Through the study of theory, current situation and factors affecting the state budget management of Hanoi Department of Finance, the thesis proposes scientific and practical solutions to improve State budget management activities of Hanoi Department of Finance.
MINISTRY OF EDUCATION AND TRAINING THUONG MAI UNIVERSITY HONG HANH, NGO THI STATE BUDGET MANAGEMENT OF HANOI DEPARTMENT OF FINANCE Major: Economic Management Code: 9.34.04.10 SUMMARY OF ECONOMIC DOCTORAL THESIS Ha Noi – 2020 THE RESEARCH WORKS ARE COMPLETED AT THUONG MAI UNIVERSITY Name of Instructor: Instructor 1: Associate Professor. PhD. Nhung, Le Thi Kim Instructor 2: PhD. Binh, Ngo Xuan Reviewer 1: ………………………… Reviewer 2: ………………………… Reviewer 3: ………………………… The dissertation is defended in front of the Dissertation Examination Council at Thuong Mai University At: ………. Date………. Month ……… Year………… The dissertation can be found at:: National Library Thuong Mai University Library INTRODUCTION 1. Urgency of research topics The State budget consists of all revenues and expenditures of the State and has been approved by the authorized State agency and is implemented within a certain period of time to ensure the functional performance of the State. The State budget is the main tool to adjust the macro economy and plays an important role in mobilizing and distributing resources of the economy to ensure the operations of the State and at the same time contribute to distributing resources to promote stable and sustainable economic development; addressing social security issues, implementing justice as well as ensuring the functions of the political system. In the comprehensive renovation of the Vietnam economy, shifting to a marketbased mechanism, the State budget has become one of the most important macroregulatory tools; plays a key role in mobilizing and distributing resources of the economy in order to ensure the operations of the State, and at the same time contributes to the distribution of resources to promote stable and sustainable economic development Hanoi Department of Finance is a specialized management agency under the People's Committee of Hanoi City with the function of advising and assisting the City People's Committee in performing the state management of local finance and budget, organize the management of local budget cycles in accordance with the law. In the process of public finance reform in Vietnam, along with the improvement of the legal environment, the specialized management agencies in general and the Hanoi Department of Finance in particular have made many improvements in state budget management activities and have yielded encouraging results. Beside these successes, the State budget management activity of Hanoi Department of Finance still has many limitations and shortcomings due to various objective and subjective reasons. This situation requires an objective study to find suitable solutions to improve the state budget management activities of Hanoi Department of Finance to meet the practical requirements. For that reason, the author chose the topic "State budget management of Hanoi Department of Finance" for the PhD thesis 2. Research objective, tasks and research question 2.1. Research objective Through the study of theory, current situation and factors affecting the state budget management of Hanoi Department of Finance, the thesis proposes scientific and practical solutions to improve State budget management activities of Hanoi Department of Finance 2.2. Research task + Overview of the research situation related to the topic, from which to find the research gaps + Systematize theoretical and practical basis for state budget management and local state budget management + Surveying the curent state of State budget management activities of Hanoi Department of Finance in the period of 2010 2017, testing and assessing the influence of objective and subjective factors on budget management of Hanoi Department of Finance, showing the achieved results, limitations and their causes + Proposing solutions to perfect the State Budget management activities of Hanoi Department of Finance until 2025, with a vision to 2030 2.3. Research question The aim of the thesis topic is to answer the following research questions: State budget management with the approach from a local specialized management agency theoretical and practical basis? The contents of local budget management, factors affecting state budget management at local level? Experience of budget management in a local region and lessons for Hanoi Department of Finance in state budget management? What is the current state of budget management activities of Hanoi Department of Finance? Inadequacies and limitations in the State budget management activities of Hanoi Department of Finance and their causes? Objectives and directions for state budget management of Hanoi Finance Department up to 2025 and the following years? For the state budget management of Hanoi Department of Finance to meet the objectives set in the new context, what solutions are needed? 