MINISTRY OF FINANCE | SOCIALIST REPUBLIC OF VIETNAM |
No. 10/2020/TT-BTC | Hanoi, February 20, 2020 |
CIRCULAR
ON SETTLEMENT OF FINISHED PROJECTS UTILIZING STATE CAPITAL
Pursuant to Law on state budget dated June 25, 2015;
Pursuant to Law on Public Investment dated June 13, 2019;
Pursuant to Decree No.163/2016/ND-CP dated December 21, 2016 of Government on elaborating to a number of Articles of Law on State budget;
Pursuant to Decree No. 68/2019/ND-CP dated August 14, 2019 of Government on management of construction expenditure;
Pursuant to Decree 37/2015/ND-CP dated April 22, 2015 of Government on elaborating to construction contract;
Pursuant to Decree No. 59/2015/ND-CP dated June 18, 2015 of the Government on construction project management;
Pursuant to Decree No.42/2017/ND-CP dated April 5, 2017 of Government on amendments to a number of Articles of Decree No. 59/2015/ND-CP dated June 18, 2015 of Government on construction project management;
Pursuant to Decree No. 87/2017/ND-CP dated July 26, 2017 of the Government on functions, tasks, powers, and organizational structure of the Ministry of Finance;
At the request of Director General of Department of Investment;
Minister of Finance promulgates Circular on settlement of finished projects utilizing state capital.
Chapter I
GENERAL PROVISIONS
Article 1. Scope and regulated entities
1. Scope:
a) This Circular prescribes settlement of investment projects, (project or cost) tasks in preparation for investment, and planning tasks (hereinafter collectively referred to as “projects”) that utilize state capital after finishing or suspending permanently according to written permission for temporary or permanent suspension issued by competent individuals capable of approving projects.
State capital includes: Public investment capital, loan capital guaranteed by the Government, loan capital guaranteed by government properties, capital for development investment of state enterprises.
Projects, constructions, and work items that utilize partial or total state capital sources: Implement according to this Circular, except for projects that are separately prescribed by the Government and/or Prime Minister.
Projects with tangible contributions and work days or completed constructions: Based on unit price of exhibits and number of work days or value of completed constructions, perform settlement of construction and project value for monitor and management.
b) Investment projects affiliated to National target programs: Conform to Circular of Ministry of Finance on payment and settlement of investment capital sources from State budget for implementation of National target programs.
c) Investment projects utilizing official development assistance (ODA) and preferential loan capital sources of sponsors: Perform settlement for finished projects according to signed International agreements on ODA and preferential loan capital and separate guiding Circulars of Ministry of Finance. In case no International agreements and separate guiding Circulars are available, conform to this Circular.
2. Regulated entities: This Circular applies to organizations, agencies and individuals related to settlement of finished or permanently suspended projects utilizing state capital.
3. Organizations and individuals may adopt this Circular to prepare final accounts, appraise and approve settlement of completed projects for projects that are not mentioned under Clause 1 of this Article and shall be responsible for their decisions.
Article 2. Objectives of performing settlement of finished projects
1. Assess investment results, identify manufacturing capacity and value of added assets as a result of investment.
2. Assess compliance with regulations and law of the government in project investment and execution, clarify responsibilities of project developers, bidders, agencies that grant capital, loans, control payment and relevant regulatory agencies.
3. Enable regulatory agencies to develop government policies and enhance state management effectiveness.
Article 3. Investment cost for settlement
Investment cost for settlement refers to the entire legitimate cost required in investment process to bring projects into use. Legitimate cost refers to all costs included in projects, approved projects and signed contracts according to regulations and law (for affairs implemented under contracts) including approved amendments performed as per the law and within competence. Investment cost for settlement must be within total approved or revised investment cost as per the law.
Article 4. Settlement for finished independent component projects, sub-projects, constructions and work items
1. With respect to important national projects and class A projects with multiple component projects, independent sub-projects (which can operate independently, be utilized or invested in stages) and independent decisions on approving investment projects: Prepare final account, appraise and approve settlement each component project or independent sub-project similar to an independent investment project.
Component projects or sub-projects that have been appraised and approved as per the law do not require further audit, appraisal and approval of settlement. Ministries, ministerial agencies, Governmental agencies, other central agencies (hereinafter referred to as “central ministries and agencies”) groups, state corporations, People’s Committees of provinces and central-affiliated cities (hereinafter referred to as “People’s Committees of provinces”) assigned to manage primary projects or act as contact points for consolidating projects are responsible for producing reports on general settlement of projects (using Form No. 10/QTDA attached to this Circular) and submitting to Prime Minister, Ministry of Finance and Ministry of Planning and Investment when important national projects and class A projects finish completely.
2. With respect to projects in preparation phase:
a) In case projects in preparation phase are provided with capital plans for investment in cost of approved investment projects, competent individuals capable of approving investment projects shall decide to perform separate settlement for projects in preparation phase or settlement along with investment projects.
b) In case projects in preparation phase are provided with separate plans for allocating capital, perform settlement similar to independent sub-projects and consolidate project settlement as specified under Clause 1 of this Article.
c) In case projects in preparation phase are suspended permanently or altered in a way that the contents that are being prepared cannot be used, investment preparation cost for implemented contents shall be subject to settlement similar to projects that are suspended permanently.
3. Regarding compensation, assistance and relocation:
a) In case compensation, assistance and relocation are turned into separate projects during approval f national important projects and class A projects: Prepare final accounts and reports on settlement appraisal similar to independent investment projects.
b) In case separate compensation, assistance and relocation costs are turned into separate categories under decisions on approving investment projects: Organizations that perform compensation, assistance and relocation tasks are responsible for preparing final accounts for expenditure on compensation, assistance and relocation, requesting Chairpersons of People’s Committees of the same levels to approve compensation, assistance and relocation in order to approve settlement and sending approved final accounts to developers of construction investment projects to integrate into general final accounts of the whole projects. Presiding authorities shall appraise settlement of the whole projects without appraising the compensation, assistance and relocation expenditure whose settlement has been approved.
4. Regarding completed independent structures and work items that are brought into use of investment projects: If settlement appraisal and approval are necessary, project developers shall report to competent individuals capable of deciding on approving investment projects for consideration. Settlement value of constructions and work items consist of: Construction cost, equipment cost, consulting cost and other cost directly related to the constructions and work items. Project developers shall consolidate approved settlement value of constructions and work items in final account of completed projects and determine general cost distribution for each construction and work item of the projects and request competent individuals to approve settlement of completed projects.
