Finance and Financial Management Mechanism for Public Higher Education

Second, public universities are sponsored by the State and the Government, and are provided with operating budgets by the State and the Government or local authorities to promote human resources and implement educational policies of the State and the Government.

Third, universities of higher education have the nature of orienting training development by supplementing and perfecting training programs, building training programs suitable to the needs of society and being research-oriented.

Fourth, in addition to the role of training quality human resources, universities of higher education have the role of transferring technology, skills, and research directions to other schools due to the advantages of infrastructure conditions and quality of staff.

2.2. Finance and financial management mechanism for public higher education

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2.2.1. Finance and financial resources of public higher education

2.2.1.1. Finance and financial relations

* Concept of finance

There are many financial concepts and each financial approach is understood in different meanings: In a narrow sense : "Finance is the movement of limited resources (ie money) from one subject to another through space and time to generate profits". In a broad sense : "Finance is a system of economic relations in the distribution of total social products in the form of value between economic subjects through the creation and use of monetary funds".

* Financial concept of GDĐHCL

In general higher education activities, and higher education in particular, it is necessary to have finance to ensure the central task of training to achieve high efficiency. Applying the above financial concept, higher education finance is understood as a system of economic relations arising in the process of distributing financial resources by creating and using monetary funds to meet operational requirements in the training process.

* Financial relations of training institutions - higher education: Finance in higher education in Vietnam is specified and affects all training institutions - higher education associated with certain entities.

First, the financial relationship of the CSĐT with the State budget.

The State budget provides funding for: regular expenditures, science and technology expenditures, development investment expenditures, expenditures for national target programs on education and training, and expenditures for extraordinary tasks assigned by the State to schools. Schools must fulfill their financial obligations to the State such as paying taxes according to State regulations.

Second, the financial relationship of the CSĐT with society.

Specifically, the financial relationship between schools and society - between schools and students - is expressed through the following revenues: tuition, fees and some other types of fees to contribute to ensuring educational activities. The Government regulates the tuition fee framework, the mechanism for collecting and using tuition fees for all types of schools; however, subjects under social policies and the poor have tuition fee exemption and reduction policies, good and excellent students have scholarships, reward policies, etc. In addition, there are other sources of contributions, support and cooperation from organizations and individuals who voluntarily contribute, support and cooperate with the school and comply with the law.

Third, the financial relationship of the CSDT internally.

Financial relations within the CSDT include financial relations between faculties, departments, centers, affiliated units and between officers, lecturers, and employees through advances, payments, and income distribution: teaching and scientific research remuneration, salaries, bonuses, additional income, etc.

Fourth, the financial relationship of the CSĐT with foreign units and organizations.

Financial relations between CSĐT and foreign countries include financial relations with foreign organizations on activities such as: training cooperation, scientific research, international development cooperation to develop financial resources, seek funding sources, etc.

Thus, financial relations reflect the activities of CSDT associated with the GDĐHCL system. In the 4 financial relations of CSDT - GDĐHCL, it shows that:

Firstly , the financial source of CSĐT - GDĐHCL, the relationship between CSĐT and the State budget is the main basis and decision for the activities of CSĐT - GDĐHCL, which is called the financial source from the State budget.

Second , the remaining three financial relations are called financial resources mobilized outside the state budget.

To form 2 financial sources for higher education, the decisive role still belongs to the owner and the financial management subject is the State management agency for higher education through financial management mechanisms with different impact management tools to mobilize, allocate and effectively use financial resources, meeting the current requirements of innovation in higher education.

In the management of CSDT activities, especially in terms of finance and financial management, it is considered very important and a necessary condition for the effective development of education and training, in accordance with the strategic orientation of education and training development set forth by the Party and the State.

2.2.1.2. Financial resources of public higher education and training institutions

According to state regulations, the financial resources of CSĐT - GDĐHCL are formed from the following sources:

Funding source allocated from the State budget to carry out assigned political and professional tasks. This is a traditional source of revenue and plays an important role in ensuring financial resources for the operations of public service units. However, with the policy of innovation to enhance financial autonomy for public service units, the proportion of this source of revenue in units will tend to decrease gradually to reduce the burden on the State budget.

