Proposal to arrange extra-budgetary financial funds

Basic funds comply with financial regulations

According to Report No. 609/BC-CP of the Government on the implementation of the 2024 financial plan and the expected 2025 financial plan of extra-budgetary financial funds managed by the Central Government, there are currently 22 funds managed by ministries and central agencies.

It is estimated that by the end of 2024, the balance of funds will be relatively large, increasing by 3.97% compared to 2023. The 3 public funds managed by Vietnam Social Security alone account for 91.4% of the total fund balance; 4 funds have a balance of less than 100 billion; 8 funds have a balance from 100 billion to 1,000 billion; 8 funds have a balance of over 1,000 billion.

Basically, these funds have used finances according to state regulations and internal spending regulations; in accordance with assigned goals and tasks...

Clause 19, Article 4 of the 2015 State Budget Law stipulates: “A non-budgetary state financial fund is a fund established by a competent authority, operating independently from the state budget, its revenue sources, and expenditure tasks to perform tasks as prescribed by law”.

The implementation of the tasks of the central non-budgetary financial funds has contributed to improving the efficiency of assigned tasks such as: Managing insurance funds, accumulating public debt repayment, lending capital at preferential interest rates, supporting environmental protection projects, science and technology projects, innovation activities, enterprises, cooperatives, sponsoring and supporting activities and projects on telecommunications, preventing the harmful effects of tobacco, supporting overseas employment, supporting job creation, supporting people with revolutionary contributions or relatives in difficulty, compensating for losses, sacrifices and hardships in crime prevention and control work and being a source of encouragement for collectives and individuals to continue to fight fiercely against all types of crime and drugs, improving the effectiveness of ensuring security and order and developing the country's socio-economy ...

The organizational model is not unified, spending tasks are duplicated, financial resources mainly rely on the budget.

However, besides the positive aspects, the audit results of the management and use of extra-budgetary state financial funds managed by the Central Government in the 2020-2023 period showed that the operations of these funds still have many shortcomings and limitations.

Currently, legal regulations related to the organization and operation of funds are designed into 3 groups: Regulations in laws and decrees, according to the Prime Minister 's Decision, according to the Decision of the Central agency.

In fact, funds are organized in four main ways: Specialized model, public service unit model, Single Member Limited Liability Company model and other models that have not been specifically regulated. Moreover, the management apparatus among funds is also lacking in synchronization. Some funds are managed by concurrently appointed officials of ministries and branches, so there are no costs incurred, while many other funds have their own organizations, including: management board, control board and fund management board, leading to increased staffing and costs...

In addition, although most funds operate under similar models and management mechanisms, they apply different salary and bonus mechanisms, and do not even comply with current regulations. For example, at the Vietnam Environmental Protection Fund, salary payment based on work results does not accurately reflect the labor efficiency of each individual when all workers are applied the same unit price, ignoring the assessment of work completion.

One of the major shortcomings of the current extra-budgetary financial fund system is the overlap in spending tasks with the state budget and the Vietnam Bank for Social Policies.

For example, the Science and Technology Development Fund, the National Technology Innovation Fund, the National Employment Fund or the Gratitude Fund all have expenditure contents similar to the state budget.

Some funds even directly provide financial services that overlap with the Social Policy Bank. Some funds also stipulate unspecified expenditure contents, typically the Public Telecommunications Service Fund.

Although established with the aim of mobilizing resources from society, foreign organizations or the private sector, the financial resources of some basic funds are formed from the state budget. Some funds are initially provided with charter capital by the state budget, some funds are supported with regular funding, and some even continue to receive additional capital during their operations - which is no longer in accordance with the provisions of the 2015 State Budget Law.

Some funds have not yet generated revenue from their own mission activities and other sources such as the Vietnam Cooperative Development Support Fund. Notably, many funds have their main revenue from... bank deposit interest such as the Vietnam Environmental Protection Fund, the Small and Medium Enterprise Development Fund, the Overseas Employment Support Fund...

To improve the fund management mechanism and policies based on the assessments of audited central extra-budgetary financial funds, the State Audit makes the following recommendations: Study the management mechanism for extra-budgetary financial funds managed by the central government, organized in the direction of distinguishing between public funds operating under fund charters and specialized laws (including: Social Insurance Fund, Health Insurance Fund, Unemployment Insurance Fund and Debt Repayment Accumulation Fund) and the remaining extra-budgetary financial funds with appropriate management mechanisms.

Regarding the organizational model, research and arrange the extra-budgetary financial funds managed by the Central Government to ensure the effective use of state budget resources. Arrange the fund management model in a streamlined and effective manner. For some funds, it may not be necessary to have a separate apparatus, but only need ministries and branches to determine the standards and criteria for enjoying incentives from the fund and entrust commercial banks and policy banks to lend to enterprises and enjoy incentives according to the fund's mission.

Regarding the salary regime, review the regulations on salary payments for financial funds outside the central budget to ensure consistency and fairness compared to other agencies of the state apparatus and commensurate with the performance of assigned tasks, evaluate the activities of the funds, and avoid cases where the fund mainly uses capital to deposit in banks but still receives high income according to the income level for a single-member limited liability company with 100% charter capital held by the State.

For the implementation of the funds' tasks, research and review the funds' missions and operational objectives. On that basis, propose appropriate measures and mechanisms to ensure that the funds operate properly and fully implement their missions and objectives as determined at the time of establishment. At the same time, it is necessary to review the funds' tasks to avoid overlapping with the tasks of the state budget.

In addition, the State Audit also proposed that the Ministry of Finance consider coordinating with relevant ministries to review in detail the use of capital sources at all funds, thereby identifying this as one of the criteria for evaluating the performance of the funds.

Source: https://nhandan.vn/de-xuat-sap-xep-quy-tai-chinh-ngoai-ngan-sach-post880311.html