STATE AUDIT OFFICE OF VIETNAM AUDIT REPORT RESULT-BASED NATIONAL URBAN DEVELOPMENT PROGRAM FOR THE NORTH MOUNTAINS IN 2020 Hanoi, on..... June 2021 Document code: …… STATE AUDIT OFFICE OF SOCIALIST REPUBLIC OF VIETNAM VIETNAM Independence – Freedom – Happiness No: 102/KTNN - CARDS Hanoi, June 21, 2021 Subject: Submitting the Audit Report on the result-based national urban development program for the northern mountains in year 2020 To: Ministry of Construction Implementing Decision No. 278/QD-KTNN dated March 10, 2021 of the State Auditor General on auditing the result-based national urban development program for the Northern Mountains in 2020, the Audit Mission of Specialized Audit Department No. V (The State Audit Office of Vietnam - SAV) conducted the above-mentioned Program from March 18, 2021 to the end of May 16, 2021; Up to now, the audit report has been completed. The State Audit Office would like to send the Audit Report enclosed to this Official Letter./. Recipients: - As above; - Chairman of Finance and Budget; SIGN ON BEHALF OF SAV - Committee of the National Assembly; DEPUTY AUDITOR GENERAL OF - Minister of Finance; SAV - Ministry of Construction; - State Auditor General; (signed and sealed) - Deputy Auditor General Doan Anh Tho; - Specialized Audit Department No. V; - Departments: Legality; Audit Quality Control and Regime; General Affairs; Doan Anh Tho - Office of SAV (Dept., of Statistics and General Affairs); - Filed at: Archival, Eco., STATE AUDIT OFFICE OF SOCIALIST REPUBLIC OF VIETNAM VIETNAM Independence - Freedom - Happiness Hanoi, June 21, 2021 AUDIT REPORT RESULT-BASED NATIONAL URBAN DEVELOPMENT PROGRAM FOR THE NORTHERN MOUNTAINS IN 2020 Implementing Decision No. 278/QD-KTNN dated March 10, 2021 of the State Auditor General on auditing the result-based national urban development program for the Northern Mountains in 2020, the Audit Mission of Specialized Audit Department No. V (The State Audit Office of Vietnam) conducted the above- mentioned Program from March 18, 2021 to the end of May 16, 2021; Up to now, the audit report has been completed. 1. Subject matters The management and use of the Program's fund; compliance with the State's policies, regimes and laws; management, direction and coordination in implementing the Program; the fulfillment of the Program's objectives; economy, effectiveness and efficiency of the Program. 2. Audit scope and limitations 2.1. Audit scope - List of audited units (Detailed Appendix No. 01/BCKT-CTMT). - Audited period: Fiscal year 2020 and relevant previous and subsequent periods. 2.2. Audit limitations - Not verifying the quality of the works, machinery and equipment, not verifying and comparing against the units providing materials, equipment and services; not checking hidden items when conducting the on-site inspection; - Not auditing compensation and clearance costs under the Program (not comparing and confirm that households receive money, not witnessing and confirming the calculation of compensation quantity, not auditing unit prices in the approved plan), only generally auditing (compensation order and procedures approved by competent authorities, confirmation of actual data paid on compensation plan, progress and evaluation of site clearance); - Not auditing investment costs in the formation of fixed assets, debt situation, backlog materials and equipment because the program has not been completed; - Not checking and evaluating the management and use of the works after the investment to avoid overlapping with the content of tally made by the Department of International Cooperation. 2 - Not auditing the investment preparation stage performed by the PPTAF Project Management Board because it is within the scope of another project; Not re- auditing the contents audited by specialized Department of SAV in 2015, 2016, 2017, 2018 and 2019. 3. Audit basis - Law on State Audit, Law on State Budget, Law on Public Investment, Law on Accounting, Law on Construction, Law on Bidding, Funding Agreement between the Government of Vietnam and the Donor, other legal documents and relevant laws; - System of State Auditing Standards, Audit procedures, Regulations on Organization and Operation of the State Audit Mission, terms of reference between the SAV and the Donor (WB); The audit report is prepared on the basis of audit evidences, program financial statements (capital sources, investment costs) of the audited units; audit minutes of the audit mission at the audited units and related documents. PART ONE AUDIT EVALUATION AND CONFIRMATION I. I. THE TRUTH AND FAIRNESS OF FINANCIAL STATEMENTS (DATA, FINANCIAL INFORMATION) PROGRAM 1. Program audit results: (Details according to the attached Annexes 07.1, 07.2, 07.3, 08, 09 and 10/BCKT-CTMT). 2. Opinions on the truthfulness and fairness of the financial statements and expense finalization of the Program Audited entity's responsibilities: To prepare and present honestly and fairly the final settlement report on the situation of funding for the implementation of the Program, the report on investment capital and non-business funding, and investment costs for the implementation of the Program from January 1, 2020 to January 1, 2020. by the end of December 31, 2020 and the program's 2020 financial statements according to the framework of the preparation and presentation of the final settlement report on the implementation of funding, the report on investment capital and non-business funding, implementation in investment costs of the program is applied (Standards, Accounting Regime and relevant legal regulations); Implement internal control that the entity determines it necessary to ensure the preparation and presentation of the financial statement, the statement of investment capital and non-business expenses, and investment expenses on the execution of the program is free of material mistake due to fraud or error. Audit Mission’s responsibilities: Giving an independent opinion on the final report on the financial situation for the implementation of the Program, the report on investment capital and non-business expenses, and the implementation investment costs of the Program from January 1, 2020 to the end of December 31, 2020 and the program's 2020 financial statements based on the results of the audit. We conducted the audit 3 based on the basis, scope, limitations (stated at the beginning of the audit report), documents provided by the entity, compliance with regulations on professional ethics, plan of audit, and perform the audit in accordance with the necessary expertise based on the auditor's judgment to obtain audit evidence: assess the risks of material misstatement in the financial statements budget implementation, reports on investment capital sources and non-business funds, implementation investment costs and financial statements in 2020 of the program; consider internal control related to the preparation and presentation of the financial statement on finalization, the report on investment capital and non-business funding, implementation investment expenses and financial statements in 2020 of the program to design appropriate audit procedures; An audit also includes evaluating the reasonableness and appropriateness of accounting policies used and the reasonableness of accounting estimates. The collected audit evidence (through methods of analysis, comparison, detailed examination of documents, making spreadsheets, etc.) is sufficient and appropriate to serve as a basis for the State Audit mission's opinion. Opinion of the State Audit mission - Basis of the audit opinion: The audit mission performed on the basis of the audit (mentioned in Section 3 of this audit report), regulations on professional ethics, audit plan and audit performance calculated by the material and necessity method. Total of overall erroneous estimates is higher than overall materiality (VND23,166 million /VND 5,774 million) but not pervasive, of which: cost reduction due to wrong quantity of VND 5,040 million, wrong unit price of VND 646 million and not yet eligible for settlement of VND17,477 million. - In the opinion of the State Audit Mission, on the basis of records and documents provided by the Investor and audit results, in all material aspects, except for the influence of the issues mentioned above (in scope audit scope and limitations of this audit report), the financial settlement report, the report on investment capital and non- business funding, implementation investment costs and the 2020 financial statement. of the program are prepared to fairly reflect the financial settlement, investment capital sources, non-business funds, investment costs for implementation and in accordance with current regulations of the State and the Donor. The settlement report on the implementation of the program, the report on investment capital and non-business funding, the cost of implementation investment and the 2020 financial statement of the program is partially accepted according to the contents of the Audit Report. II. EVALUATION AND CONFIRMATION OF COMPLIANCE WITH LAW, POLICIES, REGIME IN PROGRAM MANAGEMENT 1. Overall evaluation - The Ministry of Construction and the People's Committees of the provinces have directed relevant departments and branches to coordinate and support the People's Committees of cities in the management and implementation of the Program such as the arrangement, balance, and allocation of capital plans, advance capital; assisting in design appraisal and estimation; coordinate in disbursement and payment to create 4 favourable conditions for the Investor during the implementation process. - The PMUs and related units have carried out the implementation from the order and procedures of investment, survey work, formulation and approval of investment projects, construction technical design and cost estimate, construction work, contractor selection, investment cost management and quality management; financial and accounting work, acceptance and payment of settlements complying with the provisions of the Law on State Budget, Law on Public Investment, Law on Accounting, Law on Construction No. 50/2014/QH13, Law on Bidding No. 43/2013/QH13; Decree No. 59/2015/ND-CP on management of construction investment projects, Decree No. 32/2015/ND-CP on management of construction investment costs, Decree No. 63/2014/ND-CP on detailed regulations on the implementation of a number of articles of the Bidding Law on contractor selection, Decree No. 37/2015/ND-CP of the Government detailing construction contracts, Decree No. 46/2015/ ND-CP on quality management and construction maintenance; Circulars guiding on capital construction investment management, state budget management, funding agreements, program documents, program manuals and other relevant legal documents. - The PMUs have disbursed payments to construction contractors when the documents and procedures are consistent with the provisions of Circular No. 111/2016/TT-BTC dated June 30, 2016 and Circular No. 349/2016/TT-BTC dated December 30, 2016 of the Ministry of Finance, the expenditures are made according to the assigned estimates and ensure the regimes, standards and norms provided by the financial regulations of the Program. At the end of the year, the PMUs will compare and confirm the debts and advance recovery according to the contract rate; accounting revenue and expenditure in 2020 with the amount of VND 620,482 million as per regulations. - By the end of December 31, 2020, 7 cities and the Ministry of Construction continued to accelerate the implementation of the Program's activities as planned and complete the Program's disbursement indicators, including: No. DLI 1.1, DLI 1.2, DLI 2 (local urban infrastructure investment items according to the City/town's annual improvement plan approved in 2020, total investment items completed in 2020 is 25/39 items.1 Verification of results includes 02 items that were verified early and achieved by the State Audit 2; DLI 3.1, DLI 3.2: according to the report of cities, in 2020, there are four out of seven cities achieving this index are Bac Kan (16.1%), Cao Bang (14.1%), Hoa Binh (20.9%) and Tuyen Quang (12%). The Ministry of Construction 125 items including: Construction of Nam Cut Bridge, Construction of resettlement area (Bac Kan); River Bang embankment (Cao Bang); Construction of Hoa Binh 3 bridge and road (Hoa Binh); Undergrounding the urban technical infrastructure system of some main highways (Thai Nguyen); Renovating and upgrading Trung Viet Reservoir (Tuyen Quang); Hoa Ban Kindergarten, Hoa Mai Kindergarten, Son Ca Kindergarten, Road B - Nguyen Thai Hoc, Nguyen Khac Nhu Street, Tuan Quan Street, HM Dien Bien Street - Yen Ninh (from Architecture Consulting JSC.,) , Dien Bien - Yen Ninh Road (from the Department of Health), embankment of Hoa Binh reservoir, Construction of works to upgrade Luong Yen road, 7C road, Yen The road HM, Construction of resettlement area infrastructure, Power system Lighting a main street, Construction of works on Le Chan street, Tran Binh Trong street, Da Den village road, To 3 bridge, Ngoi Yen stream embankment (Yen Bai province). 2 Including: HM Construction of Hoa Binh 3 bridge and roads (Hoa Binh) and HM Undergrounding the urban technical infrastructure system of some main streets (Thai Nguyen). 