Summary of the Public Sector Budget

Be it approved as an Estimate of Income of the Central Administration for the Fiscal Year 2013, the sum of EIGHTY-NINE THOUSAND, FIVE HUNDRED FORTY-FOUR MILLION FOUR HUNDRED TWENTY-ONE THOUSAND SIX HUNDRED TWENTY-NINE LEMPIRAS EXACT (L89,544,421,629.00).

Be it approved as an estimate of income of the Decentralized Public Administration for Fiscal Year 2013 in accordance with the Sources of Financing, for the sum of FORTY-TWO THOUSAND ONE HUNDRED FIFTY-SIX MILLION TWO HUNDRED THIRTY-EIGHT THOUSAND ONE HUNDRED FIFTY-NINE LEMPIRAS EXACT (L42,156,238,159.00).

The expenses of the Centralized Public Administration, Fiscal Year 2013 by Institution and Purpose, are approved for a total of EIGHTY-NINE THOUSAND, FIVE HUNDRED FORTY-FOUR MILLION FOUR HUNDRED TWENTY-ONE THOUSAND SIX HUNDRED TWENTY-NINE LEMPIRAS EXACT (L89,544,421,629.00). The expenses of the Decentralized Public Administration, Fiscal Year 2013 by Institution and Purpose, are approved for a total of FORTY-TWO THOUSAND ONE HUNDRED FIFTY-SIX MILLION TWO HUNDRED THIRTY-EIGHT THOUSAND ONE HUNDRED FIFTY-NINE LEMPIRAS EXACT (L42,156,238,159.00).

The Secretary of State in the Office of Finance is instructed to make a reduction of ONE BILLION LEMPIRAS (L 1,000,000,000.00) to the budget of the Public Sector institutions detailed below: Institution Reduction 22 Honduran Social Investment Fund 5,670,848.00 24 Institute of Property 4,607,696.00 26 National Youth Institute 287,531.00 28 National Institute of Forest Conservation and Development 7,412,888.00 30 Presidential Office Secretariat 15,926,704.00 32 Institute for Access to Public Information 483,406.00 40 Secretariat of Interior and Population 79,049,033.00 41 Permanent Commission of Contingencies 2,290,983.00 50 Secretariat of Education 355,008,220.00 51 National Center for Education for Work 249,612.00 60 Secretariat of Health 177,657,568.00 61 Regulatory Entity for Water and Sanitation Services 145,243.00 70 Secretariat of Security 63,790,047.00 71 Direction of Investigation and Evaluation of the Police Career 879,450.00 90 Secretariat of National Defense 58,286,882.00 100 Secretariat of Finance 41,964,707.00 101 National Commission of Telecommunications 1,144,225.00 103 Executive Direction of Revenue 42,430,836.00 110 Secretariat of Industry and Commerce 3,046,585.00 120 Secretariat of Public Works, Transport and Housing 45,366,762.00 121 Direction of the Merchant Marine 537,748.00 122 Road Fund 14,287,401.00 130 Secretariat of Labor and Social Security 6,935,880.00 140 Secretariat of Agriculture and Livestock 14,287,760.00 141 Direction of Science and Agricultural Technology 2,747,680.00 144 National Program for Sustainable Rural and Urban Development 5,201,057.00 150 Secretariat of Natural Resources and Environment 14,810,252.00 151 National Commission of Energy 332,955.00 152 Executive Direction of Mining Promotion 210,534.00 160 Secretariat of Culture, Arts and Sports 3,798,331.00 161 Garinagu Culture Center of Honduras 126,569.00 170 Secretariat of Tourism 1,480,030.00 180 National Registry of Persons 7,990,629.00 200 General Prosecutor's Office of the Republic 772,141.00 201 Prosecutor's Office for Environment and Natural Resources 219,440.00 210 Supreme Electoral Court 9,589,483.00 240 Secretariat of Social Development 8,238,003.00 250 Technical Secretariat of Planning and External Cooperation 4,515,716.00 260 Secretariat of Justice and Human Rights 638,921.00 270 Secretariat of Indigenous Peoples and Afro-Hondurans 530,204.00 Total 1,000,000,000.00

The Secretary of State in the Office of Finance is instructed to make a reduction in the Budget throughout the Public Sector in the following spending objects: Cellular Telephony, Advertising and Propaganda, Equipment Rental for Traction and Lifting, Domestic Travel and Passages, International Travel and Passages, Fuels and Lubricants, among others, for a total amount of ONE HUNDRED SEVENTY MILLION EIGHTY-SEVEN THOUSAND SIX HUNDRED SEVENTY-FIVE LEMPIRAS EXACT (L.170,087,675.00), from the institutions detailed below: 003. National Commissioner of Human Rights 687,646.00 020. Presidency of the Republic 7,525,000.00 021. Family Allowance Program 6,388,955.00 022. Honduran Social Investment Fund 2,490,600.00 024. Institute of Property 415,861.00 025. National Program of Prevention, Rehabilitation and Social Reinsertion 158,760.00 026. National Youth Institute 714,461.00 028. National Institute of Forest Conservation and Development 3,568,023.00 030. Presidential Office Secretariat 4,060,884.00 032. Institute for Access to Public Information 134,594.00 040. Secretariat of Interior and Population 16,784,812.00 041. Permanent Commission of Contingencies 106,000.00 050. Secretariat of Education 6,620,562.00 051. National Center for Education for Work 209,878.00 060. Secretariat of Health 4,491,087.00 061. Regulatory Entity for Water and Sanitation Services 20,000.00 070. Secretariat of Security 7,412,150.00 071. Direction of Investigation and Evaluation of the Police Career 366,300.00 080. Secretariat of Foreign Relations 1,782,564.00 090. Secretariat of National Defense 3,672,530.00 100. Secretariat of Finance 4,609,950.00 101. National Commission of Telecommunications 1,281,902.00 103. Executive Direction of Revenue 3,050,429.00 110. Secretariat of Industry and Commerce 12,715,564.00 120. Secretariat of Public Works, Transport and Housing 435,826.00 121. Direction of the Merchant Marine 24,000.00 122. Road Fund 67,983.00 130. Secretariat of Labor and Social Security 5,192,000.00 140. Secretariat of Agriculture and Livestock 1,018,280.00 141. Direction of Science and Agricultural Technology 490,653.00 144. National Program for Sustainable Rural and Urban Development 2,980,612.00 150. Secretariat of Natural Resources and Environment 1,465,718.00 151. National Commission of Energy 115,200.00 152. Executive Direction of Mining Promotion 123,900.00 160. Secretariat of Culture, Arts and Sports 1,234,643.00 161. Garinagu Culture Center of Honduras 206,749.00 170. Secretariat of Tourism 6,000,000.00 180. National Registry of Persons 642,715.00 200. General Prosecutor's Office of the Republic 104,300.00 201. Prosecutor's Office for Environment and Natural Resources 93,600.00 210. Supreme Electoral Court 8,631,860.00 240. Secretariat of Social Development 194,600.00 250. Technical Secretariat of Planning and External Cooperation 2,072,678.00 260. Secretariat of Justice and Human Rights 781,975.00 270. Secretariat of Indigenous Peoples and Afro-Hondurans 1,130,781.00 449. Financial Services of the Central Administration 23,000,000.00 512. National Institute for Women 4,000,000.00 702. Francisco Morazán National Pedagogical University 6,000,000.00 507. Honduran Institute for Prevention and Treatment of Alcoholism, Drug Addiction and Drug Dependence 4,000,000.00 807. National Supplier of Basic Products 10,000,000.00 502. Honduran Institute for Children and Family 5,000,000.00 501. Honduran Tourism Institute 5,000,000.00 Total 170,087,675.00

The Secretary of State in the Office of Finance is authorized to make the necessary adjustments to the General Budget of Income and Expenses of the Republic and of the decentralized institutions approved for Fiscal Year 2013, through the use of the Budget Modification Form (FMP-DOS). CHAPTER IV GENERAL PROVISIONS RATIFIED FROM 2012 FOR 2013

For the Fiscal Year 2013, the articles of the General Provisions of the General Budget of Income and Expenditures and of the Decentralized Institutions contained in Legislative Decree 255-2011 and whose wording is identical to those shown in the present Decree are certified, as follows: [followed by list of article numbers]

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REPUBLIC OF HONDURAS > TEGUCIGALPA; M. D. C...6 FEBRUARY 2013 No. 33;044

CHAPTER V

GENERAL PROVISIONS FOR THE EXECUTION OF THE GENERAL BUDGET OF INCOME AND EXPENDITURES OF THE REPUBLIC OF THE DECENTRALIZED INSTITUTIONS

I. GENERAL STANDARDS OF BUDGETARY EXECUTION

focus on: i) The consolidation of Public Finances; ii) The recomposition of Public Spending strengthening Investment; and iii) Guarantee the sustainability of Public Debt. To this end, the Program of Reengineering and Monitoring of Institutional Management shall have as one of its main functions the monitoring of the activity of the Public Sector at its different levels to preserve compliance with these fiscal goals.

Violations of the budget that are not specifically sanctioned shall be punished with fines.

ARTICLE 13.- The Technical Secretariat of Planning and External Cooperation (SEPLAN) shall carry out monthly monitoring of institutional management, based on information from physical and financial execution of the POA-Budget at national, regional and municipal level, linked to the objectives and goals of the National Vision and Plan of Nation. ranging from TWENTY THOUSAND LEMPIRAS (L20,000.00) to TWO HUNDRED THOUSAND LEMPIRAS (L200,000.00), which shall be imposed by the Office of the Attorney General of the Republic to the responsible officials; based on the administrative procedure applied for such purpose by the Superior Court of Accounts, according to its severity, without prejudice to other administrative, civil and criminal responsibilities that may apply.

The amounts from the concept of fines collected shall be remitted to the General Treasury of the Republic and from these income, twenty percent (20%) shall be allocated to the Superior Court of Accounts to finance expenses related to audit and compliance actions with this Law.

The Technical Secretariat of Planning and External Cooperation (SEPLAN) is instructed, within the competencies conferred upon it by Law, to establish a National Vision and the Adoption of a Plan of Nation for Honduras; to present to the National Congress the Program of Reengineering and Monitoring of Institutional Management, which shall include a proposal for reforms to the institutional structure of the Public Sector, with the purpose of achieving substantial improvements in public management and its impacts on the provision of public goods and services to citizens, as well as contributing to the goals of fiscal consolidation. For this purpose, information must be recorded mandatorily by all institutions of the Central, Deconcentrated and Decentralized Public Sector, in the Integrated Financial Administration System (SIAFI) and in the Monitoring Platform of the POA-Budget regionalized and monthly of SEPLAN. Financial information must be recorded no later than the last day of the month and physical information within five (5) business days once the month has ended.

In order to have an early alert that allows halting extraordinary spending derived from salary commitments, SEPLAN shall require that the monthly report include a specific section in which the movements made in the different budgetary structures referred to permanent personnel, by contract in its various modalities and by daily wages are broken down; and project the commitments acquired for the entire fiscal year; ensuring that the budgetary ceiling and fiscal goals approved for 2013 are maintained.

Additionally, in the last quarter of each year, a report shall be formulated regarding the qualitative achievements and impacts on indicators, goals, strategic axes and sectoral, institutional objectives of the National Vision, Plan of Nation and Government Plan. The actions derived from the execution of the Reengineering and Monitoring Program of Institutional Management are considered an integral part of this report. The Secretary of State for Finance is empowered to make the budgetary adjustments necessary, as a consequence of the organizational reforms of the Public Sector presented by SEPLAN.

SEPLAN shall publish this report and the results of:

The Reengineering Program and Monitoring shall conduct monthly monitoring of public management on its Internet portal and on the transparency page of the same Secretariat. Its scope shall encompass all dependencies of the Central Public Sector, Deconcentrated, and Decentralized. It shall act furthermore, in a manner that contributes to complementary actions to the objectives of the policy directed to the Secretariat of the Presidential Office. Additionally, SEFIN shall provide complementary support to the objectives of the policy. The Secretary of State in the Presidential Office and the Court of Accounts and the Budget Commission of the National Congress shall provide the technical support deemed convenient.

The non-compliance with Articles 13 and 14 of this Law, by the official in charge of the Secretariats of State, Deconcentrated Bodies and Institutions Decentralized, in addition to the sanctions established in Article 10, shall give rise to censure by the National Congress, of which the Presidential Office shall be informed; likewise, disbursements by the Secretariat of State in the Department of Finance to the infringing institutions shall be suspended until said situation is remedied.

