Implementation, monitoring, assessment, audit and supervision of public investment plans, programs and projects in Vietnam

Vietnam Law has regulations on implementation, monitoring, assessment, audit and supervision of public investment plans, programs and projects. Let’s find out this issue with Lawyer X through the following situation: “Dear Lawyer! I want to ask what are regulations on administration of public investment plans in Vietnam? What are regulations on Enforcement of public investment plans? Thanks for answering my questions!”

Legal grounds

• 2019 Vietnam Law on Public Investment

Administration of public investment plans

– Pursuant to the National Assembly’s resolution regarding midterm and annual public investment plans, the Government shall regulate measures to take control of and implement these plans.

– Pursuant to the National Assembly’s resolution, the competent authority’s decision on assignment of planned tasks and the resolution of the People’s Council at any level regarding midterm and annual public investment plans, Ministries, central and local regulatory authorities, district-level, commune-level People’s Committees and other affiliated entities using public investment capital shall make their decisions on measures to take control of administering public investment plans funded by funding sources under their respective management.

– The Prime Minister may coordinate and integrate funding sources intended for implementation of public investment programs using the state budget’s capital of Ministries, central and local regulatory authorities, affiliated entities and units using public investment capital provided that goals and objectives of public investment programs and projects are not changed.

– The Chairman/Chairwoman of the provincial-level People’s Committee may decide to coordinate and integrate funding sources intended for implementation of public investment programs and projects using the local budget’s capital and other borrowings of the local budget for investment purposes provided that goals and objectives of public investment programs and projects remain unchanged.

Enforcement of public investment plans

– Ministries, central and local regulatory authorities, district-level and commune-level People’s Committees shall assume the following responsibilities:

+ Inform or decide assignment of tasks of public investment plans to their affiliated entities and units using public investment capital;

+ Report to senior competent authorities on assignment of tasks of public investment plans.

– Affiliated entities and units using public investment capital shall be obliged to send senior competent authorities review reports on implementation of public investment plans under the Government’s regulations.

– The Ministry of Planning and Investment and bodies specialized in management of public investment shall be responsible for checking and expediting assignment of planned tasks and enforcement of public investment plans under the senior competent authority’s regulations.

Implementation of public investment plans

– Ministries, central and local regulatory authorities, district-level and commune-level People’s Committees, affiliated entities and units using public investment capital shall assume the following responsibilities:

+ Take charge of carrying out public investment plans to meet objectives already decided by competent authorities;

+ Implement public investment projects according to the schedule and budget plan already decided by competent authorities;

+ Plan and organize procurement to select contractors with respect to bids belonging to public investment projects funded according to public investment plans already obtaining the competent authority’s decision;

+ Carry out the commissioning and acceptance testing, make payments for and final accounts as agreed upon in contracts with respect to bids already completed and transferred to put these projects in operation;

+ Balance funding sources to repay debts accruing from capital construction activities as provided in clause 4 of Article 101 herein;

+ Ensure scope and scale of investment in each public investment project are aligned with objectives, sectors and programs already approved and conform to plans for use of allocated capital;

+ Monitor, inspect and assess implementation of public investment plans.

– The Ministry of Planning and Investment shall provide instructions for, monitor, assess and inspect implementation of midterm and annual public investment plans of Ministries, central regulatory authorities and provincial-level People’s Committees.

– The Ministry of Finance shall ensure allocation of a full amount of the central budget’s capital specified in public investment plans already decided by competent authorities.

– The Government shall adopt specific regulations on implementation of public investment plans.

Modification of public investment plans

– The National Assembly shall decide to modify the entire midterm and annual public investment plan using the state budget’s capital

+ due to any adjustment in the national socio-economic development strategy and plan;

+ due to any sudden change in the state budget balance or capacity for calling for funds of different sorts.

– The National Assembly Standing Committee shall decide to modify midterm and annual public investment plans using the central budget’s capital to ensure the concordance between those of Ministries, central and local regulatory authorities if total midterm and annual investment capital already decided by the National Assembly are kept unchanged.