5 continues to implement this index. coordinating the Program, supporting participating municipalities, cities in completing disbursement linkage indicators (DLI) and complying with PAP actions, in addition, the Ministry of Construction also implemented the Central level DLI, including: indicators DLI 4.1; DLI 4.2 and DLI 4.3 according to Programme Operation Manual (POM). 2. Shortcomings 2.1. Management, direction and coordination in implementing the program The direction and coordination of a number of city People's Committees and related units in solving problems in compensation and site clearance has not yet been performed promptly, leading to the progress of construction of many construction items not guaranteed, but extended many times, affecting the overall progress of the program (Thai Nguyen, Dien Bien, Hoa Binh, Tuyen Quang, Bac Kan provinces) 2.2. Implementation status of the program's goals, contents and progress - 14/39 urban infrastructure investment items of localities according to the annual improvement plan have not yet completed their goals according to the approved schedule and time.3 The main reason is due to problems in compensation for site clearance or the construction site has not been fully cleared, affecting the implementation progress of the Program and other causes due to changes in planning and design. - In 2020, 3/7 cities did not meet the requirements of DLI index 3.2 in terms of local revenue growth rate (<12%), including: Dien Bien Phu (0.7%), Thai Nguyen (5.4%) ) and Yen Bai (2.49%). The reason is that the city's revenue sources were reduced, in which in 2020, the Covid-19 pandemic has greatly affected production and business activities, tax and fee revenue of cities, and some policies of the city. The Government allows the reduction or postponement of taxes and fees for those affected by the pandemic, affecting the city's local revenue growth index. - 07 PMUs of 07 provinces are late in submitting reports/component data to the Ministry of Construction compared with the agreed deadline (before January 31 every year) at Point 5.5 of the Program's manual, affecting the the compilation of progress reports of the entire Program during the year. The reason is that at the end of the year, the PMUs carry out the review and acceptance of the quantity to pay the contractor, a big load of work and need to focus on disbursing budget in time during the budget adjustment, so it affected the compilation of the report. 2.3. Compliance with financial and accounting regulations - As of December 31, 2020, the Construction Investment PMU of City of Bac Kan has just temporarily paid natural resources tax and environmental protection fee on the basis of provisional estimates but has not yet calculated accurately according to the checking and acceptance quantity, payment and settlement of works, leading to underpayment of natural resources tax corresponding to the area of land for exploiting according to Article 8, Article 9 of Circular No. 152/2015/TT-BTC dated October 2, 3 Including: Bac Kan (2/4); Dien Bien (4/4); Tuyen Quang (6/7); Thai Nguyen (1/2); Peace (1/2). 6 2015 of the Ministry of Finance guiding on natural resources tax and underpayment of environmental protection fee as prescribed in Article 2, Article 6 of Decree 164/2016/ND-CP dated December 24, 2016 of the Government regulating environmental protection fees for mineral exploitation and guiding documents of the People's Committee of Bac Kan province.4 The reason is that the PMU was temporarily paying tax on the basis of the estimated quantity of provisional estimates and the unit price of natural resources tax and environmental protection fee at the time as of 2015. - The accounting of expenses for verification and approval of project finalization reports was completed in accordance with the provisions of Circular No. 10/2020/TT- BTC dated February 20, 2020 of the Ministry of Finance into unfinished construction investment costs. (Account 241) is not rational when there is no record of acceptance and payment (Cao Bang City Program Management Board). 2.4. Implementation of the Law on State Budget - The preparation, allocation and assignment of estimates did not match the ability to perform actual expenditure tasks, so in the year, they still have to cancel the estimates and pay the budget with a total budget of VND 472,087 million 5. The main reason is that the assignment of the medium-term supplementary capital plan for 2019- 2020 was assigned on December 28, when the disbursement deadline allowed until January 31 of the following year, leading to late disbursement, so the estimate was cancelled. In addition, there is another reason, some PMUs have not based on the expected quantity of implementation in the year, and have not yet estimated the construction progress in line with each item. - The preparation and withdrawal of estimates of revenues and expenditures for project management of the Program in phase 2 and allocation to investment costs of the Program have exceeded the amount of VND484,536,519 compared to the ratio 6 specified in the Decision No. 957/QD-BXD dated September 29, 2009 of the Ministry of Construction on cost norms for project management and construction investment consultancy; The PMU has not yet refunded the program funding of VND 2,454 million to the central budget because the funding year has expired 7 as prescribed in Item c, 4 According to the provisions of Decision No. 05/2018/QD-UBND dated March 30, 2018 of the People's Committee of Bac Kan province, Promulgating the price list for calculating natural resource tax in 2018 in Bac Kan province; Decision No. 35/2017/QD-UBND, dated November 28, 2017 of the People's Committee of Bac Kan province on the amendment and content of the 2017 resource tax calculation price list, issued together with the Decision No. 30/2017/QD-UBND On 10/20/2017, the People's Committee promulgates the price calculation for natural resources tax in 2017 in Bac Kan province; Decree No. 1084/2015/UBTVQH13 dated December 10, 2015 of the National Assembly Standing Committee promulgating the tax rate table of natural resources; Resolution No. 42/2016/NQ-HDND, dated July 14, 2016 of the People's Council of Bac Kan province on regulations on environmental protection fee rates for mineral exploitation in Bac Kan province. 5 Ministry of Construction VND 4,358 million; Tuyen Quang 91,593 million VND; Yen Bai 918 million dong; Bac Kan 9,534 million VND; Hoa Binh: 56,818 million VND; Dien Bien: 63,867 million VND; Thai Nguyen 244,998 million VND. 6 According to the norm in Decision 957/QD-BXD, the total cost of project management is VND 4,015,463,481, in fact, the unit withdraws the estimate to the World Treasury at the State Treasury and has spent, allocated and finalized VND 4,500,000,000. 7The amount allocated by the central budget in 2018 from the IDA loan according to the 2018 public investment plan, but because the People's Committee of Bac Kan province adjusted the plan, leading to the current balance remaining at the 7 Clause 4, Point 5, Article 1 of Decree 120/2018/ND-CP dated On September 13, 2018, the Government issued a Decree on amendments and supplements to a number of articles of Decree No. 77/2015/ND-CP dated September 10, 2015 of the Government on medium-term and annual public investment plans (Bac Kan City Construction Investment Project Management Board) - The estimation of project management revenues and withdrawal of estimates from the Program's funding sources are not close to the actual needs of using funds, so when finalizing the annual project management expenses, there is usually a transfer of the deposit by the PMU at the provincial state treasury 8, by the time the program audit has not finished, the unit is continuing its implementation (Cao Bang City Program Management Board). - The rate of finalization for the whole program's budget is low (44.76%), the unused funds will be carried over to the following year. As of December 31, 2020, the remaining budget is VND 759,873 million, but during the period of January 2021, the PMUs have disbursed it for the program. 2.5. Debt control As of December 31, 2020, the whole program owes contractors an amount of VND 340,240 million of construction and installation and the prepayment to contractors of the whole program at VND 232,374 million (advance under the contract, not yet due)9, by January 31, 2021, the investor has basically been paid and disbursed to the contractor 2.6. Compliance with the regime of construction investment project management 2.6.1. Surveying, appraisal, approval of design and cost estimation - For the bidding packages and works for the period of 2019-2020, most provinces10 have to adjust and supplement the shop drawing design and estimate. The reason is that the initial project design survey was carried out from 2014, 2015 so it is no longer consistent with the newly approved planning, the cost estimate shall be World Treasury account of the project management board at the State Treasury. 8 In 2017, withdrawing the estimate of 3,527,595,000 VND, settlement of 1,340,519,426 VND balance of deposits 2,187,075,574 VND; In 2018 Settlement is 1,420,707,959 VND, Balance of Deposit is 766,366,615 VND, in 2019 is 179,454,615 VND, Balance of Deposit is 586,913,000 VND and In 2020 withdrawal of estimate is 1,291,174,000 VND, Settlement is 744,989,165 VND, Balance of Deposit 1,133,097,835 VND. 9 Ministry of Construction: 3,211 million VND and 764 million VND in advance for contractors (advance according to contract regulations); Tuyen Quang 34,880 million VND; Yen Bai 29,834 million VND; Bac Kan 59,506 million VND; Cao Bang 42,868 million VND; Hoa Binh 58,956 million VND; Dien Bien 48,465 million VND. 10 Yen Bai Province: The embankment work of Hoa Binh reservoir must be adjusted and supplemented with embankment volume because during construction, some embankment sections cannot take advantage of dike repair and must be built new; Lighting works on some main streets must be adjusted because they have been invested with other capital sources. Tuyen Quang province: Locally adjusting the heart line due to overlapping with the planning, cutting off the electrical system in the renovation and upgrading items of Tan Trao road passing through Thien Son quarry, Dom village; local reduction of the section of the route to suit the actual conditions in the renovation and upgrading of Binh Thuan road. Dien Bien Province: During construction, additional surveys must be carried out for additional geological assessment to adjust the design to adjust the content and scale (contract packages DB18, DB19, DB28). Cao Bang Province: Adjusting the design of Song Bang embankment item to ensure technical requirements (5 times). Bac Kan province: During construction, it is necessary to treat soft soil, adjust the volume of grade III rock, grade IV soil, add drainage system in the category of road upgrade from group 11B p. Duc Xuan goes to group 11 p. Phung Chi Kien; The section from Km2+040 to Km3+946.55 Tay Minh Khai Street. 8 adjusted and the new price measurement and norms shall be updated according to regulations. - The preparation, application and approval of the estimate cost, in which the norm DX2-1158/VKT- TTTV is not included in the estimate norm system prescribed by the Task "Breaking rocks with large-capacity machines combined with baking powder ((not including transportation)” in the DB-28 package but which has not been approved by the Provincial People's Committee is not consistent with the provisions of Decree 68/2019/ND-CP, leading to no basis for acceptance and payment of the value of VND 4,220,643,723 even though, when appraising it, the Department of Construction required the investor to get approval from the Provincial People's Committee and the Ministry of Construction before carrying out the construction work (PMU of Dien Bien Phu City Program). - The preparation, appraisal and approval of the estimate is still inaccurate, through the audit, the estimated value is reduced by VND 1,140 million due to the numerical error of the quantity (package XL-03A02 - Thai Nguyen City Program Management Board). - The estimate for the preparation of excavation, filling and transportation of soil is not consistent with the survey results 11; the investor has not based on the Decision approving the adjustment of shop drawing design and cost estimate to stipulate the acceptance conditions for rock excavation work 12; Calculation of arithmetic error in geotextile quantity determination13. (PMU of Tuyen Quang City: At the construction site of Tan Trao road passing through Thien Son quarry, Dum village) 2.6.2. Contractor selection and contract signing - Some investors did not inspect and require contractors to buy contractor's equipment insurance, construction insurance for the contractor's responsibility, 3rd party liability insurance, not sufficiently complying with the provisions of Point b, Article 19.1 of the Contract; Not extending the contract guarantee upon the expiration of the contract is not to comply with Clause 2, Clause 4, Article 16 of Decree 37/2015/ND-CP and Clause 4.1, Article 4 of the contract (Dien Bien province 14; Hoa Binh province). 