Luận văn thạc sĩ Quản lý công: Improving the mechanism of financial independence at institute for ethnic minority affairs

Irstitute for Ethnic Minority Affairs, a public scientific non-business unit directly under the Committee for Ethnic Minorities, has assigned the right tofinarcial independence and self-

UNIVERSITET

Title of Thesis:

“IMPROVING THE MECHANISM OF FINANCIAL INDEPENDENCE

AT INSTITUTE FOR ETHNIC MINORITY AFFAIRS”

Authors: Nguyen Huy Duan (Head)

Truong Thi Bich Hanh

Sutervisor: Dr Sven Jungerhdm

Local Supebvisor: Dr Tran Thi Thanh Tu

Class: 4B MPPM INTAKE 4 - Group 12

Hanoi, Match — 2010

| Name of Thesis: Improving the mechanism of financial independence attte Institute for Ethnic Minority Affairs

Degree: Master thesis of Public management program

3 Authors: Huy Duan Nguyen & Bich Hanh Truong Thi-MPPM 4B class(szroup 12)

4 Supervisors: Dr.Thanh Tu Tran Thi & Dr.Sven Jungerhem

mn Backgrounds :

Tie modern revolution in science and technology with giant step forward:

"a day equals twenty years" is impacting totally to every economies, every

socidl systems over the world In order to make science and technology

becone background of industrialization and modernization, the Party and

State advocate changing strongly the management of science and technology,and giving the power of total independence to public scientific and

techrological organizations with the highest level of independence andclearzst mechanism

Irstitute for Ethnic Minority Affairs, a public scientific non-business unit

directly under the Committee for Ethnic Minorities, has assigned the right tofinarcial independence and self-responsibility After few years of

implementation, the mechanism has been promoting more positive aspects than previous mechanism However, the mechanism has shown some

disacvantages and some regulations have not been suitable with Decree No115/2005/ND-CP providing for the mechanism of financial independence andselfesponsibility of scientific and technological organizations As a result,

many problems have arose in implementing process, and the effectiveness of

manegement has restricted, which need to be researched, summarized,

amerded and supplemented.

6 Research Purposes

The purposes of this thesis is to research, evaluate current situation of the

mectanism of financial independence and self-responsibility in the Institute

for Ethnic Minority Affairs, to find out the reason and the solution to improve

hz operation capacity of the Institute

‘J Research Method

This is a qualitative research concerned with state management The thesis

can be applied to manage the Institute by the Committee for EthnicMinorities In this thesis we used some researching methods such as:

nheritance method, dialectical materialism methods, statistical methods,methods of interview of relevant subjects, method of synthesis and analysis

of available information and data On that basis, comparing and evaluating

results to find out the advantages and disadvantages and to propose completesolutions for the mechanism of financial independence at the Institute These

methods are combined and interwoven throughout the thesis Main resources

are specialized books and magazines, related policies, and annual financialstatement of the Institute

8 Results and Conclusion.

The mechanism of financial independence and self-responsibility is a new

and an effective management mechanism to promote the role of the Instituteand individuals The question here is how to be independent and which is thetheoretical and practical basis to propose the amendments and supplements ofthe right to financial independence and self-responsibility of the Institute, andthe applicable possibility in the operation of Institute

Through researching process, we have found that the mechanism of

financial independence and self-responsibility in the Institute for Ethnic

Minority Affairs has enhanced the independence and initiative in financialmanagement It also has contributed to save cost, increased added-income for

the staff However, at present, the connection between the management

mechanism of structure, scientific research tasks, staff and finance of theInstitute has not been clear and logical Investing in resource increases butscientific product does not increase or increases slowly, not corresponding tosources invested and in danger of repeating the subsidy, lack of supporting

from policies to the decentralization of the independence in affiliated units,and restrain staff's work motivation as well as outside sources supporting forthe Institute’s activities Because of that limitation, we proposed solutionsand recommendations to related state management agencies to compete themechanism of financial independence of the unit.

9 Proposal for coming Research:

As mentioned above, our study is only on the first step In order to have acomprehensive view about this, it’s necessary to have more profoundanalysis and comparisons with other technology and science organizations

On that basis, it will help to give overall and qualitative recommendations,contribute to modify mechanism and policy of independence in scientific and

technological organizations If we are financed further, we may submit a PhD

thesis on this issue

10 Contribution of the Thesis:

Basically, the Thesis has given out a quite overall policy frame offinancial independence and self-responsibility in public scientific and

technological organizations, the current situation of the mechanism of

financial independence and self-responsibility in the Institute for EthnicMinority Affairs, the causes of shortcomings and limitations in financialmanagement of the unit; then, show out solutions and proposal to relatedstate management agencies to complete the mechanism, and contribute toenhance researching science and technology capacity

11 Common terms in the Thesis:

Public scientific and technological organizations, mechanism, mechanism offinancial independence, payroll, staff, civil servant

MECHANISM OF FINANCIAL INDEPENDENCE IN PUBLIC

SCIENTIFIC AND TECHNOLOGICAL ORGANIZATIONS

1 Overview of public scientific and technological organizations

2.2 The contain of the mechanism of financial independence at public

scientific and technological organizations

2.2.1 Independence in financial sources

2.2.2 Independence on using the funds:

A The State’s policy on assigning the right of financial independence toBuble scientific and technological organizations

.3.2, Awareness of the mechanism of financial independence in public

scientific and technological organizations

.3.3 Qualifications and ability of management staff

NN 061".3.4 The relationship and decentralization between autonomous units and

management agencies.

2.3.5 The management of inflows and outflows of funds - 192.3.6 Inspection and supervision:

CHAPTER 3

CURRENT SITUATION OF THE MECHANISM OF FINANCIAL

INDEPENDENCE AT INSTITUTE FOR ETHNIC MINORITY

AFFAIRS

1 Overall of Institute for Ethnic Minority A Affairs

1.1 Functions and tasks:.

1.2 The organizational structure of Institute for Ethnic Minority Affairs :

22

1.3 The mechanism of financial management at Institute for Ethnic

Minority Affairs 24

1.4 The achievements of Institute for Ethnic Minority Affairs 25

2 The current situation of the mechanism of financial independence atInstitute for Ethnic Minority Affairs in the period 2007 - 2010: soe 262.1 Current status of documents providing legal basis for self-financingregime 262.1.1 Sel 262.1.2 Financial independence ead2.2 Current situation in the process of organizing and implementing: 28

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esponsibility on organization and operation

2.2.1 On the human resources:

2.2.2 On the finance:

2.2.3 Regarding the scientific research

2.3 General assessment of the status of financial independence of Institutefor Ethnic Minority Affairs in the period 2007 - 2010): .-. - 342.3.1 The results achieved: 34

