To manage,administer, inspect and supervise the activities of the statebudget in general and district level in particular and to meetthe requirements from 2017 to apply the State Budget
Trang 1INTRODUCTION 1.The urgency of thesis topic
Accounting and auditing play an especially importantrole in budgeting finance Although accounting and auditinghave contributed significantly to the management ofbudgeting finance, the tasks of budgeting finance inVietnam in general and the districts in particular haveencountered many difficulties Those are:
* The estimation and forecast of revenue (especiallytaxes) is not close to the real situation Budgeting andforecasting of state budget revenues is not a simple task Inorder to effectively implement this task, it is necessary tosynthesize many sources of information However, theestimation work still does not comply with the principlebased on the performance of the previous year and theforecasts of revenues for the next year, which is stillmandatorily allocated from the higher level down the lowerlevels
* That the budget has not been implemented according
to the estimated budget is already allocated at the beginning
of the year This makes the state of spending over thebudget frequently occur The spending in some unitsgreatly exceeds estimated budget, which affects thefinancial discipline, reflecting limitations in forecasting andbudgeting
* Situations in recent years have shown that manycountries, including Vietnam, are facing certain fiscal risks,especially from medium and long term perspective That isthe state of over-spending and the continuous increase ofpublic debt The experience of many countries around theworld has shown the delay in implementing fiscalconsolidation, restructuring the state budget can cause manynegative consequences for the economy
* The efficiency of allocation and use of state budget ininvestment is not high, and the investment situation isspread out, leading to many problems in this expense.Corruption, wastage of investment capital in our country hasbecome such a chalenging problem that many levels,branches from central to local need special attention
Trang 2The reform and renovation of public finance, especially
in the public service sector, has made a lot of progress,especially after the Decree 16/2015 / ND-CP, but there is nobreakthrough
In the past years, with the deep transformation of thenational socialist-oriented financial system and internationalintegration, the Vietnamese accounting and auditing systemhas ceaselessly improved and developed To manage,administer, inspect and supervise the activities of the statebudget in general and district level in particular and to meetthe requirements from 2017 to apply the State Budget Law
2015 with the spirit of " State budget management according
to performance results "and implementation of the scheme
on renovation of the management mechanism, financialmechanism and reorganization of the system of public-sector units (presented in the 6th convention, XIIth CentralCommittee, opened on October 4, 1977); accounting andauditing become one of the most effective tools to solve theabove problems
With the above mentioned issues and reasons, I choose the
thesis“Using accounting and auditing tools in the financial management of district budgets in Hanoi”as my
research topic for my doctoral dissertation
2 Overview on related researches
2.2 Researches outside Vietnam
The dissertation deals with relevant studies by majorscientists in the world, such as Lüder (1992); Ouda (2004,2008); Chan J.L (2005); Phetphrairin Upping and JudyOlive (2011); Harun Harun and Haryono Kamase (2012);Cristina Silvia Nistora, etc
2.3 Overview on related published researches
Based on research projects related to the use of accountingand auditing in state budget management in Vietnam andabroad that the author have studied, the author draws onissues that scientists have solved and the issues that need to
Trang 3be further researched At the same time, the author confirmclearly that the chosen thesis do not overlap with the researchhas done before about the title of the topic, objectives, tasks,objects and scope of research.
3 Purpose and tasks of the research
Purpose:To propose orientations and measures to
enhance the use of accounting and auditing tools in thefinancial management of district budgets in Hanoi
Tasks:To achieve the purpose of research, the
dissertation has the following research tasks:
Firstly,systemizing and clarifying theories on the use of
accounting and auditing in the financial management ofdistrict budget
Secondly,based on the actual use of accounting and
auditing tools in the financial management of districtbudgets in Hanoi, evaluating the achievement, limitationsand causes
Thirdly,introducing orientations and basic solutions to
enhance the use of accounting and auditing tools to managedistrict budgets in Hanoi in the period up to 2025, vision to2030
4 Object and scope of the study
Firstly,the research subjects of the thesis are the
theoretical and practical issues on the use of accounting andauditing tools in the financial management of NSQH The
thesis“Using accounting and auditing tools in the financial management of district budgets in Hanoi”refer to the organization of accounting and auditing works to support authorities in making budget estimates, compling with estimates and settling the district budgets.