3. Object and scope of the study 3.1. Research Object The research object of the thesis is local state budget management activity at the Department of Finance 3.2. Research Scope Research content: The research approach of the thesis is the state budget management activity of Hanoi Department of Finance a specialized financial management unit with a function of budget management over all districts in Hanoi City The thesis focuses on researching local budget management activities according to the budget cycle. The thesis does not research on the management of assets formed from the state budget (public assets) Research space: The thesis studied the state budget management activities in Hanoi area tasked to the Hanoi Department of Finance as the specialized financial agency, including revenue management units, budget expenditure management units under the management of Hanoi Department of Finance, and local budget beneficiary units in Hanoi City The research period: The thesis studies the state budget management activities of Hanoi Department of Finance in the period of 2010 2017, and proposes solutions to improve the state budget management activities of Hanoi Department of Finance until 2025, vision to 2030 4. New contributions of the thesis Academic and theoretical contributions: The thesis contributes to systematizing the theoretical basis for state budget management at the local level The thesis proposes a system of criteria for evaluating local budget management activities The thesis has built an analytical framework about factors affecting local budget management activities. Practical contributions: The thesis has surveyed and analyzed the practical situation of State budget management of Hanoi Department of Finance on the following aspects: Advising in local budget management; Managing budget process according to decentralization (prepare and allocate state budget estimates; Coordinate management of state budget revenues according to decentralization; Manage state budget expenditures according to decentralization; Revenues and expenditures balancing and state budget settlement); Inspection and examination of state budget compliance; Coordination in state budget management Examining the influence of factors on the state budget management activities of Hanoi Finance Department Assessing the achieved results and pointing out the limitations and causes of the limitations in the state budget management of Hanoi Department of Finance Contributions on the solution: The dissertation proposes solutions to improve the State budget management activities of Hanoi Department of Finance: (i) Complete the decentralization of State budget management; (ii) Innovating the process of making and deciding the state budget estimates; (iii) Strengthen activities in the process of implementing State budget; (iv) Innovation in implementation of state budget settlement; (v) Effective management and use of state budget expenditures; (vi) Strengthen inspection, revision and timely handling of violations in state budget management; (vii) Strengthen facilities and application of advanced technologies in the management of state budget revenues and expenditures; (viii) Improve the qualifications of cadres and civil servants to meet the needs of state budget management 5. The thesis structure In addition to the Introduction and Conclusion, the thesis is presented in 4 chapters: Chapter 1: Overview of Research and Methodology Chapter 2: Theoretical basis and practical situation of state budget and local state budget management Chapter 3: Current situation of state budget management of Hanoi Department of Finance Chapter 4: Solutions to improve state budget management activities of Hanoi Department of Finance CHAPTER 1: OVERVIEW OF RESEARCH AND METHODOLOGY 1.1. Overview of studies related to the thesis topic 1.1.1. The studies on state budget management (1). Foreign studies Richard Lingensjo (2002) studied the topic "Construction budget management", California Construction Consultan, United States of America built practical budget management perspectives based on practical issues and experiences, from which pointed out solutions to budget management Janet M.Kelly William C.Rivenbark (2011), “Performance budgeting for state and local government”, M.E. Sharpe, Inc, New York F Stevens Redburn Robert J Shea and Terry F Buss (2008) with the research “Performance management and budgeting: How governments can learn from experience”, National Academy of public administration, 2008, M.E. Sharpe, Inc, New York Aman Khan W.Bartley Hildreth (2012), with the research “Case studies in Public Budgeting and Financial Management” Gerald J. Miller (2012) published the study with title “Government Budgeting and Financial Management in Practice”, CRC Press – Taylor and Francis Group The report of the International Monetary Fund mentioned the problem “Government financial management, Issues and country studies” 1993, International Monetary Fund, Publication Services Washington, USA The authors of the Council of Europa have developed and proposed “Budgetary procedures and budget management at local authority level”, Council of Europe Publishing Editions du Conseil de l’Europe, 2002 Scientific research work