Exists and limitatioi oD

2.3.3 Causes: 40

CHAPTER 4:

SOLUTIONS TO IMPROVE THE MECHANISM OF FINANCIAL

INDEPENDENCE AT INSTITUTE FOR ETHNIC MINORITY

2.3 Innovating the management mechanism

2.4, Strengthening and diversifying non-business revenues

2.5 Strengthening to control expenditures, implementing saving policy,

and fighting against W@SÍ€ƒHÏH€SS e-ce-ce+ces©ssccs+s

2.6 Setting up the fund actively

2.7 Implementing the financial disclosure regulation well

2.8 Strengthening the financial inspection and supervision

2

2.9 Strengthening the application of information technology andcomputerization in financial management

2.10 Recommendations to State agencies

REFERENCE LIST

SURVEY RESULT

CEMA Committee for Ethnic Minority Affairs

IEMA Institute for Ethnic Minorities Affairs

ND Decree

GP Government

UNDP United nations development programme

ODA Official development assistance

OECD Organization for Economic Co-operation and

Development

LIST OF DIAGRAMS, FIGURES AND TABLES

Table 1 Structure of Institute for Ethnic Minority Affairs

Table 2 Status on the management and use of human resources

Table 3 The mobilization and usage

Table 4 Accepted scientific projects

CHAPTER 1: PREFACE

1 The urgent need of the Research

The modern revolution in science and technology with giant step forward: "A day equals twenty years" is impacting totally to every economies, every social systems over the world In the last decades, there has been in the world three typical development models: the highly concentrated planning mechanism such as was in the former Soviet Union and other socialist countries, the market mechanism as the U.S and other developed industrialized

countries, and the 3rd model that appeared in the developed countries is a mix

model combining either the planning and the market mechanisms In the recent

years, there has been in the world two transition/movement with adjustmentprocesses : countries (such as the socialist ones) having centralized planningeconomy are moving into the market mechanism (the countries in the socialist

camp), countries (such as Japan, France, Korea, Taiwan ) with market

economy are to strengthen the role of government in coordinating the macro

economic development as well as science and technology (S&T) Regardless

the type of economic model, most of the countries are considered S&T is an

integral part of planning and socio-economic development program The forms

expressing the S&T development plans usually are the R&D programs,

research projects at national level The mechanism of formation and

implementation of these countries are tasked through the mode of selection,bidding, evaluation, assessment transparently, objectively and fairly Funds arealso allocated on the basis of official decision with the formal contract with theselected supplier ensuring the optimal implementation conditions Through theimplementation of programs and projects of Science and Technology, countrieswill enhance their internal capacity, develop key economic sectors, andimprove the competitiveness of products and services

In the inevitable trend of world economic integration, besides the own

capacity, developing countries like Vietnam, apply the achievements of science

and technology and grasp new knowledge compulsorily to develop the

economy rapidly Recognizing that problem, Viet Nam has set the goal: "To

concentrate on building science and technology of our country toward

modernization and integration, to strive to achieve average advanced level in the region in 2010, for the purpose of science and technology really become the foundation and motivation for promoting industrialization and modernization

of the country"'' To achieve that goal, the Party and State advocates to change

strongly in the management of science and technology, to make a fundamental

change in management of science and technology in accordance with the

socialism-oriented market mechanism, the characteristics of scientific and technological activities, the requirements of international economic integration,

in order to improve markedly the quality and efficiency of scientific and technology performance; strengthen and use effectively the science and technology resources Ministry of Science and Technology has submitted to the

Government a major breakthrough policy in science and technology activity, which encourages public non-business units to switch to operate according to the mechanism of independence and self-responsibility under Decree No.I152005ND-CP , Decree No.96/2010/ND-CP amending and supplementing Decree No.115/2005/ND-CP and forming science and

technology enterprises under Decree No.80/2007/ND-CP Guideline and

innovation of these Decrees are the State gives public scientific and technological organizations the complete independence on organizational

apparatus, payroll, tasks and finance with highest level of independence and

clearest mechanism

Institute for Ethnic Minority Affairs is a public non-business unit directly

under Committee for Ethnic Minorities with the principal function is basic

scientific research to serve for the setting up state management strategies, policies on ethnic minority affairs in Viet Nam Following the innovation policy of scientific and technological management mechanism of the Government, on 20/08/2008, Minister-Chairman of Committee for Ethnic

"The str y of scientific and technological development of Vietnam to the year 2010

Minorities has issued Decisions No 15/QD-UBDT on assigning the right tofinancial independence and self-responsibility for Institute for Ethnic MinorityAffairs After some years of implementation, the mechanism has beenpromoting more positive aspects than previous mechanism, enhancing the right

to independence and initiative in unit's financial management activity, savingcosts, creating additional income for workers However, the existence of somelimitations is the reason for the imperfect mechanism of independence of theInstitute Thus, the analysis and evaluation to clarify the positive aspects of themechanism to promote, and to realize the limitations, difficulties and problems

lo propose timely resolutions are extremely important Especially, at present,Committee for Ethnic Minorities is drafting a new Decree providing for thefunctions, tasks, powers and organizational structure in the new term of

Government Studying, evaluating the result of implementation of

independence has become urgent than ever Recognizing the above

requirements, we have chosen the topic "Improving the mechanism of

financial independence at Institute for Ethnic Minority Affairs” for thisMaster Thesis with the hope of seeking and giving some solutions to perfectingthe mechanism of financial independence in order to improve the performance

of Institute for Ethnic Minority Affairs in the new term

2 Research Purposes

The Thesis focuses on:

- To clarify the basic theory of the mechanism of financial independence

in the scientific and technological organizations

- To study, analyze and evaluate the implementation the mechanism offinancial independence in the scientific and technological organizations indepth

- To provide solutions and recommendations to improve the mechanism

of financial independence of Institute for Ethnic Minority Affairs

3 Objective and Scope of Research

- The objective of the research is mechanisms of financial independence

at Institute for Ethnic Minority Affairs including relevant legal documents andthe implementation of the mechanism at the unit

-The scope of research is limited to the period 2007 - 2010 (themechanism of financial subsidies is implemented in 2007, 2008, and themechanisms of financial independence according to Decision No.64/2007/QD-UBDT dated 26/02/2007 of the Minister, Chairman of the Committee for

Etanic Minorities is implemented in 2009, 2010.