5. With respect to projects that have completed component projects, sub-projects, constructions, work items and equipment that have been transferred and brought into use while component projects, sub-projects, compensation, assistance or relocation categories have not been fulfilled: Project developers shall request competent individuals capable of deciding to approve investment projects to permit production of final accounts of implemented cost of projects and send to agencies presiding appraisal settlement; in which, component projects, sub-projects, compensation, assistance or relocation categories are legitimate cost that has been implemented. In case component projects, sub-projects, compensation or land clearance categories are revised, project developers shall prepare documents on further settlement and submit to agencies presiding settlement appraisal to appraise and approve further settlement.
Article 5. Settlement for specific investment projects
With respect to investment projects for specific constructions according to Article 42 of Decree No. 59/2015/ND-CP dated June 18, 2015 of the Government on management of investment construction projects, in case specific regulations are required, ministries, central government authorities, groups, state corporations, People’s Committees of provinces managing projects shall request Ministry of Finance in details.
Chapter II
SPECIFIC PROVISIONS
Article 6. Final accounts for finished projects
1. Final accounts for finished projects must fully and accurately identify:
a) Investment capital sources for project execution according to each investment capital source.
b) Total investment cost requested for settlement based on cost for each section (compensation, assistance, relocation, construction, equipment, project management, consulting and other costs).
c) Cost for damage during investment process.
d) Cost that is not accounted for when calculating asset value.
dd) Value of asset formed after investment.
2. Final account forms:
a) For completed independent projects, component projects, sub-projects, constructions, work items, and permanently suspended projects with construction and equipment load subject to inspection, use forms No. 01/QTDA, 02/QTDA, 03/QTDA, 04/QTDA, 05/QTDA, 06/QTDA, 07/QTDA, and 08/QTDA attached to this Circular.
b) For planning projects, projects in preparation phase or permanently suspended projects utilizing investment capital sources of the government with no construction or equipment load subject to inspection, use forms No. 03/QTDA, 08/QTDA, 09/QTDA attached to this Circular.
3. For projects under management of People’s Committees of communes, wards, towns (hereinafter collectively referred to as “People’s Committees of communes”): Documents on settlement of investment projects for finished constructions consist of forms of final accounts for finished projects attached to relevant legislative documents according to forms No. 14/QTDA and 15/QTDA (prepare final account forms according to instructions under Annex I attached to this Circular).
Article 7. Application for settlement appraisal and approval
Project developers shall submit 1 application to competent individuals capable of approving settlement and 1 application to agencies presiding settlement appraisal. The application consists of:
1. For finished projects, work items and permanently suspended projects with construction and equipment load:
a) Application for settlement approval of the project developers (master registers). In case of independent auditing bodies, the applications must specify details that the project developers and independent auditing bodies have agreed and disagreed with the other and reasons for the disagreement. In case agencies conducting inspection (hereinafter referred to as “inspecting bodies”), examination, State auditors and law authorities conduct inspection, audit and/or investigation, the project developers must specify compliance with propositions and conclusions of bodies mentioned above in the applications.
b) Forms of final accounts according to Article 6 of this Circular (master registers).
c) All relevant legislative documents using Form No. 02/QTDA (master registers or copies of the master registers produced by the project developers).
d) Settlement documents of each contract consist of following documents (master registers or copies of the master registers produced by the project developers): Construction contracts and annexes thereto (if any); records of acceptance inspection for completed items according to payment stages; records of acceptance inspection for completed items of the whole contracts; final contract price spreadsheet (A-B spreadsheet); contract closure records where eligible according to contract laws; other documents as agreed upon in contracts related to details of inspection, examination, approval and settlement of finished projects.
dd) Records of acceptance of finished projects or independent work items (master registers), written approval for acceptance results (master registers) of competent authorities.
e) Audit reports on settlement of finished projects produced by independent auditing bodies in case independent auditing bodies are employed (master registers).
g) Audit reports or audit result notice (hereinafter referred to as “audit reports”), inspection conclusions, inspection records and penalty decisions of the State auditing authorities and inspecting authorities in case these authorities carry out inspection and audit of the project; investigation results of law enforcement authorities if project developers commit any violation. Reports of project developers and relevant documents on compliance with remarks of authorities mentioned above.
2. For planning projects, projects in preparation phase utilizing development investment fund (if any) and permanently suspended projects having none of the construction work completed and equipment installed thereof:
a) Application for settlement approval of the project developer (master register).
b) Forms of final accounts according to Article 6 of this Circular (master registers).
c) All relevant legislative documents using Form No. 09/QTDA (master registers or copies of the master registers produced by the project developers).
d) Settlement documents of each contract consist of following documents: Contracts and records of acceptance inspection for completed items according to payment stages (except for cases in which construction and/or equipment load is not available); documents approving revision and replacement (if any), records of acceptance inspection for completed items of the whole contracts (if any); final contract price spreadsheet (if any), contract closure records where eligible according to contract laws.
dd) Audit reports on settlement of finished projects produced by independent auditing bodies in case independent auditing bodies are employed.
e) Audit reports, inspection conclusions, inspection records and penalty decisions of the State auditing authorities and inspecting authorities in case these authorities carry out inspection and audit of the project; investigation results of law enforcement authorities if project developers commit any violation. Reports of project developers and relevant documents on compliance with remarks of authorities mentioned above.
3. Project developers are responsible for presenting other relevant documents to serve settlement appraisal at written request of agencies presiding settlement appraisal.
Article 8. Entitlement to approval, agencies presiding settlement appraisal
1. Entitlement to approval of settlement:
a) For important national projects and other important projects invested according to decisions of the Prime Minister:
- Projects or component projects utilizing state capital: Heads of ministries, central authorities, groups or state corporations shall approve settlement of projects or component projects and transfer to ministries, central authorities, groups or state corporations for management; Chairpersons of People’s Committees of provinces shall approve settlement of projects or component projects and transfer to provincial level for management; Chairpersons of People's Committees of districts shall approve settlement of projects or component projects and transfer to district level for management.