All institutions of the Central Public Sector, Deconcentrated and Decentralized, must submit within the first twenty (20) days of the following month after the quarter is completed, to the Secretariat of State in the Department of Finance (SEFIN), quarterly reports on their respective physical and financial execution of the Annual Operating Plan and the Budget. These reports must be prepared quarterly and in accumulated form. The monitoring and evaluation of the Annual Operating Plan and Budget shall be carried out by the institutions of the Public Sector without any exception, in accordance with the Technical Norms and Manuals of Procedures of the Subsystems of Budget, Personnel, Accounting, Public Credit and Public Investment by the Secretariat of State in the Department of Finance on the basis of information mandatorily registered in the Integrated Financial Administration System (SIAFI). Likewise, consideration must be given to information available in the Public Investment System (SISPU), in the Human Resources Administration System (SIARH), Teaching Administration System (SAD), and the Monitoring and Evaluation System (SME). The aforementioned institutions must enter monthly into SIAFI, financial information no later than the last day of the month and physical information five (5) business days after the month is completed. SEFIN shall send no later than fifteen (15) days after receiving the information, the quarterly report of monitoring and evaluation of institutional budget execution to the Secretariat of the National Congress, the Secretariat of the Presidential Office and the Supreme Court of Accounts; similarly they shall send a copy of this report to the Ordinary Legislative Budget Commission, to the Heads of each of the bancadas of the National Congress and to the Head of the Institution. SEFIN shall publish the reports on its Internet portal and on the transparency page of the same Secretariat. Quarterly, the Ordinary Legislative Budget Commission together with representatives of the different accredited bancadas that make up the National Congress, shall analyze the reports and hold Public Hearings in the institutions of the Central Public Sector, Deconcentrated and Decentralized, in order to exercise a financial and operational control function, for which they shall require the Secretariats of State in the Offices of the Presidency and Finance.

All Central Administration institutions that generate or receive income, whether from their own activities, contingent activities, or activities emanating from current laws, shall deposit in the General Income Account that the General Treasury of the Republic maintains in the Central Bank of Honduras the total of the same no later than two (2) days after receipt, using for this purpose the procedures of the Income Execution Module of the Integrated Financial Administration System (SIAFI) or the deposit receipt authorized by the State Secretariat in the Office of Finance. The State Secretariat in the Office of Finance may authorize, through the "Budget Modifications Module of the Integrated Financial Administration System (SIAFI)" and the respective opinion that will be issued by the General Directorate of Budget, up to fifty percent (50%) of the net income generated by activities of their own nature and that refer to the sale of goods and services, so that they may be used by such agencies and automatically expand their budget allocations after verification in the System of the record of income received.

The institutions described below are excepted from what is established in the previous paragraph, to which the following percentages are authorized:

• 1)

  To the State Secretariats in the Offices of Security and National Defense; to the General Directorate of Migration and Foreign Affairs and to the National Institute for Forest Development and Conservation, Protected Areas and Wildlife, directly shall be assigned up to eighty percent (80%) of the income from the different activities carried out by their agencies.

  For the use of these resources, the State Secretariats in the Offices of Security and National Defense shall present to the State Secretariat in the Office of Finance the Budget and the Expenditure Plan, which must include prevention and rehabilitation programs, and shall likewise inform the National Congress. Income from the issuance and renewal of passports received by the State Secretariats in the Offices of Interior and Population and Foreign Relations respectively are excepted, which shall be subject to compliance with the goal established in the Budget, for which Article 25 of this Law shall apply.

• 2)

  To the State Secretariat in the Office of Natural Resources and Environment, of the own resources it receives for environmental tariffs, canon, certifications or statements and any other income related to its competencies, shall be assigned up to seventy percent (70%).

• 3)

  To the General Directorate of Civil Aeronautics, in accordance with Article 101 of its Law, shall be assigned up to eighty percent (80%) of its own resources, which it generates from the collection of Civil Aviation Security Services, which must be invested in operational expenses. The Finance Secretariat should facilitate its connectivity to the Financial Administration System to operate accordingly.

• 4)

  To the Property Institute, shall be assigned up to seventy-five percent (75%) of the resources it generates from the collection of the services it provides, which shall be destined to cover operational expenses for the normal functioning of the institution, and the co-financing of Subsidy 31-2008 Supervision and Quality Control of the Cadastral Process and Property Registry in the Atlantic Department, financed with European Union funds.

• 5)

  To the Prosecutor's Office for the Environment and Natural Resources for actions concluded and final before any corresponding instance of the Judicial Power in matters of environment and natural resources, shall be assigned up to fifty percent (50%) of the resources generated as a result of the same.

• 6)

  The collections made by the Executive Directorate of Income (DEI) in the concept of data transport service (HONDUTEL) shall be transferred to it at one hundred percent (100%) as own resources which it must use in the following manner:

  • a)

    Seventy percent (70%) to cover the cost of services provided by the Honduran Telecommunications Company (HONDUTEL) for data and internet transport; as well as the updating, maintenance and permanent sustainability of the new and existing IT platform for the optimal functioning in its entirety of the Automated System of Honduran Customs Income (SARAH); and,

  • b)

    The remaining thirty percent (30%) shall be used for operational expenses of the Executive Directorate of Income (DEI).

    The Executive Directorate of Income (DEI) must inform quarterly of the management of these resources to the State Secretariat in the Office of Finance through the General Directorate of Budget.

• 7)

  To the television channels owned by the State shall be assigned one hundred percent (100%) of the values they collect for the services they provide and the different institutions of the State must invest as a minimum forty percent (40%) of their advertising expenses for television in the State channels in equal percentages for each channel.

• 8)

  The income that the National Registry of Persons (RNP) receives for the concept of the services it provides, shall be incorporated at eighty percent (80%), after verification of the existence of the corresponding deposits in the Integrated Financial Administration System (SIAFI), by the State Secretariat in the Office of Finance through the General Directorate of Budget.

• 9)

  To the Free Tourist Zone of the Bay Islands shall be assigned one hundred percent (100%) of the values they collect for the services they provide.

  The income received by the State Secretariat in the Offices of Public Works, Transport and Housing (SOPTRAVI) from the sale of electrical energy to the National Electrical Energy Company (ENEE), through the operation of the Nacaome Hydroelectric Plant, shall be entered in the General Treasury of the Republic and its use must be subject to what is established in the second paragraph of this Article, being used exclusively to cover operation and maintenance expenses of said Hydroelectric Plant.

  All institutions of the Central Administration that have received the percentage of their own income generated as referred to in the previous paragraphs and that do not use it in the Fiscal Year, must return the surplus values to the General Treasury of the Republic, no later than the first three (3) business days after the close of the Fiscal Year. In duly justified cases, the State Secretariat in the Office of Finance may authorize the incorporation in the current Fiscal Year of the resources received, incorporated and not executed in the previous period.

  For purposes of incorporation of own income generated and/or received by institutions of the Central Administration, these income shall be subject to deduction of amounts charged by the Banking System in the concept of collection service.

  ARTICLE 17.- The Medical and Dental Health Centers (CESAMO), Rural Health Centers (CESAR), Emergency Clinics, Maternal and Child Clinics; Hospitals, the Pharmacy Division, the Food Control Division, the Division of Diseases Transmitted by Vectors and the General Directorate of Health Regulation, all dependent on the State Secretariat in the Office of Health, may make use of their income recovered through fees to carry out operational expenses. Likewise, official educational establishments and other agencies of this State Secretariat that generate resources may make use of their own income, in accordance with what is established in the Regulations and the procedure that for that purpose was approved by the State Secretariats in the Offices of Health and Education with the State Secretariat in the Office of Finance, in order to properly and timely record own income received and expenses incurred financed with said income.

  This provision shall also apply to the Military Hospital and the Military Industry of the Armed Forces, which must register in the Integrated Financial Administration System (SIAFI), both income and expenses so that budget execution reports must reflect the original destination of these resources.

  The Internal Audit of each of the aforementioned institutions shall ensure compliance with this provision, in keeping with what is established in Article 119 of the Organic Law of the Budget. The State Secretariat in the Office of Finance through the General Accounting Office of the Republic must inform the Superior Court of Accounts and the Ordinary Budget Commission of the National Congress of the non-compliance with this provision.

  ARTICLE 18.- Income from tariffs, surcharges, authorized licenses or services provided by the National Telecommunications Commission (CONATEL) shall be paid to the General Treasury of the Republic or to any Bank of the National Financial System authorized. The income that the National Telecommunications Commission (CONATEL) receives abroad from the issuance of Radio Licenses paid by owners and lessees of ships or vessels as well as income from registration in the Registry of Ships and from the issuance of the Navigation Patent collected abroad by the General Directorate of the National Merchant Navy must be registered in the Income Execution Module of the Integrated Financial Administration System (SIAFI) through direct internet access and deposited in the Correspondent Banks abroad, which will transfer such values to the account established by the General Treasury of the Republic, and these collection agents shall inform said Treasury no later than two (2) business days after their collection.

The amounts collected by the application of the additional rate of thirty percent (30%) on the value of the sale of land, to which the third paragraph of Article 2 of Legislative Decree No. 131-98 of April 30, 1998 refers, as well as the four percent (4%) for tourist services, established in Article 43 of the same Decree, once entered in the General Treasury of the Republic, shall be incorporated into the Budget of the National Agrarian Institute (INA), and the Honduran Institute of Tourism (IHT) respectively, in accordance with what is established in Article 16 of these General Provisions and after verification of the deposit by the General Directorate of Budget, using for this purpose the automatic expansion mechanism, prohibiting the use of said funds for matters related to salaries and wages. The Internal Audit of each of the aforementioned institutions shall ensure compliance with this provision, in keeping with what is established in Article 119 of the Organic Law of the Budget.

ARTICLE 20.- The income that is received from actions executed by the Attorney General of the Republic before the Courts or Tribunals of the Republic resulting from operative actions carried out by the Superior Court of Accounts must be deposited in the General Treasury of the Republic in accordance with what is established in the first paragraph of Article 16 of this Law.

Of such income shall be distributed up to twenty percent (20%) to the Superior Court of Accounts and up to twenty percent (20%) to the Attorney General of the Republic for the automatic expansion of their respective budget allocations, and the remainder shall remain in the Fund of the General Treasury of the Republic.

The income received from the intervention of the Attorney General of the Republic (PGR), at the request of other Institutions, must be deposited in the General Treasury of the Republic and may be assigned to it through the automatic expansion procedure, up to ten percent (10%) of such income.

In the case of sanctions imposed by the Secretary of Labor and Social Security on companies that commit infractions and in which the Attorney General of the Republic (PGR) intervenes, the Secretary shall be assigned ninety percent (90%) of the percentage established in the previous paragraph.

All institutions of the Central Administration to which a percentage is assigned based on collections from own income must present to the General Directorate of Budget (DGP) the supporting documentation (payment receipt TGR-1) within fifteen (15) calendar days of the month following the month in which said income was generated; otherwise they will lose the right to budget credit for the corresponding fiscal year. These resources and those generated by the recovery of loans granted by forced liquidation operations of Financial System Institutions shall be allocated in order of priority for:

• i)

  reducing amounts of domestic debt for fiscal year 2013;

• ii)

  reducing amounts of floating debt registered in 2013;

• iii)

  to cover other expenses considered in the budget, giving priority to infrastructure investment projects especially in the areas of education, health and social investment.

  Equal treatment shall be given to recoveries and remainders of funds granted for payment to investors and/or depositors who were harmed by said forced liquidation and these shall be used to meet commitments derived from the same purpose.

  All the aforementioned values shall be incorporated into the Institution "449 Financial Services of the Central Administration". Such funds may not be used for professional fees, in contracts of another nature that are not necessarily incorporated in the current expense of salaries and wages. The second half of the month of December; which must be documented no later than December 30, 2013, in which case these resources shall be incorporated in the Budget of the following Fiscal Year in the month of January. Failure to comply with this provision will result in loss of the right to budget credit in question.

  ARTICLE 23.- For purposes of this Law, Net Income is understood as the result of subtracting from Total Income: the amount of loans received from both internal and external sources, transfers and internal and/or external donations, loan recovery, values generated by the application of Legislative Decree No. 105-2011 dated June 23, 2011, reformed by Decree No. 106-2011 dated September 6, 2011, as well as amounts collected as own resources, which should not be considered for the payment of transfers that must be granted to the different institutions.

