The Vietnamese government will strictly punish anyone found guilty of misusing Danish Official Development Assistance (ODA) funds, Vietnamese Foreign Minister Pham Binh Minh told the press on Monday.
His comments came after the Danish Embassy in Hanoi announced that it would suspend aid for three climate-change research projects in Vietnam due to reports of fraud.
It will take time for the Vietnamese authorities to review all the information provided by Denmark about the alleged fraud, Minh said during a break in a National Assembly session on Monday.
He said two Vietnamese ministries charged with overseeing the projects the Ministry of Science and Technology and the Ministry of Agriculture and Rural Development are still reviewing the charges.
Police have not yet been called in to the investigation, he added.
Last Friday, Denmark's Ministry of Foreign Affairs released a Price Waterhouse Coopers (PWC) report alleging the misuse of US$547,000 in four Vietnamese climate change projects.
According to the ministry, signs of irregularities were uncovered in the four projects funded by the Danish International Development Agency (DANIDA) last October, and the misused funds accounted for 23 percent of the total project budgets.
The PWC report alleges that all of the irregularities were committed by Vietnamese participants, although the four projects involved both Danish and Vietnamese partners.
Most of the improperly allocated funds were spent on salaries and bonuses for project employees as well as unclear expenditure items, according to the report.
One of the four projects will proceed due to the relatively small quantity of misused funds, the embassy said.
Minister Minh said that the project investors have expressed their willingness to provide information about the projects.
"It means things will soon be clear," Minh said.
Vietnam has been a recipient of ODA funds for years and has been regarded by international donors as one of the countries using its aid most effectively, according to Minh.
"Some ODA funding has been misused, but not much compared to the total number of ODA projects.
"The Vietnamese government always values ODA funds. I hope international donors will not lose their trust in Vietnam."
Vietnam's most recent ODA scandal involved Ho Chi Minh City's VND13.4 trillion ($642.7 million) East-West Highway project funded by Japan.
Huynh Ngoc Si, former deputy director of the city's transport department, was sentenced to life in 2010 for accepting $262,000 in bribes from the Tokyo-based Consultants International to help the company win contracts to build the highway.
The revelation led Japan, Vietnam's top ODA provider, to suspend development assistance to Vietnam from December 2008 to February 2009.