Classification of Financial Autonomy Levels of Public Service Providers

Article 9 of Decree 60/2021/ND-CP (Effective from August 15, 2021) provides for the classification of financial autonomy levels of public service providers as follows:

1. Public service providers self-financing recurrent and capital expenditures (hereinafter referred to as Group 1 units) are those meeting one of the following conditions:

   a) The unit has a self-financing rate for recurrent expenditures determined according to the plan specified in Article 10 of this Decree to be equal to or greater than 100%; the self-financing rate for capital expenditures is equal to or greater than the depreciation and amortization of the unit's fixed assets.

   The self-financing rate for capital expenditures is determined to include the following sources:

   - The projected amount allocated to the Development Fund for professional activities in the plan year or the average of the preceding 5 years;

   - The fee revenue retained for recurrent expenditures not assigned for autonomy as prescribed.

   b) The unit provides public service activities without using the state budget, with public service prices set according to market mechanisms, including full depreciation of fixed assets and accumulation for investment expenditures.

2. Public service providers self-financing recurrent expenditures (hereinafter referred to as Group 2 units) are those meeting one of the following conditions:

   a) The unit has a self-financing rate for recurrent expenditures determined according to the plan specified in Article 10 of this Decree to be equal to or greater than 100% and has not yet self-financed investment expenditures from the Development Fund for professional activities, fee revenues retained for expenditures according to the law on fees and charges, other lawful financial sources as prescribed by law;

   b) The unit provides public service activities included in the list of public services using the state budget, ordered or tendered by the State to provide public services at fully costed prices (excluding depreciation of fixed assets).

3. Public service providers partially covering their own recurrent expenditures (hereinafter referred to as Group 3 units) are those having a self-financing rate for recurrent expenditures determined according to the plan specified in Article 10 of this Decree from 10% to less than 100%, ordered or tendered by the State to provide public services at prices not fully costed, and classified as follows:

   a) Units self-financing from 70% to less than 100% of recurrent expenditures;

   b) Units self-financing from 30% to less than 70% of recurrent expenditures;

   c) Units self-financing from 10% to less than 30% of recurrent expenditures.

4. Public service providers whose recurrent expenditures are fully funded by the State (hereinafter referred to as Group 4 units) include:

   a) Public service providers with a self-financing rate for recurrent operational expenditures determined according to the plan specified in Article 10 of this Decree to be less than 10%;

   b) Public service providers without any professional revenue sources.

Sincerely!