4 Research Method

Some researching methods are used in the Thesis as follows:

- Inheritance method: researching and using secondary data from thesummary reports of the Ministry of Science and Technology, the financialstatements, the report on assessing the implementation of annual workingplans, and the Decisions providing for functions, tasks, powers andorganizational structure of the mechanism of financial independence of IEMA

- Method of interview of relevant subjects: in the form of survey forms

Te subjects of survey are all the employees of the Institute of Nationalities (62vetes) This method aims to collect information of evaluating theirplementation of the mechanism of financial independence of IEMA

- Method of synthesis and analysis of available information is used inchapter 3 to analyze the situation of the mechanism of financial independence

of IEMA to find out advantages and disadvantages of the mechanism On thatbasis, propose solutions to complete that mechanism of IEMA

- Method of comparison is used to compare the subsidy mechanism whichwes applied at the Institute from the year 2007 to 2008 with the mechanism offirancial independence (in the period 2009-2010) to highlight the outstandingpcints as well as the inevitable trend of switching to the mechanism of financialindependence at the Institute in particular and in the Public Science andtechnology organizations in general

5 Research Contain

The Thesis is divided into five chapters:

Chapter 1: Preface

Chapter 2: Theoretical backgrounds of the mechanism of financial

independence at public scientific and technological organizations

Chapter 3: Current situation of the mechanism of financial independence

at IEMA

Chapter 4: Solutions to perfect the mechanism of financial independence

at IEMA

Chapter 5: Conclusion

CHAPTER 2: THEORETICAL BACKGROUNDS OF THE

MECHANISM OF FINANCIAL INDEPENDENCE IN PUBLIC

SCIENTIFIC AND TECHNOLOGICAL ORGANIZATIONS

1 Overview of public scientific and technological organizations

1.1.Concepfs:

The Law on Science and Technology defines:

- Science is a system of knowledge about phenomena, things and laws ofthe nature, social and thought;

- Technology is a combination of measures, processes, skills, know-how,

Implements and means used to turn resources into products;

-Public scientific and technological organizations are established

according to the decision of competent state agencies, and operated in the field

of science and technology including scientific research, scientific research andtechnological development, scientific and technological service, innovation

promotion activities, technical innovations, production rationalization and other

activities for the development of science and technology

1.2 Characteristics and classification of public scientific and technological

organizations

- Public scientific and technological organizations are public business units, provide public services and state management in scien-tech field.Thus, they have basic characteristic as follows:

non Operating under the assigned political tasks, professional, and not fordirect profit - They are independent budget-estimating ones, which havetheir own seals and accounts and accounting apparatuses organized inaccordance with the provisions of the Accounting Law

- Directly under the governing bodies (Ministries, Departments; People’sCommittee) as well as to be subject to strict management of the Ministry ofScience and Technology and local government where they are located Thus,public scientific and technological organizations are managed by many

management levels with overlapping and complex relationships affecting theirmanagement mechanism

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- Public scientific and technological organizations are organized inaccordance with their professional activities, so their financial sources is notonly from state budget but also from other non-business revenue sources.

Based on the portion of state fund in the total operating fund of organizations, scientific and technological organizations are classified into three models as follows:

The first is self-financing scientific and technological organizations(called transformable organizations for short) are the units self-finance alltheir regular operations (salary fund and operating expenses) After thetransformation, they are still a scientific and technological organization

operated under the Law on Science and Technology, and continuously funded

their development and investments task by the State, as well as, if they dobusiness they also have the rights of new established enterprise

The second is scientific and technological enterprises are the newmultiple-ownership enterprises They operate in the field of science andtechnology under the Law on Science and Technology, produce and trade innew products which are the fruit of scientific research, technology secret,technological cultivate samplings, are enjoyed preferential policies of the state

in the early stage of formation and development

The third is academic researching scientific and technological

organizations which research strategies and policies related to statemanagement, are continuously funded by the state budget depend on theirassigned task This model of organization is basically subsidized by the state as

before, but with a higher degree of independence.

1.3.The role of public scientific and technological organizations in the

national economy

The operation of public scientific and technological organizations plays

an important role in the national economy In recent years, local and centralpublic scientific and technological organizations have made great contribution

to the socio-economic stability and development of the country, showing:

- Performing the assigned tasks such as: training and providing high

quility and qualification human resource; caring people’s health, protectingcn/ironment, researching and applying scientific results; supplying highqulity science-tech products to serve the industrialization andm<dernization of the country.

- Making important contribution in providing scientific grounds forplinning the guidelines and policies of the Party and State, contributing to

th: success of the reform in general and in the process of renewing

conomic thought in particular

- Taking part in proposing and implementing major projects andprograms for socio-economic development of the country, key research

pDgrams on information technology, biotechnology, materials technology,

auomation, mechanical-manufacturing technology, contributing to

inproving the internal capacity in several areas of advanced technologies,

imroving productivity, quality and efficiency of many economic sectors

- Making great contribution in acquiring, owing, adapting andexloiting effectively imported technology Thus, the level of technology insone manufacturing industries and services have risen significantly, manyconmodity products are more competitive Especially in the agricultural sector,

ha created many plants and animals with high quality, contributed to theretructuring of rural economy, brought our country from an imported food onetoone of the most leading exporter of rice, coffee, etc in the world

- Contributing to strengthen the diversify and socialization the sources

ofscience and technology such as contract with manufacturing and business

setor, banks, international donors and other sources Science andtehnology activities are increasingly socialized nationwide

- Improving the awareness and application of science and technology

of people: public scientific and technological organizations,agriculture,

foestry and fishery promotion organizations has widely propagandized the efect of science and technology on production and life to raise markedly theavareness and ability to acquire and apply scientific and technological

knowledge of the people

2 The mechanism of financial independence at public scientific and

technological organizations

2./ Definition of the mechanism of financial independence

The word “mechanism” has used popularly in management field fromabout late 1970 when we started to pay attention to the issue of managementresearch and economic management innovation with the meaning of

management regulations Therefore, mechanism is a system of methods and

tools by which people perform their activities

The concept of "independence" is often understood as the freedom ofaction However, independence also means capability to act to achieve the

results (strength) - Pfeffer and Salancik (1978) Lundquist (1987, 39) defines

independence in relation between freedom of action and capability to act

The mechanism of financial independence is a management one tostrengthen the independence and responsibility of the units in terms of financialperformance, apparatus and labor arrangements to increases the quality of theoperation and service providing of the unit This mechanism allows the units to

be proactive and responsible to the state for generating revenue and spending toraises revenue and ensures to cover operating expenses, to manage uniformly

revenues, to promote practices thrift and combat wastefulness in managing and

using state funds

The Party and State advocate to implement the mechanism of financial independence in the scientific and technological organizations to raise the

activity, initiative, creativeness of the organizations in raising the performance,linking scientific research and technological development to production, salesand human resource training, speed up the process of socialization of scientificand technological activities, contribute to enhance scientific and technologicalpotential of the country