11 The survey records show the soil level I, III at the positions on both sides of the abutment piers, there are no results of the land level survey on the whole route, but the estimate made for digging, filling and transporting the soil is allocated land. I, II, III, IV. 12 In Decision No. 552/QD-UBND dated May 14, 2020 of the People's Committee of Tuyen Quang Province on approving the adjustment of construction drawing design and cost estimate based on the request of the People's Committee of Tuyen Quang city and the opinions of the People's Committee of Tuyen Quang province. Decision of the Department of Construction of Tuyen Quang, including a recommendation for the change of construction methods for rock excavation work. “During the construction process, the investor and relevant contractors must measure the draw, calculate the volume of rock excavation; take rock samples for testing of rock strength as a basis for determining rock grade; prepare as-built completion documents according to the right method of execution and organize the acceptance test in accordance with reality to serve as a basis for payment and settlement of the contract in accordance with relevant regulations.” 13 The estimate is not divided by the calculation unit of 100m2 for geotextile work, leading to an arithmetic error of 997.45m2, corresponding to the estimated price of VND 2,420.6 million, which has not been discovered, adjusted first. volume of solicitation and volume of contract. Pursuant to the signed contract, the volume of geotextiles due to the above arithmetic error is VND 3,038.5 million. 14 Dien Bien Province: Packages: DB19, DB20, DB21, DB22, DB28, DB29, DB30. 9 - The People's Committee of Dien Bien province has not yet adjusted the project implementation time, the investor has not completed the procedures for adjusting and extending the contract period for the items that have not yet been implemented and completed 15 as Clause 3, Article 39 of Decree 37/2015/ND-CP. 16 - Excavation and shoveling of grade III soil and stone, the arising part increases by more than 20% of the corresponding work quantity stated in the contract, but the parties have not yet agreed to determine a new unit price but still applied the initial contract price that did not comply with the provisions of Point b, Clause 2, Article 38 of Decree No. 37/2015/ND-CP. The State Audit Office has adjusted the unit price with the quantity of acceptance during the Audit period (Package DB28); The investor has approved the adjustment of the bid package price and signed the contract appendix for implementation without the approval of the Provincial People's Committee and the Ministry of Construction on the application of norms DX2-1158/VKT-TTTV of the “Rock breaking with a large capacity machine combined with baking powder” is not included in the prescribed norm system as it does not comply with Point b, Clause 4, Article 15 of Decree 68/2019/ND-CP, and has not yet complied with Article 2 of Decision No. 1181/QD-UBND dated November 16, 2020 of the People's Committee of Dien Bien province and the appraisal recommendation of the Department of Construction (Hoa Binh 3 Bridge and the approach road). (PMU of Program in Dien Bien Phu City) - The contract does not clearly define the responsibility of each party for the damage caused by the delay in order to determine the adjusted quantity according to the provisions of Clause 1, Article 39 of Decree 37/2015/ND-CP and Decree No. 13/CT- UBND dated October 4, 2019 of the People's Committee of Hoa Binh province. - Extension of the contract performance schedule issued after the expiration of the contract period is not in compliance with Directive No.13/CT-UBND dated October 4, 2019 of the Provincial People's Committee (Contract No. signed on November 18, 2016; Contract No. 68/2016/HDXD signed on November 7, 2016); The contract appendix on price adjustment No. 05/2018/PLHD dated August 1, 2018 applies the unadjusted coefficient of 14.47% which is not consistent with the unadjusted coefficient of 16.64% in the List of price adjustment data attached to Contract No. 36/2016 HDXD dated 18/11/2016; applying the adjustment formula that does not comply with the guidance in the appendix promulgated together with Circular No. 07/2016/TT-BXD dated March 10, 2016 of the Ministry of Construction.17 ODA using PMU capital of 15 Tinh Dien Bien: Package DB18, DB19, DB20, DB21, DB22, DB28, DB29, DB30. 16 As of December 31, 2020, the project implementation period and the duration of the construction contracts have expired, but due to not yet approved, the adjustment to the proposal for investment policy and the extension of the loan agreement period has not been approved. capital (according to the unit report, the Ministry of Planning and Investment is submitting to the Prime Minister for consideration and approval the investment policy proposal as a basis for the Ministry of Finance to negotiate with the WB to adjust and extend the duration of the Agreement. loans until June 30, 2022. 17 The index of labour and construction machinery applies formula (2) in Section 2.1. Case Adjustment for all cost requirements (Adjustment of materials, labour, and construction machines); while the material index applies formula (9) in Section 2.3.4. Case of price adjustment for some major materials. 2.6.3. Quality 10 Hoa Binh city). - Some PMUs, when selecting contractors and signing contracts when there is no cleared site, affecting the progress of projects (Dien Bien Phu, Hoa Binh, Thai Nguyen, Tuyen Quan). 2.6.3. Quality management - The investor has not yet reached an agreement with the construction contractor on the form and content of the construction log as a basis for implementation before construction, the work has not yet complied with the provisions of Clause 2, Article 10 of Circular 26/2016/TT-BXD.18 - Dossier of quality management of input materials on cement and crushed stone materials without certificate of conformity has not yest complied with the provisions of Point 1.4.3, Part 1 of the general regulations QCVN 16:2019/BXD promulgated together with Circular No. 19/2019/TT-BXD dated December 31, 2019 (Dien Bien Phu). - The construction log shows the irregular consultant's supervision. The construction log does not record the progress of construction conditions, the number of workers, construction equipment, the as-built drawing without the signature of the preparer, etc., which has not yet complied with the provisions of Point a, Clause 3 of Article 10 and Appendix II of Circular No. 26/2016/TT-BXD (PMU using ODA capital - Hoa Binh city). - Traffic safety work: on the construction site, the contractor has inadequately arranged signs and barriers (Thai Nguyen province: bidding package XL-03A1); - There is no design plan to prevent landslides, specified in Section 10.5 of TCVN 4447-2012 and Section 8.2.4 of TCVN 9436-2012 on soil work for road foundation construction. The the site clearance work encountered difficulties, the actual construction shall adjust the Positive Slope coefficient (from 1:0.75 to 1:0.3) at the end of the road of Yen The. (PMU of program in Yen Bai city) - The construction maintenance process has not yet been organized and approved according to the provisions of Articles 30 and 31 of the Government's Decree No. 06/2021/ND-CP dated January 26, 2021 specifying a number of contents on construction quality management, work construction and construction work maintenance. (Items of Song Bang embankment in Cao Bang province; Construction of Nam Cat bridge in Bac Kan). 2.6.4. Management in the progress of contract performance - In some provinces, the contract performance progress of the works is behind the schedule specified in the contract, during the implementation process, the investor and contractors have to adjust the implementation schedule many times. The main management. 18 Dien Bien Province; Hoa Binh province: package of Hoa Binh 3 bridge and road; Upgrading and renovating Hoa Binh road; Relocating Hoa Binh road infrastructure; Thai Nguyen province: bidding package XL-03A1; XL-03B; Construction and relocation of fiber optic cables, railway signal information within the area of land clearance; Construction of XL to move the water line within the clearance area. 11 reason is due to problems in the compensation for site clearance, leading to contractors not having a cleared ground to execute the construction on schedule, in addition, there are other reasons for changing and adjusting the design to match the needs of the contractor in accordance with the actual geological and topographical conditions and in accordance with the detailed plans and master plans, due to the impact of the covid pandemic. Specifically: - Dien Bien Province: By the time of audit, the construction has not been completed and the implementation schedule has not been extended. Some bidding packages have signed construction contracts since April 2018 but up to the time of audit, the commencement order has not been issued (Bidding packages DB20, DB22), no quantity of acceptance for payment (Bidding packages DB21); - Hoa Binh Province: There are 03 bidding packages 19 with adjusted and extended implementation progress: - Thai Nguyen province: the project of upgrading Viet Bac road, Phase 2, is being implemented, the implementation progress of the bidding packages is slow compared to the schedule of the contract 20. - Tuyen Quang province: The progress of the implementation of 05 work items in the 02 bidding packages is behind schedule compared to the provisions of the Contract and the Decision on approving the bid awarding results. 21 2.6.5. Acceptance and payment finalization work In the implementation process, there are still some shortcomings in acceptance and payment of wrong quantity, wrong unit price, other differences leading to financial 19 Contract No. 36/2016/DXD dated November 18, 2016 - Hoa Binh 3 bridge and link: contract period is 18 months, in fact, the implementation time must be extended to May 30, 2020, 24 months late; Contract No. 68/2016/HDXD dated 07/11/2016 - Construction of Hoa Binh road: contract period is 15 months, in fact, the implementation time must be extended until August 30, 2020, 30 months late; Contract No. 10/2019/HDXD dated June 6, 2019 - Construction of infrastructure system: contract period is 180 days, in fact, the implementation time must be extended to May 30, 2020, 5 months late ). Cause: The unit does not have a record to clearly define the responsibility of each party for the damage caused by the delay. In the reports of the City People's Committee. Hoa Binh, the main reason is due to problems in site clearance work. 20 Progress in the construction contract: package XL-03A1 completed in December 2020, XL-03A2 completed in December 2020, XL-03B completed in May 2019, construction and installation bidding package moving water lines completed in July 2020, the construction and relocation package of fiber optic cables and railway signal information completed in March 2020); Bidding packages (XL-03B, construction and installation of water lines, construction of fiber optic cables, railway signal information) have been extended until December 31, 2020. 21 Package No. 01 (construction of 02 work items): construction progress of Tien Lung road, Ỳ La ward to be completed on June 16, 2021; For the LIA'S area, Tan Ha ward, it is September 12, 2021 but by the time of audit, acceptance is mainly the production of prefabricated components, reaching 12.01% of the volume value (7,158 million VND/ 59,599 million dong), 5/13 roads in LIA'S area have no plan for compensation for site clearance; Package 02: Item to renovate and upgrade the road from Tan Trao through Thien Son quarry, Dom village to be completed on July 6, 2021 (Construction announcement on November 6, 2020), the item renovating and upgrading the road from Binh Thuan road (NH37) at group 18 to be completed on June 19, 2021 (Construction deployment notice on October 19, 2020), the renovation and upgrade item from Phan Thiet road to Phan Thiet street. Road 17/8 has not yet announced the start of construction, by the time of audit, the volume of acceptance reached 5.76% of the contract value (VND 9,103 million/VND 157,955 million). The reason for the contract number 01, 02 was signed from July 2020 but the compensation plan was approved mainly in December 2020 (5 months late) or by the time of the audit, the compensation plan had not been prepared or approved. 