Secondly,the scope of the study:
About content:
* The dissertation focuses on theoretical and practicalissues of using accounting and auditing in the financialmanagement of district budget The main theme is the use ofthe State Budget Accounting tool - accounting for all statebudget revenues and expenditures (currently carried out bythe State Treasury) to manage district budgets Accounting
Trang 4by other agencies (tax, estimation unit, etc.) will only becovered by the thesis when necessary
* Due to the time limit, the dissertation does not study theuse of independent auditing and internal audit but onlyfocuses on the use of the State Audit for financialmanagement
* The study of the use of state budget accounting and theState Audit in the dissertation is mainly to help the districtauthorities to manage the district budget
* Based on theoretical and practical research, thedissertation focuses on proposing solutions to enhance theuse of accounting tools and the State Audit in order toimprove the financial management of district budgets in theupcoming time
About research time:
Survey on howaccounting and the State Audit are used infinancially managing district budgets in Hanoi from 2011 to
2017, forecasting and proposing solutions for the period up
to 2025 with a vision to 2030
About space:
Analyzing and evaluating issues related to the use ofaccounting tools and the State Audit in the financialmanagement of district budget in estimation, annual budgetestimation and settlement by the authorities of districts inHanoi
5 Methodologies
The thesis is based on the methodology of dialecticalmaterialism and historical materialism of Marxism-Leninism Specific methods: Methods of generalization,synthesis and analysis, compare, etc
Trang 5Chapter 1 THEORIES ON THE USE OF ACCOUNTING AND AUDITING TOOLS IN FINANCIAL MANAGEMENT
OF DISTRICT BUDGETS
1.1 DISTRICT BUDGET
1.1.1 The formation and development of district budget
According to Resolution 108 / CP dated 13/5/1978, theState budget includes central budget and local budget (nodistrict budget and commune budget is outside the statebudget system) By November 19, 1983, the Council ofMinisters (now the Government) issued Resolution No
138 / HDBT, local budget comprises three levels:provincial, district and commune Later, State Budget Law
1996 (amended 1998), State Budget Law 2002 and StateBudget Law 2015 also stipulate that the three levels
1.1.2 Characteristics and functions of district budget
District budget has the characteristics and general role ofthe state budget, but limited to the functions, tasks andpowers of the district authorities At the same time, thedistrict budget is subject to the direction and managementfrom higher levels
1.2 FINANCIAL MAMAGEMENT PROCEDURETOWARDS DISTRICT BUDGET
According to international practice, the state budgetmanagement process (including district budget) includes 3stages: (1) preparation and decision of state budget; (2)compliance with state budget; (3) Audit and evaluation ofstate budget In Vietnam, three phases of the state budgetmanagement process are called: (1) state budget estimation;(2) compliance with state budget; (3) Final settlement ofstate budget
1.2.1 District budget estimation
The content of the district budget estimation includes 2parts: the budget revenue estimates and the budgetexpenditure estimates
Trang 61.2.2 Compliance the district budget
District budgetcompliance is the process of synthesizingeconomic, financial and administrative measures to turn therevenue and expenditure targets in the district budget planinto reality
1.2.3 Final settlement of district budget
At the end of the year, the district Committee shall make
a final settlement report to the district Council for approval.The contents of the final settlement report include thefinal settlement of revenue and settlement of expenditure.1.3 NATURE, FUNCTIONS AND ROLE OFACCOUNTING AND AUDITING IN FINANCIALMANAGEMENT OF DISTRICT BUDGETS
1.3.1 Nature, functions of accounting and auditing in financial management of district budgets
Accounting for district budgets is a system ofinformation and inspection on revenue and expenditure,with the system of scientific methods such as vouchers,price calculation, reciprocal account and general - balance;Its function is to provide information and check on revenueand expenditure
Auditing is the process by independent and qualifiedauditors to collect and evaluate evidence of auditedinformation in order to validate and report on the relevance
of such information to the standards which have beenestablished The State Audit of Vietnam assists lawenforcement agencies (the Committees) in managing thebudgets,assists theCouncils to supervise the district budgets
1.3.2.The roles of accounting and auditing in financial management of district budgets
Accounting for district budgets plays an important role inproviding information and data to State agencies at districtlevel (the Council, the Committee) as well as the entirepopulation on the use of public resources, the efficiency andeffectiveness of using public finances to implement policiesaimed at the benefit not of any individual but of the publicinterest
The role of the State Audit in the management of thedistrict budget: (1) To contribute to inspect the observance
Trang 7of current regulations on the State budget paymentobligation in the local, to properly and fully pay according
to the provisions of law (2) Strictly control the use of thedistrict budgets, prevent against losses and waste, improvethe efficiency of using state capital and assets (3) Provide adatabase to make decision and to manage the districtbudgets accurately and effectively (4) Throughout the audit,the State Audit can suggest solutions to improve thefinancial and environmental management mechanisms andpolicies at local agencies and units
1.3.3 The relationship between accounting and auditing in managing district budget
At the end of the operation of the programs and costestimates in a fiscal year, the accountants shall prepare,supply and issue accounting reports according toregulations In order to ensure the reliability of the dataprovided by the accountant (as a basis for assessing theperformance of the year and budgeting for the followingyear), these information should be verified, confirmed andconsulted This is the most basic work of the State Audittowards district budgets
1.4 OBJECTIVES AND PRINCIPLES FOR USINGACCOUNTING AND AUDITING TOOLS INFINANCIAL MANAGEMENT OF DISTRICT BUDGET
1.4.1 Objectives and principles for using accounting tools in financial management of district budget
There are 2 basic objectives: Presentation and processing
of data arising in accordance with the law, ensuring thetransparency of budgets; provide information for decisionmaking
There are 6 basic principles: Comply with the rules ofaccounting and accounting standards; in line with theregimes, policies and regulations of legal documents onrevenue and expenditure accounting; suitable to thecharacteristics and geographical areas of the revenue andexpenditure units; meet the requirements and professionalqualifications of the managerial staff and accountants;ensure thrift and efficiency District authorities should
Trang 8improve the level of using accounting information toestimate, implement and settle budgets.
