Thông tư 118/2007/TT-BTC

CIRCULAR

GUIDING THE MANAGEMENT AND USE OF INVESTMENT PROJECT MANAGEMENT FUNDS OF STATE BUDGET-FUNDED PROJECTS

Pursuant to the Governments Decree No. 77/2003/ND-CP of July 1, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
Pursuant to the Governments Decree No. 60/2003/ND-CP of June 6, 2003, detailing and guiding the implementation of State Budget Law No. 01/2002/QH11;
Pursuant to the Governments Decree No. 99/2007/ND-CP of June 13, 2007, on the management of work construction investment expenses,
The Ministry of Finance guides the management and use of investment project management funds of state budget-funded projects as follows:

Part I

GENERAL PROVISIONS

1. Investment project management funds cover all necessary expenses used by investors and project management units (PMUs) for performing their project management tasks throughout the project investment duration.

2. Subjects and scope of regulation: Investors and PMUs that manage state budget-funded projects, including projects funded with official development assistance (ODA) or government bond capital, shall manage and use investment project management funds in accordance with the current provisions of law and specific guidance in this Circular, ensuring that those funds are used for proper purposes in a thrift and efficient manner.

3. Projects capitalized at under VND 7 billion each are not subject to formulation and approval of separate estimates of project management funds but must use these funds according to Point 3 (3.2), Section IV of the Part Specific provisions of this Circular within the project management expense norms set by investment deciders. The settlement of project management expenses shall be made together with the settlement of expenses of the completed project.

4. Consulting enterprises that perform project management under consultancy contracts are not governed by this Circular.

Part II

SPECIFIC PROVISIONS

I. GROUPING OF INVESTMENT PROJECT MANAGEMENT

1. Group I includes PMUs which are set up-under decisions of ministers, heads of ministerial-level agencies, heads of other central agencies, heads of government-attached agencies or provincial/ municipal Peoples Committee presidents in order to manage important national projects and group-A large-scale projects; those PMUs have the independent legal person status and staff salaried from project management funds.

2. Group II includes investors, in case no PMUs are set up, and PMUs other than those of group I; staff of PMUs of this group are not salaried from project management funds.

II. SPECIFIC REGULATIONS APPLICABLE TO PROJECT MANAGEMENT GROUPS

1. For group I

1.1. Group-I PMUs shall implement the accounting regime applicable to investors according to the States current regulations.

1.2. Annually, based on the assigned investment capital plan, a PMU shall make annual estimates of project management expenses and request the finance agency of the PMU establishment-deciding authority to evaluate and approve them. The time limit for making and approving annual estimates of project management expenses starts from the time of issuance of the investment capital plan allocation decision and expires on January 31 of a plan year. The decision approving the annual estimate of project management expenses shall be sent to the PMU and the investment capital-paying agency for compliance.

a/ In case the PMU is newly set up or at the beginning of a plan year, if the decision approving the annual estimate of project management expenses is not yet issued, the PMU may request in writing the finance agency of the PMU establishment-deciding authority and the investment capital-paying agency to advance state budget funds to cover expense items from 1 thru 9 in the annual estimate of project management expenses specified at Point 3(3.1) of Section IV, including:

- Salaries and amounts of salary nature, based on actual salary tables, excluding amounts calculated on the basis of adjustment coefficients for increasing salaries;

- Payments for public services and procurement of office supplies sufficient for task performance.

The PMU shall carry out procedures for payment and refund of the advance amounts immediately after the annual estimate of project management expenses is approved; the advance duration must not exceed 2 months.

b/ In case the PMU is allocated by a competent authority additional funds for achieving a certain target or increasing incomes for project managers, it may use such funds according to the competent authority’s decision.

1.3. At the end of a plan year, the PMU shall make the annual settlement of project management expenses and send it to the finance agency of the PMU establishment-deciding authority no later than February 28 of the subsequent year for evaluation and approval.

1.4. When a project is completed and put into operation, the PMU shall synthesize annual settlements of project management expenses and the report on the settlement of expenses of the completed project in order to submit them to a competent authority for approval.

2. For group II

2.1. After the projects capital plan is approved and the execution of the project is deployed, the PMU or the investor, in case no PMU is set up, shall prepare an estimate of project management expenses for the whole execution duration of the project, but not on a yearly basis, then submit it to the investor for evaluation and approval. The decision approving the estimate of project management expenses shall be sent to the PMU and the investment capital-paying agency for compliance.