2.2 The contain of the mechanism of financial independence at public

scientific and technological organizations

Giving scientific and technological organizations the right to self-control is

a resolution to release the creative energy of scientists as well as create good

association between research and production, which is the essential way to renewthe of scientific and technological organization and operation according toenterprise mechanism Therefore, Decree No.115/2005/ND-CP dated September

9, 2005 of the Government providing for the mechanism of independence,

self-responsibility of the scientific and technological organizations is considered abreakthrough step in the scientific management with the specific provisions of thefollowing financial independence:

2.2.1 Independence in financial sources

Depending on the functions, tasks and activities of scientific and technological organizations, the following funding sources may included:

a Funds allocated by the state budget, including: funds for regularactivities, funds for implementing the tasks accordance with their function andfunds for implementation of scientific and technological tasks assigned by the

State These funds will be allocated depend on their assigned task.

b Revenues from non-business activities, including charge and feerevenues according to regulations; revenues from service provision; revenuesfrom scientific research, technological development and technology transfer

contracts; revenues from production business activities; revenues from other

non-business activities (if any)

c Other funding sources, including fixed asset depreciation capital; retained revenues from the liquidation of assets according to regulations; capital mobilized from individuals and loan capital from credit institutions; financial support capital, aid, donations and gifts of domestic and foreign organizations and individuals; other lawful funding sources provided for by law(if any)

2.2.2 Independence on using the funds:

Depending on specific sector, the scientific and technological

organizations have the right to use actively the funds as follows:

a Regarding expenditures on performance of scientific and technological tasks:

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The scientific and technological organizations can apply the mode ofexpenditure contracting package for the performance of the State's scientificand technological tasks (in forms of scientific and technological programs,subjects and projects) in all domains of scientific and technological activities(including scientific and technological tasks under national target programs,urgently assigned scientific and technological tasks), which are assigned orordered directly or through selection or bidding by state agencies Scientificand technological organizations may decide by themselves on the use ofcontracted funds for the performance of their tasks, ensuring the quality andimplementation progress requirements under contracts.

b Payment of salaries and wages and setting up funds:

Depending on their financial operation results and employees' capacity

and qualifications, the scientific and technological organizations shall paysalaries and wages higher or equal (but not lower) the salaries and wagesprescribed by the State Annually, after paying all reasonable expenses andfulfilling obligations towards the State, for the positive differences between

revenues and expenditures (if any), scientific and technological organizations

have the right to set up funds in accordance with the provisions of law.Particularly, the minimum of non-business activity development funds must be

at least equal to 30% of the above difference The use of funds shall be decided

by the head of organization in accordance with their regulations on internalexpenditure Scientific and technological organizations may decide bythemselves on the use of balance of funding sources after deducting allexpenses and setting up funds according to regulation to pay incrementalincome to cadres, civil servants and laborers in accordance with the unit’sinternal regulation of spending

c Regarding expenditures on other activities:

Scientific and technological organizations may decide by themselves onthe use of funding sources for spending on their activities (spending on

implementing State’s science-tech tasks, paying salaries, setting up funds,

investing in basic construction, reciprocal capital, buying equipment and

overhauling of fixed assets must comply with State’s regulations on standards,

norms and contents)

Therefore, the financial independence has changed basically the way toallocate the State fund, instead of allocated by payroll, the public scietific andtechnological organizations will be allocated by a lump sum depending on theirtasks (maybe including of the expenses to maintain the apparatus according totheir functions and duties), or be selected by bidding at present They have theright to business actively and operate in the role of an enterprise, to transforminto an enterprise, granted business registration certificates, got remission ofcorporate income tax (remit tax for four years, reduce 50% for 9 years and therate is 10 percent) and many other incentives, have the right to import andexport technology and specialized products directly, to make a joint-ventureand association with domestic or foreign organizations or individuals, to hireforeign experts to do at the units Especially, the scientific and technological

organizations on fundamental research, strategies and policies research for the

purpose of serving state management, scientific research for the purpose of

serving public service are continuously allocated fund for regular activities by

the State in the way of giving a lump sum for their task

About property, the scientific and technological organizations have theright to be assigned State’s property as well as the right of land use, and theright to manage and use that property in scientific research, production andbusiness under the law; The property used in production and business need to

be summed the depreciation as state’s property of state-owned enterprises and

to be posted in the cost price That depreciation will be retained to add in their

own non-business activity development funds If the unit transform into

scientific and technological enterprises operated under the Decree No.80, theassigned state’s property is considered as the state’s capital of the enterprise’scapital They have the right to be assigned land, hired land and used securityassets, borrowed capital, made a joint-venture and associated under theregulations of law Therefore, besides the right to independence, the publicscientific and technological organizations are assigned to manage and use a

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arge amount of state’s assets in their business (including direct import-export).

Comparing with other economic organizations, the favors that scientific and

'echnologieal organizations received from the mechanism is their large

ed vantage

2.3.Factors affecting the mechanism of financial independence of public

scientific and technological organizations

3.3.1 The State’s policy on assigning the right of financial independence to

public scientific and technological organizations

In certain stages, the State launched the policy on financialndependence to public scientific and technological organizations consistentsvith the requirement of financial management innovation and in accordanceswith the economic development situation of the country For each period,when State's policy change, the legal documents guiding the implementationare adjustted Therefore, the units must also change the financial independence

in accordance with general provisions of the state The policy of the state on

the financial independence for public scientific and technologicalorganizations has a large effect on the operation of these units If state policy

is issued timely, and in accordance with the country's economic development,

it will have a positive impact to help the units adjust their revenues and

expenditures reasonably

2.3.2 Awareness of the mechanism of financial independence in public

scientific and technological organizations

The renewal of financial management mechanism of public scientific andtechnological organizations in the way to self-reliance, self-responsibility is a

major correct policy of the Party and State However, to apply effectively the

mechanism of financial independence in the science and technology units, it is

required insightful and proper awareness of the leaders as well as the staff and

employees in the units Since, with the insightful and proper awareness ofpurpose and benefits of independence, awareness of responsibility for financialindependence, the units can launch flexible policies initiatively and creatively

and release all resources to generate the highest financial efficiency

2.3.3 Qualifications and ability of management staff

Human is the heart of the management apparatus, a essential element inthe processing of information to draw out the management decision Thequalification of management staffs is the factors that affect directly theeff ciency, accuracy and timeliness of management decisions, so it affects the quality of the management apparatus, determining the success of management

in general and the financial independence in particular.

