Disclosure report on annual audit report 2005 and implementation outcome of audit conclusions and recommendations

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For Press Release

on 17 August 2006


Independence - Freedom - Happiness






In 2005, the State Audit Office audited: budget balance reports of 30 central provinces and cities (28.3% of local budget income and 40.5% of local budget expenditure); balance reports of 11 ministries and central agencies (22.4% of central budget expenditure); 2004 state budget balance report; balance reports of 9 prioritized plans and programs; financial reports of 19 state owned enterprises and corporations and financial-banking institutions; financial reports of 24 security, national defense and party finance agencies (Annex 1).

At the IX Session, the XIth National Assembly approved 2004 state budget balance. Under Article 58 of State Audit Office Law, at the consent of the NA Standing Committee and the Prime Minister, the State Audit Office releases its Annual Audit Report 2005 and Report on Implementation Outcome of Audit Conclusions and Recommendations:


Summarized audit results in the year 2005 of the 2004 budgetary period, the State Audit Office has identified and made recommendations for income increase, expense decrease and putting into budget management of the combined 4,408 billion VND which could be clarified as follows:

- Income increase: 789 billion VND

- Expenditure decrease: 708 billion VND

- Putting into state budget management (income-expenditure) 2,164 billion VND

- Recommendations on solving temporarily collected items and outstanding tax identified by the State Audit Office of being increased: 747 billion VND

(Detailed data on incomes, expenditures and audited agencies are available in Table 02, 03, 04 and 05 )


Financial and budget management has made significant progress in 2005:

1. Generally, financial management in agencies has improved. Audited agencies has been more aware of legal observation in financial and budget management. Legal regulations have been better enforced . in addition to efforts by audited agencies, such outcome also resulted from effective governance by the Government, supervision by NA and People’s Council, efforts by supervision, audit and investigation agencies, impacts from the public and the mass media.

2. financial and budget management regimes and policies have been sufficient and stricter. Various policies and regimes have been realized. Financial and budget management have followed legal regulations. “give and take” has been limited thanks to clearer and more transparent policies and mechanisms. 2002 State Budget Law came into effect since 2004 budget year without trouble in enforcement and management thanks to effective preparation.

3. Law on Accounting has contributed to raising observation of accounting regime in audited agencies. Accounting books, accounting records and account entries have been better observed.

4. Audited agencies have been more responsible in implementing conclusions and recommendations from supervision, monitoring and audit agencies.

Year-long weaknesses and shortcomings, however, have not been thoroughly addressed: local estimates are not close to reality; income estimate is lower than previous year figure; administrative expenditure exceeds estimate; loans for capital construction is higher than assigned level; reserve budget is used for wrong purposes; SOEs efficiency remains low, capital construction investment management is weak, etc. in 2005, State Audit Office identified additional orders in bidding projects which were carried out not in accordance with procedures and payment terms (Highway 18, Noi Bai-Bac Ninh Section under PMU 18, State Audit Office recommended to deduct 50 billion from balance report, equivalent to 10% of audited value). Wrong utilization of budget for target programs occurred frequently.

1. Planning and allocating state budget estimate

a. Planning and allocating state budget income estimate

Budget income estimate planning has not changed compared to previous years. 2003 income estimate was only 87% of 2003 real income. Therefore, though 2004 income estimate increased by 12.6% compared to 2003 estimate, it was only 98% of 2003 real income. Domestic income alone, income estimate from SOEs was 117% compared to 2003 real income, 122,6% and 115.2% from FDI and non-state enterprises respectively.

9 out of 30 provinces proposed income estimate 10% higher than 2003 real income. However, 9 out of 30 provinces proposed income estimate lower than 2003 real income, especially 2 provinces propose only 55% to 60% of 2003 real income.

For income retained for expenditure through budget management: Many provinces did not pay due attention to such income: 17 out of 30 audited provinces did not propose estimate; 13 provinces proposed estimate but mostly equivalent to 40% to 60% of 2003 real income.

