The state financial management for foreign aid projects managed by the ministry

VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL GRADUATE THESIS THE STATE FINANCIAL MANAGEMENT FOR FOREIGN AID PROJECTS MANAGED BY MINISTRY OF HEALTH QUẢN LÝ NHÀ NƯỚC VỀ TÀI CHÍNH ĐỐI VỚI CÁC DỰ ÁN VIỆN TRỢ NƯỚC NGOÀI DO BỘ Y TẾ QUẢN LÝ Major: Financial management Code: 8340202.01QTD Student: VU THI HONG NHUNG Supervisor: DR. DO PHUONG HUYEN Hanoi, 2024 ACKNOWLEDGEMENT During the time of preparing and completing my report, I was received numerous support and encouragement from many people. In addition, this is hereby to express my sincere gratitude to them. First and foremost, I would like to give my sincere thanks to the lecturers, especially to my supervisors Dr.

Do Phuong Huyen for her devoted attention, lessons and guidance, which have equipped me with key knowledge and essential skills throughout the course. More importantly, everything I have learned here would undoubtedly help me tremendously in my work in the future. Second, I wish to express my gratefulness to my colleagues in Ministry of Health and in partner companiesfor their enthusiastic support and creating favorable conditions for me to have more useful information to complete this report I would also like to thank lecturers at International School - Vietnam National University for their useful supports during studying and researching to complete this paper. This course has equipped and improved and added a lot of knowledge about the different areas.

In addition, the course also helps me to have a relationship and opportunity to share information and learn from other students in the program. Hanoi, 2024 Vu Thi Hong Nhung ii TABLE OF CONTENT ACKNOWLEDGEMENT. ii LIST OF ABBREVIATIONS. vi LISTS OF TABLES .vii LIST OF FIGURES.

Research objects and scope. LITERATURE REVIEW AND THEORIES ABOUT STATE FINANCIAL MANAGEMENT FOR USING ODA CAPITAL IN HEALTH SECTOR. The international studies on effectiveness of managing and using ODA capital resources .2 The Vietnamese studies on effectiveness of managing and using ODA capital resources. The research gaps and a necessary for further study.

Overview of official development assistance (ODA). Definition and characteristics of ODA. The ODA impacts. ODA for health sector.

Theories about state financial management for using ODA capital in health sector. The principals of state financial management for using ODA capital. The foreign aid projects management. The organizational model.

Content and management process. The effectiveness of ODA capital using and state financial management for foreign aid projects in the health sector. The evaluate criteria. The impact factors on effectively using ODA capital and state financial management in the health sector.

Experience in state management for ODA projects of some countries in the world. Some countries’ experiences. Lessons learnt for Vietnam. Designing scales of evaluate the effective using ODA capital.

Designing a scale of factors impacts to effectively using ODA capital and state financial management. Sample and data collection. Analyzing data plan. Reliability analysis by Cronbach’s alpha.

Exploratory factor analysis. THE REALITY OF STATE FINANCIAL MANAGEMENT FOR FOREIGN AID PROJECTS MANAGED BY MINSISTRY OF HEALTH AND RESEARCH RESULTS. The reality of foreign aid projects for health sector. Overview the health care system in Vietnam.

ODA capital mobilizing in health sector. Foreign aid projects managed by Ministry of health. Operational results of ODA capital projects. The reality of state financial management for foreign aid projects managed by Ministry of health.

Legal documents system guided using ODA capital and financial management for foreign aid projects. The reality of organizing the state financial management for foreign aid projects. Receiving foreign aid, coordinating and using ODA capital. Financial monitoring, inspecting and settlement of foreign aid projects.

Evaluating the effectiveness of using ODA capital for foreign aid projects managed by the Ministry of Health. Reliability analysis and scale. Exploratory Factor Analysis. The achieved achievements and limitations in effectively using ODA capital and state financial management for foreign aid projects managed by Ministry of health.

The achieved achievements. Limitations in state financial management for foreign aid projects. DISCUSSION RESEARCH RESULTS AND RECOMMENDATIONS TO IMPROVE THE STATE FINANCIAL MANAGEMENT EFFICIENCY AND INCREASE AN ATTRACTIVENESS OF ANNUAL ODA CAPITAL IN Ministry Of Health IN THE FUTURE. Discusion research results.

Evaluating results of effectively using ODA capital in health sector in Vietnam. Evaluating results of effectively using ODA capital and state financial management for foreign aid projects managed by MOH. Recommendations to improve the state financial management efficiency and in crease an attractiveness of annual ODA capital in MOH in the future. Government's orientation on attracting, managing and using ODA and concessional loans from foreign donors in the period 2021-2025.

The group recommends improving the capacity of management and executive staffs. The group recommends improving the capacity of construction contractors. The group recommends improving the project financial capacity.XIV v LIST OF ABBREVIATIONS 1. ADB : Asian Development Bank 2.

ASEAN : Association of South East Asian Nations 3. EU : European Union 4. IDA : International Development Association 5. IMF : International Monetary Fund 6.

NGO : Non government organization 7. ODA : Official Development Assistance 8. OECD : Organization for Economic Cooperation and Development 9. UNESCO : United Nations Educational, Scientific and Cultural Organization 10.