2.2. When a project is completed and put into operation, the PMU or the investor, in case no PMU is set up, shall make the settlement of project management expenses and the report on the settlement of expenses of the completed project and submit them to a competent authority for approval.

3. Control of the payment of project management expenses

3.1. The investment capital payment-controlling agency shall control the payment of project management expenses according to the approved estimates, current financial management regulations and specific provisions of this Circular.

3.2. In the course of using project management funds, the investor (the PMU) may adjust on its own initiative expenses in the estimate of project management expenses (written adjustment is not required) without increasing the total value of the approved estimates.

4. Handling of proceeds from the sale of bidding dossiers

The selling prices of bidding dossiers comply with the bidding law; bidding organization expenses must not exceed the proceeds from the sale of bidding dossiers; after paying necessary expenses for organizing biddings, the investor (the PMU) shall remit into the state budget the remainder of the proceeds from the sale of bidding dossiers.

5. Procurement and use of vehicles

Separate cost estimates must be made for the procurement of cars (if any) for project management work and submitted to a competent authority for decision in accordance with the Prime Ministers Decision No. 59/2007/QD-TTg of May 7, 2007, promulgating the Regulation on criteria, norms and management and use of vehicles applicable to state agencies, public non-business units and state companies. The investor (the PMU) may not lease or lend the projects assets.

III. PROJECT MANAGEMENT FUNDS

1. Investment projects management funds are deducted from the projects investment capital.

2. Norms for deduction of project management funds:

2.1. For work construction investment projects, norms for deduction of project management funds are determined according to investment deciders regulations on the basis of management expense norms publicized by the Ministry of Construction for work construction investment projects.

2.2. For projects without construction and equipment expenses or with total construction and equipment expenses accounting for less than 60% of the projects total investment capital, norms for deduction of project management funds are determined according to investment deciders regulations.

2.3. For ODA projects: If specific levels of project management funds are determined in projects agreements, these levels shall be complied with; if not, the levels of project management funds shall be determined in accordance with Point 2 (Items 2.1 and 2.2) of Section III.

IV. ESTIMATION OF PROJECT MANAGEMENT FUNDS

1. Bases for the estimation of project management expenses

The investment decision;

The PMU establishment decision;

The investment capital plan allocation decision;

The staff salary table (for group-I PMUs).

2. Determination of total project management expenses

2.1. The total investment capital of the approved project and norms set by the investment decider serve as bases for the determination of total project management expenses(GQLDA), made according to attached form No. 01/DT.QLDA (not printed herein);

2.2. To determine the value of expenses for construction investment consultancy(GTV) performed by the investor (the PMU) itself:

2.3. To determine the value of expenses within project management expenses (GQLDA-TV) for jobs to be performed by hired consultants:

2.4. To determine the value of expenses within project management expenses (GQLDA-KTH) for jobs not required to be performed (if any) under the project thanks to its specific characteristics:

2.5. Total project management expenses payable by the investor (the PMU) throughout the project management duration, GQLDA(CDT), are determined according to formula (1) below, serving as the maximum level for the estimation of project management expenses of the investor (the PMU).

(1) GQLDA(CDT) = GQLDA + GTV - GQLDA-TV - GQLDA-KTH

3. Contents of estimates of project management expenses

3.1. For group-I PMUs:

Based on the project execution progress according to plan, the PMU shall allocate project management expenses (GQLDA(CDT)) already determined in form No. 01/DT.QLDA (not printed herein), for years of project execution in order to include them in annual estimates of project management expenses. An annual estimate of project management expenses covers:

(1). Salaries, including grade- and rank-based salaries according to allocated salary funds, and long-term contract wages, which are paid to individuals salaried by projects under competent authorities decisions according to the States current regulations on salary regimes.

The determination of salary funds for project managers must be based on state payrolls approved by a competent authority. In case of cutting down other expenses, the PMU may apply adjustment coefficients for increasing laborers incomes according to current regulations (the Prime Ministers Decision No. 198/1999/QD-TTg of September 30, 1999, on salaries for construction management units, and the Labor, War Invalids and Social Affairs Ministry’s Circular No. 32/1999/TT-LDTBXH of December 23, 1999, guiding the implementation of Decision No. 198/1999/QD-TTg).

(2). Salary-based allowances, including position-based, responsibility-based, area-based, attraction, cost-of-living, extra-time work, hazard, danger, itinerant job and special branch allowances, which are paid to individuals salaried by projects under competent authorities decisions according to current regulations applicable to state agencies and public non-business units.

