of the Director of the Department of Banking and Financial Institutions;

The Minister of Finance promulgates a Circular providing guidelines for implementation of Government’s Decree No. 147/2020/ND-CP dated December 18, 2020 prescribing organization and operation of provincial development investment funds.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular provides guidelines for implementation of the Government’s Decree No. 147/2020/ND-CP dated December 18, 2020 prescribing organization and operation of provincial development investment funds (hereinafter referred to as “Decree No. 147/2020/ND-CP”) in respect of mechanisms for financial management, supervision, performance evaluation, assessment and ranking of executives, reporting and disclosure of information of provincial development investment funds, and performance of functions as a provincial development investment fund by the Ho Chi Minh City Finance and Investment State-Owned Company (HFIC).

Article 2. Regulated entities

1. Provincial development investment funds that are established by governments of provinces or central-affiliated cities (hereinafter referred to as “Fund”).

2. Ho Chi Minh City Finance and Investment State-Owned Company (HFIC).

3. People’s Committees of provinces and central-affiliated cities (hereinafter referred to as “provincial People's Committees”).

4. Relevant authorities, organizations and individuals.

Chapter II

SPECIFIC PROVISIONS

Section 1. MANAGEMENT OF CAPITAL AND ASSETS OF PROVINCIAL DEVELOPMENT INVESTMENT FUNDS

Article 3. Change in charter capital

1. The authority to make change in charter capital of a Fund shall be determined according to Clause 2 Article 35 of Decree No. 147/2020/ND-CP.

2. The adjusted amount of charter capital of a Fund shall be determined adopting the same methods as those for wholly state-owned enterprises. Particularly, an increase in charter capital shall be determined as follows:

a) With regard to the increase in charter capital for executing investment projects on formulation of assets serving the Fund’s operation and the increase in charter capital due to receipt of transferred assets, receipt of financial supports under State policies or due to asset revaluation, the Fund shall comply with relevant regulations applicable to wholly state-owned enterprises.

b) Based on the Fund's 05-year operating strategy or plan which has been approved the provincial People’s Committee, the increase in charter capital under that 05-year operating strategy or plan shall not exceed the planned increase in the Fund’s budget for giving loans or making investments.

3. The increase in charter capital of a Fund to meet the requirement laid down in Clause 1 Article 6 of Decree No. 147/2020/ND-CP shall not be determined according to Clause 2 of this Article but the Fund shall develop a plan to make additional contribution to charter capital, and submit it to the provincial People's Committee for submission to the provincial People’s Council for approval to meet the minimum charter capital as prescribed.

4. Each Fund shall determine its adjusted amount of charter capital and propose funding sources for making additional contribution to charter capital to the provincial People's Committee or Provincial People’s Council for issuing decision within their competence.

Article 4. Formulation of regulations on management of capital, assets and operations 

1. Each Fund shall develop and submit to the Fund’s Executive Board for promulgation of regulations on investment, construction, procurement and management of fixed assets; regulations on capital mobilization; lending regulations; regulations on management of investments in establishment of business entities, contributions to, purchased shares and stakes in business entities; regulations on management of investments made under contracts or investment projects; regulations on entrustment and other regulations at the request of the Fund’s Executive Board.

2. The Fund’s regulations on investment, construction, procurement and management of fixed assets must comply with the following rules:

a) The authority to make decisions on investment, construction and procurement of fixed assets shall be determined according to relevant regulations applicable to wholly state-owned enterprises and the Fund’s charter on organization and operation;

b) Procedures for investment, construction, procurement, management, use, depreciation, leasing, mortgaging, liquidation, transfer and inventory of fixed assets of the Fund shall be followed in accordance with regulations of the Law on management and use of state investments in enterprises.

3. Regulations on capital mobilization include the following contents:

a) Purposes of capital mobilization;

b) Funding sources and mobilization forms;

c) Steps to develop the plan to mobilize capital from funding sources as prescribed by law;

d) Plan to manage and use mobilized capital;

dd) Plan to allocate funding for paying principal and interests when they become due;

e) Authority to mobilize capital which must be determined in accordance with Decree No. 147/2020/ND-CP and the Fund’s charter on organization and operation.

