49341-001: Supporting Public Financial Management in Viet Nam | Asian Development Bank

Viet Nam: Supporting Public Financial Management in Viet Nam

Sovereign (Public) Project | 49341-001 Status: Closed

The TA will have four Outputs: (i) assessment of financial management information system requirements for monitoring of debt mobilization of sub-national governments completed; (ii) drafting of Decree on Infrastructure Asset Management facilitated; (iii) assessment on information system requirements for public asset management prepared; and (iv) manual on National Budget oversight functions of the National Assembly, following State Budget Law (2015), drafted. TA activities will include a mix of: a) direct advisory assistance through a mix of international and national consultants; and b) capacity development activities (including specialized workshops on best international practices, new legislation dissemination seminars, training events, etc.). Final design and implementation of TA activities will use a consultative approach where all relevant stakeholders will be involved, including national and local government agencies, development partners, and private sector among others.

Project Details

Project Officer
Batten, Aaron Southeast Asia Department Request for information
Country
  • Viet Nam
Modality
  • Technical Assistance
Sector
  • Public sector management
 
Project Name Supporting Public Financial Management in Viet Nam
Project Number 49341-001
Country Viet Nam
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8980-VIE: Supporting Public Financial Management in Viet Nam
Technical Assistance Special Fund US$ 225,000.00
TA 8980-VIE: Supporting Public Financial Management in Viet Nam (Supplementary)
Technical Assistance Special Fund US$ 225,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Public sector management / Public expenditure and fiscal management

Gender Equity and Mainstreaming No gender elements
Description The TA will have four Outputs: (i) assessment of financial management information system requirements for monitoring of debt mobilization of sub-national governments completed; (ii) drafting of Decree on Infrastructure Asset Management facilitated; (iii) assessment on information system requirements for public asset management prepared; and (iv) manual on National Budget oversight functions of the National Assembly, following State Budget Law (2015), drafted. TA activities will include a mix of: a) direct advisory assistance through a mix of international and national consultants; and b) capacity development activities (including specialized workshops on best international practices, new legislation dissemination seminars, training events, etc.). Final design and implementation of TA activities will use a consultative approach where all relevant stakeholders will be involved, including national and local government agencies, development partners, and private sector among others.
Project Rationale and Linkage to Country/Regional Strategy

Over the past 2 years, the Government of Viet Nam has approved a number of landmark reforms to its system of PFM. This has included the passage of the Public Investment Law (PIL) in 2014 and more recently the passage of the State Budget Law (SBL) in June 2015. This is the first revision of the SBL since 2002. Recent reforms aim to incorporate generally regarded international good practices to Viet Nam's public financial management system. These include: a) introducing medium-term expenditure and revenue planning; b) increasing the fiscal autonomy of provincial governments (particularly with regards to debt management); c) introducing output-based budgeting practices; d) reducing the extent of off-budget expenditure; e) strengthening the management of public assets; and enhancing budget accountability and transparency. Over time, these measures have the potential to significantly improve the efficiency and effectiveness of public expenditure in Viet Nam.

The Government's drive towards enhancing the country's public financial management system will soon include two key additional pieces of legislation. In 2015, the National Assembly is expected to approve the Law on Accounting, and a new draft Law on Public Asset Management (PAML) will be submitted for consideration in 2016. The latter has important implications for budget formulation (both recurrent and investment components) and important linkages to all of the other elements of the PFM system, with the management of public assets being better integrated with financial management information systems.

In light of these recently passed and forthcoming legislative initiatives, the Government is faced with significant implementation challenges. An important number of decrees and circulars are needed to clarify how the high-level principles of the PIL, SBL and the upcoming PAML will be put to work. Significant capacity development and training is also required at both national and provincial government levels to ensure officials are fully aware of, and able to implement, new requirements. With the SBL (2015) coming into effect on the 1st of January 2017, many of the law's implementing regulations need to be in place by the middle of 2016, when 2017 budget preparations commence. At the same time, several draft implementation decrees need to be prepared in parallel to the finalization of the draft PAML, which is expected to be submitted to the Government in May 2016. This situation provides ADB with an opportunity to deepen its engagement in and support to the Government of Viet Nam's public financial management reform.

Impact The Project will support the implementation of the Ministry of Finance's Financial Sector Strategy 2012-2020 objectives of improving the efficiency and accountability of public financial management systems in Viet Nam.
Project Outcome
Description of Outcome The Government's knowledge and implementation capacity in selected PFM reform areas are enhanced.
Progress Toward Outcome Reporting templates for provincial public debt sustainability assessments have been completed, and hands-on support for public debt assessment has been provided to 8 provinces participating in ADB projects
Implementation Progress
Description of Project Outputs

1. Assessment of financial management information systems for monitoring debt mobilization of sub-national governments prepared.

2. Background papers for the drafting of Decree on Infrastructure Asset Management prepared.

3. Assessment on information system requirements for public asset management prepared.

4. Manual on Budget Oversight Functions of the National Assembly, following State Budget Law (2015) prepared.

Status of Implementation Progress (Outputs, Activities, and Issues)

Project's outputs are being completed on schedule, including:

" A Decree on rail and metro asset management has been prepared and submitted to the Government for approval;

" A manual on national budget oversight has been completed and published;

" The National Public Borrowing and Debt Repayment Plan, 2016-2020 has been prepared and submitted to the Government for approval;

" A plan of priority actions to strengthen public debt management has been prepared and submitted to Ministry of Finance for approval;

" A decree on government guarantees for projects has been revised and approved by the Government;

" A revised law on public asset management has been prepared and is being finalized by 31 March 2017 for submission to the National Assembly for approval in May 2017;

" A methodology to calculate risk-based government guarantee fees for projects is being finalized, by 31 March 2017; and

" Reporting templates for provincial public debt sustainability assessments have been completed, and hands-on support for public debt assessment has been provided to 8 provinces participating in ADB projects.

Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design ADB undertook a series of scoping meetings with relevant government stakeholders and development partners to gauge the level of demand for ADB technical assistance, between May and August 2015. These meetings reached agreement on high priority reform areas currently not being supported by other development partners and for which targeted support had the potential to generate strong synergies with ADB's existing operations in the country. The meetings included the Ministry of Finance Departments of State Budget, Banking and Financial Institutions, Debt Management and External Finance, Public Assets Management, Tax Policies and International Cooperation Department. In addition, meetings were held with the National Assembly's Committee for Financial and Budgetary Affairs (CFBA), and with the Foreign Economic Relations Department of the Ministry of Planning and Investment (MPI). Policy dialogue was also held with the staff from World Bank and the Australian Department of Foreign Affairs and Trade (DFAT).
During Project Implementation ADB maintained frequent dialogue with counterpart agencies to ensure timely adjustments to technical assistance priorities.
Business Opportunities
Consulting Services Three international consultants (total of 5.0 person-months), and four national consultant (13.0 person-months) will be recruited by the ADB on an individual basis to implement the TA activities in accordance with ADB's Guidelines on the Use of Consultants (2013 as amended from time to time).
Procurement N/A
Responsible ADB Officer Batten, Aaron
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Viet Nam Resident Mission
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Timetable
Concept Clearance -
Fact Finding 19 Aug 2015 to 21 Aug 2015
MRM -
Approval 14 Oct 2015
Last Review Mission -
Last PDS Update 30 Mar 2017

TA 8980-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Oct 2015 - 14 Oct 2015 30 Sep 2016 31 Jul 2017 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
450,000.00 0.00 0.00 0.00 0.00 0.00 450,000.00 14 Oct 2015 439,149.39

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Related Publications

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Procurement Plan

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