For income from ministries: income estimate for 2004 for some ministries was much lower than 2003 real income (Ministry of Culture and Information 34.6%), which led to 2004 real income higher than estimate (MARD 2.8 times higher; MONRE 2.5 times higher and MOCI 12 times higher).

b. Planning and Allocating state budget expenditure estimate

Many provinces have followed Government’s instructions, sparing 2004 budget year investment for capital construction debt payment in 2003.

Ministries, central agencies and provinces have allocated investment in accordance with the investment level assigned by the Prime Minister. Such investment has been basically following the objectives, sectors and sources. Some ministries and provinces failed to allocate all investment early in the year and retained for allocation for several years, which does not comply with Budget Law, of which investment expenditure was 79.8 billion dong (Quang Binh 42.5 billion dong, Vinh Phuc 32.5 billion dong), regular expenditure 418 billion dong (MARD 212.9 billion dong, Nghe An 130 billion dong, etc).

Some provinces allocates estimate for education and training, science and technology activities lower than government allocation, not complying Circular 114/2003/TT-BTC dated November 28th 2003 by MoF on guiding the implementation of 2004 state budget estimate. The total amount was 64.6 billion dong (Lai Chau 23.8 billion; Tuyen Quang 18.7 billion dong, etc).

Kien Giang People’s Council approved the local budget over-expenditure of 155.4 billion dong; therefore, the province borrowed for regular expenditure and still owed 74 billion dong at year-end.

2. State budget observation

2.1 state budget income observation

2.1.1 outcome of state budget income estimate implementation:

State budget income was 125.5% of the income estimate, an increase of 23% compared to 2003 figure. Budget income increase came mainly from crude oil and land; let alone the two sources, budget income was only 5% higher than estimate. Budget income structure remained unsustainable, depending on crude oil and import tariffs (43.6% of the total income).

All ministries, central agencies and provinces recorded income higher than estimate and 2003 real income. Such increase resulted from effective budget governance by the Government, ministries and agencies and budget allocation and planning.

Income from SOEs stood at 95.5% compared to income estimate, the second consecutive year of income deficit. Reasons are business ineffectiveness and constant loss: 4 out of 16 audited enterprises (25%)recorded a loss of 124 billion VND; 11 out of 16 enterprises (68.7%) has suffered progressive loss of 1,058 billion VND by December 31st 2004.

2.1.2 State budget income management

Value added tax: State Audit Office identified and recommended a collection increase of 131.2 billion VND (63.9 billion VND alone for Vinashin). Reasons are disobedience of tax law, inaccurate registration of applied tax rate, unrevealing taxed income and inaccurate registration of tax deduction.

Corporate Income tax: State Audit Office identified and recommended a collection increase of 187.7 billion VND, mainly from Urban and Housing Development Investment Corporation – 33.3 billion VND and Saigon Construction Corporation – 9 billion dong. Main violations are incomplete account entries of income and revenue, illegitimate entry of business fees into business cost.

Nonstate income collection management: Tax registration followed legal regulations. However, step-1 tax document verification quality remained low (verification at tax bureaus). By auditing tax documents at tax bureaus of 112 enterprises in 7 provinces, State Audit Office recommended a collection increase of 8 billion VND. Main reasons are inaccurate application of VAT rate, incomplete income account entry, incomplete registration of VAT and account entries of illegitimate costs.

Domestic tax debts: as reported by Tax General Department, tax debt stood at 4,314 billion VND by December 31st 2004. Of which 1,421 billion VND could not be collected and 902 are pending settlement. Shortcomings in tax debt settlement are:

- some tax bureaus failed to adopt adequate sanctions against enterprises to collect tax debts though these enterprises were able to pay tax like Kien Giang, An Giang, Lang Son, etc.

- Some tax bureaus failed to update and amend tax debt figures in accordance with tax balance outcome; therefore tax debt figure was estimated lower than real one. In 8 out of 30 provinces, State Audit Office identified 433.3 billion dong in tax debt higher than reported figure by tax bureaus like Dong Nai – 117.7 billion, Vinh Phuc – 87.6 billion.

- Some SOEs operated profitably but failed to register and pay corporate income tax; tax payment stood between 30% and 50% of real figure which caused high tax debt. In Dong Thap, 3 enterprises owed 152 billion dong.