4. Lending regulations include the following contents:

a) Lending fields, entities and conditions sorted by lending forms, including: direct lending, entrusted lending and syndicated lending;

b) Term, interest rate and restrictions on each lending form as prescribed in Decree No. 147/2020/ND-CP and management demands of the Fund’s Executive Board, rights and responsibilities of the parties;

c) Appraisal procedures, authority to make lending decisions and loan guarantee;

d) Forms of loan guarantee, and mechanism for collateral management;

dd) Samples of contracts for direct lending, entrusted lending and syndicated lending;

e) Procedures for disbursement, management of loans, debt classification and establishment of provision for credit losses;

g) Procedures and authority to settle debts;

h) Procedures and authority to make collateral disposition.

5. Regulations on management of investments in establishment of business entities, contributions to, purchased shares and stakes in business entities include the following contents:

a) Fields, entities, conditions, forms and restrictions on capital contribution;

b) Procedures for formulation, appraisal and authority to approve the capital contribution plan. In which, the authority to approve the capital contribution plan must comply with Article 21 of Decree No. 147/2020/ND-CP;

c) Procedures for capital contribution, additional capital contribution, management and transfer of partial or entire stakes which shall comply with regulations on intercorporate investments by state-owned enterprises laid down in the Law on management and use of state investments in enterprises;

d) Procedures for management, supervision and evaluation of efficiency of the Fund’s capital contribution.

6. Regulations on management of investments made under contracts or investment projects include the following contents:

a) Fields, entities, conditions, forms and restrictions on investment;

b) Procedures for formulation, appraisal and authority to approve the investment plans or investment projects. In which, the authority to make investment decision must comply with Article 21 of Decree No. 147/2020/ND-CP;

c) Procedures for performance, supervision and evaluation of efficiency of investments;

d) Procedures for additional investment, transfer of partial or entire investment;

dd) Procedures for establishment of provisions against risks;

e) Procedures and authority to manage risks.

7. Regulations on entrustment include the following contents:

a) Procedures for offer of entrustment to give loans or make investments;

b) Procedures for acceptance of entrustment to manage funding for making investments or giving loans and collect debts, and allocate investment capital to construction works/projects from state budget agencies, banks for policies, enterprises and domestic and foreign entities; procedures for acceptance of entrustment to manage funding and operations of provincial state financial funds;

c) Rights and responsibilities of relevant parties;

d) Authority to approve, rules for entering into entrustment agreements and primary contents of an entrustment agreement.

Section 2. MANAGEMENT OF REVENUES, EXPENSES, AND DIFFERENCE BETWEEN REVENUES AND EXPENSES OF PROVINCIAL DEVELOPMENT INVESTMENT FUNDS

Article 5. Revenues and other incomes

1. Operating revenues of a Fund:

a) Revenue from investment activities;  

b) Revenue from transfer of investments;

c) Revenue from loan interests, including syndicated loans or entrusted loans;

d) Revenue from entrustment fees collected under a decision issued by the provincial People's Committee or the entrustment agreement signed between the Fund and the trustor;

dd) Revenue from issuance of municipal bonds with authorization given by the provincial People's Committee in accordance with regulations of law;

e) Revenue from other operations.

2. Revenues from financial activities of a Fund:

a) Deposit interests;

b) Earnings from exchange rate differences (if any);

c) Revenue from financial activities.

3. Other revenues, including:

a) Earnings from liquidation, transfer or selling of assets;

b) Revenue from leasing of assets;

c) Differences earned from disposition of collateral and assets which are formed from borrowed funds and under the ownership of the Fund in case investors transfer assets to the Fund as repayment of debts (if any);

d) Difference between the compensation for asset damage received from the issuer and actual compensation for asset damage; recovered amounts of debts which have been charged off;

dd) Breach of economic contract penalties;

e) Income from debts to creditors that cease to exist or are not identified, which is recorded as an increase in income;

g) Other lawful incomes.