of Abachi and Salamatu (2012) uses overall data on revenue decentralization and expenditures of Nigeria from 1970 to 2009 French author Michael Spackman (2002) analyzed the effectiveness of budget and public investment plans to improve the efficiency of the State budget (2). Local studies Huynh Van Hoai (2001), System of legal documents on State Budget management, Agriculture Publishing House, Hanoi Bui Thi Mai Hoai (2007), Vietnam's State Budget Balance in a Market Economy, National University Press, Ho Chi Minh City Nguyen Ngoc Hung (2015), State Budget Management, Statistics Publishing House, Hanoi, the author has systematically set up the theoretical issues related to state budget management such as state budget theory, State budget management cycles, the role of state budget management, factors affecting state budget management, issues of budget revenue and expenditure, and state budget balance Le Ngoc Chau (2004) studied the doctoral thesis with the topic "Some solutions to enhance control of state budget spending through the State Treasury system in the condition of computerization" Le Hung Son (2003) studied his doctoral thesis with the topic "Solutions to improve the quality of financial management of investment projects in the State Treasury system in Vietnam" Duong Dang Chinh and Pham Van Khoan (2009) stated that the state budget management process is used to refer to the entire operation of a budget from the beginning of its formation to the end of the transition to a new budget. The author Nguyen Thi Phu Ha (2007) studied her doctoral thesis with the topic "Improving the efficiency of state budget expenditure management to serve development needs in Vietnam" at National Academy of Politics Ho Chi Minh, Hanoi The author To Thien Hien (2012) studied a doctoral thesis with the topic "Improving the efficiency of State budget management in An Giang province in the period of 20112015 with vision to 2020", Ho Chi Minh City The author Tran Van Hong (2002) studied his doctoral thesis with the topic "Renewing the mechanism of management of construction and investment capital of the State" at the Finance Academy, Hanoi The author Bui Manh Cuong (2012) studied his doctoral thesis with the topic "Improving the efficiency of development investment from the state budget in Vietnam", Hanoi. The study clarified the issues on the theoretical and practical basis of development investment from the State budget Author Nguyen Ngoc Thao (2007) studied the economic management doctoral thesis: "Promoting the role of the state budget to contribute to Vietnam's economic development" 1.1.2. Studies on decentralized state budget management (1). Foreign studies Allen Schick (2007), in his book "The Federal Budget: Politics, Policy, Process" has shown that budget allocation affects many different aspects of socioeconomic life, to many different interest groups Kurt M. Thurmaier & Katherine G. Willoughby (2001) in the book "Policy and Politics in State Budgeting", studied the budget management process in states of the US, the operation of the State budget management body, the roles, the influences and how they make budget policy decisions; budget decision making process Author John M. Kim with his research "From Line item to Program Budgeting Global Lessons and the Korean Case", mentions the innovation of Korea's state budget management method, analyzes the transition from management budget management by item to budget management by program Muhammad Zahir Faridi (2011) used time series aggregate data on revenue decentralization and expenditure tasks between central and local governments between 1972 and 2009 to study the impact of fiscal decentralization to economic growth Angel de la Fuente (2003), in his article "Secondbest redistribution through public investment: a characterization, an empirical test and an application to the case of Spain" clarified the role of redistribution through public investment (2). Domestic studies Assoc.Prof. PhD. Le Chi Mai (2006), Budget decentralization to local authorities the practical situations and solutions, National Political Publishing House, Hanoi This study also provided specific theoretical and practical basis for budget decentralization; solutions to increase budget decentralization for local governments in our country Mai Dinh Lam and Mai Thi Kim Oanh (2015) had scientific research with the topic "Decentralization of local budgets in Ho Chi Minh City, Achievements and Shortcomings”, Journal of Information and SocioEconomic Forecasting No. 109110. In this study, the issue of local budget decentralization has been analyzed specifically with theoretical and practical basis Mai Dinh Lam (2012) with a PhD thesis entitled "Impact of fiscal decentralization on economic growth in Vietnam", Ho Chi Minh City. The research focuses on the impact of fiscal decentralization on economic growth in the neoclassical production model Nguyen Phi Lan (2009) based on endogenous economic growth theory and fiscal theory, model of the relationship between economic growth and budget management decentralization, has found the relationship between decentralization