A Proposal to Address Tens of Thousands of Billions in Financial Matters Through Auditing Public Investment Projects

Through its annual audits of public investment projects, the State Audit Office of Vietnam has recommended financial rectifications amounting to tens of thousands of billions of dong. These rectifications include recoveries to be paid into the state budget, reductions in payments, and other necessary adjustments.

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Multiple Issues Uncovered Through 53 Investment Audits

Public investment is recognized as a driver of growth and a catalyst for attracting various investment resources. Notably, since 2023, public investment has witnessed a significant transformation, with the National Assembly approving a substantial amount of VND 711,684 billion. As of the end of January 2024, VND 708,252 billion has been allocated in detail, reflecting a 22.1% increase compared to 2022. However, alongside the achievements, certain issues persist in public investment that require attention.

According to the State Audit Office of Vietnam (SAV), 53 operational audits in the field of public investment were conducted between 2017 and 2022. These audits focused on pressing issues that garnered public attention and served the National Assembly’s supreme audit agenda.

Notable examples include audits of national target programs, capital allocation for the socio-economic recovery and development program as per the National Assembly’s resolution, and the population stabilization and socio-economic development plan in the Song Da Reservoir area for the Hoa Binh Hydropower Plant construction.

The audits focused on pressing issues of public concern and served the supreme audit agenda of the National Assembly.

The audits conducted by SAV revealed several shortcomings in mechanisms, policies, and implementation processes. Deficiencies in project preparation, appraisal, and approval led to multiple revisions in total investment and budget estimates, impacting investment planning and causing project delays.

Additionally, most projects required adjustments in scope and total investment increases. Delayed progress was also a prevalent issue, affecting many critical infrastructure projects and resulting in increased costs and reduced efficiency.

Furthermore, capital planning has been misaligned with reality, with a situation of “capital waiting for projects.” This refers to projects that lack investment procedures and conditions for annual capital allocation yet still receive capital proposals from ministries, sectors, and localities, leading to unallocated capital.

There are also instances of scattered and fragmented investments, with capital allocation not adhering to criteria and failing to prioritize urgent and important projects with substantial volumes in some ministries, sectors, and localities.

Addressing Scattered and Wasteful Investment

In this context, based on audit recommendations, the Ministry of Planning and Investment and other agencies have advised the Government and the Prime Minister on effective public investment management solutions that align with practical situations, promote transparency, and focus on key areas.

One notable improvement is the resolution of scattered and prolonged investment practices, contributing to enhanced investment efficiency in line with the goals and orientations of the five-year socio-economic development strategy.

Public investment capital has been allocated more concentrically, continuing to address scattered, fragmented, and wasteful investment practices. Autonomy and proactiveness in capital allocation for specific projects have been strengthened, ensuring alignment with development objectives and orientations.

Regarding the institutional framework, since the beginning of 2021, the Government has closely collaborated with National Assembly agencies, resulting in the submission of essential mechanisms and policies to the National Assembly. These contributions have facilitated the resolution of challenges and bottlenecks, unlocked various investment resources, and established legal corridors for emerging issues to achieve the mid-term public investment plan for the 2021-2025 period successfully.

Notably, through annual public investment project audits, SAV has recommended financial handling of tens of thousands of billion VND, including budget recoveries, payment reductions, and other measures. Simultaneously, ministries, sectors, and localities have been urged to promptly address shortcomings and make necessary improvements. The audits have also identified policy gaps and inconsistencies, leading to recommendations for revisions to ensure effective management and utilization of public investment capital.

SOURCEcafef
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