Article 6. Revenue recognition principle

1. Incomes of a Fund are determined in conformity with accounting standards of Vietnam and relevant laws, supported by lawful invoices or receipts, and must be fully recorded as its revenues.

2. With regard to loan interests, the Fund shall evaluate the debt recoverability and classify debts in accordance with Decree No. 147/2020/ND-CP as the basis for accounting for interests receivable as follows:

a) The Fund shall record loan interests receivable in the period as its interest income in respect of debts classified as standard debts for which provision for risks is not required as prescribed in Article 30 of Decree No. 147/2020/ND-CP.

b) The interests receivable of debts remaining classified in the standard debt group as a result of implementation of the State policies and the interests receivable in the period of remaining debts shall not be recorded as income. In such cases, the Fund shall monitor them in off-balance sheet so as to expedite the collection of debts. They shall be recorded as income, when collected.

3. Deposit interest revenue is the amounts of deposit interests receivable during the period.

4. Incomes from investments in establishment of business entities, contributions to, purchased shares and stakes in business entities, investments made under contracts or investment projects include dividends and profits distributed according to the resolution of the General Meeting of Shareholders or distribution decision issued by members contributing capital to the enterprise or a decision issued by a competent authority. In case the Fund directly manages the investment projects, incomes from investment activities shall be recorded in the same period in which revenues/expenses from investment activities are earned or incurred.

5. The Fund shall recognize income from exchange rate differences as a result of revaluation of foreign currency and gold in accordance with accounting standards and relevant laws.

6. With regard to accounts receivable which have been recorded as income but then are considered unrecoverable or not collected on due dates, the Fund shall record them as a decrease in revenue in the same period or as expenses in another period, and monitor them in off-balance sheet to expedite the collection. They shall be recorded as income, when collected.

7. Revenue from other activities shall be recorded in accordance with regulations of laws on taxation and relevant laws.

Article 7. Expenses

Operating expenses of a Fund are total expenses incurred in the period from normal business operations of the Fund, including: 

1. Operating expenses:

a) Costs associated with lending activities (including direct lending, entrusted lending and syndicated lending), investment in establishment of business entities, contributions to, purchased shares and stakes in business entities, and investments made under contracts or investment projects;

b) Costs associated with offer and acceptance of entrustment;

c) Expenses on mobilization of funding for provincial-government budget with the authorization given by the provincial People's Committee (if any);

d) Contributions to provisions against risks;

dd) Payments for insurance for operational risks and other types of insurance as prescribed by law;

e) Compensations for asset damage as prescribed;

h) Other operating expenses.

2. Financial expenses:

a) Payments of interests and operating fees on mobilized amounts of capital;

b) Expenses on exchange rate differences (if any);

c) Other financial expense.

3. Administrative expenses:

a) Asset-related costs, including: depreciation of fixed assets as prescribed by law; costs of leasing premises and fixed assets; costs of maintenance and repair of assets; costs of purchase of tools and devices; asset insurance premiums;

b) Expenses on employees:  Salaries, wages; salary-based contributions:  social insurance, health insurance and unemployment insurance contributions, accident insurance premiums, and trade union contributions; expenses on shift meals; personal protective equipment costs; costs of workplace uniforms; compulsory payments for female employees; payments for unused annual leave days and other expenses on employees as prescribed by regulations of law on wholly state-owned enterprises;

c) Management and administration expenses:  electricity and water expenses, telephone charges, costs of printing materials and papers, stationery; counseling and auditing expenses; costs of hiring of domestic and foreign experts/specialists; expenses on scientific research and technology innovation; costs of professional training activities; expenses on grant of rewards for initiatives in improving and increasing labor productivity, rewards for practice of costs saving; costs of environmental protection and workplace security tasks; costs of information dissemination, advertisement, marketing and sales promotions; expenses on organization of conventions, reception activities and external relations as prescribed by law;

d) Allowances for part-time members of the Fund’s Executive Board and other part-time position holders (if any);

dd) Other administrative expenses as prescribed by law.

