The general State Auditor of Vietnam’s report on the audit in 2018 showed that Vietnam Development Bank was in a serious loss.
Loss of nearly 5 trillion dong, bad debt was more than 46 trillion dong.
Specifically, the audit of the Vietnam Development Bank (VDB) of the State Audit of Vietnam (SAV) showed that VDB’s credit activity had encountered many difficulties, resulting in VDB’s revenue and expenditure gap in 2018 was minus more than 866 billion dong.
Remarkably, the bank’s accumulated loss as of December 31, 2018, was over 4.8 trillion dong. Bad debt as of December 31, 2018, was over 46.1 b trillion dong, accounting for 17.2 percent of total loans.
In particular, currently, the figure of interest rate compensation that the state budget must subsidise for VDB as of December 31, 2018 was very high, amounting to 13.496 trillion dong. Meanwhile, the risk provisioning was only 5.79 trillion dong, equal to 12.5 percent of the total bad debt. SAV assesses this, making ‘great potential risks in the operation of the organisation.’
In addition, SAV transferred the records of two cases showing signs of criminal law violations to the Investigation Police Department for strict handling according to law provisions due to the audit results at VDB.
The case of Thai Hoa Vietnam Group Joint Stock Company showed signs of making a false record of goods sale and purchase between the Parent Company and its Subsidiary to validate the bank loan application in order to reverse the debt used for other purposes, which lead to the failure of repayment of principal and interest, as of April 30, 2019 was 342.7 trillion dong. The company was not transparent in using the loan, did not coordinate with the bank in checking goods formed from the loan.
The case of Phuc Hung Construction Co., Ltd had signs of falsifying loan documents to be disbursed and use loans for other purposes, resulting in the failure to repay principal and interest until April 30, 2019, of 32 billion dong (the company had been shut down since 2011). Transaction centre One VDB had not yet fulfilled its responsibilities in inspection and supervision of customers.
Many errors were discovered
According to SAV, the total result of financial settlement as of September 30, 2019, was 61.7 trillion dong, of which the number of proposals for increase of revenue was 6.197 trillion dong, decrease of 12.842 trillion dong, and other treatment of 42.693 trillion dong.
A number of thematic audits uncovered many errors and shortcomings that need improving and overcome, which were auditing the implementation of autonomy mechanism for public universities in the 2016 to 2018 period at the Ministry of Education and Training; auditing the implementation of the autonomy mechanism for public hospitals in the 2016 to 2018 period at the Ministry of Health, and so on.
Additionally, the Audit of the Programme on socio-economic development of regions in the period of 2016 to 2020 according to Decision No.1256/QD-TTg of the prime minister financially dealt with 2.534 trillion dong, and at the same time evaluated that specific targets would be difficult to achieve by 2020.
The audit of the implementation of Resolution No.42 of some credit institutions had shown that the rate of the number of files handled under Resolution 42 was still low. The handling measures under Resolution 42 included six groups of measures, of which the main possible one was only in the form of seizing collateral and selling debt at market prices. Other forms had not been applied.
Audit of the Enterprise Arrangement and Development Fund for the period of 2011 to 2017 showed that the source of the Fund was quite large. As of December 31, 2017, after being handed over to the Ministry of Finance, the Fund’s balance was recorded at 112.513 trillion dong.
The remaining receivables and payables that had not been remitted to the Fund were certified at 3.536 trillion dong by SAV. The amount of State budget advance to invest in five key hospitals according to the prime minister’s decision from the Fund had not yet been monitored was 9.329 trillion dong.
Local budget audits of provinces and cities directly under the Central government have found that some localities did not deliver all the budget estimates right from the beginning of the year, but left operating in contravention of the State Budget Law. Specifically, they allocated funding to subordinate units without specific spending tasks. There was the situation of improper expenditures of funding sources, targeted supplementary funding. The national targeted programme was still in surplus and had yet to pay the central budget.
Besides, the advance of the estimate from the central budget to December 31, 2018, had not allocated capital to recover 10.591 trillion dong.
According to SAV, the management and implementation of budget revenue were not tight. There still remained omitting revenue sources, tax evasion, tax debt, and large budget revenue loss.
In particular, due to tax reconciliation at 1,428 non-state enterprises, SAV determined to pay the State budget an increase of 585 billion dong, a loss decrease of 1.071 trillion dong, a tax increase of 1.2977 trillion dong.