- Component projects not utilizing state capital: Project developers shall approve settlement of projects.
b) For other projects: Competent individuals capable of approving investment projects shall approve settlement of finished projects or authorize heads of subordinates to approve settlement of finished projects.
2. Agencies presiding settlement appraisal for finished projects:
a) For projects utilizing state capital under management of provincial budget: Department of Finance shall appraise (unless otherwise decided by Chairpersons of People’s Committees of provinces).
b) For projects utilizing state capital not under management of provincial budget: Department of Finance - Planning shall appraise (unless otherwise decided by Chairpersons of People’s Committees of districts).
c) For projects utilizing state capital under management of commune budget: Chairpersons of People’s Committees of communes shall employ specialized officials within their competence to appraise final accounts of finished projects. In case specialized officials are ineligible for appraisal of final accounts of finished projects, Chairpersons of People’s Committees of communes shall request Department of Finance – Planning of districts to appraise final accounts of finished projects.
d) For other projects: Competent individuals capable of approving settlement shall assign competent entities under their management to appraise settlement of finished projects prior to approval.
dd) If necessary, competent individuals capable of approving settlement shall decide to establish task forces to appraise settlement prior to approval of settlement. The task forces consist of representatives of relevant agencies and entities.
Article 9. Audit of settlement for finished projects
1. All national important projects and class A projects utilizing state capital must perform audit for final accounts of finished projects before presenting to competent authorities for appraisal and approval. For other projects, competent individuals capable of approving project investment shall consider and decide independent auditing bidders to conduct audit for final accounts of finished projects.
Project developers shall choose auditing bidders according to bidding laws and enter into audit agreements according to regulations and law on contracts.
Project developers, independent auditing bidders and relevant entities shall conform to Clause 2 and Clause 3 of this Article.
2. Independent auditing bidders are independent auditing enterprises established and operating according to regulations and law on enterprise establishment and operation in Vietnam. Audit and prepare audit reports according to regulations and law on independent audit and applicable audit standards.
3. For projects subject to audit and/or inspection of State audit agencies and inspecting bodies:
a) In case State auditing authorities and inspecting bodies perform audit, inspection and issue adequate audit reports and inspection conclusions according to Article 11 of this Circular, agencies presiding settlement appraisal shall utilize audit report results of State auditing authorities and inspection conclusions of inspecting bodies as the basis for appraisal; independent auditing bodies are not necessary.
b) In case State auditing authorities, auditing bodies and inspecting bodies fail to perform all contents specified under Article 11 of this Circular, pursuant to Clause 1 of this Article, project developers shall identify contents and scope of additional audit and select independent auditing bidders to conduct additional audit. Expenditure on additional audit shall be determined in the same manner as expenditure on hiring independent auditing bodies specified under Article 20 of this Circular. Agencies presiding settlement appraisal shall use audit report results of State auditing authorities, conclusions of inspecting agencies and audit report results of independent auditing bodies as the basis to appraise project settlement.
c) In case State auditing authorities or inspecting bodies issue decisions on conducting audit or inspection while independent auditing bidders are executing auditing agreements, independent auditing bidders shall execute auditing agreements.
Article 10. Appraisal of settlement of projects, constructions, and work items that have already been subject to audit and inspection of final accounts of finished projects
1. In case independent auditing bidders conduct audit of final accounts of finished projects, agencies presiding settlement appraisal shall:
a) Examine legitimacy of independent auditing agreements, audit scope, duration and methods.
b) Compare audit result reports with audit contents as per the law and applicable audit standards regarding auditing final accounts of finished projects. In case audit results are defective or inadequate as per the law, agencies presiding settlement appraisal shall inform project developers to request independent auditing bodies to conduct additional audit sessions.
c) Examine compliance with relevant law provisions and legal basis which auditors adopt to audit projects.
d) Consider propositions and contents which project developers disagree with audit results of independent auditing bidders.
dd) Examine compliance of project developers and relevant entities with conclusions of inspecting bodies, State auditing authorities and with investigation results of law authorities in case inspecting bodies, State auditing authorities and investigating bodies conduct inspection and investigation against projects. If necessary, agencies presiding settlement appraisal shall report to competent individuals capable of approving settlement to collect feedback of relevant agencies to agree on solutions before presenting to competent individuals capable of approving settlement.
2. In case State auditing authorities and/or inspecting bodies perform adequate audit and/or inspection according to Article 11 of this Circular:
a) Compare audit reports of State auditing authorities, conclusion of inspecting bodies with final accounts of finished projects of project developers to determine compliance with regulations and law of project developers and relevant entities; figures requested for settlement of project developers with audit and inspection results to serve as the basis to present to competent individuals when approving settlement.
b) Examine compliance of project developers and relevant entities with conclusions of inspecting bodies, State auditing authorities and with investigation results of law authorities in case inspecting bodies, State auditing authorities and investigating bodies conduct inspection and investigation against projects. If necessary, agencies presiding settlement appraisal shall report to competent individuals capable of approving settlement to collect feedback of relevant agencies to agree on solutions before presenting to competent individuals capable of approving settlement.
Article 11. Appraisal of settlement of projects, constructions, and work items that have not been subject to audit and inspection of final accounts of finished projects
Agencies presiding settlement appraisal shall appraise as specified under Articles 12, 13, 14, 15, 16, and 17 of this Circular and prepare reports on results of appraising settlement of finished projects consisting of:
1. Legal document.
2. Investment capital sources of the projects.
3. Investment expenditure.
4. Investment expenditure that is not included in asset value.
5. Value of assets formed after investment (specify by category, quantity, scale, capacity and input value of each asset).
6. Public debt, outstanding materials and equipment.
7. Compliance of project developers and relevant entities with conclusion and investigation results of law authorities and other agencies (if any).
8. Remarks, assessment and propositions.
a) Assessment and remarks regarding compliance with regulations and law of the government on managing investment, construction and bid; management and use of public investment capital; management of investment expenditure, management of investment asset of project developers; responsibilities of each levels for managing project investment capital.
b) Propositions regarding settlement value and solutions to relevant issues.
Article 12. Appraisal of legal documents
Based on reports using Form No. 02/QTDA and relevant legislative documents of projects, compare category and procedures for implementation legislative documents with regulations and law to provide remarks on:
1. Procedures for preparing and approve documents, entitlement to approving documents.
2. Compliance with investment procedures according to regulations and law on investment and construction.
3. Compliance with bidder selection procedures of contract packages according to bidding laws.
4. Compliance with regulations and law on signing contracts between project developers and bidders according to regulations and law on contracts.