When the Income of the Public Sector based on a percentage established in the Central Administration are greater than the amounts established by Law regarding Income, and should be deducted from them the values paid to the national banking system for the service of collection, tax refunds corresponding to the present Fiscal Year that are deducted from the respective collection, the refunds of taxes collected in excess in previous periods, the values registered as refunds for payments made in excess in previous Fiscal Years, the Executive Power is authorized so that through the Secretary of State in the Finance Office incorporates periodically the surpluses to the General Budget of Income and Expenses of the Republic through the procedure of budgetary attribution, which must be approved by the National Congress. Such resources may not be used to increase the budget of the Institutions that receive percentages established by Law, nor of the items for Salaries and Wages.

The transfers that must be granted to the different institutions of the Public Sector based on a percentage established by Law regarding income, shall be made in accordance with the programming of the General Treasury of the Republic and insofar as the corresponding collection is realized, this condition is extensive for the transfers that are made to institutions of the private sector.

All Transfers in accordance with the different institutions of the Public Sector that appear approved in the General Budget of Income and Expenses of the Republic, based on a percentage established by Law regarding income, their granting shall be subject to the value collected in the present fiscal year, independently of the value approved, just as established in the previous article. In this sense, the Finance Secretary will notify the values that are not granted so that the institutions can carry out the reprogramming of their POA and budget.

The revenues generated by the application of the Consular Tariff Law regarding consular activities, such as authentication or recognition of signatures, translation of documents or certification of translations and others related, shall be processed exclusively by the General Consulates, Consular Sections and Honorary Consulates; for this purpose, the beneficiary of the service shall pay the amount at a Bank previously authorized by the Central Bank of Honduras. The selected Bank shall transfer the funds periodically to an account in United States dollars opened at the Central Bank of Honduras in the name of the General Treasury of the Republic. Any collection outside the procedure established in this Article is strictly prohibited.

The revenues collected from the sale of passports abroad must be deposited in Correspondent Banks, using the procedure established in Article 26 of this Law. For those sold in the country, the procedure established in the Article of this Law must be followed. Once the collection from Passport Books has exceeded the goal provided in the General Budget of Income and Expenses of the Republic, for the surplus from the passports issued it shall correspond: 1) In the country, eighty percent (80%) to the General Directorate of Migration and Foreign Affairs; and 2) Abroad, forty percent (40%) shall be distributed to the Secretariat of State in the Department of Foreign Affairs, distributed thus: fifty percent (50%) for its operational expenses and the remaining fifty percent (50%) for equipment and operational expenses of the Embassies, and forty percent (40%) to the General Directorate of Migration and Foreign Affairs, dependent on the Secretariat of State in the Departments of Interior and Population, who shall incorporate it into their respective budgets through the automatic expansion mechanism. In order for the Secretariat of State in the Department of Finance to authorize the incorporation into the budget of these values, the Secretariat of State in the Department of Foreign Affairs must present the detail of the resources obtained from the delivery of passports and a copy of the record kept for such purpose by the Secretariat of State in the Departments of Interior and Population. ARTICLE 28.- In order to ensure progress in the process of operational decentralization in the execution of the respective budgets of all departmental regions and all hospitals of the Secretariat of State in the Department of Health with the exception of the Teaching Hospital, which shall be governed by the Inter-institutional Agreement between the National Autonomous University of Honduras (UNAH) and the Secretariat of Health, their respective approved allocations in the General Budget of Income and Expenses of the Republic may not be reduced, as well as the resources incorporated from any other source. With the exception of the budgetary allocation for medicines, since ninety percent (90%) shall be allocated exclusively to finance the purchase of pharmaceutical products for the central medicine warehouse through public procurement. ARTICLE 29.- The budgetary allocations destined for the payment of public services must be used exclusively to cover expenses incurred for these purposes. Consequently, transfers are prohibited to cover commitments of a different purpose. Quarterly, the Administrative Managements or their equivalent in the Institutions of the Central, Deconcentrated and Decentralized Sector shall simultaneously submit to the National Company of Electric Energy (ENEE), Honduran Telecommunications Company (HONDUTEL), National Autonomous Service of Aqueducts and Sewerage (SANAA) and to the Secretariat of State in the Department of Finance evidence of the budgetary execution of these allocations.

Any requirement for additional resources on the part of the Institutions of the Central Administration, Deconcentrated Institutions, Decentralized Institutions, Financial and Non-Financial Companies, aimed at satisfying unavoidable needs not foreseen in the Objectives and Results of the Annual Operating Plan contained in the approved Budget, must be addressed with resources from their own budget, through a physical and financial reprogramming of their objectives and results in accordance with the Technical Standards of the Budget Subsystem.

Officials and employees of the Public Administration (State Secretariats; Decentralized Entities, other institutions attached to Decentralized Institutions), to whom Travel Allowances and Other Travel Expenses are granted, as well as Representation Expenses within the country, must be subject to the express authorization of the President of the Republic and must comply with the determination of categories, zones, periods of missions and limits for travel allowances set forth in the Regulation of Travel Allowances and Other Travel Expenses for Officials and Employees of the Executive Branch. The supporting documentation shall be submitted for review by the Administrative Management or its equivalent in each institution and in the event that falsifications or alterations are verified, the total return of the amount granted in the altered document or documents must be made within a period not exceeding five (5) business days after notification, without prejudice to the administrative and criminal liability in which they may incur.

Returns of actual surpluses of travel allowances and other travel expenses must be registered in the Trip Settlement and deposited with the General Treasury of the Republic or Institutional Treasury by means of a cashier's check accompanied by the form designated for such purpose. If a trip is not carried out, the value of the travel allowances and other expenses that have been granted shall be returned within a period not exceeding five (5) business days after receipt. Under no circumstances may these resources be used for other purposes.

Representation Expenses within the country are the amounts determined for non-liquidable expenses, inherent to the exercise of their functions, the same being granted to officials according to their position and responsibilities and shall be determined by the President of the Republic for the Central Administration and Decentralized or by the Superior Governing Body when it is the Decentralized Administration. These expenses are different from those referred to in the Regulation of Travel Allowances and Other Travel Expenses for Officials and Employees of the Executive Branch. Such representation expenses may be granted only to the President of the Republic, Secretaries and Sub-Secretaries of State and heads of Decentralized Institutions, as well as to the heads of Decentralized Bodies that have ministerial rank. For other officials of the Executive Branch, the authorization of representation expenses shall be formalized through the respective Agreement of the President of the Republic or Governing Body as appropriate with validity only for the present Fiscal Year. The budgetary allocations of the Representation Expenses Abroad item that appear in the Diplomatic Representations and Consular Representations Activities of the External Promotion and International Management Program of the State Secretariat in the Office of Foreign Relations shall serve exclusively to cover expenses directly linked to the operation of Embassies and Consulates Abroad.

The budget allocations contained in the Ministry of State in the Office of Security in Program 11 Criminal Investigation Services, Activities: 01 Criminal Investigation Services, 02 Organized Crime Investigation Services, 03 Minor Death Investigation Services; Program 12 Police Prevention and Protection Services, Activities: 01 Senior Management and Coordination, 02 Protection of Property and Persons, 03 Traffic Control and Improvement, 04 Prevention Services; Program 13 Police Educational System, Activities 01 Senior Management and Coordination, 02 Officer Training, 03 Police Technological Training; Program 14 Administration of Detention Centers, Activity 01 Administration of Detention Centers; in the Ministry of National Defense, Programs 11 Army, 12 Air Force, 13 Naval Force; and in the Directorate of Investigation and Evaluation of Police Career Program 11 Investigation and Evaluation of Trust of Police Personnel; which by the nature of their functions require expedited administrative procedures, shall be transferred at the beginning of each month to the bank accounts in the Central Bank of Honduras that will be opened for each of the programmatic categories mentioned of said institutions, whose management shall be in charge of the Administrative Manager of the respective Ministry of State, based on the payment schedules and performance reports that these present. They must submit execution reports to the President of the Republic, to the President of the National Congress and to the National Defense and Security Commissions of the National Congress. It is understood that the resources managed through this mechanism must be annually liquidated and any surplus deposited in the General Treasury of the Republic within five (5) business days after the end of the Fiscal Year. The following are excepted from the above: budget allocations contained in the Programs and Activities mentioned, which refer to Transfers, Leasing, Insurance, Employer Contributions to Social Security and Pension Institutions, Payment of Thirteenth and Fourteenth Month Salary, and Contracting of Public Works, Public Services, and Consulting that will be carried out following the budget procedures called: Pre-commitment, Commitment, Accrual and Payment.

ARTICLE 35.- All dependencies of the Public Sector shall allocate and pay from their respective budgets for the services provided by the Honduran Telecommunications Company (HONDUTEL), the National Autonomous Service of Aqueducts and Sewers (SANAA), Aguas de San Pedro and the National Electrical Energy Company (ENEE), or any other institution that provides these services. None of the institutions of the Public Sector may suspend payment of said obligations. The public service institutions mentioned in the previous paragraph are obliged to provide the Public Sector user dependencies with the detailed list of services provided during the period covered by the respective payment notices. All institutions shall conduct a review of the meters for electrical energy, water, and telephone numbers in order to determine that the amounts charged effectively correspond to their institution. Any payment made improperly shall be the personal responsibility of the Administrative Manager who performs this function in the institution. Public service companies shall provide all necessary cooperation to carry out this review.

II. BUDGETARY MODIFICATIONS

With the purpose of avoiding overdrafts in approved budget allocations, all institutions of the Public Sector, when necessary, must make the necessary budget modifications prior to the execution of expenses. No institution shall make payment commitments without having the respective budget allocation. If the Ministry of State in the Office of Finance, through the General Budget Directorate, becomes aware of cases that violate this regulation, it will not approve the budget modifications that are intended to be made after the acquisition of such commitments and will proceed to notify the Superior Court of Accounts for the corresponding legal actions.

ARTICLE 37.- Without prejudice to that established in Article 36 of the Organic Budget Law, for purposes of expediting the incorporation into the General Budget of Income and Expenses of the Republic for 2013, external resources from donations or loan agreements; the latter previously approved by the Legislative Branch, the use of the Form called "Budget Modification Document generated by SIAFI" shall serve as an Internal Resolution and shall be incorporated as long as the national counterpart is available, when applicable.

With the aim of achieving sound resource administration, a maximum of ten (10) budget modifications per quarter derived from internal transfers carried out by Public Sector institutions is restricted. Excepted from the above are the transfers made by the Ministry of State in the Office of Finance with prior analysis with favorable opinion or resolution.

III. TREASURY OPERATIONS

All payments by the Central Administration in favor of or through the Central Bank of Honduras shall be made through the respective manual or electronic document issued by the Ministry of State in the Office of Finance. The Central Bank of Honduras shall not make any debit to accounts in the name of the General Treasury of the Republic and of the Ministry of State in the Office of Finance that do not have the express authorization of this Ministry of State, except as agreed in agreements and/or contracts executed prior to this provision. For these exceptional cases the Central Bank of Honduras must: A.-- In Direct Internal Public Debt, deliver to the Ministry of State in the Office of Finance, through the General Directorate of Public Credit, a copy of the documents that support the amounts paid under the concept of amortizations, interest and commissions; disaggregated according to the requirements of said General Directorate, each time the operation is generated, for purposes of registration and control of indebtedness; 2) In loans granted to Public Sector Institutions that have the guarantee, bond or guarantee granted based on Article 78 of the Organic Budget Law, notify the Ministry of State in the Office of Finance, through the General Directorate of Public Credit the following situations: a) With twenty (20) business days in advance, the availability or lack thereof of funds in the accounts of the debtor institution, for purposes of cash flow programming of the Single Account; and, b) With seven (7) business days in advance, the failure to present the debt service payment order by the debtor Institution; as well as the availability of funds from the bank accounts of the same; 3) If there is availability in the accounts and the debtor institution has not initiated the payment procedure, the Central Bank of Honduras must comply with the instruction of the Ministry of State in the Office of Finance, debiting the bank accounts of the debtor institution to effect the payment directly; and, 4) Give immediate notice to the General Treasury of the Republic and to the General Directorate of Public Credit of each debit made in application of this Article, detailing the concept and basis thereof, in order to proceed with its corresponding verification.

In order to obtain timely information related to funds deposited in accounts of the Private Banking System (National and Foreign in those cases that apply), including Trusts and fixed-term deposits; by Public Sector Institutions and Organizations, in accordance with what is ordered in numerals 7) and 8) of Article 94 of the Organic Budget Law, banking institutions shall send fortnightly to the General Treasury of the Republic, the bank statements in electronic format, related to the movement of such accounts, for the process of automatic bank reconciliation in the Integrated Financial Administration System (SIAFI). These statements must include the executing units and projects financed with external funds. ARTICLE 41.- For expenditures made by the State in foreign currency, Payment Orders shall be generated with their equivalent in national currency using the exchange rate of the day established by the Central Bank of Honduras. Currency differentials derived from these operations shall be generated and recorded automatically in the Integrated Financial Administration System (SIAFI) through form F-01 in the same previously affected allocations. Any differential in favor of the State must be credited to the account originally affected.