Import-Export Tariff Debt: AS reported by the Customs General Department, tariff debts was 5.542 billion dong by December 31st 2004, including 3,195 billion in specialized income debt and 2,347 billion in temporary income debt). Out of specialized income debt, 173 billion was owed by non-addressed enterprises and 1,032 billion owed by enterprises in motorbike domestification policy.

Budget income from non-productive enterprises: some agencies failed to report income retained for expenditure; the total amounted to 108 billion dong, of which 38.2 billion from MOFA, 31.6 billion from MOD and 19.8 billion from MOCI.

2.2 State budget expenditure observation

2.2.1 Outcome of state budget expenditure estimate implementation

  1. Expenditure for development investment

Implemented expenditure stood at 117% of expenditure estimate, accounting for 29.7% of total budget expenditure. Such deficit was compensated from income increase. Almost all ministries, central agencies and provinces exceeded expenditure estimate like Hai Duong 103.9% higher than estimate, Lang Son 88.7% higher and Son La 52.9% higher.

  1. Regular expenditure:

Implemented expenditure was 116.7% compared to expenditure estimate. Administrative, party and mass organization expenditure was 33.5% higher than estimate. Ministries and central agencies did not exceed estimate expenditure. Almost all provinces exceeded estimate like Vinh Phuc 114.9%, Hai Duong 50%%, Ninh Thuan 55% and Khanh Hoa 51.7% higher than estimate.

Administrative, party and mass organization expenditure accounted for 7.5% of state budget expenditure, higher than previous years. Reasons were commune officials’ subsidy converted into civil servant salaries and overspending for procurement, meetings and festivities.

2.2.2 State budget expenditure management Development investment management

  1. investment preparation state:

AT almost ministries, central agencies and provinces, scattered investment has not been settled. Group B and Group C projects extended capital allocation deadlines (Tien Giang, Kon Tum, Ninh Thuan, Nghe An, Tay Ninh, Dong Thap, Vinh Long, Can Tho..). MoT had 196 Group B and Group C projects; especially Group B Project of Maritime University extended for 23 years and Group C Project of Transport Official Refreshment School extended for 17 years. Lai Chau had 21 Group C projects which extended for over 2 years and total investment of 142 billion dong.

Reasons for scattered investment and construction delays are:

+ Investment capital planning: In some provinces, many projects have been registered for investment plan though these projects did not meet criteria. Lang Son had 24 out of 26 projects (92%) did not meet required procedures.

+ Investment plan exceeded capital allocation capacity which led to insufficient investment. Lang Son decided to invest 2,334 billion dong while only 271.5 billion was allocated, or 11.6% of total investment. The same situation was witnessed in provinces like Tien Giang, Kon Tum, Ninh Thuan, Nghe An, Tay Ninh, Dong Thap, Vinh Long and Can Tho.

+ Investment estimate evaluation and approval procedures failed to identify mistakes in estimate planning; therefore, almost all projects must have amended and adjusted investment estimate. Some projects did not go through estimate evaluation; estimate was endorsed after the bidding package was approved and so on.

  1. Investment Implementation stage:

- Bidding process:

Almost all audited agencies violated or did not observe bidding regimes like not following bidding process, dividing bidding package for bidding designation, limited bidding session; inaccurate bidding volume. In some cases, incompetent contractors were chosen which led to indolent of sub-contractors later; bidding decisions were nominal only; prejudiced bidding decisions; illegal bidding outcome.

In some audited agencies and provinces like Son La, Lam Dong and Ministry of Fisheries, some installation and construction packages which should have gone through bidding were decided by bidding designation. Chieng Ngan Road in Son La which had construction value of 238.8 billion VND went under bidding designation; the designation value was 18.8 billion higher than the approved investment. Some contractors did not have sufficient capacity (MoT), which led to involvement of sub-contractors, i.e. Nghia Lo Vach Kim Project had to invited 5 sub-contractors for package 7 and 3 sub-contractors for package 2.

