How will the funds for implementing the downsizing of the workforce be allocated and used?

The Ministry of Finance is seeking feedback on the draft Circular guiding the determination of funding sources and the preparation of budgets, management, use, and settlement of funds for implementing the policy of downsizing the workforce.

Accordingly, the preparation, allocation, use, and settlement of state budget funds for implementing the personnel downsizing policy shall be carried out in accordance with the provisions of the State Budget Law and its guiding documents. This Circular provides supplementary guidance on the following regulations:

Prepare a budget estimate for the state budget to implement the policy of downsizing the workforce.

For ministries and central agencies:Annually, based on the implementation of the personnel downsizing policy (including the number of personnel subject to downsizing and the amount of severance pay for each individual, as prepared by the head of the agency, organization, or unit directly managing the personnel subject to downsizing and approved by the competent authority as stipulated in Clause 3, Article 12 of Decree No. 29/2023/ND-CP); and the personnel downsizing plan for the following year as stipulated in Clause 2, Article 12 of Decree No. 29/2023/ND-CP, the relevant financial planning department shall be directed to prepare a budget estimate for implementing the personnel downsizing policy. This estimate shall be included in the annual state budget estimate and submitted to the corresponding financial agency for presentation to the competent authority for allocation and assignment of the personnel downsizing budget estimate within the annual budget of the Ministries and central agencies.

DFor local areas:Based on the implementation of the personnel downsizing policy (including the number of personnel subject to downsizing and the amount of severance pay for each individual, as prepared by the head of the agency, organization, or unit directly managing the personnel subject to downsizing and approved by the competent authority as stipulated in Clause 3, Article 12 of Decree No. 29/2023/ND-CP), and the personnel downsizing plan for the following year as stipulated in Clause 2, Article 12 of Decree No. 29/2023/ND-CP, localities shall develop a budget estimate for the implementation of the personnel downsizing policy for the overall plan year, incorporating it into the needs for salary reform in the annual state budget estimate.

Allocation and use of state budget funds to implement the policy of downsizing the workforce.

For ministries and central agenciesThe state budget funds allocated for implementing the personnel downsizing policy are distributed from the non-autonomous funding sources of the budget-using units.

Based on the approved list of personnel reductions, ministries and central agencies shall proactively use their annual allocated state budget to pay benefits and entitlements to those subject to personnel reduction as prescribed.

For local authorities:The allocation and use of state budget funds for implementing the policy of downsizing the workforce in localities shall comply with the provisions of the State Budget Law and its guiding documents.

Based on the approved list of personnel reductions, local agencies and units shall proactively use their annual allocated state budget to pay benefits and entitlements to those subject to personnel reduction as prescribed.

In cases where ministries, central agencies, and local authorities implement personnel downsizing improperly, the funds used for downsizing shall be recovered and deposited into the state budget, the downsizing decisions shall be revoked, and those not subject to downsizing shall be reassigned to their positions. Simultaneously, the responsibility of relevant agencies, organizations, units, and individuals shall be considered, and they shall be held accountable under the law for any improper implementation of personnel downsizing regulations.

Regarding the settlement of funds for implementing the personnel downsizing policy, the draft clearly states that the funds for implementing the personnel downsizing policy are included in the overall financial statements and settlement reports of agencies and units annually, as stipulated in the State Budget Law, the Accounting Law, and guiding documents.