All amounts received by Central Administration Institutions as advance of funds, own resources, transfers and any other source of income, that were not used at the end of the Fiscal Year, must be remitted to the General Treasury of the Republic within five (5) business days after its conclusion. This provision is also applicable to public and private institutions that receive resources from the Central Administration. Likewise, these latter must present the statement of expenses incurred.

To suspend Article 7 of the Special Law for the Simplification of Investment Procedures in Public Infrastructure, contained in Legislative Decree No. 58-2011 dated May 18, 2011. IV. REGARDING PUBLIC CREDIT OPERATIONS. ARTICLE 44.- The Executive Power through the Secretariat of State in the Ministry of Finance, during Fiscal Year 2013, if it does not have the necessary cash, shall pay in bonds the installments that the State, as employer, must contribute to social security institutes, as well as up to a maximum of twenty percent (20%) of the transfer that corresponds to it to make to the municipalities of the country. The characteristics, terms and conditions of the Issuance of Government Bonds shall be established in the Regulation that for such purpose is issued by the aforementioned Secretariat of State.

The Secretariat of State in the Ministry of Finance is authorized to receive Bonds issued by the State of Honduras, in concept of payment for the sale of assets. ARTICLE 46.- In line with the Public Debt Policy document for the Period 2013-2016 and in compliance with the agreements negotiated with the International Cooperating Community and in accordance with Monetary Policy, to maintain a level of public debt in conditions of financial stability, this shall represent a percentage ratio of the nominal balance of Total Public Debt with Gross Domestic Product (GDP), sustainable in the medium and long term and consistent with macroeconomic variables, ensuring that these are situated in a range between forty and forty-five percent. Article [number].- In accordance with Articles 71, 72, 73 and 78 of Decree 8-2004, containing the Organic Law of the Budget of May 18, 2004, it is prohibited for the Central, Decentralized and Deconcentrated Administration to manage reimbursable financial resources without having the approval and risk evaluation by the Secretariat of State in the Ministry of Finance, in accordance with the requirements established in the aforementioned initiative.

The Secretariat of State in the Ministry of Finance and the Technical Secretariat of Planning and International Cooperation (SEPLAN) shall work jointly to ensure that all resources from Non-Reimbursable External Cooperation that are received by the Centralized, Deconcentrated and Decentralized Institutions of the Government of Honduras are incorporated into the General Budget of Income and Expenditures of the Republic and into the Integrated Financial Administration System (SIAFI).

Regarding Articles 1, 18 of the Organic Budget Law, 18 of its Regulations and 19 of the Technical Standards of the Public Credit Subsystem and particularly with compliance with institutional debt capacity indicators, at the beginning of negotiations for the contracting of any new external or internal public debt, including the issuance of securities by Municipal Corporations and Decentralized Public Institutions, authorization must be obtained from the State Department of Finance for this purpose. ARTICLE 49.- The State Department of Finance is authorized to refinance Internal to External Debt, which shall be done under market conditions. The budgetary savings generated by compliance with the conditions in debt payment shall be used to reduce the balance of non-concessional debt. Similarly, any availability of financial resources derived from the conversion of internal to external debt shall be used solely for the purpose of reducing floating debt.

For purposes of granting sovereign guarantees and warranties by the Central Government. Article 51.- Swaps represent simultaneous buy and sell operations of Government securities and as such, shall be recorded in the current budget as a principal payment and an issuance of a new bond, provided that the operation involves the purchase of securities with maturity within the current fiscal period. In the case of swaps of securities with maturity dates in years after the current year, they shall not count against the budgetary ceiling of that year. ARTICLE 53.- The State Department of Finance may conduct swap operations or refinancing of existing bonds at maturity by other bonds, for the purpose of minimizing risk and the debt portfolio profile. If the State Department of Finance or another Public Sector institution, in compliance with the Standards of the Public Credit Subsystem, uses bond swaps or adjustment of public debt, the refinancing program that is implemented shall not affect the authorized amount of external public debt.

The State Department of Finance is authorized to proceed with collections of available balances from the issuance of bonds authorized to finance the expenses of Fiscal Year 2012; which may be in national or foreign currency. The resources collected for this purpose shall be allocated to pay obligations originating at the close of fiscal year 2011, in accordance with the Law for the Strengthening of Income, Social Equity and Rationalization of Public Spending and for purposes of the.

[1] In order to guarantee the proper use of funds from loans or donations from external sources, the persons responsible for the administration of such resources who incur in the authorization of ineligible expenses within the agreement framework shall be responsible civilly, criminally and administratively for such authorizations.

[2] The Executive Power through the Ministry of State in the Office of Finance, with the No Objection of the Financing Agency, reserves the right to decide the reorientation of external resources allocated to projects with low execution.

[3] The bonds acquired by Public Sector Institutions may be negotiated in the secondary securities market. It is explicitly recognized that operations of financial securities in the open market are priced according to market conditions on the date of the operation. The sale or purchase prices of bonds acquired by Public Sector Institutions, including Public Service Companies, may fluctuate according to market conditions specific to the date of their negotiation. Likewise, it is understood that transaction costs may also form part of the cost of the operation, including any standard charge of the intermediary(ies) if the operation is carried out through the Stock Exchange.

In the Service of the Department, resources are included intended to cover payment of employer contributions; payroll deductions; teacher contributions and other personal obligations assumed by the State, for the benefit of teachers of the Honduran Community Education Program (PROHECO); these shall be paid to the National Teachers' Social Security Institute (INPREMA). Said payment shall preferably be made through the issuance of Government bonds, which may be carried out in the second semester of the year 2013, corresponding to the second installment established in the Inter-institutional Agreement between the Secretariat of State in the Office of Finance and the National Teachers' Social Security Institute, which shall be charged against the amount authorized for the issuance of securities of the year 2013.

Without prejudice to what is provided in Article 68 of Decree 17-2010 of March 28, 2010, the contracting of financing that is considered necessary and for which no financial source exists that permits the required weighted concessionality; non-concessional debt may be contracted, provided that the total outstanding external debt portfolio maintains a minimum weighted concessionality of twenty-five percent (25%); preferably new indebtedness should be contracted in currencies in which the country's international reserves are constituted, a provision that is consistent with the Public Debt Policy Guidelines that shall govern for 2013-2016.

Public indebtedness authorized through bond issuance and obtaining loans is fungible in nature and may therefore be redistributed when more favorable financial and market conditions exist in one source than in another, with respect to the internal or external market, currency type, terms and other conditions that impact financing, provided that it does not exceed the amount authorized in ARTICLE 1 of this Law. V. PUBLIC ADMINISTRATION CONTRACTS ARTICLE 61.- For the purposes of applying Articles 38 and 63 numeral 3) of the State Procurement Law, the required amounts are established for applying public bidding, competitions or quotations,

• a)

  Contracts for Works, Consultancies, Investment Projects, Feasibility Studies, Works Supervision and Real Property Leasing: For amounts equal to or greater than ONE MILLION NINE HUNDRED THOUSAND LEMPIRAS (L1,900,000.00), must comply with the Public Bidding procedure. Amounts equal to NINE HUNDRED FIFTY THOUSAND LEMPIRAS (L950,000.00) and less than ONE MILLION NINE HUNDRED THOUSAND LEMPIRAS (L1,900,000.00) must comply with the Private Bidding procedure. Amounts less than NINE HUNDRED FIFTY THOUSAND LEMPIRAS (L950,000.00) shall be contracted directly; provided that a minimum of three (3) quotations be requested. The amount of a Real Property Lease contract shall be calculated with the sum of its annual rent. Exceptions are made to the obligation to submit to Public Bidding the contracts for leasing of real property of the Public Sector, when they represent greater damages to the institution due to mobilization, price, location, and quality of service. In these cases, the extension of contracts executed by annual periods is authorized.

• b)

  Purchase Orders or Supply Contracts of Goods and Services, Equipment Leasing and Repairs; For amounts equal to or greater than FOUR HUNDRED SEVENTY THOUSAND LEMPIRAS (L470,000.00), must comply with the Public Bidding procedure. Amounts equal to ONE HUNDRED NINETY THOUSAND LEMPIRAS (L190,000.00) and less than FOUR HUNDRED SEVENTY THOUSAND LEMPIRAS (L470,000.00) must comply with the Private Bidding procedure. Amounts less than ONE HUNDRED NINETY THOUSAND LEMPIRAS (L190,000.00) shall be contracted directly, requiring a minimum of two (2) quotations when the amount does not exceed FIFTY-SIX THOUSAND LEMPIRAS (L56,000.00); and for amounts greater than that cited and up to ONE HUNDRED NINETY THOUSAND LEMPIRAS (L190,000.00), a minimum of three (3) quotations shall be required.

• c)

  Guarantees. The obligation to present a contract performance guarantee is excepted when the amount of the same does not exceed EIGHTY-FIVE THOUSAND LEMPIRAS (L85,000.00); the guarantee exception does not apply to contracts that provide for advance of funds. The acquisitions of material goods, supplies or provision of non-personal services, as well as the contracting of works, studies, consultancies, supervisions that are entered into between entities of the public sector, are not subject to bidding or bond, provided that these are less than those existing in the market.

• d)

  Obligations of those responsible for contracting: The quotations referred to in this article must be from providers not related to each other. The quotation document must contain general data as well as the RTN number of the provider. In application of what is provided in Article 25 first paragraph of the State Procurement Law, public sector bodies cannot fragment acquisitions or contracting of works, goods and services in order to evade the contracting ceilings and the selection procedures referred to in this article. Non-compliance with this provision shall result in the responsibility corresponding to what is established in Article 10 of this Law, without prejudice to dismissal actions without employer liability as established in Article 139 of the State Procurement Law. ARTICLE 62.- It is understood that the amount of contracts that the State negotiates or enters into includes the payment of corresponding taxes, except for exemptions expressly determined by National Law or International Agreement.

When the commencement of Fiscal Year 2013 has not completed the process required for a new contract; exceptionally and without prejudice to the responsibility that corresponds in those cases where there is a serious risk of damage to the public interest, the continuation of the effects of the contract may be authorized by means of a reasoned resolution issued by the competent superior authority for the time that is strictly necessary up to a maximum of three (3) months, within which period said procedure must have been completed. The extension shall be made by agreement between the parties; prior to a report from the administration that contains legal, technical and financial opinion of the respective Institution and shall be formalized by Agreement or Resolution of the institution, as appropriate. The foregoing shall apply provided that it does not contravene what is established in articles 122 and 123 of the State Contracting Law. ARTICLE 64.- For the purpose of complying with what is provided in Article 84 of the Organic Budget Law, which establishes the operation of the Single Account of the General Treasury of the Republic, the Secretary of State in the Office of Finance is authorized, through the direct contracting procedure, to execute Financial Services Provision Agreements with the National Banking System by virtue of the fact that said institutions participate in these Agreements through simple compliance with technical requirements of communication between the systems of each financial institution and the Integrated Financial Administration System (SIAFI). This process must be supervised by the Superior Court of Accounts.

In observance of what is provided in Article 72, second and third paragraphs, of the State Contracting Law, the daily fine applicable for non-compliance with the deadline must be established both in the conditions document and in the Construction and Supervision of Public Works Contract. This same provision must be applied to all goods and services contracts entered into by Public Sector Institutions. The value of the fines referred to in the foregoing paragraphs shall be in relation to the amount of the contract, according to the following table: Contract Value / % of Fine From L.0.01 to L.40,000,000.00 1% From L.40,000,000.01 onwards

Only payments that imply advance of funds in accordance with what is established in the State Contracting Law shall be authorized, which must not exceed fifteen percent (15%) of the total amount of the contract. In cases of construction contracts for public works and insurance derived from international agreements, the advance shall be authorized in the form and amount established by the policy of the Financial Organization. Foreign contractors may be granted an advance only when the respective projects are financed at a minimum of eighty percent (80%) with external funds. The Executive Branch agencies are authorized to pay as an advance in the lease contracts they enter into, up to the equivalent of one (1) month of rent, as a deposit, which shall be applied as payment of the rent for the last month in case of termination of the lease contract of the property. To avoid budget imbalances, Public Sector agencies are authorized to enter into lease contracts whose amounts are established in a currency other than the Lempira; excepted from the foregoing are those established in International Agreements.