of budget management and local economic growth in 64 provinces and cities of Vietnam in two separate periods 1997 2001 and 2002 2007 1.1.3. Studies on factors affecting local state budget management (1). The foreign research French authors including Michel Bouvier, Marie Christine Esclassan, Jean Pierre (2002) in the study "Finances Publiques" (Public Finance) mentioned many important and modern contents of public finance, provided data on contemporary financial systems of France and Europe Authors Kurt M. Thurmaier and Katherine G. Wooloughby in the article: "Policy and Politics in State Budgeting", studied the activities of the budget management agencies in the states of the US in the following aspects: roles, influence and how the agency makes budget decisions Authors J. Buchanan, with the study "Anarchy, State and Public Choice", the author was interested in studying the rationality of public spending choices Anand Rajaram, et al. (2010), in the study "A Diagnostic Framework for Assessing Public Investment Management", described eight "musthave" features of a good public investment system (2). Domestic studies Nguyen Thi Bien (2015), "Tax collection management of nonstate enterprises in Thanh Liem district, Ha Nam", University of Economics and Business, Vietnam National University, Hanoi, the author has studied in depth the issue of tax management of nonstate enterprises Author Le Dinh Hai and Mai Thi Lan Huong (2018) with the research paper "Factors affecting the quality of tax administration at the Tax Department of Ung Hoa District Hanoi". In this study, the authors surveyed 120 subjects including 80 enterprises and 40 individual business households under the management of Ung Hoa District Tax Department Author Tran Van Lam (2009) studied the PhD thesis topic "Improving the management of state budget expenditures to promote socioeconomic development in Quang Ninh province", this study also stated giving theoretical and practical issues in the management of provincial State budget expenditures, with practical evidence in Quang Ninh province Author Bui Duong Nghieu (2006) "Regulating budget between central and local levels", has analyzed the basic theoretical issues about budget management; Vietnam budget management mechanism; international experiences and solutions to improve the State budget management mechanism The authors Mai Dinh Lam and Mai Thi Kim Oanh (2015) had scientific research with the topic "Decentralization of local budgets in Ho Chi Minh City". Ho Chi Minh City, Achievements and Shortcomings”, Journal of Information and SocioEconomic Forecasting No. 109110 The author To Thien Hien (2012) studied his doctoral thesis with the topic "Improving the efficiency of State budget management in An Giang province in the period of 20112015 and vision to 2020", Hồ Chí Minh City Doctoral thesis with the topic "Decentralization of local budget management in Vietnam", by Nguyen Xuan Thu (2015), National Economics University 1.1.4. The inherited scientific values and the research gaps * Scientific values on theory and practice The thesis inherited a number of published research results from domestic and foreign scientists that have scientific values such as: Theoretical issues related to the state budget and state budget management, fiscal decentralization applying to the research content of the thesis Theoretical issues related to State budget and State budget management Characteristics and basic issues of budget revenue and expenditure management as well as budget decentralization process Issues on the organization of the State budget system as well as factors affecting state budget management The methods which local authorities have applied and the experience on managing the State budget are valuable scientific and theoretical values for providing solutions to improve the budget management activities of Hanoi Department of Finance in the future * Research gaps that needs further study Firstly, there has not been any specific analysis on the issue of State budget management of Hanoi Department of Finance, a state management unit with functions and tasks of state budget management in Hanoi City area Secondly, it is necessary to summarize and find out the state budget management perspectives in accordance with the specific characteristics and circumstances of Hanoi Department of Finance and Hanoi City Thirdly, it is necessary to have a comprehensive solution to improve the efficiency of State budget management activities of Hanoi Department of Finance to suit the socio economic conditions of the city, the country today, as well as an appropriate direction for the future 1.2. Research process and methodology of the thesis 1.2.1. Research process The research process is carried out in the following steps: Defining research objectives, Gathering documents and collecting data; Literature Review; Preliminary research (phase 1); Researching the practical situation (Phase 2); Qualitative and quantitative research (Phase 3). 