Revenue from public service activities: includes fees and charges from the State budget according to the provisions of law, according to the regime allowed to be left to the unit. For example, in training institutions - higher education institutions, revenue from training contracts with domestic and foreign organizations; revenue from production activities, product consumption, internships, experimental products; revenue from scientific and technological service contracts and other revenues according to the provisions of law. Along with the transition to financial autonomy, the proportion of this revenue in public service units tends to increase. This requires units to organize the exploitation of these legal revenue sources to enhance the financial capacity of the unit.

Revenues from aid, donations, and other revenues that are not required to be paid to the budget according to regulations. These are irregular and unpredictable revenues, but they support the unit in the process of performing its tasks.

Other sources such as loans from credit institutions, capital mobilized from officers and employees in the unit; joint venture and association capital of domestic and foreign organizations and individuals according to the provisions of law.

* If considered from the perspective of allocation and mobilization methods, financial resources in investment projects are formed from the state budget and non-state budget financial sources.

One is financial resources from the state budget.

The state budget includes funds allocated from the state budget. Because higher education is of particular importance to the development of each country, financial resources from the state budget always account for a large proportion in the financial structure of Vietnamese universities today. However, with the policy of "cost sharing" in higher education, with the mobilization of contributions from learners as well as from all organizations and individuals in society, the proportion of budget revenue in the total revenue of universities tends to decrease. However, this is still an important source of funding for universities.

The State budget provides funding and financial support to universities through two basic forms: funding for school operations and supporting learners.

The government provides funding for universities through capital construction investment allocations, purchasing additional machinery and equipment, investing in research and partially covering the regular expenses of the schools.

The methods used by governments to fund public universities vary widely, such as:

Funding is based on negotiation and discussion between the Government and the universities - this is the most traditional way of funding. In this way, the level of funding for universities is decided through a discussion process between the government and the university; the State budget will provide funding to the university according to each expenditure item or in the form of "funding block" with the form of funding according to each expenditure item.

In terms of expenditure, universities are not allowed to flexibly use the allocated funds but must spend on approved items. On the contrary, with the form of "budget allocation", universities can be flexible in using the allocated funds:

- Special support - This is also a traditional form of funding. This method is often applied to provide funding to a number of schools or groups of schools to achieve a specific goal, such as supplementing funding for a number of groups of schools with geographical locations, or serving special students who have not been fully allocated before. This method of allocation is suitable for targeted funding for a specific school or group of schools to spend on basic investment, based on identified needs, such as providing support for libraries or laboratories, etc.

- Grants are based on "formulas". Grant formulas are built on the basis of a number of criteria such as input (number of students or teachers), cost per student, or the "priority" level of the field of study - fields that the state considers to be national or regional priorities often receive the largest amount of support, or based on output factors: the quantity and quality of graduates.

This is the most popular method of direct funding allocation in many countries around the world today. For regular expenditure allocations, governments tend to shift from allocations based on "negotiation, discussion" and "special" allocations to allocations based on "Formula".

Financial support for HEIs through student support. Over the past several decades, strategies to help students and their families cover the costs of higher education have become an increasingly important part of the financial allocation for higher education in the context of cost-sharing policies. This is also a form of indirect government allocation to HEIs. Compared with direct allocations to HEIs, student support is often much lower. State support for students is

implemented in many forms such as non-refundable subsidies (through scholarships, student loans); or support in the form of creating job opportunities to help students earn extra income to cover their living expenses; or support through tax incentives.

Second, financial resources outside the state budget

The source of funding from the State budget for investment and financial support for universities is very limited. To ensure financial conditions for the operation of universities, it is necessary to mobilize financial resources other than the State budget. The method of mobilizing financial resources other than the State budget in universities is often implemented through the following forms:

First : Contributions from students and families. With the policy of "cost sharing", student contributions through tuition and other fees are becoming an increasingly large source of income for higher education institutions in most countries around the world. For public schools, student contributions and government subsidies are the two main sources of income to cover the operations of these schools. For private schools, student contributions are the main source of income.

