Thông tư liên tịch 161/1998/TC-GTVT

JOINT CIRCULAR

GUIDING THE FINANCIAL MANAGEMENT, ALLOCATION AND SETTLEMENT REGIMES FOR STATE ENTERPRISES ENGAGED IN PUBLIC-INTEREST ACTIVITIES IN THE FIELD OF RAILWAYS INFRASTRUCTURE MANAGEMENT AND REPAIR

Pursuant to Decree No.56-CP of October 2, 1996 of the Government on State enterprises engaged public-interest activities;
Pursuant to Circular No.06/TCDN of February 24, 1997 of the Ministry of Finance guiding the financial management regime for State enterprises engaged in public-interest activities;
Pursuant to the Communications and Transport Minister�s decision on the establishment of public- interest enterprises in the railways sector;
Based on the particularities of activities of the State enterprises engaged in public-interest activities in the field railways infrastructure management and repair;
The Ministry of Finance and the Ministry of Communications and Transport hereby jointly guide the financial management regime and the management, allocation and settlement regime for State enterprises engaged in public-interest activities in the field of railways infrastructure management and repair as follows:

I. GENERAL PROVISIONS

1. Subject to this Circular shall be State enterprises engaged in public-interest activities in the field of railways infrastructure management and repair (called for short as the railways public-interest enterprises) under the Vietnam Railways Union, established by Communications and Transport Minister’s decision according to the criteria prescribed in Article 1 and Article 2, Decree No.56-CP of October 2, 1996 of the Government. The Ministry of Communications and Transport assigns, places the order to and entrust the Vietnam Railways Union to conclude contracts for, to inspect, supervise and accept, the work volume of railways infrastructure management and repair for railways public-interest enterprises.

2. The railways public-interest enterprises are provided by the State with capital, property and human resources necessary for performing the tasks of managing, maintaining and repairing railways infrastructure in order to ensure railways traffic safety under the economic and technical norms issued by the Ministry of Communications and Transport.

3. For properties which belong to the railways infrastructure system managed by the railways public- interest enterprises such as the systems of bridges, railroads, tunnels (bridges, tunnels, main tracks, station tracks, switches, viaducts, stone embankments, fences, sluices, fixed equipment along rail lines such as sign boards, marker posts, switch towers, half- barrier equipment); communications and signal system equipment (station entry-exit signals, signal cable system, track control equipment, concentrated control system, transmission lines system, switchboard stations); station architectures (working offices, waiting hall, booking hall, luggage and cargo warehouses, switch tower, half-barrier watch tower, cross-barrier equipment), the enterprises shall not have to make basic amortization but only to determine and monitor the wear and tear levels as prescribed in Clauses 1 and 2 of Article 19 regarding the regime of management, use and amortization of fixed assets, issued together with Decision No. 1062/TC/QDCSTC of November 14, 1996 of the Finance Minister.

4. The railways public-interest enterprises shall observe the enterprise accounting regime and pay taxes as well as other State Budget collections as prescribed by the State for the State public-interest enterprises.

5. The railways public-interest enterprises shall not have to pay fees for the use of the State Budget capital and the land rent for the part of land where the assets belonging to railways infrastructure system mentioned in Point 3 above are annexed to; in cases where such parts of land are used by railways public- interest enterprises for service business purpose, the land rent must be paid according to the provisions of law.

6. Besides performing the public-interest tasks assigned by the State, the railways public-interest enterprises shall be entitled to make full use of lands, capes, State capital and properties under their management to organize extra business activities in conformity with their capabilities and market demands, provided that:

- It is so permitted in writing by the Ministry of Communications and Transport;

- Such business activities must not affect the tasks of managing, maintaining, preserving and repairing railways infrastructure assigned to them by the State;

- They have to register additional business lines and trades according to the current regulations;

- The business activities jurist be accounted separately from the public-interest tasks;

- They have to fulfill the tax obligations for the business activities outside the public-interest tasks as prescribed by law.

II. MANAGEMENT AND USE OF CAPITAL AND PROPERTIES AT THE RAILWAYS PUBLIC-INTEREST ENTERPRISES

1. The investment, capital mobilization and investment outside enterprises shall comply with guidance in Points 1, 2 and 3, Item II, Circular No.06/TT/TCDN of February 24, 1997 of the Ministry of Finance guiding the financial management regime for the State public-interest enterprises.