Article 13. Appraisal of project investment capital sources
Based on reports using Forms No. 01/QTDA, 03/QTDA in final accounts, agencies presiding settlement appraisal shall:
1. Analyze and compare implemented investment capital structure with investment capital structure defined under total investment capital approved (Form No. 01/QTDA).
2. Compare figures on annual paid capital of project developers and payment agencies (Form No. 03/QTDA).
3. Examine increase and decrease to investment capital of projects permitted by competent authorities compared to the increase and decrease prescribed by regulations and law.
4. Assess compliance with regulations and law on funding and payment; management and use of capital sources of projects.
Article 14. Appraisal of investment expenditure
Based on total investment approved and reports using Form No. 04/QTDA, agencies presiding settlement appraisal shall appraise costs under the total investment: Expenditure on compensation, assistance, relocation, construction, equipment, project management, construction consultancy and other details.
1. Appraisal principles:
a) Appraise compliance with regulations on construction agreements and decisions on approving bidder selection of competent authorities; forms of contract prices in each construction agreements (regardless of bidder selection method) shall serve as the basis for appraisal. Examine aggregation of cost components and clauses prepared by project developers in final accounts. If necessary, agencies presiding settlement appraisal shall examine as-built dossiers to determine load of finished work subject to inspection as per the law.
b) In case expenditure on construction of temporary structures, construction of auxiliary structures serving construction, construction of temporary houses and on-site operation of construction is subject to separate design and settlement for the work items: Appraise in the same manner as an independent construction contract package.
c) In case expenditure on construction of temporary structures, construction of auxiliary structures serving construction, construction of temporary houses and on-site operation of construction is determined as percentage of primary contract package (no separate design or settlement): Appraise application of percentage on the basis of appraisal results of the primary construction contract package.
d) In case expenditure on construction of temporary structures, construction of auxiliary structures serving construction, construction of temporary houses and on-site operation of construction is inclusively accounted for: Appraise in the same manner as a lump-sum construction contract package.
2. Appraise expenditure on compensation, assistance and relocation.
a) Appraise expenditure on compensation, assistance and relocation implemented by organizations in charge of compensation or land clearance: Compare value requested for settlement of project developers with expenditure estimates under plans for compensation, assistance, and relocation, expenditure estimates for compensation, assistance and relocation approved by competent authorities and records of compensation recipients with confirmatory signature as per the law to determine settlement value.
b) Appraise expenditure on organization of compensation, assistance and relocation implemented by organizations in charge of compensation tasks: Conform to Circular No. 74/2015/TT-BTC dated May 15, 2015 of Ministry of Finance guiding estimate, use and final payment of budget for compensation, support and relocation due to the Government’s land expropriation.
c) In case technical infrastructural constructions have been subject to settlement decisions of competent individuals: Rely on decisions on approving settlement of competent individuals and written payment request of project developers of technical infrastructural constructions and payment instruments to determine cost of the invested technical infrastructural constructions.
3. Appraise construction expenditure:
a) For contract packages implemented by the project developers as per bidding laws:
In case project developers enter into agreements with affiliated accounting entities to implement contract packages, appraisal of contract package shall be based on forms of contract price and conform to Points b, c, d, dd, and e of this Clause.
In case project developers enter into agreements on assigning affiliated entities to execute contract packages, appraisal shall be performed as follows:
- Compare contents and load in settlement value proposal of project developers with records of workload acceptance inspection to determine accepted workload as per the law.
- Compare consistency between unit prices in the settlement value proposal of project developers with unit price in approve estimates.
- Settlement value equals workload accepted as per the law multiplied by appraised unit price.
b) For contract packages in form of “lump-sum contracts”:
- Compare contents and load in A-B settlement value proposal of project developers with records of workload acceptance inspection and requirements of contracts to determine accepted workload as per the law.
- Compare unit price under A-B settlement value proposal with unit price under contract value spreadsheets. In case bidders fully implement requirements, tasks, workload and unit price under contracts and contract value spreadsheets, settlement value shall equal package value of signed contracts; do not calculate workload and specific unit price approved by competent authorities according to decision on bid acceptance.
c) For contract package in form of “fixed price contracts”:
- Compare contents and load in A-B settlement value proposal of project developers with records of workload acceptance inspection and requirements of contracts to determine accepted workload as per the law.
- Compare unit price under A-B settlement value proposal with fixed unit price under contract value spreadsheets and attachments thereto.
- Settlement value equals finished workload accepted as per the law multiplied by fixed unit price under contracts.
d) For contract packages in form of “Adjustable unit price-based contracts” (or “Adjustable price-based contracts”):
- Based on specific conditions of contracts, identify contract adjustment scope and methods.
- In case of adjustment in workload, rely on acceptance records of finished workload to determine finished workload accepted as per the law.
- In case of adjustment in unit price, rely on unit price adjustment principles under contracts to determine settlement unit price.
- In case of adjustment as a result of government policies, rely on principles under contracts and policies applied during contract execution period (specified under contracts) to determine adjusted value. Do not adjust in case of extending execution period due to error(s) of the bidders.
- Settlement value equals finished workload accepted as per the law multiplied by settlement unit price.
dd) Form contract packages in form of “Combined price-based contracts”:
Contracts in form of “Combined price-based contracts” must specify which specific form of contract is applied to contract scope, contract items or specific operations: Inclusive, fixed unit price or adjustable unit price. Appraisal of each contract section and each contract form shall conform to Points b, c, and d of this Clause.
e) Arising cases: Appraisal of arising cases must rely on regulations and law on amendments to construction agreements corresponding to each type of contract and relevant law provisions.
4. Appraise equipment cost:
a) For contract packages implemented by the project developers as per bidding laws:
In case project developers enter into agreements with affiliated accounting entities to implement contract packages, appraisal of contract package shall be based on forms of contract price and conform to Points b, c, d, dd, and e of this Clause.
In case project developers enter into agreements on assigning affiliated entities to execute contract packages, appraisal shall be performed as follows:
- Compare list, category, origin, quality, configuration and price of equipment requested for settlement with records of acceptance inspection and cost estimates of approved equipment to determine settlement value of equipment procurement.