4. Other expenses:

a) Costs of sale and liquidation of assets (if any), including the residual value of fixed assets sold or liquidated; compensations for asset damage after making up by other sources as prescribed;

b) Payment of breach of economic contract penalties;

c) Court fees/judgment enforcement charges payable;

d) Expenses on social activities as prescribed by law;

dd) Membership fees paid to domestic and foreign trade associations of which the Fund is a member as prescribed by law;

e) Other expenses as prescribed by law.

Article 8. Expense recognition and management principle

1. Expenses of a Fund are those actually incurred in the period related to operations of the Fund.

2. Expenses of recorded as operating expenses of the Fund shall conform to the matching principle between revenue and expenses and adequate lawful invoices and documents as prescribed by law.

3. Expense management principle:

a) The Fund shall formulate and submit Regulations on internal expenses and spending levels which must be appropriate for each period and comply with regulations of law in force to the Fund's Executive Board for approval.

b) With regard to expenses paid inconsistently with policies, expenses which are not yet recorded, and those exceeding the spending levels specified in Regulations on internal expenses promulgated by the Fund’s Executive Board as prescribed in Point a Clause 3 Article 8 of this Circular, the Fund shall clarify accountability of relevant organizations and individuals for requesting competent authorities to decide compensation plans.

Article 9. Statement of revenues and expenses

1. Each Fund shall annually submit revenue and expense difference report to the Fund’s Executive Board for ratification and submission to the provincial People's Committee for approval after its annual financial statements have been audited by an independent audit firm as prescribed in Clause 2 Article 34 of Decree No. 147/2020/ND-CP.

2. Expenses which have been paid in excess of the spending levels specified in Regulations on internal expenses promulgated by the Fund’s Executive Board as prescribed in Clause 3 Article 8 of this Circular and are not approved by the provincial People's Committee must be excluded from the Fund’s accounting books, and the Fund shall clarify accountability of relevant organizations and individuals for requesting competent authorities to decide compensation plans.

Article 10. Distribution of revenue and expense difference

1. The Fund shall distribute revenue and expense difference in accordance with Clause 4 Article 34 of Decree No. 147/2020/ND-CP.

2. The contribution to the reward and welfare fund shall be subject to the results of evaluation of performance of the Fund as prescribed in Article 16 of this Circular. To be specific:

a) A Fund rated A may set aside an amount not exceeding 03 months’ earned income of employees for both reward and welfare funds;

b) A Fund rated B may set aside an amount not exceeding 1,5 months’ earned income of employees for both reward and welfare funds;

c) A Fund rated C may set aside an amount not exceeding 1 month’s earned income of employees for both reward and welfare funds;

d) Specific contribution to each of the reward and welfare funds shall be subject to the approval of the Fund's Executive Board.

3. The contribution to the reward fund for executives shall be subject to the results of evaluation of performance of the Fund as prescribed in Article 16 of this Circular. To be specific:

a) A Fund rated A may set aside an amount not exceeding 1,5 months’ earned income of executives;

b) A Fund rated B may set aside an amount not exceeding 01 month’s earned income of executives;

c) A Fund rated C is not allowed to set aside the reward fund for executives.

4. A month’s earned income of a Fund shall be determined adopting the same methods as those for wholly state-owned enterprises.

5. The provincial People's Committee shall decide contributions to the development investment fund, financial reserve funds, reward fund for executives, reward and welfare funds of the Fund as prescribed in Clause 4 Article 34 Decree No. 147/2020/ND-CP and Clauses 1, 2 and 3 of this Article.

Article 11. Management and use of funds of a provincial development investment Fund

1. Purposes of funds:

a) The financial reserve fund shall be used for covering the remaining losses and asset damage incurred during the Fund’s operation after they are made up using compensations paid by the entities at fault, insurers and provisions recorded as the Fund’s expenses; and used for other purposes as prescribed by law.

b) The development investment fund shall be used for implementing development investment projects of the Fund and making supplementation to the charter capital.

c) The reward fund shall be used for:

- Providing year-end, periodic, spontaneous rewards and those stipulated by laws on emulation and reward for employees of the Fund. The Fund’s reward fund shall not be used for providing rewards for the Fund's executives.

- Providing rewards for external individuals or collectives that make a lot of contributions to operation of the Fund.