2. Property transfer, leasing, mortgage and pledge:

- The transfer, leasing, mortgage and pledge of properties under the management of the railways public-interest enterprises must be decided by the Minister of Communications and Transport after obtaining the written consent of the body managing the State capital and properties in enterprises.

- The railways public-interest enterprises are not allowed to pledge, mortgate, lease or sell fixed assets in the railways infrastructure system.

- The railways public-interest enterprises are entitled to sell unnecessary and technically outdated properties in order to recover capital for reinvestment. When selling, the enterprise shall have to set up a reevaluation council and organize an auction as prescribed by law. The reevaluation council is compose of the director, the chief accountant, head of the technical section and a number of other officials according to specific requirements of the unit.

- The difference between the proceeds from the sale of property and the remaining, value of the property as well as the sale expenses shall be accounted into the enterprises� business results.

- For the leased properties, the enterprises shall still have to make amortization as prescribed and monitor them so as to retrieve them when the leasing terms expire.

- They must not pledge, mortgate properties they have borrowed, hired, kept in custody, pledged, mortgated... from other enterprise(s).

3. Property liquidation: The railways public-interest enterprises are entitled to liquidate poor-quality, lost-quality or technically outdated properties which are no longer in use, irreparably damaged properties and properties with the expiry of use dates.

3.1. For fixed assets in the railways infrastructure system: Their liquidation must be permitted in writing by the Ministry of Communications and Transport and the body managing the State capital and property at enterprises.

Based on the remaining, value after the liquidation, to account the business capital reduction in the accounting books. The difference between the proceeds from the sale of liquidated fixed assets and the liquidation expenses shall be remitted into the State budget (or be additionally allocated as fund for repair of railways infrastructure if so permitted by the Ministry of Finance).

3.2. For other fixed assets, the liquidation shall be effected as for the State enterprises conducting business activities.

3.3. Liquidation procedures: The enterprise shall have to set up a property liquidation council composed of the director, the chief accountant, the head of the technical section and a number of other officials according to specific requirements of the unit. Where the accessories or discarded materials recovered from the liquidated property are used for production and business activities, the enterprise shall have to re-evaluate them; if the liquidated materials or property are put on sale, a public announcement must be made and auction shall be organized according to the provisions of law.

4. All discarded supplies replaced during the process of maintenance and repair of railways infrastructure (tracks, switches of various kinds, strethcher bars, accessories...) must be fully recovered and warehoused at units according to regulations, and shall be put on sale. Their sale must comply with stipulations as for the property sale. The difference between the proceeds from such sale and the sale expenses must be remitted into the State budget (or be additionally allocated as fund for the repair of railways infrastructure if so permitted by the Ministry of Finance).

5. Capital allocation, responsibility to preserve capital, reevaluation of property, plans for handling cases of property loss, the management of loans and debts shall be effected as stipulated for State enterprises engaged in business activities.

6. The railways public-interest enterprises shall have to open accounting books to monitor accurately the entire capital and properties of the enterprises in accordance with the current accountancy regime.

III. FINANCIAL RESULTS AND HANDLING THE RESULTS BY RAILWAYS PUBLIC-INTEREST ENTERPRISES

A. FINANCIIAL RESULTS

1. The turnover of a railways public-interest enterprise includes: turnover from public-interest activities turnover from production and business activities and turnover from other activities.

a/ Turnover from public-interest activities includes:

- Revenues from the State payment for public interest products and services implemented accordance to plans and approved estimates.

- Revenue from urgent traffic restoration as the result of natural calamities, fires, floods or accidents which the railways public-interest enterprises have to spend more money outside the assigned plans overcome the consequences.

b/ For turnover from production and/or business activities and turnover from other activities, the regulations on State enterprises engaged in production and/or business activities shall apply.

c/ The railways public-interest enterprises shall have to open accounting books to record, monitor and reflect fully and promptly all arising revenues and have to make invoices and vouchers fully according to the regulations of the Ministry of Finance.

