Breakthrough in financial mechanism for Science, Technology and Innovation Development Funds

One of the important contents of Decree No. 265/2025/ND-CP, detailing and guiding the implementation of a number of articles of the Law on Science, Technology and Innovation (S&I) on finance and investment, is to establish a complete and transparent legal framework for the formation and operation of S&T Development Funds. This is a specific financial tool to promote S&T at both central and local levels.

Strengthening the network of Science, Technology and Innovation Funds nationwide

According to the provisions of Article 16, Ministries, branches, ministerial-level agencies, Government agencies and Provincial People's Committees, based on actual conditions, can establish Science, Technology and Innovation Development Funds. These Funds will operate under a model consisting of a Management Board, a Control Board and a Fund Executive Agency, ensuring professionalism, transparency, and not increasing the existing staff of the governing body.

The Fund's Executive Board is tasked with organizing, managing, and implementing funding programs, placing orders, and supporting businesses and science and technology organizations. Notably, the Fund is not allowed to duplicate funding with other budget sources, and must ensure the principles of transparency, savings, and efficiency in the use of funds.

Expenditures for ordering and funding science, technology and innovation programs and tasks of ministries, branches and localities; financial support and loan interest support for technology application, technology transfer, technological innovation and creative innovation; support for activities to improve science and technology capacity; support for activities to develop innovation, creative startup ecosystems, promote culture of innovation and creative startups by the science , technology and innovation development funds of ministries, branches and localities are implemented according to the provisions in Clauses 1, 2, 3, 4 and 5, Article 6 of this Decree.

The local Science, Technology and Innovation Development Fund provides funding and interest-rate support for technology application, technology transfer, technological innovation, and innovation for local small and medium-sized enterprises. The planning and determination of the total annual state budget allocated to the fund to implement the contents specified in Clause 2 of this Article does not take into account voluntary contributions, donations, and gifts from organizations and individuals.

Transparency in management, performance evaluation and financial mechanisms

The Decree requires the Fund to publicize its ordering, funding and support, and not to provide funding to organizations and individuals who have received funding from other sources for the same content. Legal donations, gifts and contributions are allowed to be received and used for the right purpose, and are retained for continued use in the following year without having to be returned to the budget.

The Decree requires the Fund to publicly disclose its ordering, funding and support. Illustrative photo.

The governing body (Ministry, branch, locality) is responsible for inspecting and supervising the Fund's operations, ensuring timely and effective disbursement. Every year, the head of the Fund's Executive Body must prepare a report assessing the results and effectiveness of operations, and may hire an independent evaluation organization to ensure objectivity and transparency, a point of progress in public financial management.

Article 17 of the Decree details the responsibilities of organizations and individuals sponsored by the Fund.

Units must issue internal spending regulations, use funds for the right purposes, make payments according to regulations, and be responsible for the legality and reasonableness of records and documents. In case of misuse, causing budget loss, funds will be recovered and handled according to the law.

The Fund's executive body has the right to develop financial management regulations, inspect, evaluate, hire independent auditors, and ensure standards and transparency in the use of the state budget.

NAFOSTED – National financial pillar for science and technology

Regarding the National Foundation for Science and Technology Development (NAFOSTED), this is a public financial organization under the Ministry of Science and Technology , with the function of funding, ordering and supporting national-scale science and technology activities.

According to Articles 18 to 23, NAFOSTED operates on the principles of publicity, transparency, equality, ensuring scientific integrity and international standards.

The Fund prioritizes funding for basic research, applied research and technology development, especially interdisciplinary, interregional, and national strategic tasks. The research content of the S&T tasks and activities supporting the enhancement of national S&T capacity funded by the National S&T Development Fund must not overlap with the content and activities that have been or are being implemented with State funding.

The Fund's funding is allocated from the Science, Technology, Innovation and Digital Transformation expenditures, and can also receive legal donations, gifts and contributions from within and outside the country.

Funding is provided up to 3 times per year, based on disbursement progress, ensuring flexibility in budget management.

The initial funding is based on the amount proposed by the Fund but not more than 40% of the total funding, ordering, and support expected according to the annual plan and is delivered before March of the budget year.

Subsequent funding allocations are determined based on the Fund's proposal based on the progress of disbursement of the allocated funding and the disbursement plan for the next period. The final funding allocation date is before September 1st of each year.

Regarding financial management, the Fund applies the administrative accounting regime, makes payments and settlements according to regulations, and has the right to hire independent auditors to evaluate and control the efficiency of capital use.

The Government has established a complete, unified, and modern financial mechanism for Science, Technology, and Innovation Funds. Illustrative photo.

With the issuance of Chapter III of Decree 265/2025/ND-CP, the Government has established a complete, unified and modern financial mechanism for Science, Technology and Innovation Funds at both central and local levels. This is an important tool to mobilize social resources, encourage businesses and scientists to invest more strongly in innovation, contributing to the formation of a national financial ecosystem to support sustainable development of Science and Technology.

NATIF - Leverage for application and commercialization

About the National Technology Innovation Fund (NATIF) - the agency responsible for funding and ordering innovation tasks, supporting loan interest rates and funding for technology application, transfer, and innovation; at the same time promoting the development of a creative startup ecosystem and innovation culture.

NATIF is entitled to receive both budget and non-budget sources (contributions, sponsorships, in-kind, other legal revenues). The Fund's operating principles are transparent: announcing priority directions and review criteria on the information portal; democratic and objective review process; no duplicate funding. NATIF has the right to suspend or terminate funding when detecting violations; at the same time, there is a mechanism to control and monitor progress and professional quality.

The annual budget at Point a, Clause 1 of this Article of the National Technology Innovation Fund shall be allocated a maximum of 3 times. The first allocation of budget shall be based on the budget proposed by the Fund but not exceeding 40% of the total budget planned according to the annual plan and shall be allocated before March 31 of the fiscal year. Subsequent allocations of budget shall be determined based on the proposal of the National Technology Innovation Fund based on the progress of disbursement of the allocated budget. The final allocation of budget shall be before September 1 of each year.

Regarding financial management, NATIF is funded according to a plan approved by the Ministry of Science and Technology, and is allowed to use non-budgetary sources for capacity building activities, income supplementation, expert contracts, communication and training, with the principles of publicity, transparency and accountability. The receipt of non-budgetary sources must be accounted for separately, fully reflected in financial reports and subject to inspection and audit when necessary.

Risk management - a soft but responsible mechanism

Both NAFOSTED and NATIF are equipped with financial risk management mechanisms: from exemption, reduction, repayment extension to debt forgiveness, even debt cancellation in case of bankruptcy; the handling methods must be based on transparent records, grounds and, when necessary, independent expert opinions. However, risk management does not change the accountability of the organization in charge of the task.

With Chapter III - Financial mechanism for science, technology and innovation development funds, Decree 265/2025/ND-CP builds a synchronous Fund system, from the ministerial and local levels to the two national funds NAFOSTED and NATIF, creating a flexible, transparent and responsible financial mechanism for research, application and technological innovation activities. This is a necessary foundation to mobilize social resources, promote public-private linkages and accelerate the transfer and commercialization of research results, contributing to making science, technology and innovation the main driving force for the country's sustainable growth.

Center for Science and Technology Communication

Source: https://mst.gov.vn/buoc-dot-pha-ve-co-che-tai-chinh-cho-cac-quy-phat-trien-khoa-hoc-cong-nghe-va-doi-moi-sang-tao-19725102523115479.htm