- Reward amounts shall be decided by the Fund’s General Director or Director according to regulations on emulation and reward and regulations on use of the reward and welfare funds prescribed in Clause 2 of this Article.

d) The welfare fund shall be used for:

- Investing in development or repair of welfare facilities of the Fund.

- Paying for welfare activities of employees and executives of the Fund.

- Helping employees and executives deal with their unexpected difficulties, including those who are retired, incapable of working or suffer hardships, homeless conditions, or serving charitable purposes.

- Welfare amounts shall be decided by the Fund’s General Director or Director according to regulations on use of the reward and welfare funds prescribed in Clause 2 of this Article.

e) The reward fund for executives shall be used for:

- Providing  annual rewards or rewards for the Chairperson, Deputy Chairperson and members of the Fund’s Executive Board, Head of the Board of Controllers, General Director/Director, Deputy General Director/Deputy Director and Chief Accountant of the Fund at the end of their term of office.

- The amounts of annual rewards and rewards provided at the end of term of office shall be decided by the Chairperson of the provincial People’s Committee, which conform to criteria for evaluation of executives as well as operating performance of the Fund, as requested by the Fund’s Executive Fund.

- Where the Fund’s executives are provided with rewards or bonuses in accordance with regulations of the Law on emulation and reward, the Fund shall use its reward fund for paying abovementioned entities at amounts stipulated by the Law on emulation and reward in respect of each specific emulation and reward form.

2. The Fund shall formulate and get opinions from its employees and trade union about regulations on emulation and reward and regulations on management and use of the reward and welfare funds, and submit them to the Fund’s Executive Board for approval.

Section 3. ACCOUNTING, FINANCIAL AUDIT AND INFORMATION DISCLOSURE

Article 12. Financial statements and other reports

1. At the end of an accounting period (quarter or year), each Fund shall formulate, present and send reports as prescribed in Clause 2 of this Article.  Data closing time shall be the end of the reporting period (quarter or year). The General Director/Director of the Fund shall be responsible for the accuracy and truthfulness of these reports.

2. Reports prepared by a Fund:

Quarterly reports:

- The Fund’s financial statements, including: financial statement, income statement, cash flow statement, and notes to financial statements. The Fund’s financial statements shall be prepared and presented in accordance with regulations of the Law on accounting;

- Statistical reports, including: reports on direct investments, reports on lending activities, reports on investment in establishment of enterprises, and reports on debt classification and provisions against risks made according to Appendixes 1, 2, 3, 4 enclosed herewith.

b) Annual reports:

- All types of reports specified in Point a of this Clause;

- Report on revenue and expense differences as prescribed in Clause 5 Article 34 of Decree No. 147/2020/ND-CP;

- Report on evaluation of the Fund’s performance as prescribed in Article 16 of this Circular;

- Other reports: Report on financial revenues and expenses, report on fulfillment of obligations to state budget, and reports on distribution of revenue and expense difference, and use of funds which are made using Appendixes 5, 6, 7 enclosed herewith.

3. Deadline for submission of reports:

a) A quarterly report shall be submitted within 45 days after the end  of the reporting quarter;

b) An annual report shall be submitted within 90 days after the end of the fiscal year. Particularly, the report on evaluation of the Fund’s performance shall be submitted by May 31 of each year;

c) Auditor’s reports on the Fund’s financial statements shall be prepared by independent audit firms and submitted within 90 days from the end of the fiscal year.

4. Report recipients:

a) The reports specified in Point a Clause 2 of this Article shall be submitted to the provincial People's Committee, the provincial Department of Finance, and the State Bank’s provincial branch.

b) The reports specified in Point b Clause 2 of this Article shall be submitted to the provincial People's Committee, Ministry of Finance, the provincial Department of Finance, and the State Bank’s provincial branch.

5. Reports shall be submitted employing one of the following methods:

- Directly in the form of physical reports;

- By post in the form of physical reports;

- By email or through specialized reporting software system (if any);

- Other methods as prescribed by law.

6. Each Fund shall submit ad-hoc reports at the request of the provincial People's Committee, Ministry of Finance, the provincial Department of Finance, and the State Bank’s provincial branch.