Bidding procedures were nominal in some projects. National Cinema Centre Phase II (MOCI) did not consider and amend inaccurate price and volume adopted by contractors which valued 10.6 billion dong. Some projects of Ministry of Fisheries did not have sufficient contractors, i.e. bidding package for office and 5-storey hall of Fisheries Technical and Professional School No II received 5 bidding files. However, only one contractor participated bidding opening and that contractor won the bidding. Ground leveling and wall building of Northern seafood breeding centre was finished before bidding; therefore, bidding outcome could not be used for investment balance.

There was collusion among bidders and pre-arrangement of bidding outcome. In Dong Thap, Provincial Vocational School’s Hostel Phase II, ground leveling package of Tan Kieu Cemetery of Thap Muoi District and Cai Dau-Xep Ba Vai Road in Lap Vo had same format, contents, words, font and spelling mistakes. Bidding experts proposed to repeal bidding outcome of the Provincial Vocational School’s Hostel; however, DPI still submitted to the People’s Committee to approve bidding outcome.

- Inadequate check and acceptance activities:

In most audited projects and programs, approved payment value for contractors were deducted. Major mistakes were overlapping items and inaccurate volume calculation. Some projects did not have check and acceptance reports between monitoring consultants and construction contractors. In some cases, construction work had not been finished but construction volume had been checked and accepted (based on design proposal).

- Inaccurate usage of investment

MoT used capital construction investment for PMUs and road management companies for purchasing offices, vehicles and equipment up to 143.6 billion dong.

School and class concretization program between 2002 and 2004 used 167.8 billion dong for the wrong purpose, including investment in wrong item of 102.6 billion dong and investment in non-classroom items of 65 billion dong.

Program 135 in 4 provinces of Thanh Hoa, Tay Ninh, Binh Phuoc, DakLak used 7.5 billion dong for the wrong purpose. Investment which was allocated to wrong destinations came up to 14.2 billion dong.

Lang Son used capital construction investment of 54.55 billion for wrong purpose (8.5 billion dong from school and classroom concretization, 38 billion dong from border gateway infrastructure project, 8 billion dong from investment decided at Decision 120/2003/QD-TTg dated June 11th 2003 by the Prime Minister).

Lam Dong allocated investment of 15.4 billion dong from land decided in the Prime Minister’s Decision 15/CT-TTg dated June 12th 2003 for districts’ working office project, People’s Committee Guest House and Restaurant, In-service training centre.

Loans for Capital Construction: Almost all audited provinces followed Law on State Budget in terms of procedures, processes and debt surplus level. Debt surplus level of 24 provinces stood at 5,291 billion dong. However, 5 out of 30 provinces had illegal debt increase, debt surplus level higher than 30% stipulated in State Budget Law. Loans for capital construction has gone up, 7,289 billion in 2004 or42.9% higher than 2003 (7,289/5,099), let alone 2,213 billion not included into budget balance.

Capital construction debt: in addition to above-mentioned capital construction debt surplus, almost all provinces had capital construction debts. Though in 2004, provinces allocated 1,980 billion dong for capital construction debt settlement. However, according to reports from 19 audited provinces, capital construction debt amounted to 2,812 billion dong. Provinces which had high debt rate were Nghe An 485 billion dong, Nam Dinh 366 billion dong, Quang Binh 374 billion dong, Binh Thuan 299 billion dong.

  1. Investment Balance

Delays in investment balance occurred in almost all audited agencies. A project which was completed in 1992 has not been balanced. By December 31st 2004, in Dong Thap 1761 projects have been completed, amounting to 925 billion dong. However, balance has not been finished. In Lang Son, 64 projects and 166 billion dong have not been balanced, including a project which was put in operation in 1992. MoT had only 56/226 projects balanced. Regular expenditure

Observation of regular expenditure regime, standards and level: Violations of expenditure regime, criteria and level occurred in many audited agencies. Major violations were expenditure for vacations and welfare, overspending for meetings and business expenses, i.e. Flight Control Centre of Vietnam Aviation Authority sponsored 1.9 billion dong for 20 people who are not the Center’s employees to study abroad.