In any financial contract with external funds, the suspension or cancellation of the loan may give rise to the rescission or termination of the contract, with no further obligation on the part of the Public Sector other than payment corresponding to the works or services already executed as of the date of effectiveness of the rescission or termination of the Contract. The same shall occur in case of budget cuts of national funds that are made due to the country's economic and financial situation, the estimation of the perception of income lower than projected expenses, and in case of unforeseen needs or emergencies. The provisions of this Article must be mandatorily stipulated in the bidding bases and in all contracts entered into by the Public Sector. ARTICLE 68.- For the payment of acquisitions of goods and services through contracts and/or subcontracts entered into under the modality of intermediation carried out with International Organizations, the institutions of the Central Administration, Decentralized Organizations and Decentralized Institutions shall transfer funds under the modality of advances made once the respective goods and services are received in accordance with said goods and services. These institutions must settle this advance by charging the expense to the specific corresponding object within the fiscal year in which said advance was made and must reimburse to the General Treasury of the Republic or to the respective Institutional Treasury the remaining balances, including interest that results from any concept, within five (5) business days after the completion of the Fiscal Year. ARTICLE 69.- In accordance with applicable laws, based on their budgetary allocations and with the purpose of promoting decentralization in the Ministry of Public Health, acquisitions of one hundred percent (100%) of the allocated resources of the expense items for food and beverages for persons, medical surgical materials and medical equipment must be carried out by the administrations of the departmental regions and hospitals of the country. At the central level ninety percent (90%) and at the Departmental level ten percent (10%) of medicine purchases must be carried out by the administrations of the departmental regions and hospitals of the country. The remainder of the budgetary allocation for medicines shall be carried out by the Administrative Management of the State Secretariat in the Office of Health, with the exception of the Teaching Hospital, which shall be governed by the Interinstitutional Agreement between the National Autonomous University of Honduras (UNAH) and the Secretariat of Health. In any case, the acquisition processes of the administrations of the departmental regions, the hospitals of the country, and the Administrative Management of the State Secretariat in the Office of Health must be carried out in accordance with the State Contracting Law and other related Laws, giving strict compliance with Article 4 of the Law of Transparency and Access to Public Information. All procedures for selection of contractors and contracts entered into shall be mandatorily disclosed in the State Contracting and Procurement Information System (HONDUCOMPRAS). The State Secretariats in the Offices of Health and Finance, through the ONCAE and a representative appointed by Civil Society, must evaluate quarterly the results of the gradual decentralization process, which they must report to the National Congress and propose the measures they deem appropriate.

The State Secretariat in the Office of Finance is empowered to, in coordination with the Executive Direction of Income, proceed to renegotiate the Tax Collection and Collection Contract with the Central Bank of Honduras, which must reflect the actual costs of the collection and collection services provided by said Bank.

Contracting charged to the Expense Subgroup 24000 Technical and Professional Services (Consultants) shall be carried out under the responsibility of the head of each institution, provided there is availability in the budgetary allocation of the current Fiscal Year. This type of obligation shall be formalized through a contract. The person contracted under this modality shall not be considered for any purpose as a permanent or temporary employee of the institution. The prohibitions and ineligibilities established in Articles 15 and 16 of the State Contracting Law shall apply to all contracts entered into by the Public Administration, independently of its modality. ARTICLE 72.- Institutions of the Public Sector may enter into contracts for the provision of professional services or consulting with national consultants under the following conditions: 1) In their contracting, more importance shall be given to the result or activity executed than to time; and, 2) Due to the nature of the contract, the consultant shall have no right to vacations, thirteenth month as severance pay, fourteenth month as social compensation, and other rights inherent to employees that are financed through Group 10000 Personal Services. A National Consultant shall be understood as that professional who conducts their activity with permanent residence in the national territory.

The hiring of international consultants for programs or projects shall be carried out based on the conditions of the professional market and in accordance with the availability of budgetary and financial resources. Contracts for international consultants for programs and projects with external financing shall be governed by what is established in the credit agreements, letters, agreements, memoranda of understanding or donation agreements. The fixing or estimation of fees shall be recorded in the budgets agreed upon between the executing entity and the financial organism or cooperating entity. An International Consultant shall be understood as one who has performed consulting work in a country different from that of their nationality and whose permanent residence is different from that of the national territory. Foreign nationals shall not be able to perform activities of an administrative nature.

The commitment must be made as a credit reserve, in which the total of the obligation acquired shall be recorded and shall be reduced in accordance with the payments made, in order to ensure payment to the different contractors and suppliers an independent register of the budgetary stages of commitment, accrual and payment must be prepared. With regard to the execution of public works contracts, prior to issuing the start order or making any payment, said credit reserve must be registered in SIAFI by all institutions that operate under this system. ARTICLE 75.- Every supplier and/or contractor of the State at the moment of receiving the purchase order or start of work must demand a copy of the "Pre-commitment of Credit Reserve", registered in the Integrated Financial Administration System (SIAFI), in order to ensure that the contracting institution has the budgetary availability to honor the commitments acquired; otherwise the Government of the Republic, through the Ministry of State in the Office of Finance, will not accept claims for payment of debts that do not have the respective budgetary support. Officials who contravene this article shall be jointly and severally liable financially to honor all debts generated by not having the corresponding credit reserves.

In compliance with what is established in Articles 5, 6, 23, 31 numeral 4, of the State Contracting Law; 37, 38, 78, 79 and 81 of its Regulations, Article 4 of the Transparency Law and Access to Public Information and Executive Decree Number 010-2005, all State Institutions are obliged to publish in the first fortnight of the month of January, the Annual Plan of Purchases and Contracts (PACC), which includes all contracting processes established in the State Contracting Law, regardless of the amount, source of financing, and purpose of the contract; for which, unless an international agreement expressly provides otherwise, the computer module of planning available in the HONDUCOMPRAS system shall be used. Said Plan shall be based on information from the Annual Operational Plan of the institution and its preparation shall be the responsibility of the Administrative Management with the accompaniment of the Planning and Management Evaluation Unit. The model or type of specifications and other documents that each institution of the Public Sector publishes in HONDUCOMPRAS shall be the one designed by the Normative Office of State Contracting and Acquisitions (ONCAE); likewise, the Contract model designed by it shall be used. The Competent Bodies may only carry out contracting processes that are considered within the PACC. Modifications to the PACC may only be made for the following reasons: 1) In cases of budgetary modification that affects the Annual Operational Plan; and, 2) In the cases contemplated in Article 9 of the State Contracting Law, duly documented. ARTICLE 78.- Every purchase or contracting process covered by an Emergency Decree must be published in HONDUCOMPRAS by the responsible organ for the acquisition, within ten (10) business days following the start of the emergency. Contracts executed under an emergency declaration shall be strictly necessary as established in Article 9 of the State Contracting Law, and must be accompanied by supporting documentation that justifies the relationship between the contract and the emergency. The Contracting Body, through the competent authority, shall request authorization from ONCAE for the modification of the PACC. Once said authorization is obtained, the institution shall make the changes in the respective module. Any emergency declared by the Executive Power must establish a timeframe, and if it requires extension during the course of execution, it may be extended. Direct contracting is prohibited under emergency decrees whose objective is different from that which motivated the emergency, nor contracts whose effects are prolonged beyond the emergency itself. In compliance with what is established in Articles 44, 73, 74, 75, 76 and 77 of the State Contracting Law and its Regulations, all contracts subject to the State Contracting Law that the Public Administration celebrates must be registered in the contract registration module of the HONDUCOMPRAS System no later than twenty (20) days after being executed, in order to have updated information on State contracts. ARTICLE 79.- In compliance with the Law for the Promotion of Development and Competitiveness of Micro, Small and Medium Enterprises (MIPYME), and within the framework of generating equality of opportunities for this sector, the Normative Office of State Contracting and Acquisitions (ONCAE) is authorized to maintain a specialized registry of this sector, where interested parties may register to contract with the Public Administration; ONCAE shall establish the requirements for registration. Quarterly, ONCAE must publish on its website and send to the Presidential Office Secretariat, the Superior Court of Accounts and the Ordinary Budget Commission of the National Congress, the corresponding report on compliance with what is established in the first paragraph of this Article, including everything corresponding to modifications of the PACC. In case of non-compliance with what is stipulated in the present article, the heads of public sector institutions shall be responsible civilly, administratively and criminally in the cases that apply.

The use of the Standard Terms and Conditions models authorized by ONCAE is mandatory in all public and private bidding processes carried out by the public sector, within the scope of the State Contracting Law, except when...

With the purpose of making transparent and making purchasing in the health sector more efficient, the Ministry of State in the Office of Finance, through the Normative Office of Contracting and Acquisitions of the State (ONCAE) and the Ministry of State in the Office of Health will administer a specialized Registry of Suppliers in their different areas of activity, as a result of a pre-qualification process.

Those interested in registering in the Registry of Suppliers and Contractors of the State must accredit their solvency, of being current in the payment of their tax obligations, which shall be extended by the Executive Directorate of Income (DEI) and shall be mandatory for all amounts established by these Provisions.

With the purpose of reducing transaction costs and making public sector purchases more efficient, taking advantage of the benefits of economies of scale and application of the principles of transparency, speed, efficiency, economy and planning, the competent bodies are authorized to acquire goods and/or services through Electronic Catalog Purchases or Corporate Purchase. Electronic Catalog Purchases are a modality of contracting by which the State, through the State Contracting Regulatory Office, ONCAE, will select suppliers who, meeting the previously established evaluation and qualification criteria, will be permitted to offer their products, prices and other conditions in the electronic catalog registered in the System of Information on Contracting and Acquisitions of the State of Honduras (HONDUCOMPRAS), for use by the different State entities. Public Sector Institutions that operate through the Integrated Financial Administration System (SIAFI), prior to the acquisition of a good and/or service that has been included in the Electronic Catalog, must purchase mandatorily through the same, and generate the purchase order from the System of Information on Contracting and Acquisitions of the State (HONDUCOMPRAS), except in cases of force majeure qualified by ONCAE, with prior duly documented justification. Public institutions that do not operate in SIAFI must take advantage of the benefits of the Electronic Catalog, so they will have to carry out their purchases in accordance with the conditions established therein, provided that they do not violate the respective agreements when dealing with external sources. Corporate Purchase shall be understood as the grouping of two (2) or more Public Sector entities to carry out a single process that consolidates their needs and allows them to obtain equal benefits with one or more suppliers. The procedures and modalities established by Law must continue to be used for the acquisition of goods, services, works and consultancies not included in Electronic Catalog or Corporate Purchase. Regardless of their estimated value, all Framework Agreement and/or Corporate Purchase processes carried out by the State must be conducted through a public process.

The Executive Power, by agreement of the Ministry of State in the Office of Finance, will determine the goods and/or services to be acquired through any of the procedures indicated in the preceding article. ONCAE will be responsible for reviewing and authorizing the technical specifications that describe the specifications of the goods and the related services of such goods to be included in the Electronic Catalog and Corporate Purchase. Studies or other evaluations may be conducted for this purpose to determine their feasibility and convenience, through ONCAE, in consultation with other departments that are deemed relevant according to their activity and the volume of their acquisitions. For the purposes of the preceding paragraph and according to the procedure in question, special consideration will be given to goods acquired frequently or with successive or periodic deliveries, standardized products that are used by more than one entity and others in which other reasons compatible with the previously established objectives of economy and efficiency concur. The calls for bidding of Electronic Catalog or Corporate Purchase must be made with sufficient notice to promote greater competition; in no case may this period be less than fifteen (15) business days, unless an international agreement signed by the State establishes a different period and a bidder participating therein invokes such Agreement. The conditions of any procedure shall indicate its general and special conditions, including, among other aspects, the specifications of the goods or services, quantities and deadlines, ensuring the greatest transparency and objectivity in guarantee of the public interest.

The relevant provisions of the State Contracting Law and other related Laws shall apply supplementarily to the public processes mentioned in the preceding article; however, taking into account that the special characteristics of Electronic Catalog Purchases or Corporate Purchase are not considered in the State Contracting Law, these shall be governed by the regulation issued for this purpose by the Ministry of State in the Office of Finance, through ONCAE. Any action or omission that results in the evasion of acquisition through the procedures established in this Chapter shall be subject to the provisions of Article 10 of this Law. VI. PUBLIC INVESTMENT ARTICLE 85. The Ministry of State in the Office of Finance is instructed, through the General Directorate of Public Investments, to coordinate the respective actions to make adjustments to the Public Investment Plan of the State Secretariats and Decentralized Institutions, incorporating the projects detailed below, considered priorities within the Law of Country Vision and Plan of the Nation.