If the management staff in upper management agencies has experience,professional qualifications and good quality, they will draw out effectivefinancial management strategies and processing information quickly, timely,flexibly, effectively

For the base units, staff directly engaged in financial accounting also

need to have capacity, professional qualifications and work experience to bring

financial-accounting management work in the units into order, to comply with

regulations on financial accounting of the State, to contribute to the operationefficiency of the unit

Thus, the qualification of management staff have a direct impact to the financial independence in scientific and technological organizations If

management staff have good qualification and management experience, the

process of financial independence of the unit will be accelerated Conversely, if the qualification of management staff is weak and limited, it will lead to lax

financial management, losses, waste and hinder the performance of financialindependence of the unit

2.3.4 The relationship and decentralization between autonomous units and

management agencies

This relationship is decided directly on the financial management mechanism and the independence of the unit The determination of the relationship and decentralization between central and local, between the

autonomous units and management agencies, reducing the direct intervention ofthe governing body and management agencies has important role in ensuring the

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independence of the units Therefore, it is necessary to adjust the duties betweenagencies at the same level and increase decentralization to lower-level agencies tocreate conditions for the mechanism of financial independence are implementedfully and effectively.

2.3.5 The management of inflows and outflows of funds

The management of inflows and outflows of funds is one of the most

importance factors that much influence on the ability of financial independence

at the unit The management of inflows and outflows of funds is carried outaccording to an uniform process includes following stages: drafting the costestimation-observance of estimation — accounting and strike a balance Therepetition of this process every year forms the financial cycle

- Budget estimation: The process of analysis, evaluating the capabilitiesand needs of financial resources to build annual inflows and outflows of fundstargets of the budget properly, scientifically and practicality Making plan,estimates scientifically and , accurately, and proposed appropriate measures to

organize the collection of revenues for non-business activities such as

collecting fees and charges, income from providing scientific and technologicalservices will help units active in financial independence, avoiding loss of

revenue.

- Observance of budget estimates: the process of using aggregate

measures of financial economics, administration to turn the revenue andexpenditure targets stated in the budget estimates of the unit into a reality Theproposion of necessary measures to ensure the budget used for proper purposes,policies and saving will enhance the effectiveness of financial independence ofthe unit

- Strike a balance: the final work of the financial management cycle This

is the testing, data synthesis process on the observance of the budget estimates

in the period and is the basis for analyzing and evaluating the results ofobservance of the budget estimates, fromwhich to draw lessons for the nextperiod Therefore, it is also an important stage affecting the efficiency of the

financial independence of a unit

Thus, the organization of management of inflows and outflows of funds

has large impact to the financial independence of scientific and technologicalorganizations If the organization of management of inflows and outflows offunds is done well will help the units increase their revenue as well asallowwing the unit made reasonable expenditure Conversely, if organization ofmanagement of inflows and outflows of funds is loosen will affect negativelythe performance of the unit.

2.3.6 Inspection and supervision:

Inspection and supervision is an indispensable activity in themanagement process Through inspect-supervise, financial management unitgain feedback on the subjects of management, to help management agenciescapture timely and accurately the situation of financial management ofmanaged objects, to help managed objects to correct deficiencies, to enhancethe effective implementation of financial management decisions, and to preventtimely the wrongdoing, incorrectness or violation of law and financialregulations Thus, the organization of inspection and supervision well will alsobring positive effects in the financial independence in public scientific andtechnological organizations

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CHAPTER 3CURRENT SITUATION OF THE MECHANISM OF FINANCIAL

INDEPENDENCE AT INSTITUTE FOR ETHNIC MINORITY

AFFAIRS

1 Overall of Institute for Ethnic Minority Affairs

1.1 Functions and tasks:

Institute for Ethnic Minority Affairs, a public scientific non-business unitdirectly under the Committee for Ethnic Minority Affairs, is established under

sion No 144/1999/QD-UBDTMN on 08/9/1999 by the Minister-ChairmanDe

of Committee for Ethnic Minorities and Mountainous Areas (now CEMA) TheInstitute has been operated officially since 2000

Over 11 years of development, corresponding to each working period ofthe Government and Committee for Ethnic Minorities, the functions, tasks andorganizational structure of Institute for Ethnic Minority Affairs have beenchanged in accordance with the functions, tasks and organizational structure ofthe CEMA to meet the requirements of scientific and technologicaldevelopment in the field of ethnic minority work of the CEMA in each stages

* For the period from establishment to 2005:

CEMA issued Decision No 244/2003/QD-UBDT dated November 11,

2003 providing for the functions, tasks and organizational structure of Institute

for Ethnic Minority Affairs with the following main tasks:

- To research ethnic minority policies of Party and State, propose to

CEMA the revision, amendments and supplements of policies in case of

CEMA issued Decision No 412/2008/QD-UBDT dated December 30,

2008 providing for functions, duties, powers and organizational structure of

Institute for Ethnic Minority Affairs, in which, much scientific research content

has added, the independence to participate in doing scientific work in Vietnamand other countries of Institute for Ethnic Minority Affairs has expanded; as

well as, the Institute has the right to financial independence with the

expenditures funded by the State budget The contents and the main tasks were:

- To study scientific basics to make proposals for the development,

modification, revision and addition of the socio-economic development policy

of ethnic minority and mountainous areas; to provide specific policies, projects,proposals for developing areas of extremely difficult ethnic

- To make survey and conduct research on scientific basis to constructdatabase on the ethnic minorities in Vietnam; to identify the composition ofethnic minorities in Vietnam; to build criteria for classification to ethnicminority areas by the level of development

- To research and apply models of socio-economic development

effectively in ethnic minority areas; to propose implementation of plan to

replicate typical ethnic minority representative in implementing ethnic policies

- To plan and organize to implement different projects invested and

tunded by local and international organizations in ethnic minority areas

- To make tender, selection and do researching activities of science,technology environment and providing public services

- Organize information and documentation on the field of materials of

scientific researches on national policies for ethnic minority people and

mountainous areas

1.2 The organizational structure of Institute for Ethnic Minority Affairs :

Institute of Ethnic Minority has 44 staff, includes 01 General Director,

02 Deputy Directors, 05 Heads of Divisions, 01 Deputy Head of functionaldivision and 35 officials and public servants assigned by the Minister-

Chairman of CEMA, working under leader mechanism associated with theonline mode Besides, the director signs labor contracts with stable annual

22

number of 3 persons to perform the work serves such as guardian, driver,cleaner and other 15 people working in the management of ODA projectfunded by UNDP Divisions under Institute for Ethnic Minority Affairsinclude the following units:

a) Functional divisions:

- There are 5 functional divisions at the Institute

+ Division of Administration and Organization: Includes 9 people withthe main tasks is to provide advises for Leader of the Institute and makeorganization, cadres, financial - accounting and office administration work