Support expenditure and others: Violations of support expenditure occurred in 16 audited provinces, amounting to 54.3 billion dong. Other expenditure:

Usage of reserve budget: 20 out of 30 provinces used reserve budget not in accordance with Article 18, Section IV, Circular No 59/2003/TT-BTC dated June 23rd by Ministry of Finance. The amount came up to 181 billion dong or 39% of reserve budget, including 145 billion dong for non-urgent tasks, 19.5 billion for vehicles, 15.8 billion for capital construction and assets (Nghe An 34.8 billion, Da Nang 24 billion, Gia Lai 19 billion, Tra Vinh 18 billion).

Usage of budget loans and advances: Item 4, Article 8 of Law on State Budget states “State budget are prohibited from loans, lending and other illegal usages”. However, 17 out of 30 provinces provided loans and advances from state budget, not in compliance with legal regulations. Total debt by December 31st 2004 amounted 1.877 billion dong, including 98.7 billion owed by SOEs. Some provinces which provided large loans and advances from state budget were Binh Thuan – 602 billion, Kien Giang – 285 billion, Da Nang 157 billion.

Usage of income surplus: Income surplus which had been used amounted to 6,029 billion dong. Most of the cases followed regulations. However, some provinces failed to followed regulations in Item 1, Article 59 of Law on State Budget. Those provinces did not have the approval records from the Standing Committee of the People’s Council (11 provinces and 1,459 billion dong). Financial autonomy in income-earning non-productive agencies:

Financial autonomy has been operation for 3 years. However, problems remained. Many agencies failed to develop financial autonomy plans or have the plans approved. Some approved plans failed to define how much is provided by the state budget and how much is covered by the agency. Some agencies which are incapable of financial autonomy are still requested to adopt financial autonomy. Some failed to put income and expenditure in financial reports and fulfilled state budget tasks.

2.3 ODA usage and management:

ODA usage and management remained ineffective; difficulties remained in management mechanism. Decree 17/2001/ND-CP dated May 4th 2001 by the Government is the highest legal document guiding ODA usage and management. However the Decree has not been strictly followed. ODA monitoring concentrated on reporting progress to meet donors’ requirement. Project efficiency evaluation and progress monitoring were not paid due attention. Unclear responsibility of PMUs caused waste, loss and low quality of ODA projects.


Generally, SOE observed financial and accounting regimes, innovated technology to enhance business efficiency and competitiveness and followed the policy of SOE arrangement and reform. However, the number of SOEs which operated profitably remained low. Many SOE recorded loss or low efficiency; problems occurred in economic-financial and accounting management.

1. Financial reports in many audited SOEs did not reflect the real financial situation, business outcome and income to state budget. Tax and other income that 19 audited corporations and companies were to pay to state budget were 190.8 billion dong, i.e. Urban and Housing Development Investment Corporation 35.3 billion dong; Vinashin 68.8 billion and Paper Corporation 13.3 billion.

2. Almost all SOEs failed to compare and verify income and debts; debts had not been collected or settled for years; reserve for outstanding debts was not implemented as required. Outstanding debts resulted from weak management and disobedience of advance and payment regimes. By December 31st 2004, SOEs which had high outstanding debts were Southern Food Company – 156.4 billion dong, Vietnam Husbandry Corporation – 101 billion dong, Vietnam Construction Corporation – 46.7 billion dong, Vietnam Paper Corporation 36.7 billion dong.

3. Commodity and material was not well-managed in some SOEs; material loss level was not designated and year-end inventory was not conducted, particularly in installation and construction enterprises. Business and production costs were not rationally determined; business outcome was distorted; materials were not managed at construction sites. In some SOEs, materials which was recovered was not monitored and balanced; low quality goods and inventory materials were not well handled, which caused negative impact on enterprise’s business efficiency and competitiveness.

4. Fixed assets were inaccurately priced and depreciation was decided not accordingly to regulations. Due to lack of attention and investment constraints, installation and construction enterprises’ investment in fixed assets reached only 11-30%, not guaranteeing business and production capacity. Machinery and fixed assets operation productivity remained low, negatively affecting business and production. (Vinatex had usage productivity of fixed assets of 80%, even 50%-60% in some subsidiaries).