- Appraise cost for processing and installing equipment for equipment that requires processing and installation according to estimates approved and accepted as per the law. Settlement value equals workload accepted as per the law multiplied by appraised unit price.
- Appraise relevant costs: Expenditure on transporting equipment from the Seller to construction base, storage, preservation and maintenance of equipment, other expenditure.
b) For contract packages in form of “lump-sum contracts”: Compare list, category, origin, quality, configuration, and price of equipment under A-B settlement value proposal with list, category, origin, quality, configuration, and price of equipment under contracts, contract price spreadsheet and records for acceptance of contract finished items. Once bidders have fully implemented requirements and tasks according to contracts, settlement value shall equal inclusive price of signed contracts. Do not calculate specific unit price approved by competent authorities under decisions on contract award again.
c) For contract package in form of “fixed price contracts”:
- Compare list, category, origin, quality, configuration, and price of equipment under A-B settlement value proposal with list, category, origin, quality, configuration, and price of equipment under contracts, contract price spreadsheet and contract attachments and with records for acceptance of finished items and contract requirements to determine workload accepted as per the law.
- Compare unit price under A-B settlement value proposal with fixed unit price under contract value spreadsheet.
- Settlement value equals workload accepted as per the law multiplied by fixed unit price specified under contracts.
d) For contract packages in form of “Adjustable unit price-based contracts” (or “Adjustable price-based contracts”):
- Based on specific conditions of contracts, identify contract adjustment scope and methods.
- In case of adjustment in workload, rely on acceptance records of finished workload to determine finished workload accepted as per the law.
- In case of adjustment in unit price, rely on unit price adjustment principles under contracts to determine settlement unit price.
- In case of adjustment as a result of government policies, rely on principles under contracts and policies applied during contract execution period to determine adjusted value.
D) For contract packages in form of “Combined price-based contracts”: specify which specific form of contract is applied to contract scope, contract items or specific operations: Inclusive, fixed unit price or adjustable unit price. Appraisal of each contract section and each contract form shall conform to Points b, c, and d Clause 4 of this Article.
e) Arising cases:
Appraisal of arising cases must rely on regulations and law on amendments to construction contract corresponding to each type of contracts.
5. Appraise project management cost:
a) For projects utilizing state capital: Conform to Circulars of Ministry of Finance on management and use of revenues generated from project management of project developers and board of management for projects utilizing state capital.
b) For other projects utilizing state capital: Project management costs and cost for construction consulting implemented by project developers and boards of management subject to settlement refer to practical cost as per the law that does not exceed project cost or approved estimates.
c) For projects under management of project developers or boards for project management that only manage 1 project: Ensure legitimacy of payment instruments of administrative agencies and public service providers. Property of boards for project management shall be subject to management as per Law on management and use of public property and guiding documents when the projects end.
6. Appraise cost for construction consulting and other costs.
a) For cost for consulting and other costs determined as percentage: Examine conditions required for application of percentage to identify cost value of each task.
b) For cost for consulting and other cost calculated based on approved specific estimates: Compare proposed settlement value with approve estimates to assess legitimacy of the costs.
c) For cost for consulting and cost for consulting in form of time-based contracts: Compare time-based wage unit price agreed upon by project developers and contractors under contracts with practical working time (by month, week, day, hour) to determine wages to be paid to the contractors. Costs for travel, survey, hiring offices and other costs shall be appraised according to provisions on payment methods under contracts (by legitimate invoices or unit prices agreed upon under contracts).
d) For consulting cost and consulting cost in form of lump-sum contracts, fixed price contracts, or adjustable unit price-based contracts: Conform to regulations on appraisal of construction cost for contract packages in form of lump-sum contracts, contract prices in form of fixed price, contract prices in form of adjustable unit price, and contract prices in form of combined prices under Clause 3 Article 14 of this Circular.
Article 15. Appraisal of investment expenditure that is not included in asset value
1. Appraisal of damage costs due to force majeure may not be included in asset value when:
a) Principles and procedures prescribed by the Government on damage costs are fully complied with.
b) Damage cost according to confirmatory records must be examined, confirmed and proposed by project developers, awarded bidders, supervision and consulting entities, and insurance contractors.
2. Appraise costs that do not constitute property to request competent authorities to allow exclusion from property value namely: Costs for educating and improving managerial officials and general public, costs for boards of project management not directly related to property formed and transferred in local divisions, costs for damaged investment due to subjective reasons such as investment being cancelled according to decisions of competent authorities, costs that have been implemented without any damage while generating products which are not used for projects such as finished, qualified and unused products of survey and design since project developers alter design, and products of permanently suspended projects that do not constitute property; costs for rectification and remediation of natural disasters that are not accounted in terms of added value according to regulations and law on accounting and property management, etc.
Article 16. Appraisal of property formed by investment
1. Determine quantity and value of property formed from investment of projects, construction or independent work items, including: Long-term property (fixed property) and short-term property.
2. Allocation of project management cost, consulting cost and general operation cost of the whole projects for each fixed property shall be based on the principles: A cost shall be allocated to whichever fixed property it is directly related to; in case of general costs that involve multiple fixed property, allocate depending on percentage of direct costs of each fixed property over total direct costs of the whole fixed property.
3. In case property is assigned to multiple entities, clearly identify list and value of assets assigned to each entity.
Article 17. Appraisal of public debt, outstanding materials and equipment
1. Appraise and identify public debt:
a) Rely on appraisal results of investment expenditure and payment to contractors of project developers to determine collectable and payable debt.
b) Consider and propose measures for dealing with collectable amount required to be submitted to State budget that has not been submitted, outstanding of deposit and cash in funds.
2. Examine and identify value of outstanding materials and equipment:
a) Examine value of outstanding materials and equipment according to accounting book and compare with practical figures.
b) Consider and propose measures of project developers for dealing with outstanding materials and equipment.
c) Rely on property declaration records, accounting books and property reassessment records (if required) up to the date on which final accounts are produced, identify quantity and input value of property, depreciation and residual value of fixed property to transfer or dispose as per the law in case the projects are under management of project developers and/or boards for project management of a single project.
Article 18. Settlement appraisal for planning projects utilizing development investment fund, projects in preparation phase and projects permanently suspended having no accepted construction work and equipment
1. Appraise legal documents of projects.
2. Appraise sources of investment capital for implementation.
3. Appraise implemented investment cost for each payment compared with approved estimates, quotas and limits of the Government.