However, due to the policies of each country, the rate of people's contribution to higher education between countries is also very different. According to UNESCO (2008), the rate of people's payment for higher education in OECD countries is 24.3%. Korea and the United States are the two countries with the highest rate of people's contribution to higher education, at 79% and 64.6% respectively. In this group of countries, Germany and France are the countries where people have to contribute the least, at 13.6 and 16.1% respectively [2]. Also according to UNESCO (2008), the contribution of people in the group of newly developed countries is 44.8%, higher than the OECD bloc. Specifically, this rate in Chile is 84.5%, Indonesia is 56.2% [2]. With the trend of increasing tuition fees, in the coming years, the rate of people's contribution to higher education is expected to be even higher.

Second : Revenue from service activities appropriate to the professional fields and capabilities of the schools. Revenue from training contracts with domestic and foreign organizations; revenue from production activities, consumption of internship practice products, experimental products.

Experimental; revenue from scientific and technological service contracts: profits shared from joint ventures, partnerships, bank deposit interest from service activities and other revenues as prescribed by law such as revenue from fees, textbooks, exam papers, parking services, stationery counters, etc. according to the principle of ensuring cost recovery and accumulation. With this method, not only can the school's income be increased but it can also create its own capital source, supplementing other missing expenses of the school. Schools can exploit a significant source of revenue from this activity, especially consulting activities, service provision, book publishing, publications, trial production projects.

Third : Contributions and support from organizations, businesses and individuals. Universities often have fundraising activities to call for contributions from the business community, organizations and individuals in the form of gifts/charitable funds. The purposes of the funds/gifts can be very different, such as donations to build and upgrade facilities, equip more modern equipment, support research or gifts to provide scholarships for students. In recent years, fundraising activities through these forms have been given great attention by schools.

Fourth : Private universities can mobilize loans from credit institutions and mobilize capital from staff and employees in the unit; capital for joint ventures and associations of domestic and foreign organizations and individuals according to the provisions of law. However, currently in Vietnam, the mechanism for capital mobilization is only being implemented for private universities.

Fifth : Mobilizing foreign capital. In the current strong trend of economic globalization, investment capital does not only operate within the borders of a country, but can move from one country to another, serving the purpose of the owner. Although education always receives investment attention from the State and other domestic entities, for many reasons, the education system in many countries, especially developing countries, is always in a state of lacking financial resources for development. This is the premise and basis for developing countries to mobilize and attract foreign capital for investment in development.

education. Based on the method of capital transfer and use and from the perspective of the developing country receiving capital, foreign capital is expressed in the main forms of investment: official development assistance, commercial loans from banks, investment through financial market companies, non-refundable aid from non-governmental organizations, and a number of other funding sources.

Thus, it can be seen that the financial resources to carry out activities and ensure the quality of activities of the university include funds provided by the state budget and funds outside the state budget. The state budget funds provided to the universities always play a leading role and follow a basic process from national income to the formation of national finance. In addition, funds outside the state budget increasingly account for a large proportion of the total operating costs of the universities and play an important role in ensuring and improving the quality of activities of the universities.

For non-state budget sources, the financial management mechanism applied to mobilize and use non-state budget sources is mainly implemented according to the internal spending regulations of universities but still has to comply with State regulations. Therefore, it has a more market-oriented meaning, is more flexible, and is not completely directly controlled by State regulations like the financial management mechanism applied to budget-funded financial sources.

2.2.2. Financial management mechanism

2.2.2.1. Basic concepts

* Concept of management mechanism

The term "Mechanism" according to the French dictionary Le Petet Larousse published in 1999 is interpreted as: "The way a set of factors that depend on each other operate". According to the Vietnamese Dictionary compiled by the Institute of Linguistics in 2000, the definition is: "Mechanism is the way in which a process is carried out". Thus, although different approaches to mechanism are interpreted differently, it can be understood that:

- A mechanism is always a set of elements that are interdependent. A mechanism is synchronous when all elements ensure that the interdependent relationship is complete.

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