Financial inspection: Correction for violations in using budget

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The financial inspectorate has collected 51.6 trillion VND to the State budget.

A financial penalty of more than 89 trillion VND

Mr. Dang Ngoc Tuyen, Deputy Inspectorate of the Ministry of Finance stated that: To improve effect and efficiency of the inspection, in 2010, the National Assembly approved the Inspection Law which has took effect from July 1, 2011. After that, the Ministry also promptly submitted to the Government to promulgate decrees and circulars guiding the organization and operation of the Finance sector’s inspection

After 6 years of implementation of the Inspection Law (from 1/7/2011 to 30/6/2017), the inspection system of the Finance sector has implemented 49,291 inspections. Thereby, discovering 46,191 violation cases, proposing a financial penalty of more than 89 trillion VND and about $US 6.2 million; Of which, proposing to retrieve 487 trillion VND and US$ 6.2 million to the state budget; imposing an administrative penalty of nearly 9.6 trillion VND. The financial inspectorate collected 51.6 trillion VND to the state budget.

The financial inspectorate has proposed to review and urge the tax debt collection and imposed administrative penalty for violations; reorganized the management of construction investment capital, research, design, estimate, tender and measures to accelerate the progress of projects; enhanced to cooperate with State Treasury to guide and collaborate in determination of disbursement data, balance remaining at the end of projects using the fund of the sector to implement the final settlement for annual construction investment capital and completed projects according to the law.

Especially, through the inspection, the Finance sector has proposed that the ministries, sectors, and localities should supplement procedures, amend legal documents relating to management, operation and specialized policies of the sectors and localities in accordance with the law and actual situation of localities.

The verification for accuracy and legality of inspection conclusions is implemented as soon as the inspection conclusions are promulgated and examination and inspection dossiers are handed over competent departments. The encouragement to implement the proposals is carried out in many forms such as: direct contact or through documents to reorganize, purge and deploy inspection groups on the implementation of proposals. From July 1, 2010, till now, almost inspection conclusions of the Finance have been followed strictly and timely.

More sanctions

The fact that after many years of implementation, the Inspection Law has revealed many shortcomings from the reality, especially in reforms and changes of units in the Finance sector.

Pham Hung Son, Head of Inspection Division 7, Inspectorate of the Ministry of Finance, said that in the field of insurance, there are 62 enterprises with more than 1,700 units operating in the country with the target that total revenue by 2020 as well as mobilized capital for the economy will account for 3% - 4% of GDP. With such a large volume of potential risk, the specialized inspection of the insurance field is mainly carried out at headquarters or some big branches of the enterprises, only inspecting about 8/62 enterprises annually, accounting for 13%.

Or in the securities field, in the past six years, the Securities and Exchange Commission has sent only 76 inspection groups while enterprises subject to the inspection included 1,897 companies listed and registered for the transaction on the market. Representative of the Ministry of Finance’s Inspectorate said that it was mainly due to the weak force, although the training had been paid attention to improve quality and increase quantity, but the inspectorate had not much experience in inspection; the contents required for inspection were complex and field subject to inspection required Inspectorate with advanced professional skills.

Furthermore, in the field of insurance, securities, and Customs, in addition to complying with the provisions of Vietnamese law, they must also comply with international principles and standards. Therefore, the inspection and proposals are also problematic due to limited policy documents.

Moreover, inspection activities also were overlapped with functions and tasks between the Ministerial Inspectorate and the provincial inspectorate or the department’s and sector’s inspectorates, such as the case that a central enterprises located in the local area must be subject to inspection of both the Ministerial Inspectorate in charge specialized management and examination and the Department's inspectorate and provincial inspectorate. Financial inspection activities are frequently overlapped with the entities of the audit and the Party inspection agencies, especially in the management and use of state capital and public assets in the SOEs. This overlap reduces the effect, wastes time, money and resources of the financial inspection agencies and affects the operation of agencies, organizations, and enterprises.

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Therefore, in the coming time, for the inspection activities to be more effective, the Finance sector is proposing to amend many provisions of the Inspection Law. It can be mentioned: Considering to assign the administrative inspection functions to a number of General Departments under the Ministry with complicated functions, tasks, risks, large scale and large number of civil servants and nationwide organization such as Taxation, Customs, Treasury; Adding some basic regulations on inter-sector inspection as the legal basis for this activity; Raising the time limit for the issuance of administrative inspection conclusions to maximum 30 days instead of 15 days; Supplementing the regulations on the responsibility handling for heads of inspected units in delaying or failing to strictly abide by inspection conclusions or proposals; Stipulating responsibilities of units, sectors and levels in urging the implementation of the conclusions.