(3). Deductions for payment of social insurance and health insurance premiums, trade union dues, and other deductions applicable to individuals salaried by projects under competent authorities decisions according to current regulations applicable to state agencies and public non-business units.

(4). Bonuses, including regular bonus and irregular bonus (if any), according to current regulations applicable to state agencies and public non-business units.

(5). Welfare benefits, including payments for paid leaves and other leaves according to regulations; regular and irregular difficulty allowances according to current regulations applicable to state agencies and public non-business units.

(6). Extra-time work pays, applicable only to individuals not entitled to extra-time work allowances specified at Item (2) under Point 3 (3.1) of Section IV and individuals whose extra-work time can be determined according to workday-marking tables, the provisions of the Labor Code regarding work time and rest time, and guiding documents.

(7). Payments for working-trip allowances, which comply with current regulations applicable to state agencies and public non-business units.

(8). Expenses for procurement of office supplies, including office equipment, file cabinets, furniture, books and documents for professional operations, and stationeries according to current regulations applicable to state agencies and public non-business units.

(9). Expenses for public services, including charges for electricity and water, telephone, post, fax, environmental sanitation, and other service charges according to current regulations applicable to state agencies and public non-business units.

(10). Expenses for procurement of assets used for management work, including fire protection devices, computers and computer software.

(11). Expenses for asset repair.

(12). Hire expenses, including hire of vehicles, working offices, support tools, and experts.

(13). Expenses for professional conferences and training courses according to current regulations applicable to state agencies and public non-business units.

(14). Expenses for visits (if any), including airfare, meal and lodging payments, pocket money, etc., according to current regulations applicable to state agencies and public non-business units.

(15). Contingencies, which are equal to 10% of the estimated fund.

3.2. For group-II investors (PMUs):

Based on total project management expenses payable by the investor (the PMU) (GQLDA(CDT)) already determined in form No. 01/DT.QLDA (not printed herein), the PMU shall make estimates of project management expenses for the whole project execution duration, but not on a yearly basis. An estimate of project management expenses covers:

- Expenses listed at Items (6) thru (11) of group I above;

- Project management allowances, which are paid only for those directly performing project management jobs, including PMU staff members and investors staff members. The PMU shall, based on the duration of each staff members management job and specific project management funds, calculate the percentage of allowances for staff members. The monthly project management allowance for an individual must not exceed 50% of the total of his/ her monthly salary and salary-based allowance.

- Contingencies, which are equal to 10% of the estimated fund.

4. Dossier of application for approval of an estimate of project management expenses comprises:

- A written application for approval;

- The PMU establishment decision; the investment decision; the investment capital plan allocation decision;

- List of calculated project management expenses of the investor (the PMU) (form No. 01/DT-QLDA not printed herein);

- For group-I PMUs: Annual estimates of project management expenses (form No. 02A/DT.QLDA, not printed herein); staff salary list (annex No. F02A/DT.QLDA. not printed herein);

- For group-II investors (PMUs): Estimates of management expenses for the whole project (form No. 02B/DT-QLDA, not printed herein).

V. EVALUATION AND APPROVAL OF ESTIMATES OF PROJECT MANAGEMENT EXPENSES

1. Order of evaluating estimates of project management expenses:

- Evaluation of jobs, calculation methods and results in the list of project management expenses of the investor (the PMU) according to form No. 01/DT.QLDA (not printed herein);

- Evaluation of the rationality of the allocation of annual expenses and expenses for the plan year (for group-I PMUs);

- Evaluation of the consistency of expenses in the estimates with current criteria, norms and financial regulations of the State.

2. The head of the finance agency of the PMU establishment-deciding authority shall approve annual estimates of group-I PMUs according to form No. 03A/QD.QLDA (not printed herein). The investor shall approve estimates of group-II PMUs according to form No. 03B/QD.QLDA (not printed herein).

3. The cost estimate-approving decision shall be sent to the investor (the PMU), the investment capital-paying agency and relevant agencies.

4. The time limit for evaluating and approving cost estimates of project management expenses is 20 working days from the date of receipt of a full estimate dossier according to regulations.

VI. SETTLEMENT OF PROJECT MANAGEMENT EXPENSES

1. A dossier of settlement of annual project management expenses for group-I PMUs comprises:

- A written application for approval of the estimate;

- A report on the settlement of project management expenses in the plan year, made according to form No. 01/QT.QLDA (not printed herein);

- A comparison list of data on the payment of project management expenses, made according to form No. 04/QT.QLDA (not printed herein);

- Documents on expenses arising in the year.