Some SOEs did not followed Construction and Investment Management Regulation and procurement bidding regulations (Urban and Housing Development Investment Corporation, Road Company 471 of CIENCO 4); construction was undertaken without approval from relevant authority (Lang Ha-Thanh Xuan Road, My Dinh Project of Hanoi Housing Development and Investment Corporation); short-term loans were used for long-term investment (Northern Pig Breeding Company of Vietnam Husbandry Corporation).

Some SOEs’ investment was not carefully undertaken; investment was not rationally utilized; implementation progress and investment efficiency was low, causing negative impact on enterprise’s finance (Frozen Meat Production Project and Specialty Fruit Project of Husbandry Corporation, some projects of Contraction Material Corporation No 1; Kraft Paper Production Line of Hoang Van Thu Paper Company; Duplex Paper Production Line of Viet Tri Paper Company of Vietnam Paper Corporation).

5. SOEs failed to fulfill state budget income tasks; state budget debts remained high, particularly in construction and installation enterprises.

6. Audit outcome revealed that SOEs’ business efficiency remained low, even prolonged loss; 4 out of 19 (21%) audited SOEs suffered loss of 124 billion dong in 2004; 11/19 audited SOEs suffered progressive loss of 1,058 billion dong by December 31st 2004. Enterprises which suffered large progressive loss were Vietnam Textile Corporation – 328 billion dong, Vietnam Paper Corporation – 199 billion dong, Southern Food Corporation – 183 billion dong. Profit percentage remained low (Construction Material Corporation No 1- 0.18%, Vinashin – 0.42%, CIENCO 4 – 0.45%, Vinatex – 0.8%).

SOEs’ ownership capital remained low in comparison to total capital, particularly in construction and installation companies like Construction Corporation No 4-4.6%, CIENCO 4-5.8%. By December 31st 2004, total due debt of 16 SOEs amounted 21,408 billion dong, accounting for 36.48% of total assets and 2.66 times higher than total business capital; total debt reached 47,005 billion dong or 80.04% of total capital. Debt payment capacity was uncertain in some SOEs like CIENCO 4, Infrastructure Construction and Development Corporation, six subsidiaries of Husbandry Corporation, seven subsidiaries of Hanoi Housing Development and Investment Corporation.


Based on the Government’s 2004 State Budget Balance Report, evaluation from the NA’s Economic and Budget Committee and the State Audit Office’s Report, the National Assembly approved 2004 State Budget Balance Report in Decision 67/2006/QH11 dated June 29th 2006 and assigned the Government to receive and handle recommendations made by the Economic and Budget Committee in Evaluation Report No 2553/UBKTNS dated May 8th 2006 and the State Audit Office in 2004 Audit Report of State Budget Balance No 84/BC-KTNN dated April 21st 2006.

State Audit Office’s recommendations are:

1. To instruct Ministry of Finance and ministries, agencies and provinces to follow the State Audit Office’s recommendations in the audit reports; to review individual responsibility for faults and wrong-doings identified by audit agencies, particularly wrong-use of capital in MoT, School and Classroom Concretization Program, 135 Program and so on; and to allocate refund for target program as recommended by the State Audit Office.

2. To amend and improve state budget planning towards medium-term financial plans, budget allocation indicator system and budget expenditure regime, criteria and level; to improve forecast activities, to plan state budget income estimate based on annual income; to integrate expenditure from government bond, crude oil income including reinvestment in oil industry from net profit in Vietsopetro and expenditure retained by the Tax and Customs agencies into annual state budget balance estimate; from 2005 budget year, retained income for tax agencies is to be deducted from domestic income, not export –import tariff. The Government and the NA’s Standing Committee should define the involvement of State Audit Office in State Budget Estimate Planning in accordance with Item 4, Article 15 of Law on State Budget.

3. To review the implementation of Decree 10/2002/ND-CP dated January 16th 2002 by the Government on financial autonomy regime of income-earning non-productive agencies, fixed expenditure rate of tax and customs agencies, Vietnam Television, Radio Voice of Vietnam, etc to guarantee financial autonomy of non-productive agencies, reduce state budget expenditure, facilitate salary settlement for administrative agencies and guarantee income balance among economic sectors; to instruct Ministry of Finance to adopt positive measures in estimate planning, budget and accounting observation, fixed budget for Tax General Department and Customs General Department to guarantee effective budget usage, modernize tax and customs sector and reduce outstanding debts.