Article 13. Financial audit

1. Annual financial statements of each Fund must be audited by an independent audit firm.

2. Annually, the Fund’s Board of Controllers shall request the Fund's Executive Board to select a qualified independent audit firm established and operating in Vietnam to carry out audit of the Fund’s financial statements.

3. The Fund’s Board of Controllers shall organize the inspection of the Fund’s compliance with regulations on finance and accounting, and submit inspection reports to the Fund’s Executive Fund and the provincial People's Committee.

Article 14. Information disclosure

1. Each Fund shall carry out periodic and ad-hoc disclosure of information in accordance with regulations on information disclosure applicable to enterprises of which 100% charter capital is held by the State, except information about annual rearrangement and renovation of enterprises, reports on administration status and organizational structure of enterprises, mid-year and summarized financial statements.

2. Each Fund shall publish information on its website or on the website of the provincial People's Committee or other means of mass media as prescribed by the provincial People's Committee and specified in the Fund's Charter.

3. The Fund’s Executive Board shall consider approving information to be disclosed by the Fund as prescribed in Clause 1 of this Article; ensure the openness, transparency and punctuality of information disclosed.

Section 4. SUPERVISION AND EVALUATION OF PERFORMANCE, ASSESSMENT AND RANKING OF FUND’S EXECUTIVES

Article 15. Forms of supervision of Funds

1. Provincial People's Committees shall carry out financial supervision of Funds. Provincial Departments of Finance shall play the leading role and cooperate with relevant authorities in the province to assist Provincial People's Committees in carrying out financial supervision of Funds.

2. Grounds for, contents, methods and organization of financial supervision, and financial supervision of subsidiary and associate companies of Funds, and other regulations on financial supervision of Funds shall comply with the same regulations on financial supervision of wholly state-owned enterprises, Decree No. 147/2020/ND-CP and this Circular.

3. In addition to signs of financial insecurity specified in regulations on financial supervision of wholly state-owned enterprises, a Fund shall be considered financially insecure if it encounters one of the following circumstances:

a) The ratio of bad debts to total outstanding debts of loans is higher than 50%;

b) The ratio of bad debts to total investment is higher than 80%.

Article 16. Evaluation of performance

1. Operating performance of a Fund shall be evaluated and ranked in accordance with Clause 2 Article 42 of Decree No. 147/2020/ND-CP by means of comparison between its actually achieved performance and the criteria for the Fund’s financial plan assigned by the provincial People's Committee. These criteria are assigned to the Fund in writing by provincial People's Committee by April 30 of the planning year and shall be kept unchanged during the planning period (except cases of force majeure events). To be specific:

a) Regarding the revenue and expense difference and the ratio of the revenue and expense difference to the owner's equity (criterion 2): the revenue and expense difference shall be determined after deducting corporate income tax (if any); the owner's equity shall be the average owner’s equity in the year.

b) Regarding the compliance with regulations of laws on investment, management and use of capital, fulfillment of obligations to state budget, regulations on financial statements and reports serving financial supervision (criterion 4): a Fund is considered compliant with laws, regulations and policies if it has strictly and fully complied with regulations without any violations, omission, late or partial implementation of regulations. These violations include those committed by the Fund, or any individual who acts in the name of the Fund or the Fund’s executives.

2. The criteria specified in Clause 2 Article 42 of Decree No. 147/2020/ND-CP are evaluated adopting the following methods:

a) Method for evaluation of revenue and other incomes (criterion 1) and the revenue and expense difference and the ratio of the revenue and expense difference to the owner's equity (criterion 2):

- A Fund is given “A” rating if the achieved values are equal to or higher than the planned ones;

- A Fund is given “B” rating if the achieved values are lower than, but not lower than 90%, of the planned ones;

- A Fund is given “C” rating if the achieved values are lower than 90% of the planned ones.

b) Method for evaluation of the ratio of bad debts to total outstanding debts of loans (including direct loans and syndicated loans) and ratio of bad debts to total investment (criterion 3):

- A Fund is given “A” rating if the achieved ratios are lower than the planned ones;