2. The expenditures of railways public-interest enterprises include: the costs of public-interest activities, business activities and of other activities.

a/ The public-interest activity costs shall include:

- The costs of materials, fuel and energy used in the course of operation;

- Expenses for salary wages and allowances of salary-nature according to the State�s regulations;

- Deductions for social insurance, health insurance and trade union funds as prescribed;

- Amortization of fixed assets, with objects and amortization levels being specified by the Ministry of Finance (except for fixed assets in the railways infrastructure system not subject to amortization as prescribed in Point 3, Item I of this Circular);

- Spendings on regular repairs, overhauls of fixed assets;

- Deduction for formation of lands (if any) for immediate higher-level managing bodies. The annual deduction level shall be proposed by the Ministry of Communications and Transport after consulting with the Ministry of Finance;

- Other expenses as stipulated by the State.

The expenses for such things as raw materials, materials, services bought from outside... must be proved with valid invoices and vouchers as stipulated by the Ministry of Finance. Spendings on guest reception, public relations, inauguration, meetings, transactions... shall not exceed the levels prescribed by the State.

b/ The costs of production and/or business activities and other activities shall comply with regulations set for the State enterprise engaged in business activities.

3. The railways public-interest enterprises may use turnover to cover their expenses, in which:

- Turnover from public-interest activities shall be used to cover the costs of public-interest activities, taxes and other State collections as prescribed by law (except for the enterprise income tax);

- Turnover from production and business activities as well as from other activities shall be used to cover the costs of production, business and other activities, taxes and other State collections as prescribed by law (except for the enterprise income tax);

- The railways public-interest enterprises conducting business activities must, in principles, ensure that such business activities are profitable and must not offset the losses incurred in production, business and other activities with profits from public-interest activities.

B. HANDLING FINANCIAL RESULTS

1. For railways public-interest enterprises having revenues in the year, including revenues from business and other activities, such revenues shall be handled according to the following order:

a/ To pay the enterprise income tax as prescribed by law;

b/ To deduct amounts of fines for breach of contracts, overdue debts, reasonable expenses which have not yet been deducted when determining the taxable income;

c/ To deduct loss amounts not yet deducted from pre-tax income.

d/ The remaining income, after making deductions in periods a, b and c, shall be deducted by the enterprises to set up various funds according to the following controlled percentages and levels:

- For the development investment fund: The deduction is at least equal to 50 per cent.

- For the financial reserve fund: To deduct 10 per cent, the credit balance of this land shall not exceed 20 per cent of the charter capital.

- The deduction for reward and welfare funds shall not exceed the total actual wage payment for three months if the budget remittance in the reporting year is higher than that of the previous year; or for two months if it is equal or lower than that of the previous year.

After making deductions for the development investment fund and the financial reserve fund, the remaining profits, after being deducted for the reward and welfare funds, shall be fully supplemented to the development investment fund; if they are not enough for the establishment of the reward and welfare funds which are equal to the actual wage payment for two months, the railways public-interest enterprises shall be given the deficit amount by the State.

2. The deduction procedures and time, the use purposes of various lands of the railway public-interest enterprises shall comply with regulations set for the State enterprises engaged in business activities.

Within the total amount of deduction for the reward and welfare funds; directors of the railways public-interest enterprises shall have the right to decide on the deduction percentage for each fund after consulting with the Trade Unions therein.

The railways public-interest enterprises shall set up the severance allowance reserve fund. In special cases where the railways infrastructure maintenance and repair operation needs to be scaled down, the Ministry of Communications and Transport and the Ministry of Finance shall consider and provide allowances for job losers according to the prescribed regime.

IV. ELABORATING PLANS AND REGIMES FOR MANAGEMENT, DISTRIBUTION AND SETTLEMENT OF RAILWAYS PUBLIC-INTEREST PRODUCTS

A. ELABORATING AND ASSIGNING PLANS

1. Annually, basing themselves on the technical status of bridges, railroads, tunnels, communications and signal equipment, and architectural structures in the railways infrastructure system and on the requirements of transport on each operation lines, economic and technical norms as well as on regulations and guidance of the Ministry of Communications and Transport, the railways public- interest enterprises shall draw up plans for railways infrastructure management and repair as well as the financial revenue and expenditure estimates and submit them to Vietnam Railways Union for consideration and sum-up report to the Ministry of Communications and Transport and the Ministry of Finance. The Ministry of Communications and Transport shall ratify and make a sum-up report to be sent to the finance agency and concerned bodies.

2. Within the approved annual budget revenue and expenditure estimate, the Ministry of Communications and Transport shall assign plans for railways infrastructure management and repair (including plans for settling up reserve fund for emergency traffic restoration in case of natural calamities, fires, storms and floods or accidents due to objective causes), and allocated budget estimates to railways public-interest enterprises and send them to the Ministry of Finance for sum-up. The State budget shall be allocated and settled only within the approved estimates.