4. Appraise public debt of projects.
5. Appraise costs that do not constitute property to request competent authorities to allow exclusion from property value.
6. Appraise quantity and value of property formed after investment (if any).
Article 19. Application for approval of settlement of finished projects
1. Agencies presiding settlement appraisal shall produce application for approval of settlement of finished projects and request competent individuals to approve after appraising the settlement. Application for settlement approval consists of:
a) Reports on settlement appraisal results.
b) Draft decisions on approving settlement of finished projects using Form No. 11/QTDA attached to this Circular.
c) In case task force for settlement appraisal is established, appraisal personnel shall report to the task force about appraisal results; Settlement appraisal task force shall finalize and approve settlement appraisal reports of appraisal personnel to request competent individuals to approve settlement for finished projects.
2. Reports on settlement appraisal results consist of following basic contents:
a) Project overview and issues decided by competent authorities during project investment.
b) Summary of content results according to appraisal order under this Circular.
c) Proposed settlement approval value.
d) Proposition for dealing with drawbacks regarding investment capital sources, property and public debt after conducting project settlement.
3. Decisions on approval of settlement of finished projects shall be sent to: Project developers, property receiving agencies, superior supervisory agencies of project developers, payment management agencies, crediting agencies, project funding agencies (or agencies authorized to perform payment, grant credit, and fund investment capital for high-density projects), persons authorized to decide on approving project investment, agencies presiding settlement appraisal and sent to Prime Minister, Ministry of Planning and Investment, and Ministry of Finance (for national important projects and other important projects invested under decisions of Prime Minister and class A projects utilizing state capital).
Article 20. Cost for independent audit and cost for settlement appraisal and approval
1. Identify cost for independent audit and cost for settlement appraisal and approval:
Cost for independent audit and cost for appraisal and approval of final accounts of finished projects are maximum cost identified on the basis of total approved investment amount or total adjusted investment amount after subtracting backup costs (hereinafter referred to as “Total investment after subtraction”) and rates under following schedule:
Cost | Total investment after subtraction (VND billion) | Total investment after subtraction (VND billion) | Total investment after subtraction (VND billion) | Total investment after subtraction (VND billion) | Total investment after subtraction (VND billion) | Total investment after subtraction (VND billion) | Total investment after subtraction (VND billion) | ||||||
| ≤ 5 | 10 | 50 | 100 | 500 | 1,000 | ≥ 10,000 |
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Independent audit (%) | 0.96 | 0.645 | 0.45 | 0.345 | 0.195 | 0.129 | 0.069 |
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Settlement appraisal and approval (%) | 0.57 | 0.39 | 0.285 | 0.225 | 0.135 | 0.09 | 0.048 |
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a) Maximum cost for independent audit and maximum cost for appraisal and approval of settlement of finished projects are determined using following formula:
Ki = Kb - | (Kb - Ka) x (Gi - Gb) |
| Ga - Gb |
In which:
+ Ki: Basic cost estimate of projects to be calculated (unit: %).
+ Ka: Basic cost estimate of projects with higher budget (unit: %).
+ Kb: Cost estimate of projects with lower budget (unit: %).
+ Gi: Total investment of after subtraction to be calculated (unit: VND billion).
+ Ga: Total investment of after subtraction of projects with higher budget (unit: VND billion).
+ Gb: Total investment of after subtraction of projects with lower budget (unit: VND billion).
- Cost for hiring independent audit for finished projects:
Cost for hiring independent audit for projects | = | Basic cost for hiring independent audit for projects | x | Total investment after subtraction | + | VAT |
- Cost for appraisal and approval of settlement of finished projects:
Cost for appraisal and approval of settlement of projects | = | Basic cost for appraisal and approval of project settlement | x | Total investment after subtraction |
- The minimum cost for independent audit is VND 1,000,000 plus VAT; the minimum cost for settlement appraisal and approval is VND 500,000.
b) The maximum cost for hiring independent audit and cost for settlement appraisal and approval of finished component projects and sub-projects (with separate decisions on approval) of projects are determined on the basis of total investment approved or revised of component projects and sub-projects after subtracting backup cost (hereinafter referred to as “Total investment of component projects and sub-projects after subtraction”):
- Cost for hiring independent audit of finished component projects and sub-projects with separate decisions on approval:
Cost for hiring independent audit for component projects and sub-projects | = | Basic cost for hiring independent audit for projects | x | Total investment of component projects and sub-projects after subtraction | + | VAT |
Cost for settlement appraisal and approval of finished component projects and sub-projects with separate decisions on approval:
Cost for settlement appraisal and approval of component projects and sub-projects | = | Basic cost for appraisal and approval of project settlement | x | Total investment of component projects and sub-projects after subtraction |
- The minimum cost for independent audit is VND 1,000,000 plus VAT; the minimum cost for settlement appraisal and approval is VND 500,000.
c) The maximum cost for hiring independent audit and the maximum cost for settlement appraisal and approval of finished constructions and independent work items of projects are determined on the basis of estimates value approved or revised of constructions and independent work items after subtracting backup costs (hereinafter referred to as “settlement for construction and work items after subtraction”);
- Cost for hiring independent audit of finished constructions and work items of projects:
Cost for hiring independent audit of constructions and work items | = | Basic cost for hiring independent audit for projects | x | Estimates of constructions and work items | + | VAT |
- Cost for appraising and approving settlement of finished constructions and work items of projects:
Cost for appraisal and approval of settlement of finished constructions and work items of projects | = | Basic cost for appraisal and approval of project settlement | x | Estimates of constructions and work items |
- The minimum cost for independent audit is VND 1,000,000 plus VAT; the minimum cost for settlement appraisal and approval is VND 500,000.
d) Total cost for independent audit of projects, component projects, sub-projects, constructions, and work items must not exceed approved or revised cost for independent audit of the whole projects or estimates (if any). Total cost for appraising and approving settlement of projects, component projects, sub-projects, constructions and work items must not exceed approved or revised cost for settlement of appraisal and approval of the whole projects or estimates (if any).
dd) Projects with cost for equipment accounting ≥ 50% of total approved investment: Basic cost for independent audit and basic cost for settlement appraisal and approval shall equal 70% of the basic cost specified under Clause 1 of this Article.
e) For independent projects, component projects and sub-projects for compensation, assistance and relocation with separate decisions on approval: Basic cost for settlement appraisal and approval and cost for audit shall at most equal to 50% of the basic cost specified under Clause 1 of this Article.
