Managing Recurrent Expenditures in Public Universities

for social policy subjects according to State regulations.

For products, goods and services ordered by State agencies, the collection level shall be based on the unit price prescribed by the competent State agency; in cases where the price has not been determined by the competent State agency, the collection level shall be determined on the basis of the cost estimate approved by the financial agency at the same level.

For service activities under contracts with domestic and foreign organizations and individuals, joint ventures and associations, the school is allowed to decide on specific revenues and collection levels according to the principle of ensuring sufficient compensation for costs and accumulation.

1.2.5.3. Management of other sources of income

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Other sources of revenue include aid, revenue from other projects, 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.

Management of other revenue sources is based on the agreement between the University and the entities providing aid, cooperation... but must comply with State regulations on revenue management of public universities.

1.2.6. Expenditure management in universities

Based on the nature of expenditure, expenditure content at public universities includes: regular expenditure and irregular expenditure [18] .

1.2.6.1. Managing regular expenditures in public universities

Regular expenditure includes:

- Branch operates according to functions and tasks assigned by competent authorities;

- Expenses for performing work, services, collecting fees and charges;

- Expenses for service activities.

Managing regular expenses:

Regular expenses at the University of Social Sciences and Humanities are usually divided into four expense groups:

Group 1: Personal payment expenses . Including: Salary, wages, overtime pay, social insurance, student scholarships, etc.

Group 2: Professional expenses. Including : Payment for public services; office supplies; information, communication, propaganda; conferences; business expenses; rental costs; outgoing branches; incoming branches; professional expenses of each industry.

Group 3: Expenses for purchasing and repairing assets . Including: Expenses for purchasing intangible fixed assets and tangible fixed assets; repairing assets for professional purposes and projects; expenses for investing in construction and infrastructure.

Group 4: Other expenses. Including: Support expenses; aid expenses; Party work expenses; interest payments; other expenses.

Based on assigned tasks and financial resources, for regular expenses, universities have the right to decide on certain levels of management and professional expenses higher or lower than the levels prescribed by competent state agencies and the method of allocating expenses to each department and affiliated unit.

Currently, the State regulates a number of standards and expenditure norms; universities must comply with State regulations, including: Standards and norms for car use; standards and norms for office buildings; standards and norms for equipping official telephones at home and mobile phones; foreign business trip allowance regime; regime for receiving foreign guests and international conferences in Vietnam, etc.

With the view of giving autonomy and self-responsibility to universities, to proactively use regular operating funds for the right purposes.

In order to achieve the objectives of economic and effective management, universities that are autonomous and financially responsible are responsible for developing internal spending regulations. The content of internal spending regulations includes regulations on regimes, standards, norms, and unified spending levels within the unit, ensuring the completion of assigned tasks, in accordance with the specific activities of the unit, using funds economically and effectively, and strengthening management. In addition to internal spending regulations, universities that are autonomous also use other tools to manage regular spending such as: State legal documents (for items not specified in the internal spending regulations); accounting tools; plans; inspections.

1.2.6.2. Management of irregular expenditures in public universities

Irregular expenses include:

- Expenses for performing scientific and technological tasks;

- Expenses for implementing training programs for officials and civil servants;

- Expenses for implementing national target programs;

- Expenses for performing tasks ordered by the State (investigation, planning, survey, other tasks) according to prices or price frames prescribed by the State;

- Counterpart funds for implementing projects with foreign capital;

- Carry out special tasks assigned by competent authorities;

- Implement staff streamlining according to the regime prescribed by the State;

- Investment expenses for construction, equipment purchase, major repairs of fixed assets to implement projects approved by competent authorities;

- Expenses for implementing projects from foreign aid capital;

- Expenses for joint venture and association activities;

- Other expenses as prescribed (if any).

Irregular expense management:

The tools used to manage irregular expenses are essentially the same as those used to manage regular expenses. However, irregular expenses are often

are managed according to expenditure content because the State has issued a system of expenditure norms for irregular activities: Management and use of funds for national target programs; use of funds to perform extraordinary tasks assigned by competent authorities; policies and regimes for streamlining staff (if any), management and use of project counterpart funds and aid capital from the State budget; management and use of capital for construction investment, funds for purchasing and major repairs of fixed assets serving public service activities according to projects approved by competent authorities; and funds for performing scientific and technological tasks at the State, Ministry and Industry levels under the guidance of the Ministry of Finance - Ministry of Science and Technology.

1.3. Financial autonomy according to Decree 16/2015/ND-CP

1.3.1. Concept of autonomy, financial autonomy and financial autonomy mechanism

Autonomy is the act of self-managing and managing all work of an individual or organization without being controlled by another individual or organization (according to the Vietnamese dictionary compiled by the Institute of Linguistics in 2000).

University autonomy is a necessary condition for implementing advanced university governance methods to improve and enhance the quality of training. University autonomy refers to the freedom of universities and the degree of freedom to make their own decisions and the requirements that universities must implement in using this freedom. The nature of autonomy is the division of power from the State to the universities. The scope of autonomy changes over time but it is always associated with the fields of academics, administration, law and financial issues.

Financial autonomy is an element, an authority of university autonomy. Financial autonomy is essentially a financial management mechanism in which the head of the unit is given the autonomy to develop and expand the provision of service activities.

The financial autonomy mechanism at public universities is a management mechanism to strengthen autonomy and enhance self-responsibility for public universities in terms of financial activities, organizational structure and labor arrangement, thereby improving the quality of public service provision activities of the school.