– The Prime Minister shall, after allowing for specific circumstances arising in the plan period, decide to modify midterm public investment plans using the central budget’s capital of Ministries, central and local regulatory authorities that is assigned in accordance with clause 3 of Article 60 herein in comparison with the gross investment capital of specific Ministries, central and local regulatory authorities under the National Assembly’s decision.

– The Ministry of Planning and Investment shall assume the following responsibilities:

+ Preside over the evaluation of plans for modification of midterm public investment plans using the central budget’s capital to ensure concordance between these plans of Ministries, central and local regulatory authorities, and report to the Government to propose such modification to the National Assembly Standing Committee to seek its decision;

+ Preside over the internal evaluation of plans for modification of midterm public investment plans using the central budget’s capital or the evaluation thereof to ensure concordance between sector- and industry-specific plans and programs of Ministries, central and local regulatory authorities, and report to the Prime Minister to seek his decision.

– Ministers and Heads of central regulatory authorities shall have the following powers and responsibilities:

+ Adjust annual public investment plans using the central budget’s capital to ensure concordance between projects listed in the investment portfolio decided by competent authorities provided that it does not exceed the gross investment capital assigned by competent authorities in public investment plans;

+ Send reports to the Ministry of Planning and Investment and the Ministry of Finance for compiling and monitoring purposes with respect to the central budget’s capital.

– The provincial-level People’s Committee shall have the following powers and responsibilities:

+ Adjust annual public investment plans using the central budget’s target transfers under their jurisdiction provided that they do not exceed the gross investment capital assigned by competent authorities in public investment plans;

+ Send reports to the Ministry of Planning and Investment and the Ministry of Finance for compiling and monitoring purposes with respect to the central budget’s target transfers.

– The People’s Council at any level shall decide to modify midterm and annual public investment plans using the local budget’s capital

+ due to any adjustment in objectives of local socio-economic development plans;

+ due to any sudden change in the local budget balance or capacity for calling for funds of different sorts at localities;

+ due to any change in demands for or capacity for making investment of annual budgeted capital of local entities and units.

– People’s Committee at any level shall decide to modify midterm and annual public investment plans using the local budget’s capital for investment purposes between and within the sectors, industries and programs of entities and units using such capital, and report to the same-level People’s Council in the upcoming meeting.

– The Government shall adopt specific regulations on processes and procedures for modification of midterm and annual public investment plans using the state budget’s capital.

Deadlines for implementation and disbursement of capital defined in midterm and annual public investment plans

– Implementation and disbursement of capital defined in midterm and annual public investment plans shall last till end of January 31 of the first year in the midterm public investment plan for the subsequent period.

– Implementation and disbursement of capital of midterm and annual public investment plans shall last till January 31 of the subsequent year. In case any force majeure event occurs, the Prime Minister shall decide the deadline with respect to the central budget while the provincial-level People’s Council shall decide the deadline with respect to the local budget. In such situations, the timelength of implementation may be extended but not later than December 31 of the subsequent year.

– As for public investment programs and projects using non-refundable ODA funds which have not yet been estimated or exceed the estimated budget assigned to them, the Government shall report to the National Assembly Standing Committee to get their opinions beforehand and make representations to the National Assembly in the upcoming meeting.

Monitoring and inspection of public investment plans

– Bodies specialized in management of public investment shall take charge of monitoring and inspecting public investment plans under their management.

– Subject matters of monitoring and inspection of public investment plans:

+ Review of implementation of law on public investment;

+ Design, evaluation, approval and assignment of tasks of public investment plans;

+ Design, evaluation, approval and implementation of public investment programs and projects listed in public investment plans;

+ Review of implementation of the previous-year public investment plan.

+ Review of debts accruing from capital construction activities, waste and loss arising from public investment activities.

