Monday, August 26 2019

VietNamNews

State Financial funds should be restructured for efficiency

Update: August, 05/2019 - 09:25

 

Workers repair Trần Hưng Đạo Street work in Lao Cai City. — Photo baolaocai.vn

HÀ NỘI — The operation of some State financial funds have overlapped with the State Budget in terms of purpose and tasks, experts have warned.

The statement was made at a meeting held between the National Assembly (NA)’s supervising team and the Government on the implementation of a legal framework relating to the management and use of off-budget financial funds in 2013-2018 period held in Hà Nội on Friday.

According to the supervising team, though the financial funds have made important contributions to secure a number of social objectives, increasing private sector investment, and mobilising more financial resources to support the state budget in promoting economic growth and social development, there were shortcomings such as the mobilisation of some funds was still limited and most of the resources of the funds originated from the State. The management of revenue and expenditure was inadequate.

Statistics from the Ministry of Finance showed that were more than 40 active financial funds by the end of last year. Of these, 28 funds were managed by the Central ministries and agencies while the rest were controlled by localities and operated on small scale – with capital of less than VNĐ5 billion (US$215,000).

Hoàng Quang Hàm, a member of NA’s Finance and Budget Committee, said proper treatment should be paid by the Government while dealing with state financial budgets.

Regarding social security funds with income from people’s contribution, it was necessary to closely monitor them to ensuring transparency, he said.

“Stricter management should be imposed on funds for socio-economic development. Funds at localities should be restructured, either merging or splitting to ensure effectiveness,” Hàm was quoted by the Voice of Vietnam as saying.

He also said the merging of some funds could help reduce management staff as well as better carry out the identified tasks.

To promote efficiency of the Funds’ activities, Đinh Tiến Dũng, the Minister of Finance, said the Government would review and reorganise state financial funds in line with enhancing capacity for the fund management apparatus.

Accordingly, funds that operate ineffectively or those with revenue and tasks overlapping with the state budget would be suspended.

Funds that have the same purpose would be merged, he said, adding that only those who would not use the State Budget and have positive impact on socio-economic development would be established.

Funds that work effectively, such as the Fund for Forest Development, will be kept, he said.

Regarding the Road Maintenance Fund, Dũng said a number of regulations relating to this fund’s operation should be revised to make it more efficient.

The Fund has been reportedly slow in disbursement to renovate deteriorating roads due to complicated regulatory processes.

According to Professor Vũ Sỹ Cường, lecturer at the Academy of Finance, the fund only met 45 per cent of the demand for road repair and maintenance work while it collected nearly VNĐ30 billion every day. The Transport Ministry only allocates 10 per cent of its budget for road maintenance while it actually needs 30-35 per cent to ensure traffic flow.

The transport ministry has recently compiled a draft decree relating to the fund’s operation with a view to ensure its effectiveness. Under the decree, the Transport Minister would take over the management of the Road Maintenance Fund at the central level while chairmen of provincial People’s Committees would control the fund at local level. — VNS

 

 

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