positive aspects such as: increased revenue to the state budget, more economical and reasonable spending, a balance between revenue and expenditure tasks, deficit reduction and maintenance at an acceptable level, etc. However, the state budget balance in this period also has many limitations such as: tax reform still has many shortcomings, the overlapping and complicated tax system causes difficulties for tax collection and management; borrowing to cover the state budget deficit only focuses on solving spending needs; revenue sources and expenditure tasks decentralized to local authorities are unstable, limiting the initiative of local governments in balancing their budgets.
3.2.4. Current status of supervision, inspection and audit of provincial state budget
- On the supervision of provincial state budget.
The supervision of the state budget at the provincial level of Luang Prabang, Lao PDR is carried out by many entities, of which the main ones are the People's Council and the Lao Front for National Construction.
+ For the Provincial People's Council, supervising the State budget is one of the two important functions of the People's Council. Through supervision, it is possible to verify the correctness and conformity of the regulations being applied and the policies and measures that have been resolved; promptly detect difficulties and obstacles to propose solutions to remove them, contributing to better implementation of budget preparation and allocation as well as management, operation and implementation of local budget revenue and expenditure estimates; ensuring that budget revenue and expenditure are in accordance with the provisions of law and the estimates assigned by the Provincial People's Council.
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For the supervision of the State budget estimates, budget allocation must be based on the resolution of the Provincial People's Council on socio-economic tasks and the annual State budget estimates; legal documents and financial policies and regimes.
- budget; coordinate with relevant agencies to be provided with information and process information during the monitoring process. From there, have correct conclusions
and propose appropriate solutions for departments, branches and localities in managing and operating the State budget.
Regarding the supervision of the implementation of the State budget, it is mainly the supervision of the implementation of resolutions of the Provincial People's Council; compliance with the regime, norms, and standards of budget expenditure; payment of budget expenditures through the State Treasury system.
Regarding the supervision of the State budget settlement, it is based on the State budget estimate approved by the Provincial People's Council; based on the report of the Department of Finance on the implementation of the State budget estimate of the settlement year, based on the audit report of the State Audit; at the same time, refer to the State budget settlement of a number of ministries, branches and localities to have valid opinions in the process of supervising and approving the settlement. From there, it is recommended that the Provincial People's Committee only include in the settlement the actual revenue and expenditure through the State budget; issue the settlement of advances, revenues and expenditures contrary to the provisions of law, clarify the revenue and expenditure records... In addition, the Provincial People's Council supervises the implementation of the People's Council's resolutions in the field of finance - budget and legal documents of higher levels in the area.
+ For the Lao Front for National Construction, supervision is also one of many functions prescribed in the Law on the Lao Front for National Construction.
Supervision is carried out in many forms such as supervision through studying documents, materials, reports of agencies and organizations; petitions, complaints, denunciations, reflections, and recommendations of organizations and individuals sent to the Lao Front for National Construction and through reflections of the mass media. The Lao Front for National Construction can establish a monitoring team; preside over or coordinate with agencies, organizations, and people to establish a monitoring team.
During the period 2015 - 2020, the Lao Front for National Construction in Luang Prabang province established 938 thematic monitoring delegations and 420 written monitoring visits directly related to the use of the state budget, detecting and recovering for the state budget more than 2 billion kip.
- On the work of inspecting the provincial state budget.
In recent times, the use of the State budget of Luang Prabang province has achieved certain results in the following aspects: Establishing and assigning budget revenue and expenditure estimates; implementing budget revenue and expenditure estimates; implementing the budget settlement regime; publicizing settlements and basic estimates to ensure legal regulations, closely following the Resolution of the Provincial People's Council, the decision to assign estimates of the Provincial People's Committee, basically covering all sources of revenue, ensuring balance between revenue and expenditure, meeting financial requirements to serve the local socio-economic plan.
+ Inspect the implementation of budget revenue estimates:
Prepare a summary table of data on the implementation of budget collection during the inspection period. Verify and compare with the Tax Department and the Provincial State Treasury on the total budget collection and details of each revenue item according to the assigned budget estimate or tax rate. Determine the absolute number and percentage of implementation of each indicator; compared with the revenue estimate assigned by the Provincial People's Committee.
Analyze the reasons for achieving or not achieving the assigned budget revenue estimate. The inspection results at the units showed that the total budget revenue was 61.1 billion kip, exceeding 29.6 billion kip compared to the estimate assigned by the Provincial People's Council Resolution (equivalent to 94.16%).