The State Secretariat in the Office of Finance (SEFIN), through the General Directorate of Public Investments, shall issue the respective authorization note so that the project profile is presented, which includes the technical, economic, social and environmental impact, risk, legal analysis, and alignment with the Objectives, Goals and Indicators of the Country Vision and Nation Plan; based on the current methodological guidelines. Said authorization note is a requirement for the management of external and domestic resources, subject to external borrowing restrictions and budget availability. SEPLAN shall provide the State Secretariat in the Office of Finance with the criteria so that within the framework of the methodological guidelines they incorporate alignment with the Objectives and Goals and Indicators of the Country Vision and Nation Plan. No financing transaction shall proceed without meeting the established requirements. ARTICLE 87.- Without prejudice to what is established in Article 12, numeral 5), literal b) of the Technical Standards of the Public Credit Subsystem, the National counterpart of loans and donations shall not exceed ten percent (10%) of the contracted amount and preferably be in kind and have prior favorable opinion from the Planning and Evaluation Unit of Management (UPEG) of the State Secretariat in the Office of Finance. Likewise, administrative expenses shall not exceed twenty percent (20%) in relation to the budget allocated for each project.

Prior to authorization by the General Directorate of Public Credit for the extension of projects that exceed the period and/or amount established in the international agreement for the extension, a technical opinion from the General Directorate of Public Investments (DGIP) of the State Secretariat in the Office of Finance is required. For the issuance of said opinion, the DGIP shall request the accumulated physical and financial execution report of the project, the reprogramming of activities for the corresponding period, and the corresponding justifications. Likewise, programs and/or projects financed with reimbursable and non-reimbursable funds that request time extension and/or budget increase must have at least seventy-five percent (75%) of the committed resources.

For the approval of requests for modifications to budget allocations of public investment projects between specific spending objects or transfer between categories of the same program, as well as the transfer of funds between investment projects, the presentation of justification and documentation of the balance shall be required, which permits technical analysis and prior issuance of favorable opinion from the General Directorate of Public Investments of the State Secretariat in the Office of Finance.

Public investment projects included in the Public Investment Program cannot be carried out through Administration by the same public sector institutions when the value exceeds ONE MILLION EIGHT HUNDRED THOUSAND LEMPIRAS (L1,800,000.00). However, the Head of the Executive Power, when deemed necessary, may authorize through an Agreement and by means of the State Secretary in charge, that the construction of works be carried out through Administration, up to a maximum value of THREE MILLION SIX HUNDRED THOUSAND LEMPIRAS (L3,600,000.00).

The State Secretary in the Office of Finance is authorized to consider, through the General Directorate of Public Investments, as part of the process of prioritizing new investments, indicators of gender equity and human rights, as well as the priorities established in the Regional Development Plans, to promote more balanced development among the regions of the Country Vision and in accordance with the natural, cultural and social potentialities of the territory.

It is prohibited to carry out improvements to buildings that are not property of the State, unless such improvements do not exceed ONE HUNDRED THOUSAND LEMPIRAS (L100,000.00) in their entirety. ARTICLE 93.- Budget modifications that affect capital expenditure allocations to finance current expenses shall not be permitted; in case they are required, recourse must be made to the National Congress for approval; excepting those programs or projects financed with external credit in which the financing agreement expressly provides so. ARTICLE 94.- Without prejudice to the provisions contained in Article 13 of the Special Law for the Simplification of Public Infrastructure Investment Procedures, contained in Decree No. 58-2011, any natural or legal person who challenges any contracting process and fails to legally prove they are right, shall indemnify the Administration with twenty point zero percent (20.0%) of the amount of the challenged process.

Public Sector Institutions that execute public investment programs and projects with External Credit financing sources shall adjust their commitment and payment programming strictly to the Budget Approved by the National Congress; since budget incorporations will not be permitted in Fiscal Year 2013, except for incorporations reviewed and authorized by the Economic Cabinet; and projects executed by the Municipal Mayor's Office of the Central District.

It is prohibited to make payments for cellular telephone services, as well as to enter into rental contracts for real estate and air and land transportation equipment. The official who makes this type of payments and contracts shall be responsible for them with the amount of his salary, which shall be deducted automatically without prejudice to the administrative and criminal liability in which he may incur: VII. HUMAN RESOURCES ADMINISTRATION

The obligations derived from the payment of benefits, severance pay and indemnities; established in the Law, shall be paid and assumed directly by the State, with the budget allocated to the institution where the public servant provided his services. In the same manner, he shall assume payment for final judgments independently of their nature.

This. Authorizes Public Sector Institutions so that: when a State employee resigns, is dismissed and has not caused the payment of the Thirteenth Month Salary as Christmas Bonus and Fourteenth Month Salary as social compensation, the proportional payment of both benefits shall be made effective at the moment this circumstance occurs, without waiting for the months of June and December to make the liquidation. Likewise, when according to Law, such employees have the right to payment of labor benefits, these shall be made effective at the same time with said social benefits.

The payment of the Thirteenth Month Salary as Christmas Bonus and Fourteenth Month Salary as social compensation shall also be granted to officials, personnel by hourly wage and by contract of the Public Sector, who are included in group 10000 of Personal Services. ARTICLE 100.- When positions are created, or any personnel action is intended to be carried out, the procedure must be followed through the Human Resources Administration System (SIARH) of the Integrated Financial Administration System (SIAFI) for administrative personnel of the Central Administration and in the case of Teaching Personnel of the State Secretariat in the Office of Education it must be done through the Teaching Human Resources Administration System (SIARHD). Prior to initiating these processes, the position structure and the allocated budget must be available, which must be confirmed by the State Secretariat in the Office of Finance. Likewise, when new positions are created in the Detailed Annex of Basic Salaries and Wages without being classified, the corresponding State Secretariat must proceed with their Classification before the General Directorate of Civil Service or in the Sub-management of Human Resources for Teachers as appropriate. As long as said positions are not classified, the personnel action procedure shall not proceed. The position structure must be generated in the General Directorate of Civil Service or in the Sub-management of Teaching Human Resources as appropriate. ARTICLE 101.- During the last quarter of the year, no changes shall be authorized in the classification or salary of positions to be effective within said quarter, due to the formulation, presentation and approval of the General Budget Project of Income and Expenses of the Republic for the following Fiscal Year. ARTICLE 102.- In the Teaching Sector (educational) the division of teacher positions shall not be permitted, originating from retirement, vacant positions or canceled positions with the purpose of complementing class hours of teachers, authorization is only granted when the hiring of teachers is strictly in accordance with what would be assigned the base salary to meet the needs of unidocent schools in the pre-basic and basic modality. ARTICLE 103.- For personnel without a Teaching Degree or who do not meet the requirements to opt for a teaching position and who are currently hired as interim teacher, as of the month of February of the year 2013, the period of the contract must be effective starting in the month of February concluding in the month of November of each year.

For teachers under the modality of the Distance Education System (SEMED), hiring must be carried out for the periods of February to July and August to November of each year as applicable. ARTICLE 105.- Modifications to the position structure, dictated by the General Directorate of Civil Service, or others governed by Special Laws, must be authorized by means of Internal Resolution of the State Secretariat in the Office of Finance, the financing of these modifications must be carried out with the budgetary credits approved in this Budget to the different Executing Units of the Central Administration. Violation of this article shall be subject to what is provided in Articles 1.0 of these Provisions and 34 of the Organic Budget Law. ARTICLE 106.- The attribution of appointing teaching personnel corresponds to the heads of the Departmental Directorates of Education, who must verify that the vacant position exists in the Detailed Annex of Basic Salaries and Wages delivered to the State Secretariat in the Office of Finance (SEFIN) by the State Secretariat in the Office of Education and the corresponding position structure, respecting the procedures of public competition and selection established by the Teacher Statute. Violation of this Article shall give rise to the sanctions established in Articles 1.0 of these Provisions and 34 of the Organic Budget Law. Likewise, they shall be jointly and severally liable financially for all obligations generated by non-compliance with this Article. ARTICLE 107.- Savings in the allocations of basic salaries for Permanent Personnel derived from the cancellation of positions, from the creation of positions by reduction, positions that temporarily generate a lower salary than budgeted or from the cancellation of supernumerary personnel in the Public Sector, must not be used for salary increases, adjustments, equalizations, creation of positions, appointment of emergency personnel, nor be transferred for another purpose; except:

• 1)

  For the creation of positions with prior favorable opinion of the State Secretariat in the Office of Finance, when it is personnel that by the nature of their functions, is required for the normal functioning of any State body;

• 2)

  To meet urgent and unforeseen needs, such as:

  • a)

    Emergency expenses;

  • b)

    Internal upheaval or public calamity;

  • c)

    Payment of labor benefits and/or severances; and,

  • d)

    With the savings generated by the vacant positions of teaching personnel in the State Secretariat in the Office of Education due to retirement, pension, death or any other cause, these shall be reinvested 100% in the programs and projects of the Education Secretariat to improve coverage and quality of education in coordination with the State Secretariat in the Office of Finance, likewise new positions of first-time teacher positions may be created assigning them the base salary established by Law. 3) The savings generated by the Executive Directorate of Ingreso (DEI), may be allocated solely to cover improvement, maintenance and equipment expenses of the physical installations of the offices of the Executive Directorate of Ingreso (DEI) at national level.

The elaboration of payroll sheets for personnel incorporated into the Civil Service Regime, Excluded Service, Daily Wages and Contracts and other special statutes, with the exception of those governed by the Honduran Teaching Statute, shall be subject to the new Human Resources Management System (S.IARH), which is directed by the General Directorate of Civil Service, as a module of the Integrated Financial Administration System (SIAFI).

For the calculation of overtime hours, the provisions established in the Regulations of these General Provisions must be complied with. Without prejudice to the provisions contained in Article 3.1 numeral 1), subsection c) of the Tax Equity Law, contained in Decree No. 51-2003 dated April 3, 2003, the personnel of Air Traffic Service (Air Controllers) and Aeronautical Information Services (Flight Plan) dependent on the General Directorate of Civil Aeronautics and Personnel of Security, Transport and Issuance, and Treasury of the Central Bank of Honduras linked to custody, transfer and handling of funds, are incorporated within the exceptions referred to by said legal provision, related to the authorization and payment of overtime. The following officials are excluded from the payment of overtime hours: Secretaries and Under-secretaries of State, General Secretary, General Directors and Sub-directors, Directors and Sub-directors, Internal Auditor Chief, Administrative Manager, Managers, Sub-managers, Legal Advisor, Executive Presidents, Executive Secretaries and Rectors. ARTICLE II.- Personnel from the State Secretariat in the Department of Education shall not be incorporated into the regime established by the Honduran Teaching Statute when, regardless of their professional or technical training, they are performing positions subject to the Civil Service Law. In the same manner, possession of any teaching position is prohibited without the Selection Board having identified and selected it, and therefore no payment shall be made. The official or employee who violates this norm shall be subject to civil and administrative liability. Likewise, they shall be jointly and severally financially responsible for all obligations generated by non-compliance with this Article. ARTICLE III.- Any decision to transfer a position or teaching personnel, prior to its approval, must have the position or the person who will substitute it, and must previously notify the State Secretariat in the Department of Finance to carry out the issuance of the Internal Resolution, the budgetary modification and the Detailed Annex of Basic Salaries and Wages. For this purpose, the justification for the movement must be attached. In relation to the State Secretariat in the Department of Health, any person who for any reason has been transferred to a different health zone, region or institution than the area where the position is budgeted, must return to the place where they were appointed. Positions are excepted for which the institution that accepted the transfer assumes budgetary responsibility without prejudice to the institution on which the appointment originally fell.

Central Administration Institutions, Deconcentrated Agencies and Decentralized Institutions are prohibited from making appointments or contracting personal services without having the budgetary allocation previously approved, applying Article 10 of these general provisions regarding the penalties and fines established therein, as well as Article 34 of the Organic Budget Law. In the case of the State Secretariat in the Department of Education, for the appointment of teachers, the resources assigned in the respective budgetary structure of the current fiscal year must be available. Officials who fail to comply with this Article shall be jointly and severally financially responsible for all obligations generated.