4. to speed up SOEs reform; to assess how Debt Selling and Buying Corporation in settling outstanding debts in SOEs and implementation of Decision 271/2003/QD-TTg dated December 31st 2003 by the Prime Minister on SOEs Monitoring and Evaluation Regulations. Ministry of Finance should monitor and review organization, operation, financial regime and financial-accounting regime implementation in PMUs of construction corporation to prevent waste, loss and wrong-doing in budget and assets utilization.

5. To review and amend financial and assets management regime and mechanism in PMUs of ministries, agencies and provinces (including ODA and state budget); to control validity of additional orders in bidding projects and payment for additional orders; to enhance responsibility of the State Treasury in controlling expenditure of national target programs and projects to guarantee legal financial utilization.

6. To adopt synchronous measures to settle tax debts, particularly 1,032 billion of enterprises which followed motorbike domestification policy.

7. To amend and supplement Decision 1637/QD-TTg dated December 31st 2001 on providing some newspapers and magazines to mountainous and ethnic areas, Decision 204/1998/WD-TTg dated October 19th 1998 releasing Temporary Regulations on providing, managing and balancing expenditure for mineral resource survey, Circular 27/1999/TT-BTC dated February 10th 1999 by MoF guiding financial regime management of Airports; Circular 121/1999/TT-BTC dated October 11th 1000 by MoF guiding the amendment and supplement of some points of Circular 36/1998/TT-BTC dated March 21st 1998 guiding financial regime management of Vietnam Civil Flight Control Centre, Decision 116/1999/TT-BTC dated September 20th 1999 by MoF issuing aviation administrative fees, Circular 120/2003/TT-BTC dated December 12th 2003 guiding the implementation of Decree 158/2003/ND-CP dated December 10th 2003 by the Government specifying the implementation of Law on VAT and Law on Amending some points of Law on VAT, Circular 134/2004/TT-BTC dated December 31st 2004 guiding fee collection, management and utilization at diplomatic and consular delegations abroad; to repeal Decision 1320/1998/WD-UB dated September 23rd 1998 and Decision 752/WD-UB-TM dated May 29th 2000 by Ha Tinh People’s Committee on titan additional income collection; Decision 56/WD-UB dated January 16th 2004 and Decision 993/WD-UB dated March 19th 2004 by Cao Bang People’s Committee on export ore additional income collection in accordance with Law on State Budget (see Annex 6).

To request the Government to instruct MoF to study and submit amendments of state budget income and expenditure balance report and estimate forms, measures to determine income and expenditure targets, budget progress in accordance with targets proposed to the Government and the NA.

8. to specify expenditure from reserve budget for urgent tasks

9. to specify responsibility of agencies and individuals who violate Law on State Budget as stipulated in Article 73 of Law on State Budget.


Over the past years, particularly since Law on State Budget was adopted, more attention has been paid to fulfilling State Audit Office’s recommendations and conclusions. After the Audit Report was released, MoF, ministries, agencies and provinces have instructed audited agencies to strictly follow State Audit Office’s recommendations and conclusions. MoF have sent constant official letters to audited agencies requesting the fulfillment of State Audit Office’s recommendations and conclusions; in some cases, budget estimates were deducted. That reflected effective cooperation to fulfill State Audit Office’s recommendations. The State Audit Office carried out constant monitoring of conclusion and recommendation fulfillment through two forms: text reports from audited agencies and onsite monitoring. Many audited agencies have strictly followed State Audit Office’s recommendations and conclusions. Implementation outcome of State Audit Office’s recommendations and conclusions have been submitted to the NA by MoF and State Audit Office:

- Fulfillment of State Audit Office’s recommendations to 2003 State Budget Balance: 98% of recommendations have been fulfilled (3,240 billion dong/3,307 billion dong), provinces-99.2%, ministries-98.6% and enterprises-100%.

- Fulfillment of State Audit Office’s recommendations during planning and preparing state budget balance of ministries, central agencies and provinces for 2004: 63.4% recommendations have been fulfilled.