1.2.2. Qualitative research methods Issues to be considered are: Making annual state budget estimates; Management of budget revenues and expenditures; Balance and settlement of state budget; Inspection and examination of state budget compliance; Coordinating in state budget management; Management of capital and assets formed from the State budget; Factors affecting the state budget management 1.2.3. Quantitative research method 1.2.3.1. Research model and hypotheses The author selected seven factors that affect the state budget management activities of the Hanoi Department of Finance, thereby building a research model The model of reviewing and evaluating factors affecting state budget management. The linear equation is expressed as follows: QLNS = α0 + α1X1 + α2X2 +… + α6X6 + ei 1.2.3.2. Design questionnaires and scales (1) Define the theoretical concept of variables and how to measure variables in the theoretical model based on the theoretical basis and previous studies (2) Develop a Vietnamese version of the questionnaire on the basis of the theory of variables and how to measure variables (3) The questionnaire was forwarded to civil servants currently working at the Department of Finance and 3 civil servants at the Planning and Finance Division at district level to read, evaluate and comment to ensure there is no misunderstanding about the language and the content of the questions. The results were used to correct the sentences in the questionnaire to be clearer and more comprehensive (4) Adjust the original questionnaire and directly send to 5 other civil servants of Department of Finance and Cau Giay District Finance Department verify the reliability of the scales (5) Form a formal questionnaire to conduct a wide area survey 1.2.3.3. Sample choosing and data collecting The questionnaire will include answering options with statements about the attitude of the respondent with 5 levels: (1). Strongly disagree (2). Disagree; (3). Have no ideas; (4). Agree; (5). Strongly agree The sampling was carried out in combination with two convenient sampling methods because it was difficult for the author to gather a list of subjects to be surveyed, and the "snowball" method to find the next subject based on suggestions or recommendations of the interviewee (Nguyen Van Thang, 2013). In addition to asking for direct opinions, the author also uses online opinion survey. The author collects emails of civil servants working on budget management in Hanoi area Results of collecting survey data with cadres and civil servants: handed out 520 votes; 512 votes collected, of which 510 valid votes were used as research data; 02 votes were eliminated due to incomplete responses 1.2.3.4. Data processing methods Firstly, summarize and describe the data collected for the survey questionnaires, thereby giving an overview of the sample size for each survey content Secondly: Assess the reliability of the scale to the data from the survey The reliability of the scale is assessed through Cronbach's Alpha coefficient Thirdly: Verify the value of the scale by EFA factor analysis method Fourthly: After the results of factor analysis, the convergence factors will be grouped and named together Fifthly: Correlation analysis and multiple regression CHAPTER 2: THEORETICAL BASIS AND PRACTICAL SITUATION OF STATE BUDGET AND LOCAL STATE BUDGET MANAGEMENT 2.1. State budget system and state budget management 2.1.1. Definition, function and the role of state budget State budget definition “The State budget is the entire revenues and expenditures of the State, which have been decided by the authorized State agency and implemented in a year to reflect the economic relations arising in connection with the process of creating, distributing and using the centralized monetary funds of the State in order to perform the functions and tasks of the State on the basis of law " The state budget has the following main characteristics: The lowerlevel People's Committee shall periodically report to the superior financial agency on the collection and expenditure of local state budget, the provinciallevel People's Committee shall periodically report to the Ministry of Finance on the situation of state budget revenune collection, the situation of the collection and expenditure of local state budget The Ministry of Finance shall periodically report to the Government and relevant agencies on the collection and expenditure of the State budget according to the provisions of law. The Government reports to the National Assembly Standing Committee; report to the National Assembly on the implementation of state budget revenues and expenditures at the yearend session and additional evaluation report on the situation of budget revenues and expenditures at the midyear meeting next year Public transparency of budget State budget estimate reports must be publicized within 5 working days after the Government sends to the National Assembly delegates and People's Committees send to People's Council deputies Reports on state budget estimates already decided by the authorities, state budget settlement reports already approved by the authorities, results of state budget audits, results of implementation of state audit recommendations must be be made public within 30 days from the date