12 handling, recovery and payment to state budget of VND 1,669 million; Reduced payment of VND 4,017 million and VND 17,477 million that are not eligible for payment.22 (Details/ in Appendix 7.3/BCKT-CTMT) 2.6.6. Site clearance and compensation work Site clearance in 05 localities is slow (Thai Nguyen, Dien Bien Phu, Hoa Binh, Tuyen Quang, Bac Kan), of which there are 04 provinces (Thai Nguyen, Dien Bien Phu, Hoa Binh, Tuyen Quang) not yet handed over the cleared site for the construction unit, leading to slow project progress. The main reason is that people do not agree with the compensation regime and support policies on compensation prices for land, property, and crops, so they have not received compensation; because the unit price of land for land clearance and compensation has increased compared to the time of approval, it shall be adjusted to make further payment; Due to the fact that people use land for improper purposes and build illegal works, hence it takes time for the Ward People's Committee to verify the origin of the land, verify the construction time, etc., (Dien Bien Phu; Hoa Binh: Hoa Binh 3 bridge and approach road; Construction of Hoa Binh road; Thai Nguyen: project of upgrading Viet Bac road, phase 2; Tuyen Quang: Packages 01, 02 signed from July 2020 but the compensation plan was approved mainly in December 2020 (5 months late); Bac Kan: the item of upgrading and renovating the road from group 11B of Duc Xuan ward to group 11 of Phung Chi Kien ward, there are 4 cases that have not received money for compensation, site clearance support). III. IMPLEMENTATION OF OTHER RELATED LEGAL POLICIES 1. Compliance with the provisions of the Program - The relevant units performed the program management complying with the donor agreement, program documents, program handbooks and other regulations of relevant state management agencies related to the Program; - The Program Coordination Board and local steering committees have directed functional units to organize monitoring and evaluation of the Program implementation progress on the basis of the proposed plan; coordinate with the World Bank to organize the monitoring and evaluation, make a report to evaluate the program implementation to summarize and evaluate the implementation of the Program plan in the locality. 2. Implement conclusions and recommendations of SAV On the basis of summarizing data on the implementation of the audit recommendations of the units participating in the Program in 2019, it is shown that the People's Committees of the provinces have directed the units to implement the Program to rectify and remedy the problem and shortcomings in the management and 22 State budget withdrawal: Yen Bai 918 million dong; Bac Kan 503 million dong; Hoa Binh VND 210 million; Dien Bien Phu 37 million dong; Reduced payment: Thai Nguyen 264 million; Bac Kan 737 million; Cao Bang VND 2,390 million; Dien Bien VND 92 million; Tuyen Quang 241 million dong; Hoa Binh 291 million VND; Reduced value when paying for the acceptance volume until the next period is 5,727 million dong (Tuyen Quang 3,038 million dong; Hoa Binh 1,548 million dong); Not eligible for final settlement VND 17,477 million (Thai Nguyen VND 291 million; Dien Bien Phu VND 4,220 million; Cao Bang VND 307 million; Hoa Binh VND 12,658 million). 13 implementation of the Program. The Program implementation units have implemented the audit recommendations of the State Audit, specifically: Recovery of state budget payment and reduction of investment expenditure: VND 5,862 million, including: Reduction of next year's payment of VND 3,051 million; Refund to the state budget VND23 million; Other financial handling is VND 2,787 million, (details in the Report on implementation of audit recommendations). 3. Implement regulations on anti-corruption, responsibility of heads of audited units for violations discovered through audit - The People's Committees of the provinces/cities and the PMUs implementing the Program have directed and implemented the anti-corruption plan and summarized the report on anti-corruption, practicing saving against waste in 2020. - All 7 Cities have fully set up a system to store and track complaints on the database system and on the notebook. Cases are collected, handled and stored according to the correct procedures. Inspectors of the Ministry of Construction regularly support the Project Management Boards in the process of receiving and solving cases, and through the means and business trips that have directly guided as well as organized the capacity improvement in effective implementation of the database system on PAP 1. - The results of collecting feedbacks and complaints of the Program have been handled by the units in accordance with regulations. As accumulated from the beginning of the Program to date, 374 cases have been recorded (in 2020 alone, there are 55 new cases arising) and 365 cases have been resolved and 09 cases are transferred to 2021 23, Through the results of the implementation of the audit recommendations from 2019 and earlier, the audit results still have shown some shortcomings and limitations in the management and use of public finance and assets, but have been approved by the Ministry of Construction, the People's Committee of provinces/cities, the PMUs and relevant units promptly overcome all shortcomings and limitations that the State Audit concludes and recommends, and at the same time seriously correctted and learnt from collectives and individuals in executive management and financial and accounting management, investment cost management. IV. EVALUATION OF ECONOMY, EFFICIENCY, EFFECTIVENESS 1. 1. Overall evaluation - The Ministry of Construction and the PMUs shall organize the coordination of the Program, appropriately apply norms and unit prices in the organization and implementation of consultancy bidding packages, in the management of investment costs, and administrative and administrative expenses. The industry has contributed to ensuring the economics in the use of capital, the bidding to select the contractor through the open bidding form has ensured the economics in the management and use of the investment capital.24 23 2020: Bac Kan, 11 cases have been handled; Cao Bang and Thai Nguyen, no complaints occurred; Hoa Binh, 01 case has been handled; In Dien Bien Phu, there are 40 complaints cases but 31 cases have been handled, the remaining 09 cases are still being handled; Yen Bai, there are 02 cases handled. 24 Cao Bang Province: Bid package for construction of Bang river embankment (left bank embankment: 14 - The Ministry of Construction, the PMU and relevant units have basically achieved the goals set out in 2020, such as: the DLI indicators have been completed by the Ministry of Construction and 07 cities, except for the DLI index. 3.2, 4/7 cities have achieved the target of increasing local revenue (Bac Kan, Cao Bang, Hoa Binh, Tuyen Quang); 2/7 City (Cao Bang, Yen Bai) completed the Advanced Plan, 5/7 City (Bac Kan, Dien Bien Phu, Hoa Binh, Thai Nguyen, Tuyen Quang) partially completed the Advanced Plan. 2. Shortsomings 2.1. Economy The acceptance and payment of the wrong quantity with the amount of VND 5,687 million affected the economy in management and use of investment capital. 2.2. Validity - The implementation progress of the works is slow, adjusted many times during the implementation process, the delay in putting the works into operation and use has slowed down the promotion of the investment efficiency of the Program (Thai Nguyen, Dien Bien Phu, Hoa Binh, Tuyen Quang, Bac Kan). - Targets under the 2020 improvement plan of some cities have not been completed according to the approved plan, which has reduced the effectiveness of program management and implementation (Bac Kan, Dien Bien Phu, Hoa Binh, Thai). Nguyen, Tuyen Quang). 2.3. Efficiency - The construction of detailed cost estimates is not close to reality; have not promptly urged construction contractors to pay the final settlement of works and work items, leading to low disbursement rate (Hoa Binh, Dien Bien Phu, Tuyen Quang, Thai Nguyen, Ministry of Construction). - The site clearance work at some localities is slow, there is no cleared site to hand over to the construction unit, leading to slow project implementation progress (Dien Bien Phu; Hoa Binh; Tuyen Quang; Yen Bai, Thai Nguyen; Bac Kan) PART TWO AUDIT CONCLUSION 1. Implementing program objectives and contents The Ministry of Construction, with the function of coordinating the Program and directly supporting 7 provinces participating in the implementation of the Program, the PMU and units shall comply with the planning, purpose, investment scale, and total investment according to Decision on project approval; basically meet the set objectives; kmO+OO-KmO+950,411, the rate of reduction is 5.86% (3,183 million VND/54,301 million VND); Projection electricity construction Light and trees, the rate of reduction is 7.29% (362 million VND/4,961 million VND); Technical supervision consultant for construction of Bang river embankment (left bank embankment: km0+00- Km0) +950,411 reduction ratio through bidding is 3.33% (21 million VND/642 million VND); Thai Nguyen: Package XL03A1: Reduce 1.6% of the value after bidding; Package XL03A2: Reduce 7.6% price value after bidding. 15 The completed works step by step create urban civilized landscapes, improve people's lives, contribute to promoting economic growth and social equality. DLI indicators have been completed by cities, except for DLI 3.2 (only 4/7 cities have achieved the target of 12% on-site revenue increase, namely Bac Kan, Cao Bang, Hoa Binh and Tuyen Quang). In 2020, 2/7 cities of Cao Bang and Yen Bai have completed the Improvement Plan, 5/7 of the city has not completed the planned target. Responsibility belongs to the PMU, the City People's Committee of 05 provinces: Bac Kan, Dien Bien Phu, Hoa Binh, Thai Nguyen and Tuyen Quang. 2. Compliance with Law on State Budget, financial and accounting regulations Provincial PMUs shall implement the provisions of the Law on State Budget, the Law on Accounting, the Funding Agreement, the Program implementation manual, and the provisions of law in financial and accounting management, but its still exists limitations: - It is not appropriate to account for the cost of verification and approval of the final settlement report of the completed project when there is no record of acceptance and payment for capital construction investment. The responsibility belongs to the PMU of the North Mountains urban Program in Cao Bang city. - The preparation of revenue and expenditure estimates for management costs and program budget estimates is still not close to reality with assigned tasks, leading to the year-end cancellation of the estimate. The responsibility belongs to the Urban Development Project Management Board, the Urban Development Department, the Ministry of Construction and 07 Project Management Boards of the Northern Mountains urban program in the city: Tuyen Quang; Yen Bai; Dien Bien Phu; Thai Nguyen; Bac Kan; Hoa Binh, Cao Bang. - Not fully and promptly paying natural resource tax and environmental protection fee; withdraw the estimate, spending and allocating project management expenses to the program's investment costs in excess of VND 484 million; has not yet refunded VND 2,454 million at the end of the fiscal year for the central budget. Responsibility belongs to Bac Kan City Construction Investment Project Management Board. 3. Compliance with the regime of construction investment project management Provincial PMUs basically implement the management regime of construction investment projects in accordance with the Construction Law, the Bidding Law, the Financing Agreement between the Government of Vietnam and the Donor, and normative documents and other relevant legislation, however, there exists: - Surveying, design, costing: + Bidding packages and construction works shall be adjusted and supplemented with shop drawing designs and cost estimates. The responsibility belongs to the PMUs of 7 provinces. + The preparation, application and approval of the work norm estimate 16 “Breaking rocks with a large capacity machine combined with baking powder has not been approved by the Provincial People's Committee (contract package DB-28). The responsibility belongs to the PMU of the Northern Mountains urban program in Dien Bien Phu city. + The preparation, appraisal and approval of the estimate is still inaccurate, through the audit, the estimated value is reduced by VND 1,140 million due to the numerical error in quantity (contract package XL-03A02) The responsibility belongs to the PMU of the Northern Mountains urban program in Thai Nguyen city. + The estimation for the preparation of excavation, filling and transportation of soil is not suitable with the survey results; not basing on decision approving adjustment of shop drawing design, cost estimate to stipulate pre-acceptance test conditions for rock excavation work; calculation of arithmetic error in determining the quantity of geotextiles (the construction of Tan Trao road passing through Thien Son quarry, Dum village). The responsibility belongs to the PMU of the Northern Mountains urban program in Tuyen Quang city. - Contractor selection and contract signing: + Failure to inspect and require the contractor to purchase contractor's equipment insurance, construction insurance for the contractor's responsibility, third party liability insurance; The contract guarantee has not been extended when the contract expires . The responsibility belongs to the PMU of the Northern Mountains urban program in Dien Bien Phu and Hoa Binh cities. + The procedures for adjusting and extending the contract period have not been completed for the items currently under construction; have not yet agreed to determine the unit price of the arising part that is higher than 20% of the corresponding work quantity stated in the contract, but the parties are taking it according to the initial contract price (earth excavation work cap III); There is no approval from the Provincial People's Committee and the Ministry of Construction on the application of norms of the "Breaking stone by large-capacity machine combined with baking powder". The responsibility belongs to the PMU of the Northern Mountains urban program in Dien Bien Phu city. + The responsibility of each party in the contract has not been