The appointment of teachers and/or the assignment of functions in educational centers at all levels under the ad honorem modality may be carried out provided that the head of the service declares in said appointment that the same is ad honorem and that it does not generate nor will generate any economic responsibility to the State. The violation of this norm will make the officials or employees who authorize such actions personally responsible for the payment of these services. ARTICLE 114.- The hiring of personnel charged to the Specific Object of Expenditure, 12100 Basic Salaries (Non-Permanent Personnel) must be carried out in exceptional cases under the responsibility of the head of each institution, provided that the personnel to be hired appear in the Annual Operational Plan (POA) which is contained in the approved Budget and budgetary availability exists and in strict compliance with ARTICLE 103 of the Civil Service Law. This type of hiring shall be formalized through an Internal Agreement of each institution of the Public Sector. The foregoing applies to expenditures from the National Treasury. The heads of the Executing Unit and the Administrative Management of the contracting institution are directly and exclusively responsible for the selection at this stage of contractors, which must be carried out based on academic merit, probity and other suitability requirements deemed necessary for the efficient performance of the position to be held. These contracts are valid only during the present Fiscal Year and should not be considered, for any purpose, the personnel hired under this modality as permanent, and their effectiveness shall be counted from the date this personnel takes possession of the position. It is prohibited to appoint non-permanent personnel when in the Annex of Basic Salaries and Wages of the Secretariats of State or its equivalent in the rest of the institutions of the Public Sector there are approved positions for the performance of the functions, object of the contract. Officials who fail to comply with this Article shall be jointly and severally liable financially for all obligations generated.

The Specific Object 12200 daily wages shall be exclusive for paying personnel whose salary is established by day or by hour, and in no case should it be used to pay personnel who perform administrative or technical functions. The appointment of personnel whose functions are different from those corresponding to the nature of work as daily wages is prohibited: in such cases direct responsibility falls on the official or officials who violate the provisions of this Article. This personnel is not classified as permanent for any purpose.

For the payment of salaries of diplomatic or consular personnel or those who hold representation positions abroad, after the deductions required by Law, the exchange rate of TWO LEMPIRAS (L. 2.00) per Dollar of the United States of America shall be maintained; except for personnel of diplomatic missions in Europe and other parts of the World, to whom the adjustment shall be made in relation to the Euro and the currency applicable in the country where they reside, provided that such personnel are providing their services in the country of residence permanently abroad. To cover the differential between the exchange rate previously mentioned and the exchange rate in effect established by the Central Bank of Honduras, the Secretariats of State in the Offices of Foreign Relations, National Defense and Justice and Commerce have assigned in the Present General Budget of Income and Expenses of the Republic the budgetary provision for monetary correction recorded in the Specific Object "Additional Items". The allocation for these purposes should not be used for salary increases nor transferred for any other purpose. The cost for fluctuations in exchange rates or monetary correction of diplomatic and consular personnel who hold representation positions before Organizations and Institutions abroad should not be computed for purposes of payment of labor benefits, back pay, garnishments, calculation of contributions that in accordance with the Law must be sent to the National Institute of Retirements and Pensions of Employees and Officials of the Executive Branch (INJUPEMP) or other types of legal deductions. Neither is such value recognized for purposes of payment of vacations to personnel who, under the Civil Service System or other applicable contracting system, provide the representation services referred to above.

Budget allocations and scholarships may be utilized provided that the following is taken into account: 1) The execution of a commitment with executive force and immediate execution (Promissory Note or Bill of Exchange) as well as the contract between the scholarship recipient and the institutions of the public sector, aimed at obligating the recipient to work, in reciprocity for the financial aid received, for the department that nominated him/her for a period not less than double the duration of the financial aid for the completion of studies, upon proof of having obtained the respective degree or title. In the event of non-compliance with these conditions, the scholarship recipient shall be obligated to return the amounts granted, in the currency in which they were received or their equivalent at the exchange rate in effect at the moment of being obligated to return them. Only for reasons of force majeure sufficiently proven at the discretion of the Administration through the institution that granted the scholarship, shall the scholarship recipient be exempt from said responsibility. 2) That the State guarantee permanent salaried personnel the work in the position they occupy on the date they are authorized to study within or outside the country, and that upon their return they be assigned functions in accordance with their level of study and, if possible, the corresponding salary according to the level of studies attained; and 3) That scholarships granted within and outside the country be preferably for permanent personnel (item 11100) or by contract (item 12100) who have a minimum of one year of service; in the case of contract personnel, since they are not permanent employees, the State reserves the right to enter into a new contract following the completion of the scholarship and obtaining of the respective degree. Notwithstanding what is established here, the department that has granted a scholarship may authorize the scholarship recipient to fulfill this obligation by providing his/her services in a government department different from the one that granted the scholarship. Scholarship applications that have sponsorship of partial or total financing from national, international institutions or organisms or cooperating Governments shall have preference, and total or partial scholarships may be granted to private individuals, provided that there is an agreement with such organisms that expressly establishes it. The State reserves the right to contract these persons following the completion of the scholarship and obtaining of the respective degree. In the event that the duration of this benefit exceeds that established in the laws of prevision, it may be contracted in exceptional cases, with national or external funds to be developed in the country or abroad, its granting shall be formalized through an official communication from the head of the department. In the Central Administration, in the Decentralized Institutions, it shall be done through an official communication from the head of these and in the Legislative Power it shall be done through its corresponding regulation. If the duration of the scholarship exceeds one month or when it comes to scholarships, studies or seminars in exceptional cases, with national or external funds to develop in the country or abroad, the extension or renewal shall be made through Ministerial Agreement when it concerns the Secretariats of State, in the case of Decentralized and Decentralized Institutions the authorization shall be made through a resolution of the Governing Body, and in the Judicial Power and Legislative Power it shall be done through its corresponding regulation. In all cases the financing of studies carried out internally shall be covered with the resources allocated for this purpose in the budget of each institution of the Central Government, Decentralized Organisms and Decentralized Institutions.

Officials or employees of the public sector who have to participate in official events in the country, invited by national or international institutions or organisms, may participate provided that all trip costs and other expenses are fully covered by the sponsoring organization. In any case, complements or increases to salaries shall not be recognized or authorized, nor shall viatics and other travel expenses be recognized. Officials or employees of the public sector who participate in official events outside the country, duly justified, with government expenses, shall be limited to two (2) participants per institution, furthermore in any case no type of complement shall be authorized when viatics are provided by the sponsoring organism of the event. When it comes to special missions that are carried out in representation of the country there shall be no limits in their authorization, provided that they are authorized by the Presidency of the Republic, through Executive Agreement.

Former employees who have been retired by any Public Sector pension institution without exceeding the age of prohibition to work that has already been approved in the Budget of the Secretariat of State in the Labor and Social Security Offices for the present Fiscal Year.

The employer contribution that pays the State to the Social Security Institutes cannot exceed the percentage established in their respective Laws. The allocations intended for the payment of employer contribution to the aforementioned Institutes cannot be transferred for another purpose. Likewise, both employer and employee contributions of public servants must be paid in full to such Institutes in the corresponding month, being strictly prohibited to use them for other purposes. Non-compliance with this Provision shall be subject to the sanctions stipulated in Article 10 of the present Law. The officials who fail to comply with this article shall be jointly liable financially for all obligations that arise.

The Secretary of State in the Office of Finance is authorized to incorporate into the budget of the Executive Directorate of Income (DEI) one hundred percent (100%) of the amounts deposited by companies in the concept of operational fee for the customs surveillance and supervision service that this Institution provides to Companies subject to special regimes, bonded warehouses, temporary deposits and others, and that are transferred to the receiving account of the General Treasury of the Republic. To such values they will be given the treatment of registration as own resources to cover the payment of salaries, their collaterals, overtime, labor benefits, and other rights, as well as payment of travel allowances, transportation expenses and any other expense that is necessary to carry out supervision work directly or through third parties of the human resources that work in the functions described above. In the same manner they may provide what is necessary to implement control mechanisms in these companies. All amounts received by the Executive Directorate of Income (DEI) must be necessarily paid to the General Treasury of the Republic and prior to its use they will be obligated to present the detail of the expenses to be executed to the Secretary of State in the Office of Finance for their respective Opinion.

All officials of the Central Administration included in Article 1 of the Civil Service Law must enjoy the right to enjoy non-remunerated annual vacations granted in accordance with the periods established by said Law.

To public servants of the Central Administration under contract modality with expense object 12100 who voluntarily request the resolution of the Contract by mutual consent, the State may grant them indemnification in accordance with the benefit granted to employees governed by the Civil Service Law. To access this benefit, the Public Servant under that modality must meet the following requirements:

• 1)

  That the Contract has been resolved by mutual consent;

• 2)

  That the beneficiary is not a participant in any of the State's Social Security systems; and;

• 3)

  Have contracts signed for at least ten (10) consecutive budget periods. In case of terminal illness or permanent disability, this benefit shall proceed without any requirement. This benefit shall also apply to those public servants who hold excluded service positions provided they have worked consecutively for a period of no less than three (3) years.

It is prohibited to appoint by Agreement in the capacity of excluded, positions that are not included in Article 3 of the Civil Service Law. ARTICLE 129.- Public Servants who having been terminated have sued the institution in which they worked, during the time in which the case is in process and pending sentence, they may not work under any form of contracting in the State Secretariats, Decentralized and Deconcentrated Institutions; except that, by agreement between the parties, the lawsuit is terminated prior to contracting. In the event that contracting occurs in breach of the preceding paragraph, and in the final sentence the State is condemned to indemnification or reinstatement with payment as compensation for damages of lost wages; in that case the wages received by the contractor during the course of the lawsuit shall form part of the quantification of the indemnification of lost wages fixed in the condemning sentence, consequently they shall form part of the final payment settlement made to the contractor. The official responsible for the contracting shall be subject to the application of a fine corresponding to Ten (10) minimum wages.

Appointments for vacant positions shall be permitted only when they are filled on a permanent basis; the merger of positions for the creation of a new position, provided that a savings of thirty percent (30.0%) of the total amount of the merged positions is generated; and; the creation of positions arising from the division of a permanent position. ARTICLE 131.- The contracting of temporary personnel (by contract, by daily wage and special contracts, expense object 12200) and the contracting of professional services (Expense object 24000), shall be limited to the allocations and amounts established in the General Budget of Income and Expenses of the Republic; likewise, increases by budget modifications to these allocations are prohibited, in order that spending be limited to what is strictly necessary. This norm is of exclusive application for resources from source 11 of the National Treasury.

For the present Fiscal Year all Public Enterprises are obligated to pay the Income Tax in accordance with Article 7 of the Law for the Rationalization of Public Finance, contained in Decree No. 219-2003 dated December 19, 2003. ARTICLE 88.-The Budget of the National Electric Energy Enterprise (ENEE), includes resources intended to finance the Social Fund for Electric Development (FOSODE) for rural electrification, said resources cannot be used by the Enterprise (ENEE), for purposes other than those for which they were authorized. Only the National Congress shall indicate the use of the funds through its Presidency.

The Decentralized Institutions must transfer to the Central Administration the amounts detailed below: The National Patron of Children (PANI), SEVENTY MILLION LEMPIRAS EXACT (L. 70,000,000.00); Honduran Telecommunications Company (HONDUTEL), NINETY MILLION LEMPIRAS EXACT (L. 90,000,000.00); for the services provided to the State and to the Central Government, through compensation mechanisms; National Port Enterprise (ENP), FIFTY MILLION LEMPIRAS EXACT (L. 50,000,000.00); The resources allocated for these purposes cannot be transferred toward a different purpose than the one for which they were assigned or executed in favor of a beneficiary different from that of the transfer. The amounts set forth in the second paragraph of this Article, must be deposited in the General Treasury of the Republic, in accordance with the payment schedule to be prepared jointly between this office and the aforementioned Institutions, which must be agreed upon by January 31, 2013 at the latest; the maximum payment date must not exceed the fifteenth day of each month; the last installment must be deposited no later than November 30. In case of non-compliance with this obligation, the Secretariat of State in the Office of Finance is authorized to request the Central Bank of Honduras to automatically debit from the bank accounts that these institutions maintain at said Bank and/or in the rest of the National Financial System the amounts of the outstanding payment installments. of State in the Office of Finance for purposes of monitoring and control.