the document is issued Halfyearly, quarterly reports on implementation of the State budget must be made public within 15 days after the end of the quarter and half year The annual state budget implementation situation report is publicized when the Government submits to the National Assembly at the midyear meeting next year 2.2. Content of state budget management at local level Advise activities for superior agencies in budget management. At the local level, the provincial People's Committee is responsible for advising the People's Council at the same level, submitting to the People's Council for approval the annual budget estimates, and the provincial People's Committee also advises the Government on policies in state budget management through specialized agencies such as the Ministry of Finance. According to the regulations on organization of professional agencies under the People's Committee of the province or city directly under the Central Government, the professional consultancy for the provincial People's Committee in state budget management is assigned to the Department of Finance. The department is an agency of the provincial People's Committee; perform the function of advising and assisting the provincial People's Committee in state management of sectors and fields in the local area in accordance with the law and as assigned or authorized by the provincial People's Committee and the Chairman of the provincial People's Committee Management of making state budget estimates The provincial People's Committee shall base on the Prime Minister's Directive, the Circular guiding and inspection numbers on the budget estimate of the Ministry of Finance, based on the socioeconomic development orientation, specific requirements and tasks, based on the ability to balance the local budget, guide and notify the inspection number on the budget estimate to the affiliated units and the People's Committee of the lower level. Management of state budget revenues. State budget revenue is defined as the state's use its power to collect part of the national financial resources to form the state budget fund to meet the state's needs. Management of state budget spending State budget spending is the process of redistributing financed funds in the state budget and directing them to their intended use Balance of revenues and expenditures and settlement of the state budget The balance of State budget represents the balanced relationship between total revenue and total State budget expenditure, in other words, making the total State budget revenue and expenditure balanced. Inspection and examination of state budget compliance Strengthened financial inspection and examination will ensure the effectiveness and efficiency of state management; maintain the discipline and financial discipline, contribute to stability and socioeconomic development of the country Coordination in state budget management. The coordination between Department of Finance, Department of Taxation, Customs Department, State Treasury, departments, branches and People's Committees of districts, towns In particular, the Department of Finance shall assume the prime responsibility, together with the relevant units, to advise, guide and inspect the district People's Councils in organizing the performance of tasks and powers in approving the settlement reports of state budget of their levels in accordance with the State Budget Law 2.3. Evaluation criteria for state budget management at local level Revenue budget completion rate Revenue budget completion rate = Total revenue according to the settlement Total revenue according to the budget x 100% Expenditure budget completion rate Expenditure budget completion rate = Total expenditure according to the settlement Total expenditure according to the budget x 100% Budget balancing capability: Surplus of local budgets = Total revenues of local budgets Total expenditures of local budgets Compliance with regulations on budget execution: Comply with decentralization in preparing and allocating budget Adjust the allocation rate between budget levels Balance between budget revenues and expenditures 2.4. Factors affecting local budget management Socioeconomic conditions of the local area Each local area has different socio economic characteristics, conditions of facilities, natural resources, and different geographical locations. As a result, budget revenue and expenditure are also different Provisions on decentralization of state budget management Decentralized management of the state budget is the settlement of relationships between levels of government from the central to local levels in state budget management. Process in state budget revenues and expenditures. The budget process is a threestage process: budget preparation and approval, budget implementation and budget settlement Provisions on inspection and examination of state budget compliance Financial inspection is a very important task of the Finance sector, especially in the state budget management. Policies to encourage and ultilize state budget resources The requirement is to nurture and make use of all sources of domestic