clearly defined for damages caused by delay in order to determine the adjusted quantity; extension of the contract performance schedule issued after the expiration of the contract performance period; The unadjusted coefficient between the Contract Annex and the contract contract is not uniformly applied. The responsibility belongs to the PMU of the Northern Mountains urban program in Hoa Binh city: - Project quality management: + There has not been agreement with the construction contractor on the form and content of the construction log as a basis for implementation before the construction of the work. The responsibility belongs to the PMU of the Northern Mountains urban program in Dien Bien Phu city; Thai Nguyen; Hoa Binh. + Dossier of quality control of input materials for cement and crushed stone 17 materials lacks conformity certification. The responsibility belongs to the PMU of the Northern Mountains urban program in Dien Bien Phu city. + The construction log shows the occasional consultant's supervision. The construction log does not record developments in construction conditions, the number of workers, construction equipment, as-built drawings without the signature of the planner. The responsibility belongs to the PMU of the Northern Mountains urban program in Hoa Binh city. + There is no design plan to prevent landslides on soil work for road foundation construction (at the end of the road of Yen The road project). The responsibility belongs to the PMU of the Northern Mountains urban program in Yen Bai city. + The construction and maintenance process has not yet been organized and approved as prescribed in the Government's Decree No. 06/2021/ND-CP dated January 26, 2021 (Items of Song Bang embankment in Cao Bang province; Construction items) Construction of Nam Cat bridge in Bac Kan). The responsibility belongs to the PMU of the Northern Mountains urban program in Cao Bang city; Bac Kan city. - Progress management: The contract performance progress of the works is behind the schedule specified in the contract, during the implementation process, the investor and contractors shall adjust the implementation schedule many times. The responsibility belongs to the PMU of the Northern Mountains urban program in Cities of Dien Bien Phu; Hoa Binh; Cai Nguyen; Tuyen Quang. - Acceptance and payment work: + Recovered materials shall be liquidated to reduce investment costs, but the Investor handed over the recovered materials for dismantling the 0.4kV line to Hoa Binh Power Company, removing lighting for Hoa Binh urban environment JSC., is not correct (contract package for Relocating Hoa Binh road infrastructure). Responsibility belongs to Hoa Binh City Project Management Board. + There are still some shortcomings in the implementation process in the acceptance test, payment for wrong quantity, wrong unit price, difference leading to financial settlement of VND 5,687 million; in addition, the central budget shall be refunded VND 2,454 million (Bac Kan); Reducing the value when paying the pre- acceptance quantity until the next period is VND 5,727 million (Tuyen Quang at VND 3,038 million; Hoa Binh at VND 1,548 million; Thai Nguyen at VND 1,140 million) and checking and accepting payment when not meeting the conditions for final settlement at VND 17,477 million (Thai Nguyen VND 291 million; Dien Bien Phu VND 4,220 million; Cao Bang VND 307 million; Hoa Binh VND 12,658 million). Responsibility belongs to 07 Project Management Boards of the Northern Mountains urban program in the cities: Tuyen Quang; Yen Bai; Dien Bien Phu; Thai Nguyen; Bac Kan; Hoa Binh, Cao Bang. - The work of compensation and site clearance in most provinces (except Cao Bang province) has not dealt with the problems of households, leading to the slow delivery of cleared site to construction contractors, affecting the construction progress. 18 4. Through the audit results, there are still some limitations such as: Management, direction, coordination in the implementation of the Program; the implementation of the program's goals and contents; surveying, making, verifying, appraising and approving construction technical design drawings, detailed cost estimates; contractor selection, contract signing, contract management and performance; the work of acceptance, payment and settlement to put the works into operation and use; compensation and site clearance. However, fraud, corruption and wasteful acts have not been detected to the extent that the responsibility of the unit head has to be assessed. Provinces and PMUs need to correct and draw experience in management and accounting, financial and accounting management, and investment cost management, and so on. PART THREE AUDIT RECOMMENDATIONS 1. To Project Management Boards 1.1. Adjust accounting books and financial statements (investment capital, construction investment costs) to December 31, 2020 in line with the conclusions and recommendations of the State Audit Office. 1.2. Proposal on financial handling: VND 16,035,795,156, including:: 1.2.1. Increased budget revenue: VND 2,166,395,236 (Natural Resources Tax 1,715,185,353 VND; Environmental protection fee VND 451,209,882)) (Details are in Appendix 04/BCKT-CTMT, 04a/BCKT-CTMT) 1.2.2. Payment recovery and reduction: VND 8,141,912,969, including: - Withdrawal from state budget: VND 4,123,988,202, including: wrong payment of VND 1,669,988,202; recover excess funds VND 2,454,000,000); - Reduced payment next year: VND 4,017,924,767; 1.2.3. Deduct the value when paying for the acceptance quantity for the next period VND 5,727.486,951 due to the wrong quantity. (Details are in Appendix 05/BCKT-CTMT, 05a/BCKT-CTMT) 1.3. Other recommendations for handling: Not meeting the conditions for payment finalization of VND 17,477,836,060 because the unit has not completed project settlement documents, because the price adjustment is not based on the provisions of the law and the conditions of the contract, the performance of traffic control and traffic safety on the construction site has not met. (Details are in Appendix 06/BCKT-CTMT) 1.4. Proposing to improve the management and direction of the program; management and use of public finance and public assets. 1.4.1 Joint recommendations with PMUs of 7 provinces: - Rectify and draw experience in the following tasks: Management, direction and coordination in the implementation of the Program; the implementation of the Program's objectives and contents (Bac Kan, Dien Bien, Hoa Binh, Thai Nguyen and 19 Tuyen Quang provinces); the project's cost estimation was not suitable with actual needs, so the funding had to be canceled (Ministry of Construction and 06 provinces: Bac Kan, Dien Bien, Hoa Binh, Thai Nguyen, Yen Bai, Tuyen Quang); survey, preparation, verification, appraisal and approval of construction technical design drawings, detailed cost estimates (Dien Bien, Hoa Binh, Thai Nguyen, Tuyen Quang); contract signing, contract management and implementation (Hoa Binh, Dien Bien); quality management (Dien Bien, Hoa Binh, Thai Nguyen, Bac Kan, Yen Bai); progress management (Dien Bien, Hoa Binh, Thai Nguyen, Tuyen Quang) acceptance, payment and settlement to put the project into operation (07 provinces: Bac Kan, Cao Bang, (4) . For the PMU of the Northern Mountains urban program in Tuyen Quang City - Negotiate and sign the appendix to adjust and supplement the contents of Contract No. 02/HD-XL dated July 24, 2020 for item VII: Renovating and upgrading Tan Trao road passing through Thien Son quarry, village Dim: (i) Adjustment to reduce the quantity of geotextiles due to arithmetic error is VND 3,038,557,107; (ii) Supplementing conditions for acceptance of soil work on the route due to the lack of results of land allocation survey; supplementing conditions for acceptance of rock excavation work in accordance with the appraisal opinion of the Department of Construction and Decision No. 552/QD-UBND dated May 14, 2020 of the People's Committee of Tuyen Quang province; (5) . For the PMU of the Northern Mountains urban program in Cao Bang City - Expeditiously prepare and complete settlement documents for completed works and submit them to competent authorities for verification and approval according to regulations to serve as a basis for payment and settlement of expenses for verification and approval of finalization of completed projects according to regulations. Circular No. 10/2020/TT-BTC dated February 20, 2020 of the Ministry of Finance. Noticably, When paying the cost of verifying and approving the final settlement of a completed project or work that has been audited by the State Audit, the cost norm for verification and approval of the final settlement is equal to 50 % of norms specified in Clause 1, Article 20 of Circular No. 10/2020/TT-BTC dated February 20, 2020*. - Organize the formulation and approval of the construction maintenance process according to the provisions of Articles 30 and 31 of the Government's Decree No. 06/2021/ND-CP dated January 26, 2021. (6) . For Bac Kan City Construction Investment Project Management Unit - Coordinate with Bac Kan City Tax Department to review and accurately recalculate land exploitation and submit it to competent authorities for approval of additional cost estimates of natural resources tax and environmental protection fees of the project, and fully and promptly pay natural resources tax and environmental protection fee to the state budget as prescribed; - Organize the formulation and approval of the maintenance process for Nam Cat bridge works according to the provisions of Articles 30 and 31 of the Government's Decree No. 06/2021/ND-CP dated January 26, 2021. 20 (7) . For Urban Development PMU, Urban Development Department, Ministry of Construction: - Urge the PMUs of a number of provinces and cities to submit component reports/data on schedule according to the Program's regulations to summarize and report the whole Program in a timely manner; - Make and allocate annual expenditure estimates closely to the situation of performing assigned tasks to ensure compliance with regulations of the regime and sponsors, avoiding the situation of canceling the estimate. 2. To People's Committees of cities (Investors) 2.1. Direct the PMUs to strictly, fully and promptly comply with the opinion of SAV. 2.2. Direct the relevant units to completely handle the problems in the work of compensation for site clearance, speed up the construction progress of the delayed bidding packages, carry out the prescribed procedures to extend the contract performance time for bidding packages that have expired contract performance (provinces: Hoa Binh, Yen Bai, Thai Nguyen, Bac Kan, Dien Bien Phu, Tuyen Quang). 2.3. For Dien Bien Phu City People's Committee: - Organize the determination of the construction cost estimate of the rock breaking work with a large capacity machinery combined with baking powder (package DB-28) according to the appraisal recommendation No. 2020 of the Department of Construction of Dien Bien province as a basis for approving the adjustment of the bid package price; - Carry out the procedures for extending the contract performance period for bidding packages that have expired as prescribed. 2.4. For Hoa Binh City People's Committee: Direct the PMUs to clarify the responsibility of each party for the damage caused by the delay in order to determine the quantity to be adjusted price; Approval of price adjustment estimates shall be based on agreements and specific provisions in the contract for implementation. 2.5. For Bac Kan City People's Committee: Direct the Project Management Unit, Bac Kan City Tax Department to accurately review and fully calculate land exploitation work and submit it to competent authorities for approval of the additional tax cost estimates, resources, environmental protection fee of the estimate to serve as a basis for project settlement payment and fully and timely payment of natural resource tax and environmental protection fee to the state budget according to regulations.. 3. To People's Committees of provinces Direct the People's Committees of cities and relevant units to strictly implement the conclusions and recommendations of the State Auditor in these audit minutes and audit reports. 