Enhancing The Governance Mechanism for Extra-budgetary Funds in Vietnam: A Modern Public Governance Approach

Abstract

In the context of demanding enhanced efficiency and transparency within the public financial system, Extra-budgetary Funds (EBFs) are increasingly asserting a vital role in mobilizing, allocating, and utilizing resources for socio-economic development. However, the current management mechanism for these funds in Vietnam reveals several shortcomings, notably a structure that is fragmented and functionally overlapping, a lack of a centralized oversight mechanism, and a failure to fully meet modern public governance standards as recommended by the Organization for Economic Co-operation and Development (OECD) and the International Monetary Fund (IMF).

This study focuses on analyzing the theoretical framework for EBFs management, assessing the current organizational and operational mechanism of non-budgetary funds in Vietnam during the 2020–2024 period, thereby identifying legal, financial control, and accountability deficiencies. Based on a comparison with international experiences (South Korea, Indonesia, OECD), we propose an orientation to perfect the fund management mechanism towards unification, transparency, and high accountability. Key solutions include: (i) perfecting the legal framework governing fund operations; (ii) applying the Public Financial Management System (PFMS) for revenue and expenditure monitoring; (iii) strengthening the auditing and supervisory role of the Ministry of Finance (MOF) and the State Audit Office of Vietnam (SAV); and (iv) promoting information disclosure and digital transformation in fund management. The research findings provide a reliable scientific basis for perfecting the public financial management institutional framework and enhancing the efficient use of public resources in Vietnam.