+ Division of Science Management and International Cooperation:Includes 6 people with the main task is to give advices and do assistance for the

Institute’s Director to establish and manage the activities of the Institute’sScientific Council, summary and make reports on the implementation ofscentific work of the Institute, as well as implement the tasks of international

cooperation;

- Division of Economic Policy Research: Includes 8 people, the major

tasks is to study the topics, projects, science projects for building economic

pelicies of the CEMA;

- Division of Social Policy Research: Includes 7 persons, major tasks is

to study the topics, projects, science projects for building social policies ofCammittee for Ethnic Minorities;

- Division of Information, Documentation and ethnic minority ResearchJournal consisting of 8 people, the major tasks is to provide information,dccumentation, to compile, print and publish ethnic minority magazines

b) The subordinate unit:

In addition to the function divisions, IEMA of CEMA has managed 01prject funded by UNDP with the main task is to make communication andacvocacy, dissemination and provision of supplies and products for peopleinected with AIDS, HIV in ethnic minority and mountainous areas (Project

‘VE H61)

Project management Board consists of 15 people, with the NationalProject Director is the General Director of Institute for Ethnic Minority Affairs.

Project staff worked under labor contract to implement the project activities in

the areas of 7 northern and central provinces of Vietnam The project launched

in 2008 and ended in 2011

c) The Science Council of IEMA: established under Decision of the

General Director and operates on term basis

Table 1- Structure of Institute for Ethnic Minority Affairs

General Director

Deputy Directors of Administration

and Organization

Scientific

Council of

Institute

Deputy Directors of

Science and

technology

Department of Department of ) (Department of ) (Department ) (Department

Administration | | project VIE Information, Management GEEconomic of Social

and H61 Documentation Science and Policy TGIỆY)

Organization and International R 4 ei

Ethnographic Cooperation ÔNG €SSANG

Journal

1.3 The mechanism of financial management at Institute for Ethnic Minority

Affairs

Implementing Decree No 115/2005/ND-CP of the Government dated

September 05, 2005 providing for the mechanism of independence,

self-responsibility for the public scientific and technological organizations, CEMA

issued Decision No 64/2007/QD-UBDT dated February 2, 2007 to give the

se f-responsibility and financial independence for Institute for Ethnic Minority

A‘tfairs According to this decision, the Institute was defined as scientific

research unit operating in the field of basic research, strategic research, policy

24

research for state management, and secured fund for regular activities by the

state budget as the assigned duties from 2008 Because of the delay incompletion of procedures for financial independence, till 26/08/2009 theGeneral Director of the Institute issued an internal expenditure regulation inconjunction with Decision No 33/QD-VDT, applied from 2009

Thus, the financial management mechanism at Institute for EthnicMinority Affairs was applied through the following stages:

- In the period from the establishment to 2008, the Institute was managedunder subsidy mechanism, in which the revenues were fully remitted into the

State budget, the expenditures funding for the activities of the Institute were

ensured by the State budget

- From 2009 to now, the Institute has managed the finance byindependence for the regular budget funded by the State to pay for the

operation of the Institute and doing scientific projects of institutional levels

The other funds of the Institute have been not assigned the independence

1.4 The achievements of Institute for Ethnic Minority Affairs

Since the establishment, the scale of operations of the Institute has been

more and more increasing:

- Regarding the organizational structure, in 2000, there had been only aGeneral Director, a Deputy Director, 02 function divisions To date, there are aGeneral Director, 02 Deputy Directors, 05 function divisions, and an ODAproject management board funded by UNDP

- Regarding the human resources: The staff assigned to work in Institutefor Ethnic Minority Affairs in its beginning of operation was only 5 persons In

2011, the staff of the Institute increased to 44 people In addition, the Institutehas signed contracts with 15 people working to implement ODA project funded

minority of Vietnam " funded by UNDP with a total investment of USD

1,819,011, from which the cost for project management was USD 100,000

- The products of scientific research of Institute for Ethnic Minority

Affairs: including the results derived from research of scientific thematic

projects to be accepted by competent authorities, including institute-level,

ministerial-level and state-level projects Since 2000, the Institute has carried ou: 32 themes of Institute and 12 topics of Ministry.

In 2011, the Institute has proposed and applied to do several state-level projects

to be executed in 2012 At the same time, the Institute also is developing

proposal to be submitted to the Minister-Chairman of CEMA for approval for the establishment of research centers, application and transfer of technology tocone into operation from 2012

2 The current situation of the mechanism of financial independence at

IEMA in the period 2007 - 2010:

Essentially, the completion of the mechanism of financial independence

at state level is the completion of state’s regulations, policies on this area.Hewever, the appropriateness and effectiveness of that institution depend on

the feasibility of the application at the grassroots level.

Financial independence is defined as key solution to create change in

ouput for each unit; it is influenced by many factors, from which the human factor plays an important role directly influencing the results in mobilization of

firancial resources as well as in management and use of the financial resources

In the limited scope of research at Institute for Ethnic Minority Affairs ,

the improvement of the institutional policies can be regarded as to improve the dœuments and papers that permit Institute for Ethnic Minority Affairs to apply the independence financing mechanism; it is also to improve the organization

ani implementation work of that mechanism basing on the current regulationsofthe Government and CEMA

2 Current status of documents providing legal basis for self-financing

regime:

2 .1 Self-responsibility on organization and operation: 1

26

This is the important factor affecting the financial independence.

Implementing Decision 412/QD-UBDT on 30/12/2008 of the

Minister-Chairman of the CEMA, Institute for Ethnic Minority Affairs has developedand submitted to CEMA for consideration and authorization for GeneralDirector of Institute for Ethnic Minority Affairs to sign Decision No 15/QD-VDT dated 29/06/2009, in which specified the Regulation on operation ofInstitute for Ethnic Minority Affairs as a basis for the operating activities of theInstitute The principal contents of Decision were defined as follows:

- Regarding the functions, tasks and organizational structure of Institute

for Ethnic Minority Affairs: This shall comply with Decision No

412/QD-UBDT dated 30/12/2008 of the Minister-Chairman of CEMA (mentioned inPart I)

- Regarding the principle of operation of the Institute: ensuring the principle of openness, democracy and transparency to activities of the Institute

under the provisions of the Government and CEMA;

- Regarding the finance: Implement in compliance with currentregulations

- Regarding the executive relationship to operate the Institute: ït iscomplied with the head regime in consultation and advices from the ScientificCouncil of the Institute

2.1.2 Financial independence

Implementing Decree No 115/2005/ND-CP dated September 5, 2005

providing for self-responsibility of the scientific and technologicalorganization, on 26/2/2007 CEMA had issued Decision No 64/QD-UBDT forInstitute for Ethnic Minority Affairs to have the self-responsibility andindependence in financing

Implementing this Decision, Institute of Ethnic Minority constructed,submitted to CEMA for consideration and evaluation and be authorized forInstitute of Ethnic Minority to sign Decision No 33/QD-VDT dated August 26,

2008 promulgating the Regulation on internal expenditures to be applied from

2009, with the main contents as follows:

- Regarding the Scope of application: Institute for Ethnic MinorityAffairs can be self — responsible in financing for the recurrent budget funded bythe State budget.