4. To the Ministry of Construction Direct the People's Committees of cities, the PMU of Urban Development under the Urban Development Department and relevant units to strictly implement the conclusions and recommendations of the State Audit Office in the audit minutes and 21 this Audit Report. Direct the development and review of the program's capital plan in accordance with the schedule to avoid the situation that the year is not used up and the estimate shall be cancelled. Request the Ministry of Construction to direct the audited units to strictly and promptly implement the conclusions and recommendations of the State Auditor in this audit report, and notify the audit results at the audited units, detailed calculation; report on the results of the Specialized State Audit No. V, address: at 116 Nguyen Chanh - Cau Giay District - Hanoi before December 30, 2021. In the report on implementation of audit recommendations, it is necessary to clearly state: recommendations that have been made, recommendations that are being implemented, and recommendations that have not been implemented (for the implemented recommendations, it is necessary to specify the name of evidence and photocopies enclosed together with records, documents, ... to prove them; with the petitions being implemented and the petitions not yet being implemented shall be clearly explained the reason). When the unit implements the recommendations of the State Audit Office, it is required to account documents following the instructions in Appendix 03/BCKT-CTMT and send an official dispatch to the State Treasury according to Appendix 02/BCKT-CTMT attached. This audit report consists of 20 pages, from pages 1 to 20 and Annexes No. 01; 02; 03; 04; 04a; 05; 05a; 06; 07.1; 07.2; 07.3; 08; 09; 10/BCKT-CTMT is an integral part of the audit report./. HEAD OF STATE AUDIT BY ORDER OF THE AUDITOR GENERAL MISSION CHIEF AUDITOR OF SPECIALIZED AUDIT DEPARTMENT V (signed) (signed and sealed) Hoang Van Cuong State Auditor card number: Tran Hai Dong B0570 Appendix No. 01/BCKT-CTMT LIST OF AUDITED UNITS I. GENERAL AUDIT 1. Ministry of Construction II. DETAILS OF AUDIT 1. PMU of Urban Development, Department of Urban Department, Ministry of Construction 2. PMU of the Northern Mountains urban program in Tuyen Quang city 3. PMU of the Northern Mountains urban program in Yen Bai city 4. PMU of Construction Investment in Bac Kan City 5. PMU of the Northern Mountains urban program in Cao Bang city 6. PMU of using ODA-funded capital in Hoa Binh City 7. PMU of the North Mountains urban program in Dien Bien Phu city 8. PMU of the Northern Mountains urban program in Thai Nguyen city Appendix No. 02/BCKT-CTMT LIST OF DISPATCH SENT TO THE STATE TREASURY Dispatch sent to the Treasury Name of the unit issuing Audited entities requested to implement the TT Name of Treasury Number Date of issuance the official dispatch recommendations 1 2 3 4 5 6 1 384/KTNN-CNV 21/6/2021 State Audit Central State Treasury 2 390/KTNN-CNV 21/6/2021 State Audit Hoa Binh State Treasury PMU using ODA capital of Hoa Binh city PMU of Northern Mountains urban Program - 3 387/KTNN-CNV 21/6/2021 State Audit Yen Bai State Treasury Yen Bai City PMU of Northern Mountains urban Program - 4 389/KTNN-CNV 21/6/2021 State Audit Thai Nguyen State Treasury Thai Nguyen City PMU of Northern Mountains urban Program - 5 388/KTNN-CNV 21/6/2021 State Audit Cao Bang State Treasury Cao Bang City Bac Kan City Investment and Construction 6 391/KTNN-CNV 21/6/2021 State Audit Bac Kan State Treasury Project Management Board 7 385/KTNN-CNV 21/6/2021 State Audit Dien Bien State Treasury PMU of Northern Mountains urban Program - Dien Bien Phu City PMU of Northern Mountains urban Program - 8 386/KTNN-CNV 21/6/2021 State Audit Tuyen Quang State Treasury Tuyen Quang City INSTRUCTIONS FOR WRITTEN DOCUMENTS FOR IMPLEMENTATION OF THE AUDIT RECOMMENDATION OF SAV 1. For recommendations on increaseing taxes, fees, other revenues and wrongly-spent expenses, etc., to be paid at the State Treasuries: In the invoices on budget recovery to the State Treasury Offices where the audited entities communicate with (deposit slips to the State Budget, payment orders, transfer orders, etc., in addition to clearly stating the content of the audit proposal and the specific amount as prescribed, it shall also clearly state "Actual payment to the state budget." presented at the request of the State Audit for the annual budget year in the Audit Report issued in accordance with Official Letter No. ...,/KTNN-TH dated ... month... .... at.... and according to Official Dispatch No. ....dated .../... /... of the State Auditor of the region/region... to the State Treasury (Central/Provincial or City)". In parallel, please tick the box “the State Audit Office of Vietnam” in the deposit slips. For the recommendations that the tax offices impose tax arrears on the audited units: The decisions on tax sanctioning and recovering by the tax administration agencies, clearly state that "sanctioning and recovering budget according to the SAV's recommendations for the fiscal year of ... "; deposit slips to the State Treasury shall clearly state: "To pay fines and recover arrears according to the SAV's recommendation for the fiscal year of....". 2. For recommendations on reduction of capital construction investment capital, non-business investment capital: invoices/supporting documents (decisions on approving the settlement, payment documents, written certifications of public debts, decisions on adjustment of estimates, revised contracts ...) shall state clearly: "decrease in payment of an amount of ..... (the specific amount) according to the SAV's recommendation for the fiscal year of.... according to Official Dispatch No. ....dated .../... /... of the Central State Auditor/Regional State Auditor... to the State Treasury (if any)”. In case, for any reason, the invoices do not clearly state the above mentioned contents, the audited entities shall have to request the competent agencies to approve the certified settlement (in case the settlement for the completed works has been completed) or a written explanation with the certification of the investors and the contractors (in case the settlement for the completed works has not been performed). 3. For recommendations on reducing of recurrent expenses estimates: Decisions (assigning estimates, reducing budget estimates, etc.) shall state clearly that "Reduce the estimate amount (specific amount) as recommended by the State Audit for the annual budget year in the Audit Report issued in accordance with Official Dispatch No. ..../KTNN-TH dated ... month... . ... at.... and according to Official Dispatch No.....dated .../... /... of the State Auditor... to the State Treasury (if any). In case, for any reason, the invoices/supporting documents do not clearly state the contents, the audited units shall request the agencies issuing the above-said decisions to certify the contents and amounts as per the SAV's recommendations; 4. For the proposal to adopt by up-setting method: A written certification of the tax authority clearly stating "content and amount of up-setting as proposed by the State Audit" ; The VAT declaration shall clearly state "the content of the deductible VAT amount at the request of SAV" ; The CIT declaration clearly states “the additional CIT amount due to the reduction of holidays at the request of the State Audit Office”; at the same time, clearly state “budget year… in the audit report issued according to Official Letter No. ..../KTNN-TH dated ... month... year .... at .... and according to Official Dispatch No.... dated.../... /... of the State Audit Office of Vietnam/Region... to the State Treasury (if any). SUMMARY OF RECOMMENDATIONS TO INCREASE STATE BUDGET RATES IN 2020 RESULT-BASED NATIONAL URBAN DEVELOPMENT PROGRAM FOR THE NORTH MOUNTAINS IN 2020 Unit: Dong Taxes Reduce Indicators Environment state Reduc Recover Other No. Tax code Total al fees and budget ed ed receiva IM- EXC HOUS OTH VAT CIT PIT Resource EPT charges receiva VAT refunds bles Unit EX ISE ING ER bles A B C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Bac Kan City Construction and 1 Investment Project 4700184247 2,166,395,236 1,715,185,353 451,209,882 Management Board Total 2,166,395,236 1,715,185,353 451,209,882 Appendix No. 04a/BCKT-CTMT NOTES TO THE AUDIT RECOMMENDATION TO INCREASE STATE BUDGET RATES IN 2020 THE NATIONAL URBAN DEVELOPMENT PROGRAM BASED ON THE NORTH MOUNTAINS IN 2020 Unit: Dong No. Unit/indicator Tax code Amount Explain the reason Note 1 2 3 4 5 6 I Resource tax 1,715,185,353 Tax has not yet been paid and finalized according Bac Kan City to the provisions of Article 8, Article 9 of Circular Construction and 1 4700184247 1,715,185,353 No. 152/2015/TT-BTC dated October 2, 2015 of Investment Project the Ministry of Finance guiding on natural Management Board resources tax. Environmental H 451,209,882 protection fee The environmental protection fee has not yet been Bac Kan City paid and settled according to the provisions of Construction and Article 6 of Decree 164/2016/ND-CP dated 1 4700184247 451,209,882 Investment Project December 24, 2016 of the Government on Management Board regulations on environmental protection fees for mineral exploitation. Total 2,166,395,236 SUMMARY OF RECOMMENDATIONS AND REDUCTION OF THE STATE BUDGET IN 2020 RESULT-BASED NATIONAL URBAN DEVELOPMENT PROGRAM FOR THE NORTH MOUNTAINS IN 2020 Unit: dong Reduced value Withdrawing and Withdrawal of Reduce the estimate, when paying Withdraw Indicators remitting the wrong loans and advances Recovery of excess funds reduce next year's the acceptance al, other expenditures to the State against regulations payment quantity to the payment No. Total budget next period Unit Permane Capital Perman Capital Capital Permane Capital construct Recurrent nt construction ent construction nt construction ion A B 1 2 3 4 5 6 7 8 9 10 11 I Aggregate Agencies 1 Ministry of Construction III Investors, PMU PMU of Urban Development, Urban 1 Development Department, Ministry of Construction PMU of the Northern Mountains urban 2 3,279,838,816 0 241,281,709 3,038,557,107 Program in Tuyen Quang City PMU of the Northern Mountains urban 918,020,43 3 918,020,431 Program of Yen Bai City 1 Bac Kan City Construction and 503,781,99 4 3,694,784,719 2,454,000,000 737,002,724 Investment PMU 5 PMU of the Northern Mountains urban 5 2,390,880,073 2,390,880,073 program in Cao Bang city ODA capital using PMU of Hoa Binh 210,874,96 6 2,051,270,478 291,713,527 1,548,681,985 city 6 PMU of the Northern Mountains urban 7 129,769,091 37,310,810 92,458,281 Program in Dien Bien Phu City PMU of the Northern Mountains urban 8 1,404,836,312 0 264,588,453 1,140,247,859 Program in Thai Nguyen City Total 13,869,399,920 0 1,669,988,202 0 0 0 2,454,000,000 0 4,017,924,767 5,727,486,951 0 Appendix No. 05a/BCKT-CTMT NOTES TO REVOLUTION AND REDUCTION OF THE STATE BUDGET IN 2020 THE NATIONAL URBAN DEVELOPMENT PROGRAM BASED ON THE NORTH MOUNTAINS 2020 Unit: VND STT Units, targets, recommendations Amount Explain the reason Note 1 2 3 4 5 TOTAL 13,869,399,920 Withdrawing and remitted to the State Clearly explain the error Number, basis, I budget expenditures not complying with the 1,669,988,202 quote article, clause, number of legal regulations documents PMU of Northern Mountains urban program 1 918,020,431 in Yen Bai city - Wrong mass 822,307,697 - Wrong unit price 95,712,734 1.1 Infrastructure of the resettlement area 84,024,002 1.2 Tuan Quan Street 60,042,643 1.3 Dien Bien Yen Ninh Street (CTU side) 85,722,886 1.4 CPTVKT) 27,448,593 Dien Bien Yen Ninh Street (Department of 1.5 33,666,506 Health) 1.6 Main road B, Nguyen Thai Hoc ward 44,458,399 Due to incorrect quantity control according 1.7 Tran Binh Trong Street 81,820,505 to as-built documents, wrong unit price 1.8 Lighting system for some main routes 15,618,425 settlement at audited works 1.9 Nguyen Khac Nhu Street 23,766,984 1.10 Da Den village road 12,080,845 1.11 Group 3 Bridge, Hop Minh Ward 102,370,490 1.12 Yen The Street 82,026,585 1.13 7C Street, Yen Thinh Ward 34,607,000 1.14 Son Ca Kindergarten 37,663,000 1.15 Hoa Mai Kindergarten 36,051,000 1.16 Hoa Ban Kindergarten 67,604,593 1.17 Embankment of Hoa Binh Lake 89,047,975 Bac Kan City Construction and Investment 2 503,781,995 Project Management Board Using and finalizing project management costs in excess of the prescribed level (including the VAT part calculated Bac Kan City Construction Investment Project according to the total project management 2.1 484,536,519 Management Board/project management cost costs determined according to the norms in Decision 957/QD-BXD and the arithmetic error when determining the total project management expenditures used). Joint Venture Thang Long Joint Stock 2.2 19,245,476 Paid over the acceptance quantity Company/Construction of resettlement area 3 The PMU uses von ODA in Hoa Binh city 210,874,966 Hoa Binh 3 Bridge and the road. Construction Wrong quantity due to wrong pavement 3.1 unit: Trung Chinh Trading and Construction 210,874,966 length, due to same mass Co., Ltd PMU of the Northern Mountains urban 4 37,310,810 program in Dien Bien Phu city DB-25: Construction and renovation of Hong Luu stream from pile S15 (KmO+532) to pile Wrong weight due to wrong number of 4.1 34,508,871 S30 (Km 1+070). Construction unit of Thai sheets Son Construction & Construction Co., Ltd No. Units, targets, recommendations Amount Explain the reason Note 1 2 3 4 5 DB-26: Construction and renovation of Hong Luu stream from pile S30 (Km 1+070) to pile Wrong quantity of construction water pump 4.2 S45 (Kml+521) and from pile S46 (Kml+521) 2,801,939 shift due to construction water pumping has to pile S58 (Km 1+703). Construction unit: been included in the General Item Cost Truong An private enterprise II Recovery of excess funds 2,454,000,000 According to the provisions of Article 43 of Decree 163/2016/ND-CP dated December 21, 2016 of the Government promulgating the Decree detailing the implementation of Bac Kan City Construction Investment Project 1 2,454,000,000 a number of articles of the Law on State Management Board Budget; Item a, Clause 3, Point 5, Article 1 and Item c, Clause 4, Point 5, Article 1 of Decree 120/2018/ND-CP dated September 13, 2018 of the Government III Reduced payment next year 4,017,924,767 PMU of the Northern Mountains urban 1 241,281,709 Program in Tuyen Quang City - Due to inadequate control of the quantity - Wrong mass 241,281,709 according