Annex 01/DMDVKT


A. State Budget Audit

I. Audit 2004 Budget Balance Report

1. Ministry of Finance

2. Ministry of Planning and Investment

II. Audit Budget (Financial) Balance Report of Ministries and central agencies:

1. Supreme People’s Court

2. Ministry of Foreign Affairs

3. Ministry of Fisheries

4. Ministry of Culture and Information

5. Ministry of Natural Resources and Environment

6. Ministry of Transportation

7. State Bank of Vietnam

8. Commission on Ethnicity

9. Committee on Population, Family and Children

10. Customs General Department (ministry of Finance)

11. Ministry of Agriculture and Rural Development

III. Audit Budget Balance Report of central provinces and cities as follows:

1. Da Nang

2. Bac Giang

3. Lang Son

4. Tuyen Quang

5. Hai Duong

6. Vinh Phuc

7. Ha Tay

8. Thai Binh

9. Nam Dinh

10. Son La

11. Lai Chau

12. Nghe An

13. Ha Tinh

14. Quang Binh

15. Khanh Hoa

16. Quang Ngai

17. Gia Lai

18. Kon Tum

19. Lam Dong

20. Long An

21. Tien Giang

22. Dong Thap

23. Vinh Long

24. Tra Vinh

25. Tay Ninh

26. Ninh Thuan

27. Binh Thuan

28. AN Giang

29. Can Tho

30. Kien Giang

B. Auditing balance report of capital construction and projects as follows:

1. Hai Van Passage Tunnel, MoT

2. Highway No. 18 (Noi Bai-Bac Ninh), MoT

3. Vocational Training and Technical Education Project, MOLISA

4. National Target Program on Prevention and Fight against Social and Dangerous Diseases and HIV/AIDS, MoH

5. Education and Training Programme, MOET

6. School and Classroom Concretization Program (under Government Decree 28/2003/ND-CP dated March 312003).

7. National Convention Center

8. Vinh Tuy Bridge and bridge-end roads

9. Program 135 (in Bac Kan, Thanh Hoa, Binh Phuoc and Daklak Provinces)

C. Audit 2006 financial report of state owned enterprises and financial-banking institutions namely:

1. Southern Food Corporation

2. Vinashin

3. Vietnam Paper Corporation

4. Vinatex

5. Mineral Corporation, MoI

6. Industrial Construction Corporation, MoI

7. Construction Material Corporation No 1, MoC

8. Infrastructure Development and Construction Corporation, MoC

9. Urban and Housing Development Investment Corporation, MoC

10. Husbandry Corporation, MARD

11. Construction Corporation No4, MARD

12. CIENCO 4, MoT

13. Khanh Viet Corporation, Khanh Hoa Provincial People’s Committee

14. Hanoi Housing Development Investment Corporation, Hanoi People’s Committee

15. Saigon Construction Corporation, Hochiminh City People’s Committee

16. Vietnam Forestry Corporation’s Office, MARD

17. National Bank for Social Policy

18. Vietnam Deposit Insurance

19. National Note Printing Factory, State Bank of Vietnam

D. Audit 2006 financial report of agencies under Ministry of Defense’s and Ministry of Public Security’s authority and the Party Agencies:

I. Ministry of Defense:

1. 4th Military Zone

2. 9th Military Zone

3. 3rd Army Corp

4. 4th Army Corp

5. Air Force and Defense

6. Artillery Force

7. Chemistry Force

8. 16th Army Corps

9. Military Hospital 108

10. Military Medicine Institute

11. Tan Cang Company

12. Lung Lo Construction Company

II. Ministry of Public Security

  1. Department of Public Security of Binh Duong
  2. Department of Public Security of Dong Nai
  3. Department of Public Security of Binh Phuoc
  4. Department of Public Security of Phu Yen
  5. Department of Public Security of Tay Ninh
  6. Department of Public Security of Ba Ria-Vung Tau
  7. Department of Public Security of Ninh Thuan
  8. Department of Public Security of Binh Thuan

III. Party Agencies:

1. Ha Nam Provincial Party Committee

2. Nam Dinh Provincial Party Committee

3. Hung Yen Provincial Party Committee

4. Housing Development and Construction Company (Hanoi Party Committee)

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