1.4.2 Objectives and principles for using auditing tools in financial management of district budget
The objectives are expressed in the use of the three types
of state budget audits: (1) the Financial Accounting Auditfor the purpose of auditing, evaluating, confirming thecorrectness, truthfulness of the financial statements orfinancial information of the entity (2) the OperationalAuditto examine and evaluate the economy, efficiency andeffectiveness in the management and use of finance andpublic assets (3) the Compliance Audit to check and assessthe compliance with the current regulations are considered
as the auditing criteria that the audited entity has to perform.The principle of using auditing tools to improve theefficiency of state budget management is reflected in thefollowing three issues: (1) Audit must establish a system ofethical and quality control (2) Ensure that the technicianmust be aware of the necessary precautions prior tocommencement of the audit (3) fully adhere to theprinciples related to the audit process: audit planning;Conduct audits; Making audit reports; To examine theimplementation of audit conclusions and proposals (4) Thedistrict authorities should work closely with the State Audit,create conditions for the State Audit to operate effectivelyand use audit results to effectively estimate, implement andsettle the budgets
1.5 USING ACCOUNTING AND AUDITING TOOLS
IN FINANCIAL MANAGEMENT OF DISTRICTBUDGETS
1.5.1 Using accounting in making district budget estimates
Accountants provide essential qualitative andquantitative information on the future (on the basis offorecasts of socio-economic plans), use of forecasting tools,and other economic instruments to help identify theindicators of resources, levels of expenditure as reliably aspossible
1.5.2 Using accounting in implement district budget
Trang 9The revenue and expenditure accounting is carried out atthe district State Treasury and related agencies Theaccountant collects and provides information that has beendone to serve the decision making of the district authoritiesand the implementation of the decisions In addition, theaccountant also collected information to serve for theexamination, evaluation later.
1.5.3 Using accounting in settle district budget
After making the estimate, it is needed to examine andevaluate the implementation of the estimate Publicaccountants provide information to help managers identifyand evaluate performance, existing issues and the impact ofmanagement; At the same time, it is also used for furtherestimation
1.5.4 Using auditing in financial management of district budgets
Auditing district budget is also used in all stages ofestimating, implementing and finalizing the budget,basically including auditing at the following departments:Finance - Planning Division; State Treasury of districts; Taxdepartment; State budget payers at district level; Agencies,units using district budget funds
1.5.5 Using accounting tools to analyze budget statements of districts
Using the information provided by the accountant is tocheck and analyze: Whether State budget accounting hasfully reflected the data on revenue and spending?Compliance in the collection and spending of the statebudget? Effectiveness and efficiency of revenue andexpenditures? Uniformity from local units to budgetmanagerial organizations?