to the as-built records at the Ho Trung Viet project Bac Kan City Construction and Investment 2 737,002,724 Project Management Board Construction of resettlement area Due to the wrong acceptance quantity 2.1 (implemented by the joint venture of Thang 40,648,000 compared to the quantity in the as-built BV Long Joint Stock Company) Construction of Nam cut bridge (done by Me Due to the wrong acceptance quantity 2.2 Linh Housing Development and Construction 18,305,222 compared to the quantity in the as-built BV Company) Construction of the section from Km 0 + 700 Due to the wrong acceptance quantity 2.3 to Km 2 + 40 items: Tay Minh Khai Street (by 140,444,184 compared to the quantity in the as-built BV Tan Thinh Co., Ltd.) Construction of the section from Km 0 + 700 to Km 2 + 40 items: Tay Minh Khai Road Due to the wrong acceptance quantity 2.4 46,072,692 (made by 399 Construction Joint Stock compared to the quantity in the as-built BV Company) Construction of the section from Km 2 + 40 to Km 3 + 946.55 items: Tay Minh Khai Road Due to the wrong acceptance quantity 2.5 57,781,069 (implemented by Hong Ha Joint Stock compared to the quantity in the as-built BV Company) Construction of HM Road upgrading from group 11B, Duc Xuan ward to group 11, Due to the wrong acceptance quantity 2.6 Phung Chi Kien ward (made by Me Linh 143,886,609 compared to the quantity in the as-built BV Housing Development and Construction Company) Construction of HM Road upgrading from group 11B, Duc Xuan ward to group 11, Due to the wrong acceptance quantity 2.7 289,864,948 Phung Chi Kien ward (by contractor Phu compared to the quantity in the as-built BV Thanh Construction Co., Ltd.) PMU of the Northern Mountains urban 3 2,390,880,073 Program of Cao Bang City Construction of Song Bang Embankment Do khối lượng nghiệm thu sai so khối 3.1 (Right bank embankment: explanation 403,204,723 lượng trong BV hoàn công KMl+188.44-KMl+759.56) Construction of Song Bang Embankment Do khối lượng nghiệm thu sai so khối 3.2 (Right bank embankment: Explanation 985,817,000 lượng trong BV hoàn công KM0+00- KMO+620,79) No. Units, targets, recommendations Amount Explain the reason Note 1 2 3 4 5 Construction of Song Bang Embankment Due to the wrong acceptance quantity 3.3 (Left bank embankment: KmO+OO- 1,001,858,350 compared to the quantity in the as-built BV KmO+950,411) 4 The ODA using PMU capital in Hoa Binh City 291,713,527 4.1 Upgrading and renovating Hoa Binh road 31,477,345 Wrong mass due to wrong track length right Wrong quantity due to contractor not 4.2 Relocating Hoa Binh road infrastructure 260,236,182 executing PMU of the Northern Mountains urban 5 92,458,281 program in Dien Bien Phu city Wrong unit price due to increased quantity by more than 20%, at the same time, DB-28: Construction of Thanh Minh Primary generated quantity, tested and accepted at 5.1 66,715,561 School the same time, re-applied increased quantity according to additional unit price of digging and excavating cap III Wrong quantity due to wrong pipe length, DB-29: Construction and installation of Thanh 5.1 25,742,720 main step length, same mass, wrong area, Truong Kindergarten and Fire Prevention wrong number of trees PMU of the Northern Mountains urban 6 264,588,453 program in Thai Nguyen city Construction and installation of work items Wrong quantity due to the same quantity 6.1 Upgrading Viet Bac road phase 2 - Phase 1 119,472,555 between some items of XL-03A1 package (XL-03A1) Construction and installation of work items Wrong quantity due to the same quantity 6.2 Upgrading Viet Bac road phase 2 - Phase 2 99,972,077 between some items of XL-03B package (XL-03B) Incorrect quantity of demolition and Construction and relocation of fiber optic restoration of asphalt pavement due to the 6.3 cables, railway signal information within the 28,021,552 same quantity of road construction and scope of clearance construction packages under the project of upgrading Viet Bac road phase 2 Wrong quantity of construction and Construction and installation to move the installation of cast iron elbows connected 6.4 17,122,269 water line within the clearance area by flange method, diameter d-300x45 degrees compared to the as-built drawing Reduced value when paying the amount III 5,727,486,951 collected until the next period 1 The ODA using PMU capital in Hoa Binh City 1,548,681,985 Hoa Binh Road Upgrade and Rehabilitation Wrong quantity due to wrong length of 1,548,681,985 Package trench and water collection station PMU of the Northern Mountains urban 2 3,038,557,107 Program in Tuyen Quang City Due to the bidding documents, the contract calculates the numerical error of the Works to renovate and upgrade Tan Trao geotextile quantity at the project of street passing through Thien Son quarry, Dum 3,038,557,107 Renovating and upgrading Tan Trao road village. passing through Thien Son rock quarry, Dum village. PMU of the Northern Mountains urban 3 1,140,247,859 program in Thai Nguyen city Reducing the work estimate The foundation Construction and installation of work items stone buffer layer, the type of rock with Upgrading Viet Bac road phase 2 - Phase 1 1,140,247,859 diameter Dmax <=4, due to the wrong (XL-03A2) quantity as a basis for reducing the contract price Appendix No. 06/BCKT-CTMT SUMMARY OF OTHER RECOMMENDATIONS RESULT-BASED NATIONAL URBAN DEVELOPMENT PROGRAM FOR THE NORTH MOUNTAINS IN 2020 Unit: VND No. Unit, content of recommendations Amount Explaining the reason Note 1 2 3 4 5 TOTAL 17,477,836,060 PMU of the Northern Mountains Not yet eligible for payment because the unit urban program in Cao Bang city has not prepared the completed project 1 307,794,000 finalization dossier, has not received a decision approving the completed project's finalization and has not yet had a receipt for acceptance. 2 PMU using ODA - Hoa Binh City Construction cost of Hoa Binh 3 Not confirmed because the price adjustment Bridge and Road Package: Cost of 12,658,084,356 has not determined the adjusted quantity and price adjustment: (i) Clearly define conditions of the contract, specifically: the responsibility of each party for damage caused by delay in order to - Not clearly defining the responsibility of each determine the adjusted quantity ; (ii) party for the damage caused by the delay in Based on the conditions of the order to determine the adjusted quantity contract, the list of price adjustment according to the provisions of Clause 1, Article data attached to the contract No. 39 of Decree 37/2015/ND-CP and Directive 36/2016 HDXD dated November 13. /CT-UBND dated October 4, 2019 of the 18, 2016 to determine the cost of People's Committee price adjustment; - Contract Appendix on price adjustment No. 05/2018/PLHD dated August 1, 2018 is not consistent with the contract: + The contract appendix uniformly applies the unadjusted coefficient of 14.47% which is inconsistent with the unadjusted coefficient in the List of price adjustment data attached to the contract of 16.64%; + The contract appendix applies an adjustment formula inconsistent with the guidance in the appendix issued with Circular No. 07/2016/TT- BXD dated March 10, 2016 of the Ministry of Construction, specifically: index labor and construction machinery apply formula (2) in Section 2.1. Case Adjusting for all cost factors (Adjustment of materials, labor, and construction machines); while the material index applies formula (9) in Section 2.3.4. Case of price adjustment for some major materials. PMU of Northern Mountains urban 3 Program - Dien Bien Phu city Not eligible for payment because the norm DB-28: Construction and DX2-1158/VKT-TTTV is not included in the installation of Thanh Minh primary prescribed cost estimate system of the school - Construction cost: Review "Breaking stone by large capacity machine and recalculate old application combined with baking powder (not including according to construction methods transportation)" of the project. The DB-28 and actual construction as a basis bidding package but has not been approved by for making fake application and 4,220,643,723 the People's Committee is not in compliance submitting to competent authorities with Point b, Clause 4, Article 15 of Decree for approval to as a basis for 68/2019/ND-CP, not in compliance with acceptance test according to Article 2 of Decision No. 118 l/QD-UBND regulations for the cost of rock dated November 16 2020 of the People's breaking with a large capacity Committee of Dien Bien province and the machine combined with baking appraisal proposal of the Dien Bien powder Department of Construction PMU of Northern Mountains urban 4 Program - Thai Nguyen City Unable to fully pay the cost of ensuring traffic Construction and installation of due to: poor implementation of traffic control work items Upgrading Viet Bac 291,313,981 and traffic safety on the construction site road phase 2 - Phase 1 (XL-03A1) - (Monitoring report June 2020 to December Construction and installation costs 2020) NATIONAL RESULT-BASED URBAN DEVELOPMENT PROGRAM FOR THE NORTH MOUNTAIZE AREA 2020 BY TABLE OF BUDGET CONTENTS (According to Form No. 65 issued together with Circular No. 342/2016/TT-BTC) Unit: VND Subsect Settlement Unit Chapter Type Item Section ion amount 1 2 3 4 5 6 7 I. REPORTED AMOUNT 999,788,517,162 Ministry of Construction 10,790,004,63 599 280 332 8 PMU of the Northern Mountainous area Urban 599 280 292 133,687,962,322 Program in Tuyen Quang city PMU of the Northern Mountainous area Urban 599 280 292 221,432,046,478 Program in Yen Bai city PMU of Investment and Construction in Bac 599 280 332 135,284,398,185 Kan city PMU of Northern Mountainous area Urban 599 280 283 142,542,063,000 Program in Cao Bang City ODA using PMU in Hoa Binh City 40,646,002,96 560 280 312 9 PMU of the Northern Mountains urban 68,619,813,50 599 312 program in Dien Bien Phu city 2 PMU of the Northern Mountains urban 599 312 246,786,226,068 program in Thai Nguyen City II. AUDITOR AMOUNT 998,118,528,960 Ministry of Construction 10,790,004,63 599 280 332 8 PMU of the Northern Mountainous area Urban 599 280 292 133,687,962,322 Program in Tuyen Quang city PMU of the Northern Mountainous area Urban 599 280 292 220,514,026,047 Program in Yen Bai city PMU of Investment and Construction in Bac 599 280 332 134,780,616,190 Kan city PMU of Northern Mountainous area Urban 599 280 283 142,542,063,000 Program in Cao Bang City ODA using PMU in Hoa Binh City 40,435,128,00 560 280 312 3 PMU of the Northern Mountains urban 68,582,502,69 599 312 program in Dien Bien Phu city 2 PMU of the Northern Mountains urban 599 312 246,786,226,068 program in Thai Nguyen City II. DIFFERENCE (1,669,988,202) Ministry of Construction 599 280 283 - Subsect Settlement Unit Chapter Type Item Section ion Number 1 2 3 4 5 6 7 PMU of the Northern Mountainous area Urban 599 280 292 - Program in Tuyen Quang city PMU of the Northern Mountainous area Urban 599 280 292 (918,020,431) Program in Yen Bai city PMU of Investment and Construction in Bac Kan 599 280 332 (503,781,995) city PMU of Northern Mountainous area Urban 599 280 283 - Program in Cao Bang City ODA using PMU in Hoa Binh City 560 280 312 (210,874,966) PMU of the Northern Mountains urban 599 312 (37,310,810) program in Dien Bien Phu city PMU of the Northern Mountains urban program 599 312 - in Thai Nguyen City Appendix 07.2/BCKT-CTMT RESULT-BASED NATIONAL URBAN DEVELOPMENT PROGRAM FOR THE NORTH MOUNTAINS IN 2020 (According to Appendix F01-02/BCQT issued together with Circular No. 107/2017/TT-BTC) Unit: VND Total No. Items Reported amount Audited amount Difference A B (1) (2) (3) = (2)-(l) 1 Domestic budget source Previous year's budget balance is 1.1 109,079,835,430 109,079,835,430 - carried forward 1.2 Estimates assigned for the year 173,337,545,317 173,337,545,317 - 1.3 Total used during the year 282,417,380,747 282,417,380,747 - 1.4 Actual expenses received in the year 183,979,976,262 183,979,976,262 - 1.5 Fees proposed for settlement 204,167,000,714 203,682,464,195 (484,536,519) 1.6 Cost reduction during the year 2,394,264,415 2,878,800,934 484,536,519 Fund balance is allowed to be carried 1.7 over to the next year for use and 75,856,115,618 75,856,115,618 - settlement 2 ODA capital 3 Sources of foreign debt Previous year's budget balance is 3.1 792,571,171,976 792,571,171,976 - carried forward 3.2 Estimates assigned for the year 1,155,091,405,000 1,155,091,405,000 - 3.3 Total used during the year 1,947,662,576,976 1,947,662,576,976 - 3.4 Total loan amount in the year 826,492,701,424 826,492,701,424 - Expenses of used units proposed for 3.5 795,621,516,448 794,436,064,765 (1,185,451,683) settlement in the year 3.6 Glass fee reduction in the year 465,569,580,958 469,209,032,641 3,639,451,683 Funds are allowed to be carried over 3.7 686,471,479,570 684,017,479,570 (2,454,000,000) to the next year for use and settlement Annex No. 073/BCKT-CTMT DETAILED AUDIT RESULTS FOR INVESTMENT PROJECTS NATIONAL URBAN DEVELOPMENT PROGRAM ON RESULT-BASED FOR THE NORTH MOUNTAINS IN 2020 Unit: VND In which Recommendations for financial handling Reported Disbursed value Withdrawal of Reduce Withdrawal Other No. Name of project Audited Value Audited amount Difference Wrong unit number Wrong quantity Other wrong to.... state budget allocation and and other handling price, norm payment payment payment A B 1 2 3 4=3-2 5 6 7 8 9 10 12 13 TOTAL 847,210,046,752 