Managing the off-budget Funds: Issues and Policies in Vietnam

Abstract

In Vietnam, there are currently more than 40 State off-budget funds (off-budget funds) operating. These are special financial institutions owned by the government that are not part of the State budget and that established by the State to mobilize additional resources from the society to facilitate the determined tasks. In recent years, off-budget funds have made important contributions to ensuring social goals, attracting investment from domestic and foreign sources and providing additional revenue to the State budget to support economic growth and social development. However, according to many assessments, the tasks of managing, monitoring and evaluating off-budget funds are still inadequate. Moreover, because the policy framework for
off-budget funds are still imperfect, these funds could not meet the expected efficiency level. There are issues relating to the “self-controlling” spending problems, lack of unified framework and mechanisms governing different types of off-budget funds, and the unique charter of each fund. These issues have been causing the problems of overlapping objectives, tasks, revenue and expenditure activities of off-budget funds with the State budget. In some cases, off-budget funds are even relying on the annual state budget that fragmenting the State’s resources. This paper presents an overview of the current situation and governing policies of the off-budget funds in Vietnam, as well as analyzes some limitations and shortcomings of such funds and makes suggestions for solutions to govern and manage off-budget funds efficiency expecting by the Party and the government.