Long An IDICO Construction Investment Joint Stock Company is an enterprise with 51% state ownership, currently preparing the project settlement report to present to the company's board of directors for project closure.
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The project has a total investment cost including expenses: compensation, design consultancy, infrastructure construction costs, sales costs, house construction costs for sale... However, the company only executed up to the infrastructure construction stage, not carrying out house construction for sale.
Through the System for Receiving and Responding to Business Grievances, Long An IDICO Investment and Construction Joint Stock Company inquired, based on Circular No. 09/2016/TT-BTC, if the company's board of directors (with consensus capital from both the state and private sectors) selects the auditing option for each item and then self-reports as completing the project without auditing the final settlement report according to the approved total investment, is it permissible?
Regarding this issue, the Ministry of Finance has the following opinion:
In Clause 8, Article 4 of the Enterprise Law No. 68/2014/QH13 dated November 26, 2014, it is stipulated: "State-owned enterprises are enterprises in which the State holds 100% of charter capital."
In Article 1 of Circular No. 09/2016/TT-BTC dated January 18, 2016, of the Ministry of Finance regulating the final settlement of completed projects using state capital:
"1. Scope of adjustment:
a) This Circular provides for the final settlement of investment projects using state capital, upon completion or permanent cessation.
State capital includes: public investment capital, credit capital guaranteed by the Government of Vietnam, loans secured by state assets, development investment capital of state-owned enterprises...
- Subjects of application:
This Circular applies to agencies, organizations, and individuals related to the final settlement of completed projects using state capital…".
The company's query did not specify the origin of the project's capital; therefore, based on the above regulations, if the project uses state capital, the final settlement of the completed project is carried out as per the stipulations in Circular No. 09/2016/TT-BTC.
In case the project does not use state capital as stipulated in Clause 3, Article 1 of Circular No. 09/2016/TT-BTC, the enterprise can apply the regulations in this Circular to prepare and audit the final settlement report for the completed project.
In Article 10 of Circular No. 09/2016/TT-BTC, it is stated: "In cases where the person approving the final settlement requires the audit of the final settlement report of the completed project before appraisal and approval; the project owner organizes the selection of an auditing contractor as per the legal regulations on bidding, signs an audit contract of the final settlement report of the completed project in accordance with the legal regulations on contracts. The project owner, independent auditing contractor, and related units follow the provisions in Clauses 2 and 3 of this Article."
Based on the above regulations, for projects specified in Points b and c, Clause 2, Article 37 of the Law on Independent Audit, an independent audit must be hired to audit the final settlement report of the completed project before presenting it to the competent authorities for appraisal and approval.
For other projects, the hiring of an audit and determining the scope and content of the independent audit to audit the final settlement report of the completed project falls under the authority of the person approving the final settlement.
Source: the Government of Vietnam Newspaper
