What are regulations on amounts of advance disbursement of public funds using State budget in Vietnam?
What are regulations on amounts of advance disbursement of public funds using State budget in Vietnam? What are regulations on recovery of advance funding in Vietnam?
What are regulations on amounts of advance disbursement of public funds using State budget in Vietnam?
Pursuant to Clause 3, Article 10 of the Decree 99/2021/ND-CP stipulating amounts of advance disbursement of public funds using State budget in Vietnam as follows:
a) For the jobs carried out under contracts (e.g. construction contracts, contracts for execution of projects without building part or component):
Total amount of advance disbursement given upon the investor’s request shall not exceed 30% of the contract value (including any allowance). Where the higher amount of advance disbursement is needed, permission must be obtained from investment decision makers. For projects in which decisions on investment are made by the Prime Minister, the decision on the greater amount of advance disbursement may be made by Ministers, Heads of ministerial agencies or Presidents of provincial People's Committees. Makers of decisions on the amount of advance disbursement shall be legally liable for their own decisions and take control of how to use such advance disbursement legally.
b) For non-contractual jobs:
- Total amount of advance disbursement given upon the investor’s request shall not exceed 30% of the approved estimated costs of the quantities of work. Where the higher amount of advance disbursement is needed, permission must be obtained from investment decision makers. For projects in which decisions on investment are made by the Prime Minister, the decision on the greater amount of advance disbursement may be made by Ministers, Heads of ministerial agencies, Presidents of provincial People's Committees. Makers of decisions on the amount of advance disbursement shall be legally liable for their own decisions and take control of how to use such advance disbursement legally.
- The amount of advance disbursement for compensation, support and residential resettlement work is divided into the followings: advance amounts varying according to the plan and schedule of compensation, support and residential resettlement work; on-demand maximum amount of advance disbursement that does not exceed the amount specified in the plan for compensation, support and residential resettlement that is approved by competent authorities; where investors directly pay compensation, relief and residential resettlement costs, based on relevant documents and records, payments shall be made to beneficiaries; where institutional entities are in charge of the compensation, support and residential resettlement work, they must sign up for deposit accounts with regulatory payment bodies which are used for receiving advance disbursements from investors for further payment/disbursement purposes.
- The amount of advance disbursement of funds for project management work shall not exceed the estimated cost of project management and that in the budgetary year (where investors or project management authorities obtain approval of the annual estimate of project management costs from competent authorities) approved by competent authorities.
What are regulations on recovery of advance funding in Vietnam?
Pursuant to Clause 5, Article 10 of the Decree 99/2021/ND-CP stipulating recovery of advance funding in Vietnam as follows:
a) Advance funding that is recovered by payments for completed contractual quantities; amount to be recovered in each instalment, must be agreed upon with contractors, specified in contracts, and must be fully recovered when total disbursement reaches 80% of the contract value (except where greater advance is permitted by competent persons).
b) For compensation, support and residential resettlement work: After paying beneficiaries, investors shall collect evidencing documents, proceed to make payment and recover advances within 30 days from the date of payment to beneficiaries, and avoid not taking action to recover advances until the compensation, support and residential resettlement plan is fully completed.
For advance funding against general and administrative costs of compensation, support and residential resettlement work, regulatory payment bodies shall consult the annual account of these general and administrative costs approved by competent authorities to proceed to recover advance funding.
c) For project management expenses: Investors shall make a list of completed quantities (bearing their signature and stamp) and submit it to regulatory payment bodies as a basis to carry out procedures for recovery of advance funding. Investors shall not be required to submit documents evidencing payments or invoices to regulatory payment bodies, and shall be responsible for the accuracy and legitimacy of the quantities and requested payment value according to the approved cost estimate.
In case where the project management authority or the investor directly takes charge of multiple projects, on a quarterly, six-monthly and year-end basis, the investor shall prepare the distribution chart of project management expenses (completed quantities of work specified in the cost estimate) for each project for submission to regulatory payment bodies in order for the process for recovery of advances to proceed (Form No. 11/QLDA).
d) For contracts for procurement of machinery and equipment: Under contracts signed between investors and contractors, the full amount of advance funding must be recovered when quantities of work are completed as agreed upon in these contracts.
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