Overspending, spending for the wrong purpose: Who is responsible in public non-business units?

1. Legal framework for expenditure management in public non-business units

Public expenditure in public non-business units is governed by the Law on the State Budget 2015 and guiding documents such as Decree 60/2021/ND-CP regulating the mechanism of financial autonomy of public non-business units. These regulations require that all recurrent expenditures (salaries, operations) or investment expenditures (facilities, equipment) must comply with the principles of transparency, for the right purpose, and in accordance with the approved estimates. In addition, the Law on State Audit 2015 lays the foundation for the supervision and handling of violations in the use of the public budget.

Under the current legal framework, public non-business units must make annual expenditure plans, make periodic reports, and submit to inspections from superior management agencies and state auditors. Any act of overspending (spending in excess of estimates) or spending for the wrong purpose (using public money for personal or illegal purposes) is considered a violation, with the responsibility belonging to the head of the unit and the individuals directly involved.

2. The current situation of overspending and misspending: a problem that is not new

The reality in Vietnam shows that overspending and misspending are not a rare problem. The State Audit's 2023 audit report indicates that a series of public non-business units have exceeded the estimate by hundreds of billions of VND, mainly from regular expenses such as unnecessary equipment procurement or improper contract payments. Some more serious cases, such as at Dong Nai Provincial General Hospital (2022 audit report), found that tens of billions of VND were misspent on activities not related to public health.

Causes of this situation include: lack of transparency in financial management, weak capacity of the accounting team, and sometimes deliberate actions from leaders or authoritative individuals. These violations not only cause budget losses but also reduce the quality of public services, directly affecting the people – the main beneficiaries of public non-business units.

3. Who is responsible for overspending or misspending?

When the public budget is overspent or misspent, determining responsibility is an important step to handle wrongdoing and prevent recurrence. Depending on the role and level of involvement, the responsibility may belong to many subjects in the public non-business unit, with the support of lawyers to clarify the legal consequences.

Head of Unit

Heads – such as principals, hospital directors, directors – are primarily responsible for having the authority to approve and monitor spending. They must ensure that the budget is used for the right purpose, transparently, and in compliance with the estimates. If they allow overspending or wrong expenditure to occur due to lack of supervision or intentionality, they may be disciplined (warning, dismissal) or criminally prosecuted according to Article 219, Criminal Code 2015 (crime of violating regulations on management and use of State property, causing loss, waste), with a prison sentence of 1-20 years depending on the value of the damage.

Accountants and Finance Officers

Accountants and financial officers are directly responsible for the preparation of documentation, payments, and financial reporting. If they deliberately make false records, spend for the wrong purpose, or fail to comply with the regulations on budget management under the Accounting Law 2015, they may be disciplined or criminally prosecuted for the crime of embezzlement of assets (Article 353, Criminal Code 2015) or the crime of abuse of power in the performance of official duties (Article 356). with a prison sentence of 2-20 years. HTC Vietnam's consulting services assist in assessing violations, guiding the preparation of legal financial statements, and protecting personal interests when investigated.

Leadership Team

When the violation comes from a collective decision (management board, board of directors), responsibility is divided based on the level of participation of each member, according to the principle of collective responsibility in Decree 60/2021/ND-CP. If the collective approves spending for the wrong purpose, each member may be disciplined or administratively handled depending on the role.

4. Legal consequences:

Depending on the severity of the violation, the forms of handling include administrative fines, budget arrears, compulsory compensation for damages, or criminal prosecution if there are signs of embezzlement or appropriation of public property. Criminal law clearly stipulates that intentional acts of causing damage to public property can lead to prosecution for personal or organizational liability. The case at AIC Company in Dong Nai in 2022 is proof, when leaders and related officials were sentenced to prison for overspending billions of VND from the budget.

The determination of responsibility in overspending and misspending not only aims to handle violations but also sends a message about the severity of public finance laws. From the head, finance officers, to the leadership team, all face consequences if there is a lack of transparency or deliberate violations, requiring units to improve their responsibility and management capacity to avoid legal risks.

Overspending and misspending in public non-business units not only cause budget losses but also raise questions about the responsibility of public financial management. The head, accountant, and the leadership team can all be held accountable depending on the severity of the wrongdoing, with consequences ranging from discipline to criminality. To prevent this, units need to increase transparency, improve financial management capacity, and apply digital technology in spending monitoring. If you are struggling to comply with recurrent spending regulations or need legal assistance when a violation occurs, learn more here for in-depth advice and effective solutions.

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(Written by: Le Thi Ngoc Tram; Date written: 23/02/2025)

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