State Finance Report: Publishing the “health” of the national economy

This is new content in State accounting process in order to accurately and transparently reflect the information onState property, public debts and other liabilities of the State,and the sources ofState assets and capital; revenues, expenditures and financial results of State activities, and cash flows from financing activities of the State budget at the national and local level. Customs Newshad an interview with Ms. Dang Thi Thuy - Deputy Director of the State Treasury–the office thatis assigned to draft this Decree by the Ministry of Finance.

Ma'am, if this Decree is put into practice,SFR 2018 will be published on the internet for people to know and supervise. This is an issue that is very interesting to the public. Could you please tell us more about this issue?

The SFR is new content in the State accounting progress of Vietnam. Currently,the information on State property, public debts and other liabilities of the State, sources of State assets and capital; revenues, expenditures and financial results of State activities, cash flows from financing activities, etc., is tracked and recorded in several units, not aggregated in a comprehensive and consistent formin scale, content and method on the scale of national or local government. Therefore, it has not been effective in providing data for evaluating the effectiveness of public spending, analyzing the financial potential of the State as well as local governments, evaluating the effectiveness of the implementation of financial and budget structures and policies, as well as serving other macro management progress.

The State Treasuryis assigned to draft the Decree on SFR by the Ministry of Finance to provide details of the provisions in Article 30 of the Law on Accounting 2015. Until now, the draft hasbeenconsulted widely by ministries, branches and localities with its main content on publishing the SFR.

Accordingly, the People’s Committees of provinces and cities and the Ministry of Finance will publish the main information in the SFR of each province/city and the whole nation, including: the status of State property; public debts and other liabilities of the State, the sources of State assets and capital; revenues, expenditure and financial results of State activities, and cash flows from financial activities.

It will be published in forms such as: publishing via the information electronic portal (provinces’ and the Ministry of Finance’s), issuing publications and other forms prescribed by law.

The draft of theDecree is currently prescribingthe first SFR will be calculated according to the financial data of 2018. Also, the draft prescibesthe first SFR will be published in the shortest time being 12 months (for the provinces) and 18 months (for the nation). Thus, if properly planned, from 2020, the SFR will be published to all people.

The State Treasury is the office assigned to establish the SFR. How has the State Treasury prepared to perform this responsibility, ma'am?

To perform the task of establishing the SFR, many processes need to be implemented synchronously. Currently, the State Treasury has been deployed on the main processesas follows:

Regarding the legal framework, since the process of drafting the Law on Accounting, the State Treasury has recommended and commented on the regulations on theSFR. At the same time, the State Treasury was assignedby the Ministry of Finance to research and draft a Decree of the Government, which is currently being consulted widely by ministries, branches and localities, as well as documents guiding the implementation of the Decree on SFR to concretize the regulations outlined in the Law on Accounting 2015. In addition, the State Treasury is also working with the offices in charge of drafting the documents to supplement, amend, replace the accounting system in the officesthat willbe responsible for providing information to establish the SFR (domestic tax accounting system, import-export tax accounting system, administrative and professional officesaccounting system, commune’s budget and finance accounting system, investors accounting system, financial management of State funds units accounting system, including Funds of social insurance, health insurance, protection unemployment insurance, State reserves, etc.) to ensure the input sources to provide information for the State Treasury to establish the SFR.

Regarding perfecting theorganizational apparatus, with the target to ensure the human resources to meet the requirement of establishing the SFR task, the State Treasury has strengthened the organizational structure in the State Treasury (Central office), established the SFR Synthesizing Divisionunder the Department of State Accounting. At the same time, the State Treasury has also continued to strengthen the organizational structures in Local Treasuries to ensure the Departments of State Accounting under Local Treasuriescould establish the local SFR.

Regarding the construction of the information system, with the aim of designing and operating asuitable information system, which is effective to receive, aggregate and exploit the information for the SFR, the State Treasury is currently working with offices relating tostudying, researching, assessing thestatus of the information and data in a number of relevant offices, as well as researchingappropriate software application models.

Regarding training, along withthe construction of the legal framework, completing the organizational apparatus, and building the information system, the State Treasury is also working with relevant offices to prepare thenecessary conditions to train and implement the policy structure and the related accounting regulations, professional processes; train and implement the information system to the accounting staff of the State Treasury and the accounting staff of the units providing the information to establish the SFR.

Could you please tell us more, when the SFR is published, what benefits will people, enterprises and the State get?

With the financial informationis aggregated on the local and national scale, the SFR is expected to bring many benefits.

Specifically, for the State: the SFR is a tool to manage the State budget and financial funds outside the State budget, a tool to analyse and assess the situation and contribute to manage the entire resources and obligations of the State (public assets, public debts, etc.). Therefore, it will help leaders, managers and operators in assessing more accurately and comprehensively theState financial situation, setting out suitable orientations and solutions for the future, improving the allocation and use of State resources in the direction of more rational, balanced and more efficient, managing and reducing debts, reducing financial risksand ensuring the future obligations of the State.

For people and enterprises: The publishing ofthe SFRwill help people and businesses in getting information on their contributions to fulfill the obligations with the State through the payment of taxes, the use of people’s and enterprises’ tax money in thespending of the State and local governments, as well as the overall picture of the State finances. With the information reflected on the SFR about tax revenues and receivables tax revenues, the expenditures of the State, public assets, public debts, etc., people and enterprises can participate in the process of inspecting and monitoring the economic - financial activities of the State and supervising the implementation of the State to ensure the rights and policies for people and enterprises.

Ma'am, is the monitoring mechanism powerful enough to ensure that the report will be made public and transparent?

The draft of the Decree is currently prescribing the mechanism of monitoring the SFR that the Ministry of Finance will inspect whenestablishing of the SFR (nationally and locally) and the provided information to establish the SFR to ensure openness and transparency of the report at the request of financial management.

Could the State Treasury ensure the time of publication and supervision, ma'am?

The SFR will be established on the basis of the consolidation of the financial statements of State offices, public service units, economic organizations and other relevant units under the control of the State (nationally and locally). Accordingly, to ensure the time of establishing, announcing and monitoring the SFR, the close and active coordination between reporting units (the State Treasury) and the unit providing information for the report (the ministries, branches, localities and relevant agencies) is needed.

In addition, with the time-limit for the publication stated in the Draft, the State Treasury will continue to urgently implement the above tasks to ensure the rate of publishing the SFR progresswill be as stipulated by law.

Thank you, ma’am!