In case projects do not separate details of compensation, assistance or relocation into independent component projects or sub-projects, the cost for independent audit and basic cost for appraising and approving settlement of cost for compensation, assistance and relocation in projects shall equal 50% of the basic cost specified under Clause 1 of this Article.
g) With respect to projects, component projects, sub-projects, constructions and work items whose final accounts are audited by independent audit contractors or audited and inspected by State audit agencies and inspecting agencies regarding details specified under Article 11 of this Circular: Basic cost for appraising and approving settlement shall equal 50% of the basic cost under Clause 1 of this Article.
(Specific examples are under Annex No. II attached to this Circular).
2. Manage and use cost for settlement appraisal and approval:
a) Based on approved or revised cost for appraising and approving settlement of finished projects in projects or estimates (if any), agencies presiding settlement appraisal shall request project developers in writing to pay the maximum cost for settlement appraisal and approval according to the rates under Clause 1 of this Article after receiving application for settlement approval from project developers.
For projects with the final annual plans whose project developers are preparing settlement documents according to Article 21 of this Circular; agencies presiding settlement appraisal shall rely on approved or revised cost for settlement appraisal and approval in projects or estimates (if any) to request project developers to pay for settlement appraisal and approval.
Based on written request of agencies presiding settlement appraisal and approved or revised cost for settlement appraisal in projects or estimates (if any), project developers shall request the State Treasury to pay agencies presiding settlement appraisal.
b) Payments made for settlement appraisal and approval affairs consist of:
- Direct assistance for settlement appraisal and approval.
- Experts or consulting organizations appraising project settlement in case agencies presiding settlement appraisal enter into time-based contracts with experts or hire consulting organizations.
- Affairs, office supplies, translation, printing, conference, seminars, procurement of computer or equipment serving settlement appraisal and approval.
- Other payments related to settlement appraisal and approval.
c) Based on cost for settlement appraisal and approval and payments specified under Point b Clause 2 of this Article, agencies presiding settlement appraisal shall develop regulations on paying for settlement appraisal and approval and request heads of supervisory agencies to consider and approve to serve as the basis for annual implementation until the regulations are amended (if any).
d) Sources for costs for settlement appraisal and approval are not required to make reservations for wage reformation; are not required to be subject to the same account and settlement of funding sources for annual financial management of agencies presiding settlement appraisal. Unused cost for settlement appraisal and approval of the year may be left for implementation of the following year.
On the basis of funding sources and payments specified under Clause 2 of this Article, agencies presiding settlement appraisal shall produce payment orders to request payment for appraisal and approval of settlement of finished projects according to payments specified under Point b Clause 2 of this article (in case of multiple payments, entities shall declare manifests specifying payment details together with payment orders; the manifests must bear seal and signature of agencies presiding settlement appraisal and approval) and submit to State Treasury to conduct payment (agencies presiding settlement appraisal are not required to send payment instruments, contracts and procurement invoices to State Treasury). Based on request of agencies presiding settlement appraisal, State Treasury shall pay for settlement appraisal and approval of finished projects for agencies presiding settlement appraisal.
3. Cost for settlement appraisal and approval and cost for independent audit are classified as other cost in total approved (or revised) investment of projects and settlement value of projects.
4. In case project developers have fully provided documents according to audit contracts while independent audit contractors have not performed certain affairs, project developers shall rely on contract clauses and workload that fails to the implemented by the audit contractors to reduce cost for independent audit depending on the workload that fails to be implemented by the audit contractors.
5. In case of force majeure and change to operation scope of signed contracts, project developers and independent audit contractors shall rely on regulations and law on construction contracts to adjust, amend or remove tasks of signed contracts.
Article 21. Period for preparing settlement documents, appraising and approving settlement
The maximum periods are prescribed as follows:
Project | National important | Class A | Class B | Class C |
Period for project developers to produce settlement documents and request approval | 09 month | 09 month | 06 month | 04 month |
Period for appraising settlement | 08 month | 08 month | 04 month | 03 month |
Period for approving settlement | 01 month | 01 month | 20 day | 15 day |
1. The period for project developers to produce settlement documents and request approval shall start from the date on which acceptance records of projects, constructions are signed and projects, constructions are brought into operation until the date on which project developers submit adequate settlement documents to agencies presiding settlement appraisal.
2. The period for settlement appraisal shall start from the date on which agencies presiding settlement appraisal receive adequate settlement appraisal (according to Article 7 of this Circular) until the date on which competent individuals approve the settlement.
3. The period for settlement approval shall start from the date on which competent individuals capable of approving settlement (according to Clause 1 Article 8 of this Circular) receive adequate applications for approval of settlement of finished projects from agencies presiding settlement appraisal (according to Article 19 of this Circular) until the date on which decisions on approving settlement of finished projects are issued.
Article 22. Reporting regime
1. Figures of annual reports shall be consolidated from January 1 to December 31 inclusively.
2. Before January 20 each year, agencies presiding settlement appraisal that are subordinates to ministries, central government authorities, groups, state corporations, Departments of Finance, Departments of Finance - Planning of districts shall produce reports on settlement of finished projects utilizing state capital of the reporting year (Form No. 12/QTDA) and send to agencies assigned by ministries, central government authorities, groups, state corporations or People’s Committees of provinces to consolidate reports. Before January 30 each year, ministries, central government authorities, groups, state corporations and People’s Committees of provinces shall send reports on settlement of finished projects utilizing state capital of the reporting year (Form No. 12/QTDA) submitted by entities under their management to Ministry of Finance.
3. Ministry of Finance shall publicize annual settlement facts of finished projects utilizing state capital on a nationwide scale.
4. Methods of report submission and receipt: use physical copies or electronic copies.
Article 23. Examining regimes
1. Ministry of Finance shall examine settlement of finished projects utilizing State capital of ministries and local governments on a periodic or irregular basis. In case of errors or violations regarding settlement of finished projects utilizing State capital, Ministry of Finance shall request competent agencies to take actions as per the law.
2. Financial authorities of all levels shall examine settlement of finished projects of entities under their management on a periodic or irregular basis. In case of errors or violations regarding settlement of finished projects utilizing State capital, examining agencies shall request competent agencies to take actions as per the law.