Inspecting the accounting of revenues arising in the province, and adjusting the revenue books according to regulations between budget levels: The head of the inspection team assigned tasks to team members to inspect the accounting by chapter, section, category, and item according to regulations of the State budget index for each revenue arising in the area according to regulations of the budget accounting regime; inspecting the implementation of adjusting the revenue arising in the area according to regulations on the adjustment rate between budget levels for each type of revenue.
+ The work of checking and inspecting the management of provincial state budget expenditures is conducted regularly, periodically or suddenly when necessary to prevent and control violations.
Prevent violations and negative manifestations in the process of managing state budget expenditures in the province. The work of inspecting and managing provincial budget expenditures is closely monitored by the financial department. The specialized department always attaches importance to the work of inspecting and supervising the implementation and compliance with the budget estimates of the units to limit incorrect, excess or underspending expenditures.
Inspections and audits are conducted quite frequently, however, the quality of the audits is not assessed by the number of audits. Therefore, surprise audits will detect cases of illegal spending and help prevent wasteful spending and non-saving of the State budget.
The inspection before disbursement of the State budget from the stage of preparing the State budget expenditure estimate is strictly inspected and approved by the financial agency and the State Treasury according to the regime, standards and norms prescribed by the State. However, the inspection at the stage of preparing the estimate is still subjective and does not pay due attention to the actual estimates of the units, so the approved estimates of the beneficiary units are not suitable and effective. Sometimes the inspection and audit work also causes inconvenience and congestion in the work of the units. The effectiveness of the inspection work sometimes does not reach the set goals.
The implementation of the budget revenue and expenditure estimates basically ensures compliance with regulations (the revenue in 2018 reached 132.5% of the plan assigned by the province; the budget revenue of the district enjoyed decentralization reached 146.2% compared to the plan). The accounting apparatus of the inspected budget units under the local budget is basically organized in accordance with the requirements of budget and local financial management; basic expenditures according to the estimates, according to the source on the basis of norms and regulations of the internal spending regulations; invoices, basic documents are complete, archived according to regulations... The projects are prepared, appraised, and reported on technical economics by the investor; contracts are signed, completed volume is accepted; technical economics reports; payment acceptance records, basic completion records fully demonstrate the content according to regulations on investment and construction. The use of budget
Books, management of basic construction investment at units are compared and verified basically in accordance with legal regulations.
However, the inspection discovered a number of violations in the use of the budget with the amount of violations up to 17,556 million kip and recommended to recover to the State budget 10,550 million kip and urge the recovery of 7,006 million kip.
The results of the inspection at the Tax Departments of the districts and at some enterprises showed that there were still some problems such as: Not issuing value-added invoices for construction works with completed volume acceptance records; Accounting for increased costs, accounting for under-revenue for works that have been accepted and handed over for use; individual seasonal contract workers without tax codes, monthly income over 2.5 million kip but enterprises still did not deduct at source according to regulations, accounting work was not performed in accordance with the regime on documents, books and financial reports. Some expenditures from the budget reserve were not of the correct nature and content, mainly supplementing regular activities, but were not arranged from the beginning of the year. Some expenditures for units were not included in the budget expenditure tasks; allocation and use of revenue sources and land auction sources for some contents were not appropriate; the work of assigning budget estimates to public service units still had certain limitations. Some budget units have not allocated resources to implement salary reform from service revenue as prescribed, paid more than the actual construction volume, and did not pay environmental protection fees for the volume of filled soil...
The inspection team also discovered that the amount of tax revenue collection violations was
4,054 million kip (accounting for 25.7%); of which violations in value added tax were 577 million kip, corporate income tax was 3,477 million kip. On average, an inspection discovered violations of 1,351 million kip. Inspecting the capital construction investment expenditure of 22 projects in Luang Prabang city and 3 districts, the inspection team discovered violations of 1,872 million kip (accounting for 11.9%).
The average number of violations per inspection was 85 million kip. The inspection team recommended recovering 1,421 million kip to the State budget and deducting 451 million kip from the final settlement. Violations in capital construction investment expenditure were mainly due to the management of costs and construction quality not being implemented in accordance with regulations, and the incorrect determination of the scale of the project, leading to increased construction and installation costs. The acceptance and final settlement of the project were also in violation of the financial and accounting regime. Some projects did not fully utilize the capital plan, and were transferred from the previous year to the following year but were still not implemented, requiring adjustments to the capital plan for other projects.
- On state budget audit at provincial level.
