Making state financial statements: The State Treasury to follow the roadmap

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The State Treasury must organize the making of state financial statements from the local level to the central level and synthesize statements at the national level. Photo: Thuy Linh.

Follow each assigned step

According to the Government’s regulations, the Ministry of Finance and the State Treasury shall report to state agencies on the making of state financial statements nationwide. Therefore, the State Treasury must organize the making of state financial statements from the local level to the central level and synthesize reports at the national level. To realize this task, the State Treasury has been actively implementing activities such as: Building a legal framework, improving organizational structure, designing and building an information system. This will form thebasis for developing detailed guiding documents on state financial statements and improving the legal framework on state financial statements and basis for developing training materials and designing operational processes on the information system that ensures the function of the State Treasury as General Accounting from 2019 in accordance with the Accounting Law 2015.

The implementation of state financial statements will comply with the roadmap. In particular, priority is given to those units that have applied accrual accounting regime and fully made 4 financial statements (Balance sheet, Income Statement, cash flow statement and Notes to the financial statements) or other units with great value (in terms of assets, capital sources, revenue, costs). Those who are applyingother accounting regimes can synthesize each step and each stage. For example, in the first phase of implementation, only synthesizing and presenting information from state-owned enterprises in the state financial statements in the form of state investments. After the successful deployment and completion of procedures, information on assets, capital sources, incomeof enterprises will be synthesized.

In addition, the State Treasury system will apply the provisions of international accounting standards and build a general process for each level. Accordingly, level 1 estimating units are responsible for synthesizing financial information of their units and their subordinate units under the guidance of the Ministry of Finance to set up a report to the State Treasuries at all levels. State agencies for state budget revenues and expenditures management; State agencies for capital sources management at all levels shall make reports on state financial information to the State Treasuries at all levels. The lower-level State Treasuries synthesizes the local financial information and sends it to the superior level.

Many difficulties

State financial statements area new and complex content and are beingimplemented in Vietnam for the first time, so difficulties during the implementation are unavoidable. One of the first difficulties is that the information on state financial statements has a wide range andis mainly synthesized from the units. Meanwhile, with the current accounting status, the units also need time to synthesize information to send to the State Treasury.

Also according to the State Treasury, Vietnam has the characteristics of an integrated state budget, so state financial statements will be summed up from the financial statements of the accounting units in the state sector and will depend on the actual accounting and the making of financial statementsguided in accounting regimes. Moreover, at the estimating units, the budget using units have organized a spending accounting apparatus; at the Tax, Customs agencies and non-budget financial agencies organizedthe procedural accounting apparatus and internal spending accounting apparatus according to the provisions of the 2015 Accounting Law. However, due to the different qualifications ofaccountants at units, they are not familiar with the synthesis and analysis of financial information.

Regarding regulations on data aggregation of accounting units in the public sector, the Ministry of Finance issued Circular No. 99/2018 / TT-BTC dated 1 November 2018 guiding that the making of general financial statements of the state accounting unit belongs to the superior accounting unit. This Circular stipulates that the superior units shall synthesize financial statements of their units and their subordinate units from the fiscal year 2018. However, another difficulty in the applicationis theimplementation time of the circular, that was January 1, 2019, the data synthesis in 2018 is also putspressure onministries and agencies when 2018 is the first year that local units carry out accounting regime according to the Circular. No. 107/2017 / TT- BTC of the Ministry of Finance.

Recently, the Ministry of Finance has issued Circular No. 133/2018 / TT- BTC guiding the making of state financial statements. The Circular guides the form, process of making and sending reports as well as specific criteria and steps to check the making of state financial statements.

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Along with that, the Ministry of Finance requires units to reflect truthful, objective and reasonable state financial information; reflect truthful, objective and reasonable financial information of their units and affiliated accounting units (if any). The information must be presented in accordance with management requirements, in consistency, continuity and comparability. The units in charge of making state financial statements and units in charge of providing information to make state financial statements shall have to guide the implementation and inspect the implementation of this Circular.