Group B/C State-Funded Projects: Independent Settlement Audit Is the Investor's Choice, Ministry of Finance Clarifies
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Based on:193/2026/NĐ-CP - Ministry of Finance
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Decree No. 193/2026/ND-CP (effective from July 1, 2026) governs settlement of project investment capital. Clause 1, Article 9 requires mandatory independent audit of settlement reports for nationally important projects and Group A projects that use public investment capital, recurring state budget expenditure, or other state budget capital outside the scope of the Public Investment Law. A reader asked whether projects funded from recurring expenditure - such as road maintenance or irrigation repair projects funded through sector operating budgets - are also required to undergo mandatory audit before being submitted for appraisal and settlement approval. The Ministry of Finance responded that under Point b, Clause 1, Article 73 of the Construction Law, the investor (chu dau tu) is responsible for managing construction investment costs within the approved total investment amount. Independent audit fees represent only a small line item within that total, and whether to include this cost is decided at the time the project is approved. Therefore, for Group B and Group C projects using public investment capital, recurring state budget expenditure, or other state budget capital outside the scope of the Public Investment Law, the decision to hire an independent auditor before submitting the settlement report for appraisal rests with the investor - it is not a mandatory requirement, unlike for nationally important projects and Group A projects. If the investor chooses to engage an auditor, it must organize a competitive tender and sign an audit contract in compliance with procurement and contract law. For businesses acting as investors on Group B and C state-funded projects - particularly in road and irrigation infrastructure construction and maintenance - this clarification is an important legal basis for deciding whether to budget for independent audit costs within the total investment estimate, helping avoid unbudgeted expenses or delays when submitting settlement reports for approval.
The Question
On June 1, 2026, the Government issued Decree No. 193/2026/ND-CP on settlement of project investment capital (effective from July 1, 2026). Clause 1, Article 9 of the Decree states: "Nationally important projects and Group A projects (except those on the state-secret list) using public investment capital, projects using recurring state budget expenditure, or other state budget capital outside the scope of the Public Investment Law must have their settlement reports audited before being submitted to the competent authority for appraisal and approval."
The reader understood this to mean that projects funded from recurring state budget expenditure - for example, road or irrigation maintenance and repair projects funded through sector operating budgets - are subject to mandatory audit before submission for settlement appraisal and approval, and asked the Ministry of Finance to confirm.
Ministry of Finance's Response
Under Point b, Clause 1, Article 73 of the Construction Law: "The investor is responsible for managing construction investment costs from the project preparation stage to the construction completion stage, within the approved total construction investment amount of the project."
Independent audit fees make up a relatively small share and are just one of several cost items within a project's approved total investment. When the competent authority approves the investment project, it already decides whether to include this cost item in the approval decision itself.
Accordingly, for Group B and Group C projects using public investment capital, recurring state budget expenditure, or other state budget capital outside the scope of the Public Investment Law, whether to hire an independent auditor to audit the settlement report before submission for appraisal is a decision that rests with the investor - it is not a mandatory requirement, unlike for nationally important projects and Group A projects.
If the investor decides to engage an independent auditor, the tender for audit services must comply with procurement law, and the audit contract must comply with contract law.
Notes for Businesses
- The mandatory audit requirement under Clause 1, Article 9 of Decree 193/2026/ND-CP applies only to nationally important projects and Group A projects.
- For Group B and Group C projects using public investment capital or recurring state budget expenditure, independent audit is optional, at the investor's discretion, and must be budgeted for at the project approval stage.
- If an audit is conducted, the investor must hold a competitive tender to select the auditor and sign the contract in compliance with procurement and contract law.