PCM-14-2024

This decree establishes an Oversight Commission to manage the Property Institute after discovering 19 billion lempiras misused through trust funds between 2015-2022. The Commission will investigate failed projects, audit public fund usage, and present recommendations to restore transparency and legality in the institution.

Whereas the Constitution of the Republic establishes that the President of the Republic exercises the authority of the Executive Branch in representation of and for the benefit of the people, having among her attributions the direction of the General Policy of the State and its representation, as well as issuing Agreements and Decrees in accordance with Law and administering Public Treasury (articles 235 and 245, numerals 2, 11 and 19).

Whereas in accordance with the Constitution of the Republic, all ordinary fiscal revenues shall constitute a single fund, which shall be administered by the Executive Branch. For the collection, custody and disbursement of such funds, there shall be a general treasury service. The Executive Branch, however, may delegate to the Central Bank the functions of collector and depositary. The law may also establish special payment services. Likewise, it establishes that all ordinary fiscal revenues shall constitute a single fund (articles 355 and 363).

Whereas the General Law of Public Administration provides that the President of the Republic has under her charge the supreme direction and coordination of the centralized and decentralized Public Administration and in the exercise of her functions may act by herself or in Council of Ministers (article 11).

Whereas the General Law of Public Administration establishes as fundamental competencies of the State Department of the Office of Finance (SEFIN), matters concerning the formulation, coordination, execution and evaluation of policies related to Public Finance; the execution of the General Budget of Income and Expenditures of the Republic; matters relating to public credit and debt, the management of the Treasury and the Pay Office of the Republic, the registration, administration, protection and control of national assets and the programming of public investment within the framework of priorities established by the Presidency of the Republic (article 29, numeral 3).

Whereas in accordance with the provisions of the Budget Organic Law, collections must be entered into the Single Treasury Account System (CUT), which has as its purpose the orderly management of public funds and through the General Treasury of the Republic (TGR) provide the necessary funds to effect in a timely manner the payments of the State's obligations.

Whereas, in violation of the provisions of the Constitution of the Republic, through laws, Executive Decrees and administrative provisions, the creation of bank accounts outside the Single Treasury Account System (CUT) has been promoted, weakening the management of the General Treasury of the Republic (TGR) and facilitating acts of public-private corruption with veneers of legality in the management of public resources.

Whereas the massive constitution of trust agreements for the administration and investment of public funds through technical committees violated the constitutional principle of Single Treasury Account; generated public-private corruption through the direct granting of supply and service provision contracts without competition and involving monopolization, in addition to being granted for periods exceeding four years and without the corresponding legislative approval.

Whereas the Commercial Code in Subsection IV clearly establishes that "The trust agreement is a legal transaction by virtue of which the bank authorized to operate as trustee is attributed the beneficial ownership over certain assets, with the limitation, of mandatory character, of carrying out only those acts required for the fulfillment of the lawful and determined purpose to which they are destined"; it implies the cession of rights or the transfer of ownership of the assets in favor of the trustee and before third parties, the trustee shall have the consideration of owner of the rights or trust assets (articles 1,033, 1035 and 1036).

Whereas through Legislative Decree No. 82-2004 published in the Official Gazette "La Gaceta" on June 29, 2004, edition number 30,428, the Property Institute (IP) is created as a deconcentrated entity of the Presidency of the Republic, with legal personality and its own assets, which shall function with technical, administrative and financial independence.

Whereas from the year 2015 until the year 2022, the Property Institute (IP) ceased transferring collections to the Single Treasury Account (CUT) in the amount of approximately NINETEEN BILLION LEMPIRAS EXACT (L 19,000,000.00), operating outside the General Budget of Income and Expenditures of the Republic, as an entity external to the Public Administration, thereby violating constitutional and legal regulations, through the creation of trusts that administered public funds, but were located in private banking.

Whereas through Legislative Decree No. 11-2020 published in the Official Gazette "La Gaceta" on March 7, 2020, edition number 35,194, the Project Coordination Unit (UCP) was created, attached to the Trust for the Administration of the Project "Technological and Logistical System for the Administration of Property Rights in the Republic of Honduras (Trust SITEC-IP)", which implemented direct contracting processes and mechanisms in accordance with its own manuals and outside the State Contracting Law. The UCP was responsible for the execution of failed projects such as the Lomas del Diamante container houses project, which is under investigation by the Public Ministry.

Whereas the Trust SITEC-IP was created for the purpose of "Achieving the digital transformation of the Property Institute", but it was diverted for other purposes, such as alleged social works, purchases of stoves, supplies for beauty salons, fryers, machines for roasting chickens, for street paving, construction or conditioning of sports fields, construction of housing, and even diverted to other trusts such as FINA 2.

Whereas through Legislative Decree No. 66-2022 published in the Official Gazette "La Gaceta" on June 15, 2022, edition number 35,950, in its numeral 16) the Legislative Decree No. 11-2020 published in the Official Gazette "La Gaceta" on March 7, 2020, which contained the creation of the "Merger of Trust SITEC-Property Institute" was repealed, for which as of that repeal date no action could be executed within the scope of the Trust.

Whereas the State Department of the Office of Finance (SEFIN), after an exhaustive study and analysis of the applications for the incorporation of National Treasury funds into the budget of the IP for fiscal year 2023, determined the absence of supporting documentation of the programs and projects that are in execution and the subscription of contracts and/or agreements subsequent to the repeal of the Trust SITEC-IP, disbursements that are in the process of documentation for its referral to the corresponding authorities.

Whereas the Property Institute (IP) acts outside the powers of law, and has not submitted the basic documentation required to prove that the projects and processes have been or are being developed under conditions of transparency, legality and proper use of public resources.

Whereas before this serious situation, the State Department of the Office of Finance (SEFIN) communicated through official letter DCI-031-2024 dated May 27, 2024, that in compliance with the mandate of President Iris Xiomara Castro Sarmiento to combat public-private corruption and in her capacity as Coordinator of the Sectorial Cabinet for Coordination, Management and Transparency of Public Investment, would not make disbursements to institutions that did not comply with the criteria of transparency and legality in the management of public funds, particularly relating to the Property Institute (IP) project called "San Francisco de Asís Urban Infrastructure".

Whereas the General Law of Public Administration establishes that the Executive Branch may intervene wholly or partially all entities, organs or units of the Public Administration that operate at a loss, do not fulfill their functions or do not adequately provide the services for which they were created. If intervention proceeds, it shall be in charge of an Intervention Commission that shall be responsible for the administration of the intervened entity, organ or unit and shall conduct an evaluation of it, with the Advice of the Superior Court of Accounts; said Intervention Commission has the powers that correspond to the administrators thereof exercising their legal representation and shall have the necessary powers to establish timely recommendations, which allow the Powers of State to take the pertinent and timely actions, within the scope of their constitutional attributions (articles 98, 99 and 100).

Whereas for the accomplishment of the tasks corresponding to the objective of this Decree, it is necessary to appoint suitable persons of recognized integrity, civic virtue, professionalism and competence in the fulfillment of their functions, called to make up an Intervention Commission that shall act under the principles of transparency, efficiency and rationality.