tax revenue such as personal income tax, excise tax, natural resource tax and real estate Organizational structure and capacity of civil servants The streamlined and effective budget expenditure management mechanism will prevent losses and bring efficiency to activities from the state budget Facilities for state budget management The infrastructure, especially the information system and information technology, has become increasingly important, greatly affecting the management of revenue and expenditure, and budget balancing 2.5. Managing state budget in some local region and lessons for Hanoi city From researching and evaluating experience in budget management activities of four major cities: Ho Chi Minh City, Da Nang City, Thua Thien Hue Province, Quang Ninh Province The thesis has pointed out issues that are considered lessons for Hanoi Department of Finance in State budget management. Firstly, uphold the sense of autonomy in budget management Secondly, promoting propaganda to call for investment, nurture revenue sources to ensure adequate or exceeding annual spending Thirdly, allocating the budget in the direction of increasing the proportion of development investment and reducing recurrent expenditure Fourthly, thoroughly practice saving in State budget spending management Fifthly, develop detailed and specific state budget process with coordination regulations, forms, index system, measurement criteria and evaluate outputs suitable to each industry and each field. Sixthly, strengthen inspection and examination of revenue and expenditure settlement; focus on solving the situation of tax evasion, loss of revenue in the sectors and fields that are considered as the focus. CHAPTER 3: CURRENT SITUATION OF BUDGET MANAGEMENT OF HANOI DEPARTMENT OF FINANCE 3.1. Overview of the socioeconomic situation in Hanoi City The thesis has summarized the natural and socioeconomic characteristics of Hanoi City the capital of the country; It is a key locality where investment in special construction is concentrated, prescribed a number of specific policies in the field of socioeconomic development, construction and management of the Capital 3.2. Organizing the state budget management system of Hanoi City Currently, the state budget consists of the central and local budgets. Local budgets include provincial budgets, district budgets and commune budgets. In this budget system, the National Assembly only assigns revenue sources and specific spending tasks to the central budget, and determines the total revenue and expenditure in the budget year for local budgets, while the government multiplies People at each local level will decide their distribution of revenues and expenditures 3.3. State budget management activities of Hanoi Department of Finance Advise activities in state budget management To advise in financial budget management, reform administrative procedures, resolve difficulties for enterprises ; Advise and coordinate the effective implementation of revenue expenditure management in the area; Advisory work for effective public asset management Managing the making and allocation of state budget estimates. The Hanoi Finance Department shall assume the prime responsibility for aggregating and making state budget revenue estimates in the area, the City budget revenue and expenditure estimates, the City level budget allocation plan and report it to the City People's Committee for submission to the People’s Council to decide Coordinate management of state budget revenues according to decentralization The current system of revenue collection is assigned mainly to the Tax Office; Customs office; There are also a number of other agencies that are also tasked with collecting. Management of state budget expenditure according to decentralization. To ensure the full and timely payment of principals and interests on mobilized capital for cities for development investment; Strict management of loans Balance of revenues and expenditures and settlement of the state budget Department of Finance of Hanoi is tasked with reviewing and reorganizing spending tasks that are not yet really urgent, minimizing the organization of conferences, festivals, seminars, festivals and foreign travels. Table 3.2. Summary of state budget revenues in Hanoi in the period of 2010 2017 Unit: billion dong Year 2010 2011 2012 108.301 121.919 145.701 TOTAL REVENUE 94.422 105.179 121.245 I. Domestic revenue 5.742 15.320 II. Revenue from crude oil 3.317 III. Revenue from 10.562 10.998 9.136 customs IV. Revenue from dividends and remaining profits 2013 2014 2015 2016 2017 164.050 130.100 225.528 179.054 206.435 142.189 112.200 145.129 160.171 185.590 10.972 6500 3.750 1.938 2.334 10.889 11.400 15.681 16.945 18.165 60.968 346 Source: Hanoi Statistical Yearbook 2017 Figure 3.3. State budget expenditure in Hanoi period 20102017 Unit: billion dong Year TOTAL (A+B) A. Local budget balancing expenditure I. Expenditure on development investment 2010 2011 2012 2013 2014 2015 2016 2017 72.622 81.689 93.137 80.617 52.509 111.678 130.578 126.099 70.524 79.199 21.468 23.758 90.009 76.735 52.509 26.575 29.449 21.798 108.587 127.157 