- A Fund is given “B” rating if the achieved ratios are equal to the planned ones;

- A Fund is given “C” rating if the achieved ratios are higher than the planned ones.

c) Method for evaluation of the compliance with regulations of laws on investment, management and use of capital, fulfillment of obligations to state budget, regulations on financial statements and reports serving financial supervision (criterion 4):

- A Fund is given “A” rating if meeting all of the following requirements:

+ In the ranking year, the Fund is not facing any penalties imposed by competent authorities for understatement of tax amounts payable or overstatement of tax amounts eligible for exemption, reduction, refund or non-collection or tax evasion.

+ It is not reminded in writing or given more than 01 written reminder by the provincial People's Committee/the financial authority of its invalid or late submission of any of reports serving the financial supervision, report on evaluation of operating performance or financial statements.

- A Fund is given “B” rating if it falls into one of the following circumstances:

+ In the evaluation year, the Fund incurs administrative penalties imposed by competent authorities for not more than 01 violation concerning the understatement of tax amounts payable or overstatement of tax amounts eligible for exemption, reduction, refund or non-collection or tax evasion.

+ It is given 02 written reminders by the provincial People's Committee/the financial authority of its invalid or late submission of any of reports serving the financial supervision, report on evaluation of operating performance or financial statements.

- A Fund is given “C” rating if it falls into one of the following circumstances:

+ In the evaluation year, the Fund incurs administrative penalties imposed by competent authorities for 02 different violations, or more, concerning the understatement of tax amounts payable or overstatement of tax amounts eligible for exemption, reduction, refund or non-collection or tax evasion; or for its tax evasion as defined in the Government’s regulations on administrative penalties for violations against regulations on tax and invoices.

+ It is given 03 written reminders, or more, by the provincial People's Committee/the financial authority of its invalid or late submission of any of reports serving the financial supervision, report on evaluation of operating performance or financial statements.

+ During their performance of tasks, a Fund’s executive commits violations against regulations on investment, management and use of capital, obligations to state budget, preparation of financial statements and reports serving financial supervision according to announcement or conclusion given by competent authorities.  Each violation committed by the Fund’s executive shall be once included in the evaluation of the Fund.

- Violations against tax procedures shall not be considered when carrying out the evaluation of Fund.

3. Rating of Funds

a) A Fund is rated “A” if it has no criterion rated "C", and has both criterion 1 and criterion 2 specified in Point a, Point b Clause 2 Article 42 of Decree No. 147/2020/ND-CP rated “A”.

b) A Fund is rated “C” if it has criterion 1 rated "C” or remaining criteria specified in Clause 2 Article 42 of Decree No. 147/2020/ND-CP rated “C”.

c) A Fund is rated “B” if it is rated neither “A” nor “C”.

4. The report on evaluation of performance of a Fund must be ratified by the Fund’s Executive Board and submitted to the provincial People's Committee for approval.

Article 17. Assessment and ranking of a Fund’s executives

1. A Fund’s executives shall be annually assessed and ranked according to the criteria specified in Clause 4 Article 42 of Decree No. 147/2020/ND-CP. The Fund’s executives shall be ranked into 04 levels as follows: Excellent, good, complete and incomplete performance of assigned tasks.

2. Authority competent to carry out evaluation of a Fund's executives shall comply with the Fund’s Charter on organization and operation, and local delegation of power to manage officials.

3. Procedures and criteria for assessment of a Fund’s executives shall comply with the same regulations on assessment of executives of wholly state-owned enterprises and local regulations on assessment of officials.

Chapter III

RESPONSIBILITIES OF RELEVANT ORGANIZATIONS

Article 18. Responsibilities of Ministry of Finance

Consolidate and assess the implementation and compliance with policies to revise mechanisms for financial management, supervision and evaluation of performance of Funds in accordance with this Circular.

Article 19. Responsibilities of provincial People’s Committees

1. Direct and supervise Funds and their Executive Boards in implementation of mechanisms for financial management, supervision and evaluation of performance of Funds in accordance with this Circular.

