Tighten discipline for recurrent expenditure associated with staff downsizing

	Without reducing staff, it is impossible to restructure the budget
	Criteria for assessing the results of thrift practice and waste combat in recurrent expenditure
	In 2017, the control of recurrent expenditures accounts for 91.3% of the year’s estimate

The arrangement, streamlining of units will reduce staff, thereby reducing recurrent expenditure. Photo: H.Van

Saving more than VND 51 trillion

Over the past time, the National Assembly has promulgated the State Budget Law, the State Audit Law, the Inspection Law, the Law on Thrift Practice and Waste Combat, etc., which clearly stipulate responsibilities of sectors and levels and units in the budget management. Under the leadership of the Party, the supervision of the National Assembly, the drastic executive of the Government and the Prime Minister, the efforts of all levels and sectors from the central to local levels and the people throughout the country, thrift practice and waste combat included in the state budget field has achieved positive results.

Reports of ministries and localities in 2017 revealed that the country saved VND 51,401 billion, including the saving from state fund and capital was VND 47,945 billion; and from SOEs capital was VND 3,456 billion. However, it was unable to deny that regarding the state budget expenditures, there was still a misuse of regulations, many expenditures exceeded the norms; many construction works exceeded the estimates; disbursement of foreign loans exceeded the plan; outstanding debts for capital construction was significant; major source transfer, losses and wastage were still in some units.

During the administration of state budget, the Ministry of Finance determined that in addition to inadequacies of system of policies, laws, standards, norms and regimes, the sense of responsibility of heads of agencies and units in management and use of state budget and public assets was noticeable.

Thus, the reduction of budget expenditures right from the estimation stage in the recent years was a drastic and specific action by the Ministry of Finance to respond to the losses and wastage in budget expenditures.

At the conference to summarize the finance-state budget operation in the first 6 month of 2018, Deputy Prime Minister Mr. Vuong Dinh Hue affirmed that this action by the Ministry of Finance was a strong reform which was absolutely approved by the Prime Minister. This also contributed to promoting staff downsizing in accordance with the Resolutions of the Central Government and needed to be implemented more closely in the coming time, including for business units as well as administrative units.

In spite of efforts from management units and from the estimation, the implementation is still in difficulty. Regarding this, Dr. Ngo Tri Long, an economist, said that the current administrative apparatus was still very cumbersome, so state budget for recurrent expenditures for the apparatus and human resources was very big, which restricted the budget for investment and development, wage reform, social welfare and public security. Therefore, the Party and the State has set out the policy to promote staff downsizing in order to build a streamlined and effective administrative apparatus. Ministries, sectors and localities are currently fiercely implementing the staff downsizing according to the guidelines of the Party and the State. If the allocation of recurrent expenditure estimates of units associated with the staff downsizing is well controlled, it will be one of the effective solutions for reducing recurrent expenditure – a large expenditure from the budget.

Stick to the assigned payroll norms

In order to continue to effectively tighten the recurrent expenditure, the Minister of Finance worked with the Minister of Home Affairs to allocate recurrent expenditures in line with the assigned payroll norms. The Ministry of Finance has also issued Circular No. 54/2018 / TT-BTC guiding the formulation of state budget estimates for 2019 and three-year financial–state budget plan for the 2019-2021 period, which requires ministries and central and local authorities and agencies using state budget to make recurrent expenditure estimates in the right areas, right characteristic of funding source and in thrift manner. Particularly focusing on the requirement on restricting the purchase of public cars and expensive equipment, expanding the implementation of the fixed expenditures for public car use; and minimizing the organization of conferences, festivals, seminars, festivities and trips to foreign countries.

In addition, the Ministry of Finance also requires that the expenditure estimates for unit’s operations must be linked to the objectives and tasks of staff downsizing under Conclusion 17-KL / TU; the review and restructure of the apparatus must be in accordance with Resolution No. 18-NQ / TU; the implementation of each objective and task in 2019 must be specified; and the determination of the level of funding must be associated with the implementation of the objectives and tasks in 2019.

Resolution No. 18-NQ / TU requests that the arrangement and consolidation of some organizations and units inside of the organizations must be towards minimizing units, intermediaries and reducing deputies; organizational apparatus and the holding of several titles at the same time must be renovated to downsize units; administrative units at commune level failing to reach 50% of the prescribed norms on population scale, natural areas must be restructured and streamlined, and the number of villages and groups should be cut. Thereby, the units must make expenditure estimates for their operations associated with the objectives and tasks of staff downsizing, and detail the implementation of each specific objective and task in 2019. Accordingly, estimating fund allocated to administrative agencies from reducing fund for human resource and operation into for facilities.

Mr. Vo Thanh Hung - Director of State Budget Department, Ministry of Finance confirmed that the restructure and streamlining of units will reduce staff, thereby reducing recurrent expenditure. Specific analysis shows that expenditures of localities under the allocated norms include investment expenditure and recurrent expenditure. In the recurrent expenditures, the most important criterion is population (coefficient by region, priority is given to mountainous and remote areas, sparsely populated areas with large area will enjoy higher coefficient). In the localities, the restructure of education establishments (combining 2-3 secondary schools into 1 school) or hospitals will contribute to reducing state expenditure. The redundant state budget will spend for social security, welfare and investment and partly for wage reform.

Therefore, in the coming time, according to Mr. Hung, the delegation of autonomy for agencies, units and localities in the management and use of state budget and public assets will go on in association with higher requirements for responsibility of explanation from heads of units, agencies and localities to each staff.

In order to facilitate the supervision, the State Budget Law and guiding documents supplemented the regulations on the responsibility of publicizing the state budget from the stage of estimation to the stage of operation and settlement of state budget at all levels, agencies and units using the state budget.

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In addition, in order to overcome the losses and wastage, the solutions to tighten financial discipline should be further strengthened, such as regularly reviewing, amending, supplementing the budget expenditure norms; strictly managing State budget expenditures, ensuring that the expenditures are allocated in accordance with estimates and approval of the competent agencies; intensifying the inspection and audit; strictly handling violations of the State budget finance management and state asset management; and fully retrieving expenditures in contravention of the prescribed regime, criteria and norms. Along with that, carrying out well the propaganda, publicity and transparency of financial and state budget activities, and enhancing the inspection and supervision of National Assembly deputies, People's Councils at all levels and the community’s supervision.