Assessment of public investment plans

– Midterm public investment plans shall be subject to the assessment made during and end of the plan period.

– Annual public investment plans shall be subject to the assessment made on an annual and quarterly basis.

– Subject matters of the assessment of a public investment plan shall include:

+ Level of attainment of objectives compared to those defined in public investment plans already approved by competent authorities;

+ Impacts of public investment plans on attraction of investments from other funding sources and socio-economic development outcomes;

+ Feasibility of public investment plans;

+ Review of public investment management;

+ Difficulties and problems; causes of difficulties and problems arising from implementation of public investment plans and recommended solutions.

Monitoring and inspection of public investment programs and projects

– Governing bodies, program and project owners, persons competent in making decisions on investment in programs and projects and state regulatory authorities in charge of public investment shall carry out the monitoring and inspection of the entire process of investment in these programs and projects with respect to approved subject matters and items of monitoring and inspection in order to ensure fulfillment of investment objectives and investment efficiency.

– Inspection of public investment programs and projects shall be carried out under the following regulations:

+ Program or project owner shall inspect public investment programs or projects under their delegated authority;

+ Governing body and person competent in making investment decisions shall carry out at least one inspection of public investment programs or projects with the duration of implementation thereof which is more than 12 months;

+ Governing body and person competent in making investment decisions shall carry out the inspection when any modification of public investment programs or projects may result in any change in location, objectives or scale, or any increase in the gross investment capital, and as otherwise necessary;

+ State regulatory authorities in charge of public investment shall decide to carry out the planned or unplanned inspection of public investment programs and projects.

Assessment of public investment programs and projects

– Assessment of public investment programs and projects may be classified into initial assessment, midterm or stage-by-stage assessment, final assessment, impact assessment and ad-hoc assessment.

– Public investment programs must be subject to the midterm or stage-by-stage assessment, final assessment and impact assessment.

– Public investment projects of national significance and group-A public investment projects shall be subject to the initial assessment, midterm assessment, final assessment and impact assessment.

– Group-B and group-C public investment projects shall be subject to the final assessment and impact assessment.

– Notwithstanding provisions laid down in clause 2, 3 and 4 of this Article, governing bodies, persons competent in making investment decisions and state regulatory authorities in charge of public investment shall be entitled to decide other assessment provided for in clause 1 of this Article where necessary.

Subject matters of assessment of public investment programs and projects

– The primary assessment shall address:

+ Preparation, arrangement and mobilization of resources for implementation of public investment programs and projects to ensure conformity with the approved objectives and schedules;

+ Difficulties and unsolved issues that may arise in comparison with those arising on the date of approval of public investment program and project;

+ Recommended measures to deal with these difficulties and unsolved issues in line with actual conditions.

– The midterm or stage-by-stage assessment shall address:

+ Consistency of outcomes of a public investment program and project with investment goals and objectives;

+ Level of completion of workloads determined till the assessment date compared with that specified in the approved plan;

+ Recommended measures, including the measure regarding adjustments in a public investment program and project.

– The final assessment shall address:

+ Process of implementation of a public investment program and project, including: Management of implementation of a public investment program or project; fulfillment of objectives of a public investment program or project; mobilized resources; benefits that beneficiaries gain from a public investment program or project; impacts and sustainability of a public investment program or project;

+ Lessons learned from the process of implementation of a public investment program or project and useful advice; responsibilities of consulting organizations, governing bodies, program/project owners, persons competent in granting decisions on investment policies, investment decisions and other entities or persons involved.

– The impact assessment shall address:

+ Review of current economic – engineering operational conditions;

+ Socio-economic impacts;

+ Environmental and biological impacts;

+ Project sustainability;

+ Lessons learned from investment policies, investment decisions, implementation and operation of a public investment program or project; responsibilities of consulting organizations, governing bodies, program/project owners and persons competent in granting decisions on investment policies, investment decisions and other entities or persons involved.

