CIRCULAR

GUIDING THE IMPLEMENTATION OF THE REGULATION ON ORGANIZATION OF THE MOBILIZATION, MANAGEMENT AND USE OF THE PEOPLE�S VOLUNTARY CONTRIBUTIONS FOR THE CONSTRUCTION OF INFRASTRUCTURE OF COMMUNES AND DISTRICT TOWNSHIPS

Pursuant to the Government’s Decree No. 24/1999/ND-CP of April 16, 1999 promulgating the Regulation on organization of the mobilization, management and use of the peoples voluntary contributions for the construction of infrastructure of communes and district townships.
In order to ensure the principle of democracy and voluntarism in the mobilization of the peoples contributions for investment in the construction of infrastructure projects in communes and district townships (hereafter collectively referred to as communes); and that the mobilization is carried out in suitability with the peoples contribution capability, and the mobilized contributions are managed and used in an effective and transparent manner, the Ministry of Finance hereby guides a number of regulations on mobilization target objects, contribution forms, mobilization levels and organizing process, management and use of the peoples contributions for investment in infrastructure projects, as follows:

I. MOBILIZATION TARGET OBJECTS, CONTRIBUTION FORMS AND MOBILIZATION LEVELS:

1. Determination of mobilization target objects:

Basing themselves on the total maximum level of mobilization of the people’s contributions, the objects considered for contribution reduction or exemption as defined by the People’s Councils of the provinces and centrally-run cities, the characteristics and use purposes of projects to be invested, and the demand for capital to be mobilized for such projects, the commune People’s Committees shall determine the mobilization target objects and calculate contribution level for each mobilization target object. The contribution level shall be calculated for each family household and based on one of the following criteria:

- The number of family members;

- The acreage of cultivation land;

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The selection of rational criteria for the calculation of contribution level for each object shall be directly discussed and decided by the people.

2. Contribution forms:

2.1. Based on the construction characteristics and actual conditions of each project, the people may make their contributions in the following forms: in cash, in kind or workdays.

2.2. The mode of converting contributions into accountable value for accounting:

The determination of rates applicable to the conversion of contributions in kind or workdays into cash for accounting purpose shall be based on the conversion rates discussed and unanimously agreed upon by the people.

For contributions in kind or workdays, the communes shall have to set accounting books for separate monitoring.

2.3. In cases where the prices of contributions in kind or workdays at the time such contributions are made are 20% higher or lower than the conversion rates, the commune People’s Committees shall have to rally the people to discuss and reach a unanimity on prices for conversion of contributions in kind and workdays into cash.

3. Determination of contribution level for each object:

3.1. Determination of the demand for capital to be mobilized:

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b/ The demand for capital to be mobilized as the voluntary contributions of the people in a commune shall be determined equal to the total capital demanded for investment in the construction of projects in such commune (provided that the projects’ cost estimates have already been directly discussed and decided by the people) minus the total of other capital sources available for investment in the construction of such projects, such as:

- The State budget: supports from the higher-level budget or from the commune budget;

- Financial aids or direct assistance of organizations and individuals at home and abroad for investment in projects’ construction;

- Other capital sources.

3.2. Calculation of contribution level for each object: The contribution level for each object shall be calculated and determined as follows:

a/ Calculation of the total capital demanded to be mobilized from the people’s contributions for investment in projects’ construction shall comply with Point b, Clause 3.1.

b/ Determination of the capital demanded to be mobilized in each period shall conform with the construction tempo and the schedule for mobilizing capital for investment in projects’ construction. The determination shall be based on the following:

- The tempo of the projects’ construction (on the basis of projects’ construction schedule and actual construction situation);

- The actual situation of mobilization, cash balance and stock of materials and capital for investment in projects’ construction.

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d/ The calculation and determination of specific contribution level for each object must be conducted in an open and democratic manner ensuring the equality and reasonability. Basing themselves on the contribution assignment criteria specified in Section I, Clause 1; and the objects eligible for reduction or exemption as well as the reduction levels for such objects, the communes shall predetermine the calculation method and contribution level for each object, to be discussed and decided by the people.

II. ORGANIZING THE MOBILIZATION, MANAGEMENT AND USE OF THE PEOPLE’S CONTRIBUTIONS FOR INVESTMENT IN PROJECTS:

1. Organizing the mobilization:

1.1. Basing themselves on the mobilization guidelines and levels already approved, the presidents of the commune People’s Committees shall direct the village or hamlet chiefs to coordinate with the Front Working Committees in their villages or hamlets in organizing the mobilization of the people’s contributions for the construction of infrastructure projects in their communes.

The communes shall have to notify their inhabitants of the contribution time limit, places and levels applicable to each object in each mobilization.