847,210,046,752 820,691,629,723 (23,165,749,029) (5,040,948,155) (646,964,814) (17,477,836,060) 1,504,760,199,652 1,669,988,202 4,017,924,767 0 17,477,836,060 I Approved Settlement Value II Value of acceptance and settlement A CIVIL WORK 702,790,109,275 702,790,109,275 680,416,690,765 (22,373,418,510) (5,040,948,155) (162,428,295) (17,170,042,060) 1,137,989,407,063 1,185,451,683 4,017,924,767 0 17,170,042,060 PMU of the northern Mountainous 1 33,221,211,670 33,221,211,670 32,979,929,961 (241,281,709) (241,281,709) 0 0 147,959,386,348 0 241,281,709 0 0 area programme of Tuyen Quang city PMU of Northern Urban Upland 2 178,102,762,000 178,102,762,000 177,184,741,569 (918,020,431) (822,307,697) (95,712,734) 0 187,453,409,000 918,020,431 0 0 0 Urban Program of Yen Bai City Investment and Construction PMU of 3 122,006,849,872 122,006,849,872 121,250,601,672 (756,248,200) (756,248,200) 0 0 125,467,598,947 19,245,476 737,002,724 0 0 Bac Kan City PMU of the Northern Mountains 4 170,571,748,000 170,571,748,000 168,180,867,927 (2,390,880,073) (2,390,880,073) 0 0 129,156,677,000 0 2,390,880,073 0 0 urban area program in Cao Bang city The ODA capital using PMU in Hoa 5 72,976,094,759 72,976,094,759 59,815,421,910 (13,160,672,849) (502,588,493) 0 (12,658,084,356) 356,212,335,130 210,874,966 291,713,527 0 12,658,084,356 Binh city PMU of the Northern Mountains 6 52,187,890,039 52,187,890,039 47,837,477,225 (4,350,412,814) (63,053,530) (66,715,561) (4,220,643,723) 113,285,316,527 37,310,810 92,458,281 0 4,220,643,723 urban program in Dien Bien Phu city PMU of Mountains urban area 7 73,723,552,935 73,723,552,935 73,167,650,501 (555,902,434) (264,588,453) 0 (291,313,981) 78,454,684,111 0 264,588,453 0 291,313,981 Program in Thai Nguyen City COMPENSATION COST FOR B 115,863,580,223 115,863,580,223 115,863,580,223 0 0 0 0 328,003,608,839 0 0 0 0 SITE CLEARANCE PMU of Northern Mountains urban 1 5,613,306,191 5,613,306,191 5,613,306,191 0 0 0 0 11,675,441,236 program in Tuyen Quang City PMU of Northern Mountains urban 2 17,022,864,000 17,022,864,000 17,022,864,000 0 0 0 0 29,988,706,000 area program in Yen Bai city Bac Kan City Construction and 3 Investment Project Management 41,593,881,098 41,593,881,098 41,593,881,098 0 0 0 0 41,499,152,326 0 0 0 0 Board PMU of the Northern Mountains 4 2,709,836,000 2,709,836,000 2,709,836,000 0 0 0 0 2,709,839,000 0 0 0 0 urban area program in Cao Bang city PMU using ODA capital of Hoa Binh 5 1,570,311,954 1,570,311,954 1,570,311,954 0 0 0 0 47,175,698,344 0 0 0 0 city PMU of the Northern Mountains 6 14,694,189,770 14,694,189,770 14,694,189,770 0 0 0 0 82,433,403,329 urban program in Dien Bien Phu city PMU of the Northern Mountains 7 urban area program in Thai Nguyen 32,659,191,210 32,659,191,210 32,659,191,210 0 0 0 0 112,521,368,604 0 0 0 0 city C MANAGEMENT COSTS 11,843,492,124 11,843,492,124 11J58,955,605 (484,536,519) 0 (484,536,519) 0 24,401,815,633 484,536,519 0 0 0 PMU of the Northern Mountains 1 1,201,998,413 1,201,998,413 1,201,998,413 0 0 0 0 2,624,794,682 urban program in Tuyen Quang city The PMU of the Northern Mountains 2 urban area program in the northern 1,639,325,000 1,639,325,000 1,639,325,000 city of Yen Bai Investment and Construction PMU in 3 2,400,000,000 2,400,000,000 1,915,463 481 (484,536,519) (484,536,519) 0 2,400,000,000 484,536,519 Bac Kan province PMU of the Northern Mountains 4 744,989,165 744,989,165 744,989,165 0 0 1,291,174,000 urban area program in Cao Bang city In which Kiến nghị xừ lý tài chính No. Name of project Reported amount Audited value audited amount Difference Disbursed value to.... Withdrawal of Reduce Withdrawal Other handling Wrong unit Wrong quantity Other wrong state budget allocation and and other price, norm payment payment payment A B ] 2 3 4=3-2 5 6 7 8 9 10 12 13 ODA capital using PMU of Hoa Binh 5 1,069,369,848 1,069,369,848 1,069,369,848 0 4,493,371,774 city PMU of the Northern Mountains urban 6 3,169,772,417 3,169,772,417 3,169,772,417 10,747,399,038 area program in Dien Bien Phu city PMU of the Northern Mountains urban 7 1,618,037,281 1,618,037,281 1,618,037,281 0 0 2,845,076,139 area program in Thai Nguyen city COST OF INVESTMENT AND D 13,283,357,008 13,283357,008 9,930,689,008 0 0 0 0 10,535,706,924 0 0 0 0 CONSTRUCTION CONSULTANCY PMU of the Northern Mountains urban 1 345,544,644 345,544,644 345,544,644 0 0 0 0 803,591,514 area program in Tuyen Quang city PMU of the Northern Mountains urban 2 4,595,107,000 4,595,107,000 4,595,107,000 Program of Yen Bai City Bac Kan City Construction and 3 2,611,384,164 2,611,384,164 2,611,384,164 0 0 0 0 2,737,578,223 0 0 0 0 Investment Project Management Board The PMU of that program competes in 4 the northern Mountainous areas in Cao 3,729,615,000 3,729,615,000 376,947,000 0 0 0 0 2,659,335,000 0 0 0 0 Bang city 5 ODA capital using PMU in Hoa Binh city 259,579,000 259,579,000 259,579,000 0 209,579,000 PMU of Northern Mountains urban area 6 1,338,836,000 1,338,836,000 1,338,836,000 0 0 0 0 3,523,264,000 program in Dien Bien Phu City PMU of the Northern Mountains urban 7 403,291,200 403,291,200 403,291,200 0 0 602,359,187 program in Thai Nguyen city E OTHER COSTS 3,429,508,122 3,429,508,122 3,121,714,122 (307,794,000) 0 0 (307,794,000) 3,829,661,193 0 0 0 307,794,000 PMU of the Northern Mountains urban 1 963,714,000 963,714,000 963,714,000 0 0 0 0 963,714,000 area program in Tuyen Quang city PMU of Northern Mountains urban area 2 program in Yen Bai City Bac Kan City Construction and 3 1,245,529,193 1,245,529,193 1,245,529,193 0 0 0 0 1,245,529,193 0 0 0 0 Investment PMU PMU of the Northern Mountains urban 4 620,555,000 620,555,000 312,761,000 (307,794,000) 0 0 (307,794,000) 620,555,000 0 0 0 307,794,000 Program of Cao Bang City ODA capital using PMU of Hoa Binh 5 city PMU of the Northern Mountains urban 6 program in Dien Bien Phu city PMU of the Northern Mountains urban 7 599,709,929 599,709,929 599,709,929 0 0 999,863,000 program in Thai Nguyen city Total Note: Other handling is 17,477,836,060 VND, of which: 12,658,084,356 VND because the price adjustment is not based on the provisions of law and the conditions of the contract (Hoa Binh); VND 4,220,643,723 due to the norm DX2-1158/VKT-TTTV of the "Breaking stone with large capacity machine combined with baking powder (not including transportation)" of the DB-28 package that has not been approved by Dien Bien People's Committee ; VND 291,313,981 due to the poor implementation of traffic regulations in accordance with the regulations on the field (Thai Nguyen); VND 307,794,000 completed by the Cao Bang PMU preparing the final settlement documents for the completed project Appendix No. 08/BCKT-CTMT BALANCE SHEET As of December 31, 2020 NORTHERN MOUNTAINS URBAN DEVELOPMENT PROGRAM Total No. Content Reported amount Audited amount Difference A B (1) (2) (3) = (2) - (l) ASSET A. SHORT-TERM ASSETS 394,779,235,253 395,046,666,505 267,431,252 I. Cash 159,944,064,136 159,944,064,136 - Cash on hand 1,432,576,994 1,432,576,994 - Bank deposits, treasury 62,613,978,000 62,613,978,000 - Your deposit 2,193,768,869 2,193,768,869 - Treasury deposits (IDA capital) 78,602,185,628 78,602,185,628 - Other cash 14,762,014,400 14,762,014,400 - Reciprocal source deposits 339,540,245 339,540,245 - II Receivables 234,103,982,017 234,371,413,269 267,431,252 Advance payment to suppliers 232,374,570,829 232,374,570,829 - Other receivables 1,729,411,188 1,996,842,440 267,431,252 III. Other liquid assets 731,189,100 731,189,100 - Advance 731,189,100 731,189,100 - FINISHED ASSETS AND B. CAPITAL CONSTRUCTION 4,350,544,329,540 4,344,257,308,590 (5,995,706,969) INVESTMENT COSTS I. Fixed assets 662,059,646 662,059,646 Tangible fixed assets 620,091,000 620,091,000 - Original price 2,943,698,400 2,943,698,400 - Accumulated depreciation (2,323,607,400) (2,323,607,400) Intangible fixed assets 41,968,646 41,968,646 - Original price 641,520,000 641,520,000 - Accumulated depreciation (599,551,354) (599,551,354) II Cost of capital construction 4,291,385,270,386 4,285,098,249,436 (5,995,706,969) investment Cost of capital construction 4,291,132,996,386 4,284,845,975,436 (5,995,706,969) investment Other expenses 252,274,000 252,274,000 - III. Administrative and non-business 54,000,763,601 54,000,763,601 - expenses Administrative and non-business 54,000,763,601 54,000,763,601 - expenses Interest payment on loan Local IDA IV. 4,496,235,907 4,496,235,907 - funds on loan GIVE UP ASSETS 4,745,323,564,793 4,739,303,975,095 (5,728,275,717) CAPITAL - - - A. LIABILITIES SHALL PAY 673,248,848,836 667,713,795,657 (5,243,739,198) I. Short-term debt 673,248,848,836 667,713,795,657 (5,243,739,198) Short-term supplier payable 345,149,883,838 339,614,830,659 (5,243,739,198) Total No. Contents Reported amount Audited amount Differences A B (1) (2) (3) = (2) - (l) The source of advance IDA capital of 286,255,732,156 286,255,732,156 - the World Bank has not been recorded City budget advance 2,796,351,104 2,796,351,104 advance provincial budget 619,685,930 619,685,930 Other payables and payables (Contract - - performance contract) Other payable 38,427,195,808 38,427,195,808 Borrowing from the city budget to pay - - land clearance compensation IL Long-term liabilities - - Long-term supplier payable - - B CAPITAL 4,072,074,715,957 4,071,590,179,438 (484,536,519) IDA capital source (recorded revenue 3,053,766,996,210 3,053,766,996,210 - and expenditure, allocated by the Reciprocal capital 1,017,128,428,240 1,016,643,891,721 (484,536,519) IDA capital source (not recorded - - - revenue and expenditure) Capital has formed fixed assets 587,559,646 587,559,646 - The source of funds from the State 448,200,000 448,200,000 - budget to pay interest to the locality to Local IDA capital borrowed - - - (Recorded revenue - recorded Other sources of capital 224,536,861 224,536,861 - Collect money from selling HSMT - - - Central budget allocated (81,005,000) (81,005,000) - Balanced private locality - - - TOTAL CAPITAL 4,745,323,564,793 4,739,303,975,095 (5,728,275,717) Appendix No. 09/BCKT-CTMT PROFIT AND LOSS STATEMENT For the financial year ending as of December 31, 2020 NORTHERN MOUNTAINS URBAN DEVELOPMENT PROGRAM Total No. Indicators Reported amount Audited amount Differences A B (1) (2) (3) = (2) - (1) I Operating revenues 1 Income from IDA 881,607,406,780 881,607,406,780 - Advance advances to the World Bank have not yet recorded revenues and 261,125,230,624 261,125,230,624 expenditures (-) Central budget allocated 239,041,968,255 239,041,968,255 (-) Borrow back 22,083,262,369 22,083,262,369 Advance to the World Bank recorded 620,482,176,156 620,482,176,156 revenue and expenditure (-) Central budget allocated 571,736,963,023 571,736,963,023 (-) Borrow back 48,745,213,134 48,745,213,134 2 Receipt from counterpart capital 184,198,538,894 184,198,538,894 (-) Central budget allocated 129,944,416,013 129,944,416,013 (-) Local budget 54,254,122,881 54,254,122,881 3 Income from other sources 17,457,572,290 17,457,572,290 - Collecting and selling bid solicitors 302,000,000 302,000,000 - Withdrawal of audit - - - Collecting guarantee for contract 14,907,288,400 14,907,288,400 performance - Other revenues 2,248,283,890 2,248,283,890 Adjusting capital sources according - - to disbursement results Total operating revenue (1+2+3) 1,083,263,517,964 1,083,263,517,964 II Operating expenses 895,236,217,741 889,240,510,773 (5,995,706,968) Spending on capital construction 848,371,150,047 842,375,443,079 (5,995,706,968) 1 investment 2 Administration and career expenses 12,784,716,169 12,784,716,169 - 3 Other expenses 34,080,351,525 34,080,351,525 - Total operating expenses (1+2+3) 895,236,217,741 889,240,510,773 (5,995,706,968) III Difference 188,027,300,223 194,023,007,191 5,995,706,968 IV Beginning balance 47,200,338,444 47,200,338,444 - V Ending balance 235,227,638,667 241,223,345,635 5,995,706,968 Appendix No. 10/BBKT-CTMT INCOMING AND SPENDING REPORT For the financial year ending December 31, 2020 NORTHERN MOUNTAINS URBAN DEVELOPMENT PROGRAM Total No. Indicatiors Reported amount Audited amount Differences A B (1) (2) (3) = (2) - (1) I Beginning balance 58,760,604,756 58,760,604,756 - II Income in the year 1,083,263,517,964 1,083,263,517,964 - Revenue from World Bank 881,607,406,780 881,607,406,780 - Receipt from counterpart capital 184,198,538,894 184,198,538,894 - Advance collection to provincial - - - and municipal budgets Sales of HSMT 250,000,000 250,000,000 - Other Autumn 17,207,572,290 17,207,572,290 - Total revenue (I+II) 1,142,024,122,720 1,142,024,122,720 - III Money spent in the year - - - Spending on capital construction - 1 935,673,748,321 935,673,748,321 investment Construction expenses 781,881,814,671 781,881,814,671 - Equipment expenditure - - - BTGPMU . cost 126,524,691,726 126,524,691,726 - Project management costs 11,606,495,707 11,606,495,707 - Construction consulting costs 11,656,288,828 11,656,288,828 - Other costs 4,004,457,389 4,004,457,389 - Administration and career - 2 10,790,004,638 10,790,004,638 expenses Administration and career expenses 10,790,004,638 10,790,004,638 - 3 Other expenses 35,616,305,625 35,616,305,625 - Total expenditure 982,080,058,584 982,080,058,584 - IV Net cash from operations 101,183,459,380 101,183,459,380 - Cash balance at the beginning - V 58,760,604,756 58,760,604,756 of the year Cash balance at the end of the - VI 159,944,064,136 159,944,064,136 year