– The ad-hoc assessment shall address:

+ Consistency of outcomes of a public investment program and project determined at the assessment date with investment goals and objectives;

+ Level of completion of workloads determined till the assessment date compared with that specified in the approved plan;

+ Determination of issues arising unexpectedly (if any), causes thereof and responsibilities of entities and persons involved;

+ Impacts and extent of impacts of issues arising unexpectedly on implementation of a public investment program or project, and capabilities of accomplishing objectives defined in a public investment program of project;

+ Recommended solutions.

– The Government shall adopt regulations on methods and criteria for assessment of effectiveness in investment in public investment programs and projects.

Public investment supervision

– Public investment programs and projects shall be subject to the public supervision. Vietnam Fatherland Front Committees at all levels shall take charge of ensuring the public supervision and criticism over investment activities.

– Governing bodies must refer and respond to and seriously take opinions of inhabitants living at or near project sites as to the decision on investment in public investment projects of national significance, group-A public investment projects, those projects associated with a large scale of residential mobility, resettlement and agricultural resettlement, those projects posing risks of causing huge environmental impacts, those projects directly impacting socio-economic lives of communities at or near project sites in terms of investment guidelines, policies on investment, construction, land, waste treatment and environmental protection, compensation, site clearance and agricultural and residential resettlement plans as per law.

– The public supervision shall focus on:

+ Compliance with law on investment, construction, land, waste treatment and environmental protection;

+ Compensation, site clearance and agricultural and residential resettlement plans that assure rights and interests of the People;

+ Public investment programs or projects using portions of the public capital participation;

+ Implementation and progress of public investment programs or projects;

+ Public disclosure and transparency of public investments prescribed in Article 14 herein;

+ Discovery of acts that may harm public benefits; negative impacts of a public investment project on the living environment of the public during the period of investment in and operation of a public investment project; activities that inflict any loss and waste of capital and assets of a public investment project.

Documentation requirements and procedures for public supervision

– Vietnam Fatherland Front Committees shall preside over and cooperate with other socio-political organizations and entities involved in performing the following tasks:

+ Preparing annual plans for the public supervision over public investment programs and projects implemented at localities as prescribed in clause 3 of Article 74 herein;

+ Establishing a public investment supervision commission in charge of each pubic investment program or project;

+ Informing program/project owners and management units about supervision plans and the composition of the public investment supervision commission within the duration of 45 days before the supervision commences.

– Program or project owners and management units shall assume the following responsibilities:

+ Provide documents related to implementation of public investment programs and projects under the provisions of clause 2 of Article 74 herein on an adequate, truthful and timely manner to the public investment supervision commission;

+ Enable the public investment supervision commission to carry out supervision activities in accordance with law;

+ Take public opinions seriously and strengthen measures to implement public investment projects.

Implementary responsibilities for monitoring, inspection and assessment of public investment plans, programs and projects

– Program/project owners shall take charge of carrying out the monitoring, inspection, primary, midterm and final assessment of public investment programs and projects.

– Governing bodies, investment decision makers and state regulatory authorities in charge of public investment shall carry out the monitoring, inspection, impact assessment and ad-hoc assessment of public investment programs and projects under their delegated authority.

– Entities subject to the assessment requirement may carry out self-assessment or hire other experts or qualified and competent consulting bodies to provide assessment services.

– The Government shall adopt detailed regulations on the monitoring, inspection and assessment of public investment plans, programs or projects and public supervision of public investment activities.

Regulations on Public investment audit

– Audit of management and use of public investment capital shall be subject to provisions hereof and other provisions of relevant law.

– Audit of public investment activities must be related to implementation of audit functions and duties of specific competent entities and must conform to audit documentation requirements and procedures prescribed in law on auditing.

– Audit conclusions regarding public investment activities shall be publicly disclosed under law. In case of any violation against law arising from public investment activities, auditing bodies shall be authorized to impose sanctions or refer such violation to jurisdictional authorities to take proper.

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