Flawed state spending is exposed

“Many localities and ministries are wasting state assets and undervaluing financial disciplines, especially when the national economy is in big difficulties,” declared National Assembly chairman Nguyen Sinh Hung at last week’s National Assembly Standing Committee meeting.  

“I recommend that solutions be found to solve this issue, otherwise the public’ confidence in ministries and state-owned agencies will decrease.”

Under a State Audit of Vietnam (SAV) report on auditing results on state budget usage in 2011 delivered at the meeting, 17 ministries, 28 cities and provinces nationwide, and 34 state-run enterprises were audited last year on their investment and state budget usage activities.

“Lots of state budget management and usage violations were discovered,” said SAV head Dinh Tien Dung. “Some 86 state-owned enterprises and 781 non-state-owned enterprises have been found to have tax evasion worth $4.3 million in 2011.”

According to Vietnam Customs, in 2011 there was a total tax debt of $9.23 billion owed by nine out of 13 petrol wholesale traders. Most debts were overdue and from temporary-import-for-re-export tax and import-for-domestic-consumption tax.

Specifically, Petrolimex was the biggest debtor with tax arrears of $3.97 million in temporary-import-for-re-export taxes and $2.37 million in import taxes.

Military Petroleum Corporation came next with a $2.4 million debt in the former kind of tax and $23,413 in the latter, Vinapco Company $2 million and $2.25 million, and PetroVietnam Oil Corporation $721,000 and $418,270, respectively.

Additionally, under the SAV report, 13 out of 28 localities had misused state capital, leading to a 30 per cent increase in their operational costs, with Khanh Hoa misusing $4.3 million, Bac Lieu $4.2 million, Quang Nam $1.8 million, Thua Thien-Hue $1.8 million and Ha Giang $1.75 million.

Ministry of Finance statistics showed that by late 2011, localities had 7,335 approved projects worth $13.14 billion, but no capital was available for them. Based on the investment capital allocated to localities in 2011, it would take many years for many localities to have enough capital for their existing approved projects, such as Hung Yen (24 years), Lam Dong (19 years) and Nghe An (27 years).

Ca Mau province has approved 207 projects with $173 million, but only 55 projects have been invested with $3.6 million only. Bac Lieu needed $360.57 million for its approved projects, but only $52.9 million was sourced.

Eighteen out of 28 localities have also been found not to use total $200 million for salary reforms, with Hanoi at $139.4 million, Quang Ninh  ($54.3 million), Quang Nam  ($15.5 million) and Ha Nam ($3.5 million).

Thirteen out of 28 localities have also been found to misuse $161.9 million for non-salary purposes, with Hanoi faulted in regard to $100.9 million, Quang Ninh  at $42.1 million, Binh Thuan  at $15.2 million and Vinh Phuc at $673,000.

Many ministries and localities have been discovered to violate regulations in the Law on Bidding, public procurement and land use, including localities of Ho Chi Minh City, Danang, Quang Nam, Tay Ninh, Quang Binh, Dien Bien and Ben Tre, and ministries of Culture, Sports and Tourism, Natural Resources and Environment, Health, Public Affairs, Agriculture and Rural Development, and Labour, Invalids and Social Affairs and the Government Office.