3. Ministries, central government authorities, groups, state corporations and People’s Committees of provinces shall send reports on settlement of finished projects utilizing State capital submitted by entities under their management to Ministry of Finance.
Article 24. Actions against violations
Organizations and individuals violating decisions on settlement of finished projects shall be disciplined, fined or imposed criminal prosecution depending on nature and severity of the violations as per the law.
Article 25. Responsibilities in settlement of finished projects
1. Responsibilities of project developers:
a) encouraging and requesting contractors to perform settlement of contracts as per the law.
b) preparing and managing settlement documents of finished projects as per the law, requesting competent individuals to approve and perform settlement within the periods specified under Article 21 of this Circular; fully providing documents related to settlement of finished projects at request of auditors during audit of final accounts and at request of agencies presiding settlement appraisal.
c) being legally responsible to agencies presiding settlement appraisal for legitimacy of settlement documents and credibility of figures requested for settlement; accuracy of amount included in final accounts by project developers and acceptance inspection contractors; suitability of unit price agreed upon by project developers and contractors under contracts.
d) revoking residual capital of contractors or providers in case the capital subject to settlement is lower than the capital paid for the projects and transferring to state budget. Continuing payment for contractors or providers according to approved settlement value provided capital plan, in case the capital subject to settlement is higher than the capital paid for the projects.
dd) revoking all advance capital as per the law.
2. Responsibilities of contractors:
a) preparing documents on settlement of contracts, definitive evaluation of contracts signed with project developers according to regulations and law on construction agreements after finishing affairs stated under contracts; being responsible for accuracy of figures and legitimacy of relevant documents in contract settlement documents as per the law.
b) cooperating with project developers in dealing with drawbacks according to signed contracts; adequately and promptly returning all capital paid incorrectly by the project developers.
c) complying with decisions on approving settlement of finished projects of competent individuals.
3. Responsibilities of audit contractors:
a) independent audit contractors and auditors must comply with principles of independent audit operation and shall have the rights, obligations and responsibilities according to regulations and law on independent during audit of final accounts of finished projects.
b) being legally responsible for audit contents and results of final accounts of finished projects.
4. Responsibilities of agencies controlling payment, granting credit and investment capital of projects (or agencies authorized to conduct payment, grant credit and investment capital for high-density projects):
a) examining, comparing and verifying investment capital granted as loan and paid for projects complying with regulations and law of the Government. Remarking, assessing and proposing with agencies presiding settlement appraisal and settlement approval agencies regarding investment process using Forms No. 03/QTDA and 15/QTDA.
b) expediting project developers to pay collectable debt and payable debt according to decisions on approving settlement, revoking all advance capital and finalizing accounts of projects with approved settlement as per the law.
c) paying cost for settlement appraisal and approval at request of agencies presiding settlement appraisal and ensuring compliance with Clause 2 Article 20 of this Circular.
5. Responsibilities of agencies presiding settlement appraisal:
a) guiding, examining and encouraging project developers to perform settlement of finished projects promptly and adequately according to this Circular.
b) organizing appraisal of final accounts of finished projects with adequate contents and satisfy all requirements specified under this Circular; guiding project developers to deal with difficulties that arise during settlement of finished projects; being responsible for results of direct settlement appraisal on the basis of settlement documents provided by project developers.
c) agencies presiding settlement appraisal shall not be responsible for accuracy of workload accepted and included in final accounts by project developers and contractors; not be responsible for settlement unit price approved by competent authorities and contract award unit price decided by competent individuals which project developers and contractors have agreed to include in contracts.
d) being thoroughly responsible for accuracy and legitimacy of payment contents and values when requesting State Treasury to pay using funding sources for appraisal and approval of settlement of finished projects.
6. Responsibilities of ministries, central government authorities, groups, state corporations and People’s Committees of provinces:
a) guiding, examining and encouraging project developers and affiliated entities to perform settlement for finished projects as per the law.
b) approving settlement for finished projects within the deadline as per the law.
c) directing affiliated authorities to cooperate with project developers in dealing with drawbacks of projects (if any), settling public debt, and finalizing accounts of projects within 6 months from the date on which decisions on approval of settlement of finished projects are issued.
7. Responsibilities of financial authorities at all levels:
a) Ministry of Finance shall guide, encourage and examine settlement of finished projects utilizing State capital nationwide. In case of errors during appraisal and approval of settlement of finished projects utilizing State capital, request approval authorities to revise; request competent authorities to take actions against the violations as per the law.
b) Financial authorities of all levels shall direct, encourage and examine settlement of finished projects utilizing State capital under their management and subordinates’ management. In case of detecting violations in settlement of finished projects, may take actions as per the law or request competent authorities to take actions as per the law.
8. Responsibilities of other agencies: Organizations and individuals appraising technical design, technical drawing design, estimates, bidding results and competent individuals capable of approving projects, estimates, total estimates (if any) shall be responsible for credibility of workload and suitability of unit price in reports on appraisal results as per the law.
Chapter III
IMPLEMENTATION
Article 26. Transition
Projects, sub-projects, constructions, independent work items with application for settlement of finished projects submitted to agencies presiding settlement appraisal and contracts for independent audit signed before the effective date of this Circular: Conform to Circular No. 09/2016/TT-BTC dated January 18, 2016 of Ministry of Finance on settlement of finished projects utilizing State capital and Circular No. 64/2018/TT-BTC dated July 30, 2018 of Ministry of Finance on amendments to Circular No. 09/2016/TT-BTC dated January 18, 2016 on settlement of finished projects utilizing State capital.
Article 27. Implementation
1. This Circular comes into force from April 10, 2020. This Circular replaces Circular No. 09/2016/TT-BTC dated January 18, 2016 of Ministry of Finance on settlement of finished projects utilizing State capital and Circular No. 64/2018/TT-BTC dated July 30, 2018 of Ministry of Finance on amendments to Circular No. 09/2016/TT-BTC dated January 18, 2016 on settlement of finished projects utilizing State capital.
2. If the legislative documents extracted in this Circular are approved for amendments or superseded by other legislative document, the new documents will apply.
3. Difficulties that arise during the implementation of this Circular should be reported to the Ministry for consideration and revision./.
| PP. MINISTER |
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