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Official Gazette

Friday, July 10, 2020

Management of off-budget financial funds to be tightened

Updated: 16:33’ - 16/02/2017
It is necessary for the National Assembly, local People’s Councils, Government Inspectorate and State Audit Office of Vietnam to enhance their supervision, inspection and audit of the management and use of off-budget financial funds and restrict the setting up of such funds, said Vice Chairman of the National Assembly Committee for Finance and Budget Nguyen Huu Quang.

Quang has made the suggestion in the context of the growing number of off-budget financial funds that are regarded as having caused a considerable waste of financial resources through their inefficient operations.

The setting up of off-budget financial funds to be restricted__Photo: Internet

At present, the country has more than 70 central and local off-budget financial funds and the number is on the rise due to increasing proposals of ministries and sectors submitted to the Government.

According to Quang, a number of draft laws presented to the National Assembly have proposed the setting up of off-budget financial funds. For example, the drafting board of the bill on support for small- and medium-sized enterprises proposed the setting up of five or six off-budget funds at the sixth session of the National Assembly Standing Committee, he cited.

In the meantime, the founding of a trust fund to support development of cooperatives has been suggested at a workshop on “Cooperative development model in Netherlands and lessons for cooperatives in Vietnam” held in Hanoi on February 8. However, Dutch experts said their cooperatives have operated efficiently without any capital incentives or support funds.

Although financial resources of off-budget financial funds have recorded positive results in helping realize the socio-economic development targets and diversify state financial activities, there remained shortcomings in the management and use of such funds, Quang said.

This was attributable to loopholes in the fund control mechanism, inconsistent legal documents concerning this type of fund or cumbersome legal texts on operation of certain funds.

In addition, the existing regulations on setting up, management and use of a number of funds have failed to conform to the Law on Credit Institutions and the majority of legal documents guiding the fund management have revealed inconsistencies and lacked necessary revisions.

During the management and use of such funds, the Ministry of Finance has yet properly summarized the number, financial resources and revenues and expenditures of off-budget financial funds nationwide. Provincial-level People’s Committees and Finance Departments have failed to make sufficient and accurate reports on the management and use of local off-budget financial funds.

Quang suggested those funds be classified into groups according to their nature, size, subject, scope, mode of capital mobilization, use and operation.

He also emphasized the need to clearly define the role and responsibility of state agencies and local authorities for the management of off-budget financial funds, elaborate regulations on uniform professional processes and application of information technology to the fund management.

Norms, standards and regimes of the fund management, use and contribution should also be revised and improved to ensure the transparency and publicity of state fund management and use, Quang added.-(VLLF)

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