1.6 FACTORS EFFECTING ON USINGACCOUNTING AND AUDITING IN FINANCIALMANAGEMENT OF DISTRICT BUDGET
1.6.1 Factors effecting on using accounting in financial management of district budget
Key factors include: Accounting basis used; Financialmanagement mechanism; Political system; Law system;Economic system
Trang 101.6.2.Factors effecting on using auditing in financial management of district budget
Includes: independence; Viewpoint of the leader on auditquality control; The organizational structure, mechanism ofassignment, decentralization of tasks of the State Audit;Staff policy includes recruiting, training and retraining,professional development, promotion and treatment of staffand technicians; Regulations on standards, procedures andmethods of auditing; Regulations, procedures of auditquality control; Professional ethics and qualifications ofauditors
1.7 EXPERIENCE IN USING ACCOUNTING ANDAUDITING IN FINANCIAL MANAGEMENT OFDISTRICT BUDGETS IN HO CHI MINH CITY ANDLESSONS MAY APPLY TO DISTRICTS IN HANOI
1.7.1.Experience in using accounting in financial management of district budgets in Ho Chi Minh city and lessons may apply to districts in Hanoi
1.7.2 Experience in using auditing in financial management of district budgets in Ho Chi Minh city and lessons may apply to districts in Hanoi
Trang 11Chapter2 THE ACTUAL USE OF ACCOUNTING AND AUDITING TOOLS IN FINANCIAL MANAGEMENT
OF DISTRICT BUDGETS IN HANOI
BUDGETFINANCIAL MANAGEMENT DEPARTMENT
2.3.1 Legal documents on state revenue and expenditure
212/2009/TT-The previous State Budget Law on 2002 and the StateBudget Law on 2015 are now considered the most importantdocuments that affect the process of promulgation,adjustment and improvement of accounting work Since theState Budget Law on 2002 took effect, in order to meet theinformation on management and control of the state budget
at all levels, the Ministry of Finance has deployed andfinalized the consolidated state budget accounting andtreasury operations, agreeing on the data, supplying timelyinformation required by the management and administration
of the State budget
2.3.2 The status of the budget revenue and expenditure accounting
State budget accounting and professional activities of theState Treasury currently carry out the following tasks: (1)Collect, record, process and manage data centrally in the
Trang 12management system, State budget expenditure at all levels;The situation of state budget revenues and expenditures atall levels; Loans and repayment of state budget loans;Assets managed by the State Treasury and professionalactivities of the State Treasury (2) To control theobservance of the financial management regime, thepayment regime and other regimes and regulations of theState relating to state budget revenues and expenditures,borrowing and repayment of State budget loans andprofessional operations State Treasury within the scope oftasks and powers of the State Treasury (3) To abide by thefinancial reporting and management reports as prescribed;
To provide sufficient, timely and accurate data, accountinginformation required, as required for the exploitation ofinformation and accounting database on TABMIS according
to the decentralization and regulation of data mining,exchanging and supplying information among units in thefinance branch with relevant units according to regulations;
To ensure the timely supply of accounting information forthe State budget management, administration andsettlement, debt management and operation of financialagencies and the state treasury system
2.3.3 Actual state of budget revenues and expenditures
The state budget accounting and professional operations
of a State Treasury in a State Treasury unit include thefollowing components: Accounting for state budgetexpenditure; Accounting for the state budget expenditurecommitment; State budget revenue accounting; State budgetexpenditure accounting; Accounting for loans, aid;Accounting for payment; Accounting for operations onledgers; Off-balance sheet accounting; Accounting for otherprofessional operations according to the functions and tasks
of the State Treasury
The State budget accounting and professional operations
of a State Treasury in a financial agency (including Financeand Planning Section of a district or town) include:Importing and approving estimates approved by competentauthorities into the TABMIS system; Control expendituresand update state spending vouchers by spending order;
Trang 13Exploit the database in accordance with the regulations ofcompetent authorities.
2.3.4 Actual state of accounting bases in budget revenue and expenditure accounting
Until the first of June 2013, Vietnam has only pilotedmanagement on expenditure commitemnt Failure to complywith the commitment results in a number of limitations: (1)The new accountant only reflects the amount actually paid(including the payment and in-advance amount) for thegoods and service suppliers , which are not tracked, reflectthe amount of debt payable to suppliers; At the same time,there are no grounds and data that can be transferred fromaccounting to cash on the basis of cash adjustment andproceed to adjust (2) The linkages of the managementprocess are not high: Most of the districts have exceeded theinitial estimate in large scale (3) The state of arrears inpayment still occurs in some districts of Hanoi, especially inthe past years in the field of capital construction
After the implementation of the TABMIS systemnationwide, on 01/06/2013 the commitment through thestate treasury system was officially implemented That hasled to huge changes Current state budget revenues andexpenditures are recorded on the basis of the "cashadjustments" accounting (with advance monitoring,receivables, payables and some additional accrualsexpenditure)
2.3.5 The Actual state of vouchers, accounts, books and accounting reports on budget revenue and expenditures
Curent State and State Treasury budget accountingdocuments include 92 types, including: State budget receiptswith 5 types; 27 state budget expenditure documents; 5types of Payment vouchers for investment capital; etc
The current accounting system of the state budget andprofessional operations of the State Treasury consists of sixtypes of balance (Type 1 "Short-term Assets", type 2 "Long-term Assets", type 3 "Payable and Paid" type 5 "Funds,Funds", Type 7 "Income Tax", Type 8 "Expenses"); and oneout of balance (Type 9 "Estimates - Accounts not included
in balance") Each account is divided into groups of