Revising Decree 60 on financial autonomy mechanism of public non-business units

	Amending Decree stipulating financial autonomy structure of public non-business units
	Perfecting the law on public property management
	Striving to reduce the number of public non-business units under Ministry of Finance

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Many inadequacies

To implement Resolution 19/NQ-TW on continuing to renovate the organizational and management system, improve the quality and performance of public non-business units and Resolution 27-NQ/TW dated May 21, 2018 on reforming salary policy for cadres, civil servants, public employees, armed forces and employees in enterprises, in June 2021, the Ministry of Finance assumed the prime responsibility for, and coordinated with concerned ministries and agencies to propose the Government to issue Decree 60/2021/ND-CP dated June 21, 2021 stipulating the financial autonomy mechanism of public non-business units.

Decree No. 60/2021/ND-CP stipulates more specifically and clearly the financial source of the public non-business unit, separating the revenue from public non-business activities including revenue from public non-business service activities; revenue from production and business activities; joint venture activities, association with organizations and individuals in accordance with the provisions of law and approved by a competent agency in accordance with the functions and tasks of the public administrative unit; revenue from lending public property.

However, in 2020-2021, due to the impact of the Covid-19 pandemic, the revenue of public non-business units was seriously affected, especially in the health sector and vocational training and education sector. Therefore, the assessment of the implementation of the autonomy plan of the previous period to propose the autonomy plan for the next period is not objective, thereby affecting the determination of the autonomy level of the units in the next period.

Facing that situation, the Ministry of Finance reported to the Prime Minister and the Government on difficulties in the implementation of Decree 60/2021/ND-CP and proposed the Prime Minister allow public non-business units to continue implementing the approved autonomy plan until the end of 2022. Moreover, the Ministry of Finance also said that the research and submission to the Government of a draft Decree amending and supplementing a number of articles in Decree 60/2021/ND-CP is necessary and suitable for the actual situation.

The Ministry of Finance affirmed that the draft Decree is developed to concretize the guidelines of the Party, National Assembly and the Government on reforming the management and operation mechanism of the public non-business units with the focus on financial autonomy; create a legal basis consistent with current legal documents. In addition, the draft Decree will overcome some limitations in the implementation of Decree 60/2021/ND-CP; create a premise to promote the reform of the financial mechanism of the public non-business unit, thereby improving their financial autonomy and strengthening the state budget management according to the output results.

Many regulations will be revised

According to the Ministry of Finance, the draft Decree amending and supplementing a number of articles in Decree 60/2021/ND-CP will inherit the appropriate contents specified in Decree 60 and overcome inadequacies in the implementation process due to the impact of the Covid-19 pandemic.

Specifically, the draft will amend the regulation on financial sources of public non-business units of group 1 (units that self-finance recurrent and investment expenditures), and group 2 (units that self-finance recurrent expenditures). In addition, the draft will amend the regulation on Contribution to the fund for supplementation of income of group 2.

Explaining this amendment, the Ministry of Finance said that currently, according to the provisions of Decree 60/2021/ND-CP, the units of group 2 shall make a contribution to the fund for supplementation of income not beyond 2 times the salary fund of ranks, grades, positions and contributions.

This provision has no difference compared to the contribution level of group 3 units (units that cover part of recurrent expenditures by themselves). Accordingly, collecting opinions from localities, to encourage group 3 units to change their autonomy level to group 2; and to ensure the stability of the additional income payment made by units in 2021 and earlier, it is necessary to amend the regulations on the income payment level of group 2 units to a maximum of 3 times.

The draft also adds point d, Clause 1, Article 15 on financial sources of group 3 units to ensure coverage of cases where group 3 units are still allocated funds for implementation of programs and projects. At the same time, the draft supplements regulations on financial sources of group 4 units (public non-business units whose recurrent expenditures are funded by the State). The Ministry of Finance also adds regulations on recurrent expenditures of public non-business units of group 4 as prescribed for units of groups 1, 2 and 3.

What's new in the financial autonomy of public non-business units?

Notably, in the draft Decree, the Ministry of Finance has amended and supplemented the regulations on "Delegating financial autonomy to public non-business units" as follows: after each stabilization period (five years), ministries, the central authorities and the provincial People's Committees are responsible for reviewing and improving the financial autonomy of group 3 units according to the annual roadmap, reducing at least 2% of direct support spending from the state budget for the fund of recurrent expenditures which is allocated autonomy of the affiliated public non-business units.