1.2. The commune finance committees shall have to collect and conduct the accounting of the collection, management and use of the people’s contributions for the construction of local projects according to the provisions of the legislation on the current regime of commune budget accounting and the Ministry of Finance’s regulations guiding the management of commune budgets, such as: Circular No. 01/1999/TT-BTC of January 4, 1999 guiding the management of budget revenues and expenditures in communes, district townships and wards; Circular No. 76-TC/DTPT of November 1st, 1997 guiding the management and allocation of capital construction investment funds included in district and commune budgets; and Circular No. 47/1999/TT-BTC of May 5, 1999 guiding the management and allocation of investment capital for infrastructure projects in mountainous, deep-lying and remote communes meeting with great difficulties.

1.3. In cases where the commune People’s Committees authorize the village or hamlet chiefs to collect the people’s contributions:

- The village or hamlet chiefs shall get receipts from the commune finance committees to effect the collection of the people’s contributions; the commune committees shall have to guide the village or hamlet chiefs in the management and use of collection receipts and vouchers;

- The village or hamlet chiefs shall have to remit the collected amounts of people’s contributions to the commune finance committees right on the date such contributions are collected, so that the latter can promptly account such people’s contributions.

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2. Management and use of the people’s contributions for investment in the construction of infrastructure projects in communes and district townships must strictly comply with the provisions of the current legislation on budget and capital construction investment management.

3. Expenses for bidding solicitation, hiring of project designing and organization of project appraisal, pre-acceptance inspection and a number of other expenses already discussed and unanimously agreed upon by the people shall be accounted into the projects’ value. The estimating, management and use of such expenses must comply with the current law provisions, and at the same time be discussed and unanimously agreed upon by the people.

4. Compensations for damage and site clearance:

In the course of construction of projects, if damage is caused to such people’s property as cultivation crops, land..., the commune People’s Committees shall have to:

4.1. Coordinate with the local Fatherland Front Committees and mass organizations in persuading the people to reckon such damage as voluntary contributions to the construction of projects for the common interest;

4.2. In cases of heavy damage, the commune People’s Committees shall have to calculate and pay compensation therefor to people, and account them into the cost estimates of projects for subsequent incorporation into the total capital demanded to be mobilized and assigned to all contribution objects.

4.3. For projects that might yield revenues when they are put into use, the commune People’s Committees shall work out plans for use of such revenues to pay compensations to the damage-suffering people on the basis of agreement and unanimity of the compensation recipients.

5. Project final settlement:

5.1. Upon the completion of construction of projects, the concerned communes shall have to make the final settlement of collection and use of the people’s contributions for investment in the construction of such projects according to the following current regulations on final settlement of capital construction funds: Circular No.76-TC/DTPT of November 1st, 1997 of the Ministry of Finance guiding the management and allocation of capital construction funds included in commune and district budgets, Circular No.47/1999/TT-BTC of May 5, 1999 of the Ministry of Finance guiding the management and allocation of investment capital to infrastructure projects in mountainous, deep-lying and remote communes meeting with great difficulties.

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a/ If the revenue amount is larger than expenditure amount, the use of the difference therebetween shall be discussed and decided by the people.

b/ If the revenue amount is smaller than the expenditure amount, the people shall discuss and decide plans for offsetting the deficit along the following direction:

- Mobilization of other funding sources: the State budget of all levels, assistance from domestic and overseas organizations, ...

- Mobilization of additional contributions of the people.

6. Effecting the financial reporting and publicity:

6.1. Fifteen days after the project final settlement is approved, the commune People’s Committee shall make and send reports on the collection, management and use of the people’s contributions to the district People’s Committee, and at the same time present them at the nearest meeting of the commune People’s Council. The reports shall include:

a/ Financial report on the mobilization, management and use of contributions for the project;

b/ Report on the implementation of the project’s designing and construction cost estimates;

c/ Minutes on pre-acceptance inspection, and report on the project’s quality assessment;

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6.2. In the course of mobilizing, managing and using contributions for investment in the construction of projects, the communes shall have to implement the regime of financial publicity according to Circular No. 29/1999/TT-BTC of March 19, 1999 of the Ministry of Finance guiding the implementation of financial publicity with regard to funds having revenues from the people’s contributions, and other provisions of the current legislation on implementation of financial publicity.

7. In cases where the people in a village, hamlet, mountainous village or population community (following the same religion or belonging to a family lineage) of a commune voluntarily organize the mobilization of contributions and manage by themselves the investment of such contributions in the construction of a project in direct service of such population community’s interest, the commune People’s Committee shall have to guide the elaboration of the project’s cost estimate and final settlement, as well as the implementation of financial publicity; then make and send report to the higher-level administration in acknowledgment of the people’s contributions for investment in the construction of infrastructure in its locality.

III. IMPLEMENTATION ORGANIZATION

1. This Circular takes effect 15 days after its signing for promulgation.

2. The presidents of the People’s Committees of the provinces and centrally-run cities shall have to guide and implement the provisions of this Circular.

3. Any problem arising in the course of implementation shall be reported to the Ministry of Finance for study and solution.

FOR THE MINISTER OF FINANCE
VICE MINISTER




Tran Van Ta