Through the audits, there were many important recommendations on revenue and expenditure activities and the management and administration of the local budget, thereby contributing to the transparency and soundness of financial management. The quality of audit information was also focused on and improved. The audit results showed that the management of revenue and expenditure of the provincial state budget was increasingly public, transparent, and in accordance with the provisions of the law on the state budget. The efficiency and effectiveness of the use of public financial resources were ensured. However, the audit showed some limitations in all three stages of the state budget management cycle of Luang Prabang province.
+ Regarding budget preparation and assignment. Budget preparation and assignment are carried out and comply with the provisions of the State Budget Law, directives and management documents of the Government, Prime Minister, Ministry of Finance, Ministry of Planning and Investment... However, audit results show that the work of preparing and adjusting the province's budget in some years is still slow, leading to the untimely appraisal, allocation and assignment of the Ministry of Finance's budget to the province. Some units in the province prepare budgets that are not close to reality.
According to the State Budget Law, provinces and centrally-run cities must assign budget estimates to each affiliated agency and unit, ensuring correctness.
policies, regimes, standards, expenditure norms and completed before December 31 every year. However, there is still an agency or locality in the province that allocates the budget from the beginning of the year not in accordance with regulations, assigns the budget late, and does not match the nature of the funding source.
+ Regarding budget implementation. The audit results also pointed out many errors and omissions in the implementation of state budget revenue and expenditure in the province.
State budget collection: Agencies and localities in the province basically comply with State regulations on collection policies and regimes. However, the situation of improper collection still exists.
State budget expenditure: Audit results show that state budget expenditure activities of agencies and localities in the province have complied with the provisions of the State Budget Law and guiding documents; implemented management and use of funds in accordance with tasks, internal spending regimes and regulations; payment vouchers ensure regulations... However, the actual implementation still reveals some limitations such as: The situation of using funds in violation of regimes, standards and norms still occurs. Although the amount of violation is not large, it shows that the awareness of fiscal discipline is not strict.
+ Regarding the State budget settlement. Although the State budget settlement work has been carried out by agencies and units and complied with the provisions of the State Budget Law, meeting the requirements on settlement data, regulations on handling State budget revenue and expenditure at the end of the year, ensuring settlement time. However, there are still agencies and units that are slow to implement, or have not yet fully reviewed and approved the settlement for subordinate budget units.
According to the Audit report, at the provincial level, the budget allocation for districts and cities exceeded the actual amount of education, training and vocational training salary funds and the operating salary funds of state management agencies and district-level unions by more than 37 billion kip.
The budget for economic, educational, training and vocational training expenditures is also used to pay salaries for contract workers signed by the province (from many sources).
last year) was more than 4.6 billion kip in violation of regulations. Some inspection records were slow to issue decisions on administrative sanctions for tax violations, announce inspection records, report inspection results, and there was no draft inspection decision according to the procedure. The explanation of the reason for the data difference for the inspector was unclear, some contents did not have sufficient evidence, and the sales revenue was determined to be lower than the market value...
Audit reports at state-owned enterprises in Luang Prabang show that the enterprises have preserved state capital, managed and used land for production and business purposes, and paid land rents in full and on time. However, the enterprises still recorded some entries that were not in accordance with regulations, have not declared income tax for foreign contractors of 639 million kip, and have not paid back to the state budget the remaining expenditure (arising before the equitization in 2017) of more than 2.18 billion kip.
3.3. GENERAL ASSESSMENT OF PROVINCIAL STATE BUDGET MANAGEMENT OF LUANG PRABANG PROVINCE, LAOS PDR
3.3.1. Results achieved
- On state budget revenue.
In recent years, the state budget revenue situation in Luang Prabang province has always achieved high results, exceeding the assigned estimates in most targets. The structure of state budget revenue has gradually improved, the proportion of domestic revenue in the total state budget revenue is high, reaching an average of 89.9% in the period 2015 - 2019 [60].
Total state budget revenue in 2019 reached 390,650 billion kip, equal to 100.2% of the estimate (exceeding 750 billion kip), reaching a mobilization rate of 23.3% of GDP, of which tax and fee revenue reached 21.5% of GDP. Domestic revenue reached 102.9% of the estimate (exceeding 6,650 billion kip). Revenue from tourism reached 91.1% of the estimate (down 5,700 billion kip). Budget balance revenue from import-export activities reached 98.6% of the estimate (down 1,200 billion kip); Aid revenue is estimated at 6,000 billion kip (up 1,000 billion kip compared to the estimate) [57].