98.511 26.967 28.409 34.163 In which: Expenditure on capital 22.734 24.364 28.803 20.567 construction 20.780 26.503 II. Payment of debt (principal and 10 11 746 1.249 577 interest) 18.652 22.661 29.669 32.297 30.701 35.358 III. Concurrent expenditure IV. Supplementing financial 11 10 10 10 10 10 reserve fund 23.437 17.576 20.692 20.360 14.880 V. Source transfer expenditure 82 22.069 11.569 11.501 13.361 VI. Nonbudget expenditures B. Expenditure from revenue managed 3.128 3.882 through the budget 2.098 2.490 3.091 28.156 30.945 4.439 595 35.695 39.497 10 10 34.339 24.246 24.265 … 3.421 … Source: Hanoi Statistical Yearbook 2017 Management of capital and properties formed from the state budget Hanoi Department of Finance requires Departments, Boards, Branches, unions, People's Committees of districts, towns to have purchased asset management software for units in the area, directs agencies and subordinate units to review and collect files and information Inspection and examination of state budget compliance Hanoi Department of Finance has issued regulations on inspection and compliance with laws at the state budget management agencies in Hanoi. Annually set up intersector inspection teams to review some enterprises with the contents of observing the price declaration, price listing and implementation of declared prices Coordination in state budget management Hanoi Department of Finance is the focal point to receive and follow the direction of the City Party Committee, People's Council, City People's Committee and Ministry of Finance in implementing financial budget tasks 3.4. Budget management results of Hanoi Department of Finance 3.4.1. Revenue budget completion rate In recent years, the results of Hanoi's budget revenues have all reached and exceeded the estimates Not only that, the revenue structure has shifted in a positive direction, increasing revenues from domestic sources. 3.4.2. Expenditure budget completion rate In the period of 2010 2017, the actual expenditures in the total local budget expenditure of Hanoi tend to exceed the estimate but balanced with the revenue exceeding the estimate, we can see that the balance of revenue and expenditure of Hanoi is maintained. In recent years, Hanoi's budget expenditure structure has also shifted in a positive direction. Specifically, increasing the proportion of budget expenditure for development investment, reducing the proportion of recurrent expenditure 3.4.3. Budget balance capability In the period of 2010 2017, Hanoi always ensures its budget balance according to the principle of revenueexpenditure offset and increase the balance over the years 3.4.4. Compliance with regulations on budget execution Hanoi Department of Finance has implemented operations to ensure compliance with the regulations in: Compliance in the preparation and allocation of budgets; Adjust the allocation rate between budget levels; Balance between budget revenues and expenditures 3.5. Assessing the influence of factors on state budget management activities of Hanoi Department of Finance Seven factors in the model are assumed to positively influence the state budget management activities of Hanoi Department of Finance In particular, the factors have been encrypted according to the following table: Factor Number of scales Code State budget management activities HQ1 => HQ6 Socioeconomic conditions of Hanoi DK1 => DK5 Provisions on decentralization of state budget management PC1 => QT5 Procedures and procedures in state budget revenues and expenditures Provisions on inspection and examination of state budget compliance Policies to encourage and ultilize state budget resources QT1 => QT5 KT1 => KT6 KK1 => KK5 Organizational structure and capacity of civil servants BM1 => BM6 Facilities for state budget management VC1 => VC5 Testing results Cronbach’sAlpha reliability test Cronbch’s Alpha analysis results show that there are independent variables QT4; QT5; KK1; BM6 and VC5 have Cronbach's Alpha coefficient if Item Deleted > Cronbach’s Alpha coefficient, these variables do not guarantee reliability, so they are excluded and not included in the next analysis The remaining variables are reliable and are included in the EFA factor analysis EFA factor analysis. The condition for analyzing the discovery factor is to satisfy the following requirements: Factor loading factor > 0.5; KMO coefficient: 0.5 ≤ KMO ≤ 1: KMO coefficient (KaiserMeyerOlkin) is an indicator used to consider the suitability of factor analysis. A large KMO value means that factor analysis is appropriate According to the research model, there are 07 groups of factors with 37 research variables affecting the efficiency of state budget management. Cronbch’s Alpha analysis results shows that 05 observed variables are not reliable enough, the remaining 32 observed variables were analyzed using the EFA discovery factor analysis method with Varimax rotation Use the verification method (KaiserMeyerOlkin) and Bartlett to measure the compatibility of the sample. KMO and Bartlett's tests in factor analysis showed that KMO coefficient is 0.804 (> 0.5) with significance level of sig = 0.000 (