- Regarding the Principle of implementation: Within the allocatedfunding, the Institute can have the right to spend the costs higher or lower

comparing to that of state norms provided the basis of completing tasks of

assigned plans

- Regarding the funding sources, included:

+ From the regular budget ensured and allocated from State budget;

+ From scientific research contracts;

+ Financing budget is funded by national and international organizationsand individuals

- Regarding the use of the budget resulted from savings:

+ 30% to cover the general welfare of the Institute

+ 70% to cover incremental incomefor whom, who are the employees,contract workers to the payroll in the approved and not in the approved staffing,

but wage scale according to the state norms and having enough working time of

03 years (36 months) Enjoy the level of reward regime, income from savings

fund monthly as officials and employees of the Institute, for other laborcontracts with 50%

- Perform monthly funding package for a number of tasks of regular

nature, including: Package for expenditures on telephone, stationery, public carwash for leaders, officials of the Institute; and package for expenditures for perdiem expenses for clerical and accounts of the Institute

At the same time, it is also assigned for the Organization —

Administration unit to regularly inspect and supervise the use of electricity,water and property of the divisions to ensure cost savings

2.2.Current situation in the process of organizing and implementing:

2.2.1 On the human resources:

Table 2: Status on the management and use of human resources

[ TT] Content Year |Year _[Year [Year |

28

2 | Number of Contracted staff |18_ 18 18 18

i % increase compared ‘with |- 0% 0% 0%

previous year

— |Total 33 4 |Jã |6

-| [Total % increase compared -| - 33% 16% 22%

with previous year

(Source: Division of Administration & Organization of : Institute for Ethnic

Minority Affairs)

Table 2 shows:

- The total number of employees over the years: Year 2008 compared to

2007 - increased by 11 persons (33%), 2009 compared to 2008 increased by 7 people (16%), 2010 compared to 2009 increased by 11 persons (22%).

- The structure of the human resources showed that:

+ The proportion of regular workforce ensured by the Institute’s regular budget has changed from time to time and tended to increase year by year: in

2007 was 45%, in 2008 was 59%, in 2009 was 65%, and in 2010 was 71%.

+ On the contrary, the labor outside the regular workforce of Institute for Ethnic Minority Affairs ensured by other funding sources has decreased accordingly These labors working under contracts to implement ODA project management and other services such as guarding, drivers, and odd job in the

Institute’s Office

- The rate of payroll/regular workforce increasing over the years: 2008 compared to 2007 increased 33%; 2009 compared to 2008 increased 16%; 2010

compared to 2009 increased 22%

- The rate of contracted workers over the years: unchanged or no

increase or decrease for all the period from 2008 to 2010

From the above data it can be seen that:

- When looking at the total payroll of regular workforce over the years and the total number of contract workers over the years it is showed that payroll growth rate before 2009 (not yet implemented self-financing regime) and from

2009 onwards (self-financing regime applied) are both highly increased, whilethere was no change in the portion of labor contract Thus, in addition toincreased staffing to increase the budget allocated annually since 2009, theInstitute has employers on the payroll of the budget to do the topics, scienceprojects through bidding contractor (refer to the accepted projects through

tender in 2009 and 2010 in Table 4)

- When comparing the number of payroll by payroll allocation decision

of the CEMA, the employees such as guard, driver, and cleaner is included inthe total payroll In fact, Institute for Ethnic Minority Affairs signed a contractwith these people, and that is over the payroll staffing norms Therefore,

funding to pay for the later employees is actually taken from budget savings.

2.2.2 On the finance:

Table 3: The mobilization and usage

Unit: Million VND

¬ Year Year Year ‘Year |

JHỆ |GOHIN _ — J2007 |2008 |2009 |2010_

1| State funded budget 1.482 1.825 |2.543 3.106

-1.1 | Regular recurrent budget 1.482 1.563 1.603 |1.956

7 % increase compared with |- - 5,5% 25,6% 2% |

| previous year | _ _1.2 | Budget for implementing | 0 262 940 1.150

|_| Ministerial — level topics/projects

| % increase compared with | - - 259% 22%

Budget resulted from doing

3 | contracts through tender/bidding, | ¢ 0

collaboration and cooperation in 1.472 2.275

—_ | doing scientific projects _ | :

% increase compared with - 54,60% | previous year _ _

4 | Funding structure 100%} 100% 100% | 100%

_ | Stage budget 83,4%| 85,4%| 563%| 51,6%

~ | Non-stage budget 16,6%| 14,6%| 43,7%| 48,4%

a Expenditures for increase the an

income using the saving costs of | 9 0 158 238

- Total funding budget over the years: 2008 compared to 2007 increased

365 million (20.5%), 2009 compared to 2008 increased 2376 million (111%),

2010 compared to 2009 increased 1512 million (33.5%)

- The structure of funding sources:

+ The ratio/proportion of rregular budget: in 2007 was 83.4%, 2008 was35.4%, in 2009 was 56.3%, and 51.6% in 2010

+ From other sources accounting rate in 2007 was 16.6%, 14.6% in

3008, 2008 was 43.7%, 48.4% in 2008

- Funds resulted from saving costs over the years: 2009 compared to

2008 increased 158 million, 2010 compared to 2009 increased 170 million average 12.5% / person).