2. Dossier of settlement of project management expenses upon project completion

2.1. For group I:

- A general list for settlement of project management expenses, made according to form No. 02/QT.QLDA (not printed herein).

- Copies of decisions approving the projects annual estimates of project management expenses;

- A report on the settlement of project management expenses in the final year, made according to form No. 01/QT.QLDA (not printed herein);

- A comparison list of data on the payment of project management expenses, made according to form No. 04/QT.QLDA (not printed herein);

- Documents on expenses arising in the final year.

2.2. For group II:

- A report on the settlement of project management expenses, made according to form No. 03/QT.QLDA (not printed herein);

- A comparison list of data on the payment of project management expenses, made according to form No. 04/QT.QLDA (not printed herein):

- Documents on expenses arising in the course of project execution.

3. Verification of the settlement of project management expenses

- Verification of the consistency of settlement data and the approved estimates;

- Examination of expense documents, ensuring their legality, rationality, validity, and observance of the States current expense regulations;

- Consideration of advance amounts at year-end (if any).

4. Decision approving the settlement of project management expenses

4.1. A decision approving the settlement of project management funds in a plan year for group-I PMUs is similar to a decision approving the estimate of project management expenses in a plan year, made according to form No. 03A/QT.QLDA (not printed herein) and shall be sent to the investor (the PMU), the investment capital-paying agency and relevant units.

4.2. The settlement of project management funds for group-II investors (PMUs) shall be approved under a decision approving the settlement of expenses of the competed project.

VII. EXAMINATION

1. Finance-investment managing units under ministries, branches and localities shall plan the examination of the management and use of project management funds by investors (PMUs) under their management in order to rectify in time wrongdoings in the course of project management.

2. Quarterly, investors (PMUs) shall examine the management and use of investment project management funds at their units, thereby drawing experience for the efficient management.

VIII. RESPONSIBILITIES OF CONCERNED UNITS

1. Responsibilities of investors:

- To urge PMUs to make estimates and settlement reports, submit for approval estimates and settlement of project management expenses according to the time limit and contents specified in this Circular;

- To evaluate and approve estimates of project management expenses (for group-II PMUs) according to the time limit and contents specified in this Circular.

2. Responsibilities of PMUs:

- To make estimates and settlement reports, submit for approval estimates and settlement of project management expenses according to the time limit and contents specified in this Circular;

- To take full responsibility for the management and use of project management funds, the accuracy of data and the legality of dossiers submitted for approval.

3. Responsibilities of evaluating and approving agencies:

- To take responsibility for the results of evaluation of estimates, the verification and approval of the settlement of project management expenses based on dossiers sent by PMUs;

- In the course of verifying settlements, to revoke or claim compensations for improper expenses and request PMUs to remit into the state budget collected amounts according to regulations.

4. Responsibilities of controlling and paying agencies:

- To control and pay investment project management expenses according to approved estimates in accordance with the States current financial management regulations and specific provisions of this Circular;

- To compare and certify paid amounts listed in the reports on the settlement of project management expenses and, at the same time, give comments, assessments and proposals concerning investors observance to cost estimate-verifying and -approving agencies.

5. Responsibilities of ministries, branches and localities:

- To regularly examine the management and use of investment project management funds of state budget-funded projects under their management; to take measures to handle according to law individuals or units that commit violations in managing or using investment project management funds.

Part III

ORGANIZATION OF IMPLEMENTATION

1. This Circular takes effect 15 days after its publication in CONG BAO and replaces the Finance Ministry’s Circular No. 98/2003/TT-BTC of October 14, 2003, guiding the management and use of investment project management funds from the state budget.

2. Investors and PMUs that have approved estimates of project management expenses before the effective date of this Circular shall continue to apply the approved estimates till the end of the plan year, for group-I PMUs, or till the project completion, for group-II investors (PMUs).

3. Specialized PMUs and regional PMUs not yet transformed or dissolved under the Construction Ministry’s Circular No. 02/2007/TT-BXD of February 14, 2007, guiding a number of contents related to the formulation, evaluation and approval of work construction investment projects; construction licensing and work construction investment management provided for in the Governments Decree No. 16/2005/ND-CP and Decree No. 112/2006/ND-CP shall continue to comply with this Circulars provisions applicable to group-I PMUs.