2. Consider giving approval for changes in charter capital of Funds as prescribed in Article 3 of this Circular.

3. Consider giving approval for reports on evaluation of performance of Funds; reports on revenue and expense differences of Funds; contributions to development investment fund, financial reserve fund, reward fund for executives, and reward and welfare funds.

4. Organize operational and financial inspections of Funds.

Article 20. Responsibilities of Fund’s Executive Boards

1. Receive, manage and use funding derived state budget and other sources allocated by the State to their Funds in an effective manner; submit plans for adjustment of charter capital of Funds to provincial People's Committees.

2. Promulgate regulations on management of investment, construction, procurement and management of fixed assets; regulations on capital mobilization; lending regulations; regulations on management of investments made under contracts or investment projects; regulations on management of investments in establishment of business entities, contributions to, purchased shares and stakes in business entities; regulations on entrustment and other regulations as prescribed in this Circular.

3. Submit reports on evaluation of performance of Funds; reports on revenue and expense differences of Funds; contributions to development investment fund, financial reserve fund, reward fund for executives, and reward and welfare funds to provincial People's Committees.

4. Consider giving approval for information to be disclosed of Funds as prescribed in Article 14 of this Circular.

Article 21. Powers and responsibilities of a Fund

1. Comply with regulations on financial management, supervision and evaluation of performance provided herein and relevant legislative documents.

2. Prepare annual reports and carry out annual evaluation and rating of the Fund in accordance with regulations of law.

3. Promulgate its operational procedures on the basis of Government’s regulations in force and operating regulations issued by the Fund’s Executive Board.

Chapter IV

IMPLEMENTATION

Article 22. Effect

1. This Circular comes into force from November 20, 2021 and applies from the financial year 2021.

2. This Circular supersedes the Circular No. 28/2014/TT-BTC dated February 25, 2014 providing mechanisms for financial management of provincial development investment funds, the Circular No. 42/2014/TT-BTC dated April 08, 2014 promulgating sample Charter of provincial development investment funds and Article 12 of the Circular No. 84/2020/TT-BTC dated October 01, 2020 providing amendments to regulations on periodic reporting within the jurisdiction of the Minister of Finance in the field of finance and banking.

Article 23. Implementation organization

1. Funds shall formulate and submit regulations specified in Article 4 of this Circular to their Executive Boards for promulgation within 6 months from the effective date of this Circular.

2. With regard to HFIC:

a) Determination of an increase in HFIC’s charter capital to perform functions of a Fund shall be carried out according to Clause 2 Article 3 of this Circular. Other contents about the increase in HFIC’s charter capital shall comply with regulations applicable to wholly state-owned enterprises.

b) HFIC shall formulate and submit its Board of Members for promulgation of regulations on capital mobilization; lending regulations; regulations on management of investments in establishment of business entities, contributions to, purchased shares and stakes in business entities; regulations on management of investments made under contracts or investment projects; and regulations on entrustment as prescribed in Clause 3, Clause 4, Clause 5, Clause 6 and Clause 7 Article 4 of this Circular.

c) HFIC shall record its revenues, other incomes and expenses incurred during the period in association with lending, investment, offer and acceptance of entrustment in accordance with Article 5,  Article 6, Article 7 and Article 8 of this Circular.

d) HFIC shall prepare, present and send the reports specified in Article 12 of this Circular (excluding reports on revenue and expense differences).  Its annual financial statements must be accompanied by reports on evaluation of its performance of tasks and functions as a Fund as prescribed in Article 65 of the Law on state budget and its amending and superseding documents (if any).

dd) HFIC shall manage and use its capital and assets, manage revenues, expenses and distribute profits, perform accounting, audit and reporting tasks, and carry out supervision and evaluation of its performance in accordance with regulations applicable to wholly state-owned enterprises and the provisions in Point a, Point b, Point c and Point d of this Clause.

3. The Chief of Office of the Ministry of Finance, Director of the Department of Banking and Financial Institutions, heads of relevant units affiliated to the Ministry of Finance, Chairpersons of provincial People’s Committees, provincial development investment funds, HFIC and relevant organizations and individuals are responsible for the implementation of this Circular./.