In cases where the budget implementation goes beyond the approved estimate, it shall be handled according to the State Budget Law and current regulations.

Where a railways public-interest enterprise spends extra money to restore emergency traffic disrupted by natural calamities, fires, storms, floods or accidents as the objective causes, beyond its assigned plan, such enterprise shall have to make a report on the damage level (certified by the local administration or the railways traffic inspectorate) after using the reserve fund to offset it; if inadequate, it shall have to report it to the Ministry of Communications and Transport and the Finance Ministry for consideration and settlement.

B. FUND ALLOCATION AND SETTLEMENT

1. The fund sources for allocation and settlement of railways infrastructure public-interest product shall include:

- Sources of State budget allocations;

- Sources of fund collected from charges for the use of railways infrastructure, which are paid according to percentages prescribed by the State;

- Other sources of fund (if any).

2. All sources of fund shall be used only for the purposes of railways infrastructure management, maintenance and repair, not for other purposes.

3. The allocation and settlement of public-interest products for railways public-interest enterprises shall be effected via the State Treasury system; monthly, the Ministry of Finance shall transfer by "money order" to the State Treasury for payment allocation to railways public-interest enterprises, and at the same time notify the Vietnam Railways Union thereof for monitoring and making sum-up reports.

The management, allocation and settlement railways public-interest products by the State Treasury system shall comply with Circular No.40/1998/TT-BTC of March 31, 1998 of the Ministry of Finance "guiding the regime of management, allocation and payment of State budget expenditures via State Treasuries." Besides, the State Treasury shall make the allocation and payment for railways public-interest enterprises only when the following are available:

+ The production plan and the funding plan already approved and assigned by the Ministry Communications and Transport;

+ The techno-economic norms for each product issued by the Ministry of Communications and Transport;

+ The record on acceptance of the completed volume of products and services and their qualities, certified by the Vietnam Railways Union under the authorization of the Ministry of Communications and Transport;

+ The report on plan execution.

V. EXAMINATION OF BOOK-KEEPING AND FINANCIAL REPORT AND FINANCIAL PUBLICITY

1. Making financial reports:

- Quarterly and annually, the railways public-interest enterprises shall have to make financial reports according to current regulations. Enterprise directors shall have to bear responsibility before the State and law for the accuracy and truthfulness of their financial reports.

- The quarterly and annual financial reports shall be forwarded to Vietnam Railways Union, the Ministry of Communications and Transport, the tax authorities, the bodies managing the State capital and properties at enterprises, and statistical agencies.

- The report-forwarding time shall comply with the Ministry of Finance’s stipulations.

2. Examination of book-keeping and financial reports:

- Quarterly and annually, the railways public-interest enterprises shall have to examine the book-keeping and financial reports by themselves.

- The Ministry of Communications and Transport shall assume the prime responsibility and coordinate with the General Department for Management of State Capital and Properties at Enterprises and Vietnam Railways Union in examining and ratifying the annual settlement of accounts and financial reports of the railways public-interest enterprises.

- The finance agencies shall have to inspect the observance of financial and accounting regulations, the discipline in budget collection and remittance as well as the accuracy and truthfulness of financial reports.

- All violations of the regimes on book-keeping, financial revenues and expenditures, budget remittance, and on deduction for setting up enterprises’ funds and the use thereof shall be sanctioned administratively and/or economically according to the provisions of law.

3. Making public annual financial reports:

- Based on the annual financial reports already ratified by competent agencies, the railways public- interest enterprises shall announce a number of financial norms before the conference of the enterprise’s employees.

- The contents of the publicized norms shall comply with the form attached to Circular No.116/ TC-TCDN of February 24, 1997 of the Ministry of Finance.

VI. IMPLEMENTATION PROVISIONS

1. Besides regulations prescribed exclusively for them in this Circular; the railways public-interest enterprises shall have to abide by other law provisions on State enterprises.

2. This Circular takes effect as from January 1, 1999. All previous regulations on financial management over the railways public-interest enterprises, which are contrary to this Circular, shall be annulled.

3. The railways public-interest enterprises are requested to report any problems arising in the course of implementation to the Vietnam Railways Union for sum-up and report to the Ministry of Finance for study and appropriate amendment and supplement.