UNFPA : United Nations Population Fund 11. UNICEF : United Nations Children's Fund 12.WB : World Bank 13.WHO : World Health Organization 14. PMU : Project management unit 15.MOH : Ministry of health 16.SSA : Sub-Saharan Africa vi LISTS OF TABLES Table 2. Pilot testing result .1 – Budget statistics for health sector.2 – Project quantities by donors .3 – The quantity of accountants worked for some health foreign aid projects.4 – Aid projects devided by field in health sector .8: Partial correlation of regression coefficients – 1st time.

Partial correlation of regression coefficients – 2nd time. The result of regression coefficients model – 2nd time. Reliability of scale. Exploratory Factor Analysis of affecting factors to effectively using ODA capital and state financial management in the health sector.

Reliability statistics and exploratory factor analysis of affecting factors to effectively using ODA capital and state financial management in the health sector, 2nd time. XIV vii LIST OF FIGURES Figure 1. An organizational structure of PMUs. The program and project management process.

Organizing the state financial management apparatus. Financial management and PMU’s report. Gender and qualification of respondents .1 - Total ODA capital by year- committed capital projects accumulated annually. 50 viii INTRODUCTION In the process of global economic integrating, development capital investment is one of the determine factors for each country's success or failure.

For Viet Nam, in order to achieve its goals become a modern industrialized country, attracting investment capital becomes an important state’s strategy. In particularly, official development assistance (ODA) capital is assessed by the Vietnamese Government as one of the important state budget funds to be used for social economic development. According to a survey result of the national institute for financial, in a period from 1993 to 2020, the total amount of ODA capital has invested in Vietnam under the signed agreements reached 78.2 billion USD and the disbursed capital reached 58. This capital has prioritized mainly for developing healthcare, education, culture, transport and energy.

in which ODA investment for healthcare sector accounted for 10%- 20% [13, 26]. So that effectively using ODA capital and state financial management for foreign aid projects, along with state’s documents the Ministry of Health (MOH) has issued a circular No. 03/2013/TT/BYT to guide budget accounting apply for foreign aid projects to improve budget management and avoid loss. In addition, MOH is always monitor activities, adjust plans so that programs and projects fulfill their set goals and ensure that expenditures were conducted in accordance with Vietnamese government’s regulations and sponsors to speeding up the project implementation.

One of the important measures to increase an attractiveness of annual investment capital is improvement the organizational management, use capital effectively and for the right purposes, avoid losses to strengthen and raise donors’ trust. I am working in healthcare sector and my job directly relates to financial managing ODA projects, so my studying on a theoretical basis, assessing the state financial management reality specially the effectively using ODA capital in health 1 sector in Vietnam is necessary to propose some possible solutions to improve the state financial management for foreign aid projects. These are reasons why I chose a research topic: "State financial management for foreign aid projects managed by the Ministry of Health". This not only meets my job requirements but also creates good conditions for me to apply the knowledge I have equipped from the school to scientific research in reality.

Research objectives This study aims to analyse the reality of state financial management for foreign aid projects managed by the Ministry of Health that would be focus on factors impact to effectively using ODA capital and state financial management for foreign aid projects. It proposes some solutions to help MOH leaders enhance management efficiency and increase an attractiveness of annual OAD investment capital in next period. Research questions In this study, we would find out the answers to following questions: - How the state financial management for non-refundable ODA projects at MOH was conducted in the period of 2017-2021 - What factors impact to effectively using ODA capital and the state financial management for non-refundable ODA projects at MOH? - What solutions are proposed to enhance the state financial management efficiency and increase an attractiveness of annual ODA investment capital at MOH in following time? 3. Research objects and scope Based on the collected data in the period 2018 – 2023 from Ministry of Health.

However, the data of years 2022 and 2023 recorded with a number were zero because the Covid-19 epidemic has broken out in many countries and has greatly affected ODA capital. Many donor countries faced significant fiscal pressures due to the economic impacts of the COVID-19 pandemic. This led to some reductions or stagnation in ODA budgets, as governments had to prioritize 2 domestic spending for pandemic response and economic recovery efforts, the objects of the research is finding out the most important factor affecting on state financial management ồ ODA projects managed by the Ministry of Health and showing the distinctive characteristics of state financial management for foreign aid projects within Ministry of Health compared to other ministries. Research’s contribution Within the boundary of this thesis, base on evaluating the reality of state financial management for ODA projects managed by MOH, we proposed solutions to improve the state financial management efficiency and increase an attractiveness of annual ODA investment capital.

The research findings might be use for the MOH’s system in particular and for other Vietnamese sectors in general. Research structure Regardless of the introduction, conclusion, reference and appendix the thesis has four major parts as following. Chapter 1 Literature review and theories about the state financial management for using ODA capital in health sector Chapter 2: Research methodology. Chapter 3: The reality of state financial management for foreign aid projects managed by MOH and research resuluts Chapter 4 : Discussion research results and recommendation to improve the state financial management efficiency and increase an attractiveness of annual OAD capital in MOH in the future.

LITERATURE REVIEW AND THEORIES ABOUT STATE FINANCIAL MANAGEMENT FOR USING ODA CAPITAL IN HEALTH SECTOR Managing and using ODA capital in healthcare sector has remained a concern to both Vietnam and foreign researchers, experts. So far, many studies in Vietnam and on the world are related to attracting, managing and using health ODA capital resources as well as international experiences in managing this capital published in economic journals, research reports of consulting groups, donors’ annually reports and evaluation report of Vietnamese state agencies and of sponsors. The international studies on effectiveness of managing and using ODA capital resources Adèle Cassola, Prativa Baral et.