From the above data it can be seen that:

- When looking at the total cost and structure of funding sources over theyears it is showed that: From 2009 (self-financing regime applied), the ability

10 mobilize financial resources continued to increase over the years compared

10 before 2009 As well the self-ownership mechanism has freed the workers to

seek additional funding for the Institute's activities, while the state fundedbudget could ensure oonly about 51-56% of total funding

- Look into the growth in cost savings from the budget expenditures it was

showed that the living of the staff has improved, increasing by 12.5% over the first

year of self— responsibility

2.2.3 Regarding the scientific research:

Table 4: Accepted scientific projects

lo! Year Year | Year | Year

Jay coneent 2007 |2008 |2009 |2010

1 | State— level Projects 0 0 0 0

_— |% increase compared with previous | 0 0 0 0

¬ year _

-2| Ministry — level Projects 2 2 5 3

| — |% increase compared with previous | 0 150% | -40%

|_| year _

Local — level/Institute for Ethnic

8 3 4 3 5

Minority Affairs projects

| — |% increase compared with previous | 33% -33% | 67% |

L_ 1year

(Source: Division of Scientific Management and International Cooperation of

Institute for Ethnic Minority Affairs)

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Table 4 shows:

a) State level project: From 2007 to 2010, the Institute has not been

allocated to implement the state-level projects yet

b) Ministry level projects:

- Total number of projects over the years: 2008 compared to 2007: nochange, 2009 compared to 2008 increased 3 projects (150%), 2010 compared to20)9 decreased 2 projects (-40 %)

c) Institute level projects: 2008 compared to 2007 increased 1 project

(33%), 2009 compared to 2008 decreased | project (-25%), 2010 compared to

20)9 increased 2 projects (67 %)

It can be seen from the above data that:

- During the 4 years, from 2007-2010, the Institute has not done any stete-level projects, while the functions require scientific products of basic

research, strategic research in the field of EM policies This has shown that the

ethnic scientific research capacity of the Institute may be a problem, or the research focus of the Institute has not yet defined, or the capacity of research

team did not meet the requirements

- In 2009, number of projects of institutional levels decreased This can

be reasonably explained by the fact that the focus for research in 2009 is

ministerial — level But in 2010 the situation was vice versa This in some way

ca be confirmed for the conclusion that the ability and funding for research budget with average of nature, does not create major changes.

- In particular, through the situation survey conducted in 2009 and 2010

by the Research Team using the questionnaires distributed at the researchedunts for collection of the data needed for study (2) , it can be concluded that:

+ The staff working at the Institute has relatively low income level, and

in general was not satisfied with the current (half subsidiary and half

independence) mechanism in administration and finance That is the responsibility and self-ownership should be deeper decentralized so that themenagement work would be clearer and more transparent; and the divisions

self-could be more actively to operate the work on the basis of working norms and

funds allocation accordingly Assessment of staff capacity and improvement of

their income should have been done through performance and results of the

work they delivered

2.3.General assessment of the status of financial independence of Institute

for Ethnic Minority Affairs in the period 2007 - 2010:

2.3.1 The results achieved:

By analyzing two years of financial independence mechanism underDecree No 115/2005/ND-CP of the Government dated 05/9/2005, Decision64/2007/QD-UBDT on 26/02/2007 of Committee for Ethnic Minorities,Institute for Ethnic Minority Affairs initially achieved some certain results,gradually diverted from the operating subsidy mechanism for the organization,staffing and financial to the independence mechanism partly for theorganization, staffing and finance Besides the financing source granted by thestate budget, other sources of income of the Institute have increasedsignificantly and tends to account for increasing proportion of total operatingfunds of the Institute

Regarding the spirit, the majority of the staff of the Institute havepositive changes in awareness with willingness with the changes in self-ownership and self-responsibility in finance, promoting the self-reliance andself =accountability at work; the concept of giving and receiving has been

defined relatively clearer; the benefit has been gradually associated with the

responsibility to create positive incentives to complete assigned tasks

For the revenue, though the fundamental difficulties in operating fund of

the Institute compared with the needs of almost all staff of the Institute have been still not solved basically, with conscious savings associated with common

interests and benefits, the Institute actively use existing staff resources toparticipate in scientific research activities within and outside the industry,releasing redundant labor force in the staffing and gradually increase incomefor officials and employees, and expand relations with other international

organizations.

On the development and expansion of revenue sources, in addition to

revenues from the state budget through the state norms on staffing and budget,

the Institute has strongly staffing its researchers of ministerial projects to participate and do research activities from outside the sector Although there

was no significant revenue come from those outside researches for the Instituteyet, it has affirmed the right direction to have additional sources of revenue for

the Institute as well as open additional orientation for scientific researching

activities of the Institute

The management of financial resources was made by rational procedure,

in which two separate accounting parts were established to track, manage, andmake payment and settlement of each funding source Together with this, an

independent unit was formed to consolidate and make liquidation from all

funding sources, ensuring the periodic financial reports to be made on time asrequired

2.3.2 Exists and limitations:

AB Dells The work of issuing documents:

The documents defining the self-ownership in finance for Institute for

Ethnic Minority Affairs can be regarded sufficient in quantity but there may

have been some problems and limitations (regarding the content of documents)

as follows:

* Time of implementation: The documents providing for the mechanism

of financial independence of CEMA and Institute for Ethnic Minority Affairs

seemed to be issued so slowly The effective time of the documents were alsodelayed 3 years comparing with the time prescribed in DecreeNo.115/2005/ND-CP of Government; there have been relatively manylimitations regarding the contents of the documents but they were also slowlyrevised, amended and supplemented accordingly

* The contents of the regulations also revealed many shortcomings:

- Decision No 15/QD-VDT promulgated the Regulation on organizationand operation of Institute for Ethnic Minority Affairs:

+ There may have been the conflict between the provisions for the tasks

of the functional divisions with that required for the financial sources and

revenue: for example the tasks did not mention which units performcooperation activities or contracts made in research topics within and outsideInstitute for Ethnic Minority Affairs, while the regulations on financial revenue

did specifying the provisions on financial sources and revenues collected from

the scientific researches generated in and outside the industry, as well as therevenues from financial assistance from international organizations Thus, theregulation has admitted for the units to use the regular workforce and fundsallocated from the state budget to participate in the bidding and implementation

of scientific projects in and outside the Institute, including the projects that did

no: have the objectives as investment required from the state budget

+ Lack of regulations on norms and criteria for assessing the completionofeach division/unit when applying the self-ownership and self-responsibility

asa basis for budget allocation and evaluation of the effectiveness of revenue

an] expenditure of the allocated budget

+ The provisions on emulation and commendation may have been not

pleyed the role of creating the necessary incentives to promote the staff to work

efficiently The Regulation on Organization and Operation, Internal Spending

Regulations were promulgated as the original documentation for issuing otherinternal regulations, but there have not been yet in the former documents the

prneiples of institutional nature for the emulation work Furthermore, the

assignment of the payroll/regular staff paid from the state budget to participate

in research contracts, and then deduct to pay back only 2% from the receivedre*enue to the Labor Fund may show the discretion in the management as wellasin the emulation and commendation work of the unit

+ Lack of regulations on management and use of products generatedfran scientific researches The results received from scientific researches play

animportant role for the development of the Institute; therefore these productsmist be used and widely applied for development of the renovation proposalsfo: ethnic minority policies However, to date the Institute has only compiled

36