1.3.2. Roadmap for calculating public service prices [20 ]

a) By 2016: Calculate full salary costs and direct costs (excluding management costs and fixed asset depreciation costs);

b) By 2018: Calculate full salary costs, direct costs and management costs (not including fixed asset depreciation costs);

c) By 2020: Calculate full salary costs, direct costs, management costs and fixed asset depreciation costs.

1.3.3. Classification of financial autonomy[20 ]

Financial autonomy of public service units at 4 levels: (i) Financial autonomy for units that self-guarantee regular and investment expenditures; (ii) Financial autonomy for units that self-guarantee regular expenditures; (iii) Financial autonomy for units that partly self-guarantee regular expenditures (due to prices and fees for public service services not yet fully structured for costs, the State orders and assigns the task of providing public service services at prices and fees that have not yet fully calculated costs); (iv) Financial autonomy for units that are guaranteed regular expenditures by the State (according to functions and tasks assigned by competent authorities, with no revenue or low revenue).

1.3.4. Financial autonomy content[20 ]

Financial autonomy for public service units is based on the principle that units with high financial autonomy will have high autonomy in management and use of financial results and vice versa; to encourage units with low autonomy to strive to increase revenue to achieve a higher level of autonomy.

Autonomy in investment and regular expenditure

Units are allowed to proactively use autonomously assigned financial resources, including revenue from public service activities, fee revenue as prescribed and retained for expenditure, and other legal revenue sources, for regular expenditure. Specifically:

For highly financially autonomous units: For expenditure items that have expenditure norms prescribed by competent state agencies, based on financial capacity, the unit may decide on higher or lower professional and management expenditure levels than those issued by competent state agencies and stipulated in the unit's internal expenditure regulations. For expenditure items that do not have expenditure norms prescribed by competent state agencies, based on actual situations, the unit shall establish appropriate expenditure levels according to the level of financial autonomy of each type of public service unit and according to internal expenditure regulations.

Low financial autonomy units: Based on assigned tasks and financial resources, the unit is allowed to decide on the level of professional and management expenses, but the maximum must not exceed the level prescribed by the competent state agency.

To facilitate and encourage units to be fully autonomous in regular and investment expenditures, the Decree allows units to proactively develop a list of investment projects and report to competent authorities for approval.

In addition, public service units are entitled to borrow preferential credit capital from the State or receive interest rate support for investment projects using loans from credit institutions according to regulations. Based on the development requirements of the unit, the State considers allocating capital for ongoing investment projects and other investment projects according to decisions of competent authorities.

Salary and additional income

When the State adjusts the basic salary, the unit must ensure its own expenses.

Regular and investment expenditures. Units that ensure regular expenditures must ensure additional salary from the unit's revenue; the State budget does not provide additional funding; for units that have not ensured regular expenditures themselves and units that are guaranteed regular expenditures by the State, additional salary funding must come from sources according to regulations, including additional State budget funding (if lacking).

For the additional income, units are allowed to proactively use the Income Supplement Fund to distribute it to employees based on the internal spending regulations of the unit, based on the principle of linking it to the quantity, quality and efficiency of the employees' work. However, to ensure that the level of additional income paid to managers is not too different from that of employees, the new decree stipulates that when allocating additional income, the additional income coefficient of the leadership position of a public service unit must not exceed 2 times the average additional income coefficient of employees in the unit.

Fund allocation

Every year, after fully accounting for expenses, paying taxes and other payments to the State budget according to regulations; the difference between revenue and expenditure is used by the unit to set aside funds for career development; income supplement fund; reward fund and welfare fund. In addition, the Government allows units to set aside other funds according to the provisions of law to suit the actual situation. Regarding the level of deduction, based on the level of financial autonomy as follows:

- Fund for development of career activities: Units that self-insure regular and investment expenses: Deduct at least 25% of the difference between revenue and expenditure; units that have not self-insure a part of regular expenses deduct at least 15%; units that are guaranteed regular expenses by the State, if there is a budget for saving expenses and the amount of savings is greater than the actual salary fund, then deduct at least 5%.

- Income supplement fund: Unit self-insures regular and expenditure expenses.

Investors can decide on the level of deduction for the Income Supplement Fund (no limit on deduction level); units that self-insure regular expenses can deduct a maximum of 3 times the salary fund; units that partially self-insure regular expenses can deduct a maximum of 2 times the salary fund; units that are guaranteed regular expenses by the State can deduct a maximum of 1 time the salary fund.

- Reward fund and Welfare fund: Units that self-guarantee regular expenditures and investment expenditures; units that self-guarantee regular expenditures shall deduct a maximum of no more than 3 months of salary and wages in the year of the unit; units that self-guarantee a portion of regular expenditures shall deduct a maximum of no more than 2 months of salary and wages; units that are guaranteed regular expenditures by the State shall deduct a maximum of no more than 01 month of salary and wages.

Autonomy in financial transactions

To facilitate public service units in transactions with external parties, especially in joint ventures and associations, and at the same time create additional revenue for the unit, the Government stipulates: Public service units are allowed to open deposit accounts at commercial banks or the State Treasury to reflect revenues and expenditures of public service activities that do not use the State budget. Interest on deposits of the unit is added to the Fund for Development of Public Service Activities or added to other Funds according to the provisions of specialized laws (if any), not added to the Fund for supplementary income.

The Decree also stipulates that public service units are allowed to mobilize capital and borrow capital to invest and build facilities in accordance with the provisions of law and must have a feasible financial plan to repay the loan and be responsible for the effectiveness of capital mobilization and borrowing.

Apply financial mechanisms like enterprises

Decree 16/2015/ND-CP dated February 14, 2015 clearly states that units that self-insure regular and investment expenditures are allowed to apply financial mechanisms like enterprises (public).

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