With the purpose of improving performance, efficiency and effectiveness in the performance of the institutions of the Central Administration, Deconcentrated bodies and Decentralized entities, the following measures shall be applied in strict form: a) Cancel at least sixty percent (60%) of the vacant positions existing on December 31, 2011, except those positions of teaching service, health care and security. b) Cancel during the year 2013, fifty percent (50%) of all those positions that remain vacant due to severance, with the exception of management positions of all institutions. VIII. OF DECENTRALIZED INSTITUTIONS. ARTICLE 133.-The salaries of the employees and officials of the Decentralized Institutions and Deconcentrated bodies, whether of a permanent nature, for a term or any other modality that enter the public service during the validity of this Decree, must be in accordance with the remuneration earned by those of equal category in the Central Administration. In order to carry out the monitoring and follow-up of salaries and wages, the Institutions of the Decentralized and Deconcentrated sector, without exception whatsoever, must send to the Secretariat of State in the Office of Finance (General Budget Directorate, DGP and General Directorate of Decentralized Institutions, DGID) and the Secretariat of State of the Office of the Presidency; and to the Ordinary Budget Commission of the National Congress, the complete payroll containing permanent, trust, temporary and daily wage personnel, within fifteen (15) days following the end of each quarter. The Superior Court of Accounts must send a report to the National Congress through its Ordinary Budget and Control and Monitoring Commissions, of compliance with the financial and fiscal austerity that the State must maintain. Likewise, for statistical and control purposes, Decentralized Institutions must send monthly to the General Budget Directorate (DGP) and to the General Directorate of Decentralized Institutions (DGID); the list of personnel withdrawn in its different categories and classified by gender. ARTICLE 134.-The Public Institutes of Social Security and Welfare, prior to any modification in the structure of benefits to active, pensioned and retired members of their systems, including changes in payment frequency and increases in the amounts of pensions, must obtain authorization from the National Commission of Banks and Insurance (CNBS), for which they must submit the corresponding request, attaching to it the actuarial technical study that supports the financial capacity of the Institute. Likewise, the revaluation of pensions may not exceed the annual inflation index and for its granting the institution must have budgetary and financial capacity, backed by the corresponding actuarial technical study.

All decentralized institutions are also obligated to present to the State Secretariat in the Ministry of Finance no later than ten (10) days after the end of the month, the Financial Statements and other information necessary to monitor the commitments contracted with the International Monetary Fund. Notwithstanding the foregoing, the Executive Power through the State Secretariat in the Ministry of Finance, may authorize and allocate, in case the financial situation of these institutions permits, additional or complementary funds to address programs and projects that the Government deems necessary, subject to prior approval by the National Congress. Authorization is granted to the State Secretariat in the Ministry of Finance and to the Honduran Telecommunications Company (HONDUTEL), so that after the reconciliation of accounts receivable and payable between both institutions, they may apply the compensation mechanism for the payment of contributions that correspond to them in the 2013 period and that this be through the Telephone Service provided to the State, including accrued debts.

The budget modifications of Decentralized Institutions are governed by the provisions of Article 51 of the Organic Budget Law and by the Technical Standards of the Budget Subsystem. Excepted are those operations related to debt service, exchange rate operations, carried out by the Central Bank of Honduras, which must be approved by its Board of Directors and reported to the State Secretariat. ARTICLE 140: Decentralized institutions shall send no later than January 30, 2013, the inventory of property in use and supplies existing as of December 31 of the fiscal year 2012, to the General Directorate of National Property, General Directorate of Decentralized Institutions and to the Normative Office of State Contracts and Acquisitions.

In order to generate savings, the meetings of Boards of Directors or Governing Bodies of Decentralized Institutions must be held with the members and representatives that their respective Laws provide for and avoid additional expenses derived from the holding of sessions conducted outside their headquarters.

All Decentralized and Deconcentrated institutions must make effective the transfer allocated in their budgets for the National Institute of Youth (INJUVEN) and the Honduran Institute for the Prevention of Alcoholism, Drug Addiction and Pharmacodependence (IHADFA), before the month of October 2013, as well as any other transfer provided in their budgets.

Empower the National Electricity Company (ENEE) and the Honduran Telecommunications Company (HONDUTEL) to carry out strategic alliances to create synergy for the benefit of the Country. The relief of debt that this concession could generate and the funds thus obtained shall form the resources of the Heavily Indebted Poor Countries Initiative (HIPC), Multilateral Debt Relief Initiative (MDRI) and Paris Club that shall serve as the basis for financing programs and projects for the eradication of

Public Service Companies are ordered to proceed, within the term of one effective year from the effective date of this Law, to settle outstanding accounts receivable for the provision of services, having the option of using subrogation for the recovery of defaulted debt. Relief of the debtor from payment of fines, default interest, fees and surcharges at the time he makes payment or reaches a payment arrangement. Strategy for the Reduction

The State through the Secretary of State in the Offices of Interior and Population shall transfer by monthly installments to the accounts of the Municipalities registered in the National Banking System, ten percent (10%) in accordance with tax revenues, allocated in the General Budget of Income and Expenses of the Republic for the Fiscal Year 2013, which shall be distributed as follows: OF POVERTY REDUCTION

The values and resources to execute programs and projects of the Strategy for Poverty Reduction (ERP) must be incorporated in each executing unit, of:

• 1)

  Forty-five percent (45%) of the transfers shall be distributed in equal parts to the municipalities;

• 2)

  Five percent (5%) of the total amount of the transfers to the different institutions of the Public Sector, in accordance with what is provided in the Technical Standards of the Budget Subsystems and Public Investment, to the extent applicable, shall be distributed based on the criterion of fiscal efficiency and collection effort; and,

• 3)

  Fifty percent (50%) shall be distributed in accordance with

The resources coming from debt relief within the framework of the Heavily Indebted Poor Countries Initiative (HIPC), the Multilateral Debt Relief Initiative (MDRI) and to the extent that it corresponds to the Paris Club, intended exclusively for the projects included in Annex "Strategy for Poverty Reduction" which forms part of this Budget of Income and Expenses of the Republic, Fiscal Year 2013.

The Public Debt Service corresponding to: the debt agreement conventions that make up the group of loans subject to reorganization and that adjust the profile of public debt, shall be executed budgetarily through the Integrated Financial Administration System (SIAFI) and its interface with the Debt Management and Administration System (SIGADE), on the dates and terms established in the respective loan agreements or contracts. Simultaneously, the incomes that meet the following criteria must be registered in the Integrated Financial Administration System (SIAFI):

• a)

  Twenty percent (20%) by projected population according to the latest Population and Housing Census conducted by the National Institute of Statistics (INE); and, b) Thirty percent (30%) by poverty, according to the proportion of poor population in each municipality based on the Unmet Basic Needs (UBN) method and according to the latest Population and Housing Census. From these incomes, municipalities must allocate:

  • 1)

    Five percent (5%) for the execution and maintenance of programs and projects for the benefit of Children and Adolescents, including the Milk Glass Program according to the economic capacity of the Municipality and contained in the POA;

  • 2)

    Five percent (5%) for programs and projects for Economic Development, Social Development and Combating Violence Against Women; considering in these topics training, Technical Assistance and financial support to productive Microenterprises;

  • 3)

    Twenty-five percent (25%) must be allocated to the Education and Health sector with priority to free enrollment areas and primary health care according to the economic capacity of the municipality and contained in the POA;

  • 4)

    Fifteen percent (15%) must be allocated to projects and programs directed to the area of Security, Prevention and Culture of Peace considered in the Municipal POA. It should be understood that the expenditures described in numerals 3) and 4) above should be considered as an investment;

  • 5)

    Fifteen percent (15%) for Own Administration Expenses; municipalities whose annual own income, excluding transfers, does not exceed FIVE HUNDRED THOUSAND LEMPIRAS (L500,000.00), may allocate for these purposes up to double this percentage;

  • 6)

    One percent (1%) for the Municipal Transparency Fund (FTM) assigned to the Superior Court of Accounts (TSC), as municipal counterpart, for decision-making on the use and allocation of said funds, which will be done through meetings of the Committee that has been established periodically, composed of the Secretary of State in the Offices of Interior and Population (SEIP) who presides over it, the Association of Municipalities of Honduras (AMHON), acting as Secretary and the Superior Court of Accounts (TSC) which administers it, with these financial resources to conduct trainings, In Situ Technical Assistance, Monitoring, compliance with recommendations and greater coverage of municipal audits. It is understood that while resources from other sources are identified to comply with the obligated obligations, the Superior Court of Accounts (TSC) shall formalize an agreement and regulation with the committee members, for the purpose of jointly planning the activities to be developed in the Annual Operational Plan (POA) Section A Agreements and Laws of the Committee of the Municipal Transparency Fund (CFTM); and,

  • 7)

    The remainder of the transfer resources shall be allocated to investment, to cover the counterpart required by organizations that finance the projects; to the payment of contributions to the Association of Municipalities of Honduras (AMHON), to the payment of contributions that municipalities make to Intercommunal Associations or Associations prior to the decision of Municipal Corporations through the affirmative vote of two-thirds of its members, and for transfers in goods or services to organized communities for investment, always respecting what is provided in Article 98 of the Law of Municipalities. Municipalities that enjoy the economic benefit established in Decree No. 72-86 (Port Municipalities), dated May 20, 1986, may avail themselves of the regime established in this Article, provided they renounce before the Secretary of State in the Office of Finance (SEFIN), the benefit established in the aforementioned Decree. The transfer must be deposited in the Municipal Treasury, managed in a bank account in the name of the respective Municipality and registered in the Integrated Financial Administration System (SIAFI) of SEFIN, being able to dispose of the funds thereof only in the joint and several manner of the Mayor and the Municipal Treasurer. ARTICLE 149.- The Secretary of State in the Offices of Interior and Population shall transfer monthly to the Municipalities, through the Central Bank of Honduras (BCH), the amounts for Capital Contribution of Ten percent (10%) according to tax revenues, recorded in the General Budget of Income and Expenses for Fiscal Year 2024, based on the estimate of financial capacity at the time of its approval by the National Congress; and four percent (4%) or eight percent (8%) to port municipalities, provided that the municipalities accredit having delivered to the Secretary of State in the Offices of Interior and Population through the General Directorate of Local Strengthening (DGFL), the administrative documents and accounts rendered electronically to the Superior Court of Accounts; through the RENDIGCL accounts rendering system. From the administrative documents: (SEIP). a) Physical and financial progress of the projects, no later than fifteen (15) days after the quarter ends;

• b)

  The Annual Budget of Income and Expenses of the Municipality, no later than January 31 of the same year;

• c)

  The Municipal Investment Plan no later than January 31 of the same year, and;

• d)

  Budget Settlement of the previous year, no later than January 31 of the following year; this documentation shall be delivered in two original copies, one for the General Directorate of Local Strengthening and the other for the Superior Court of Accounts (TSC). From the Rendering of Accounts: (TSC). a) Accumulated Quarterly Rendering in electronic form through the RENDIGCL tool, no later than fifteen (15) days after the quarter ends; and, b) Annual Rendering of Accounts containing the information in the forms defined through the accounts rendering manual, no later than April 30 of the following year.

All administrative and financial documents mentioned above must be presented to the General Directorate of Local Strengthening (DGFL) of the Secretary of State in the Offices of Interior and Population, in electronic and physical version in an original document annexed to the certification of the minutes of approval of the Municipal Corporation. The delivery date shall be the one evidenced by the received stamp of the DGFL. The administrative and financial documents shall be reviewed by the DGFL of the Secretary of State in the Offices of Interior and Population, who within a period of thirty (30) days shall issue an opinion on the same and shall notify the respective municipal corporation of the updates, implementations, modifications and extensions needed, and shall return them to the same address within seven (7) days counted from receiving the notification. If it fails to do so, the DGFL shall not be able to issue the final opinion; and the municipality shall be causing the retention of the disbursement of the respective transfer. In order to support the opinions and strengthen the culture of efficiency, effectiveness and optimization of public resources, the National Commission of Banks and Insurance (CNBS) shall send to the DGFL of the Secretary of State in the Offices of Interior and Population, detailed records of the loans that municipalities have with the different banking and credit entities in the country, for the purpose of verifying the percentage of thirty percent (30%) authorized by Article 153 of this Decree, to commit transfer funds to payments of bank loans. Similarly, all public and private institutions that transfer funds to Local Governments in the form of subsidies, legacies and donations, must provide this information to the DGFL of the Secretary of State in the Offices of Interior and Population, for the purpose of identifying the source of financing, use and destination of these, which will facilitate said Secretary of State in fulfilling the attributions established in Article 29 of the General Law of Public Administration in relation to: Oversight and representation of the population for the fulfillment of the Country Vision and Plan of Nation by the different executors, and coordination, liaison, supervision, evaluation and oversight of departmental, municipal regimes and civil society organizations.

It is authorized for the Secretary of State in the Offices of Interior and Population to retain and transfer, charged to the transfer of Ten percent (10%) or, in the case of port municipalities, four or eight percent (4% or 8%), of the respective transfers, the amounts in favor of:

• 1)

  Fire Department, ninety percent (90%) of the amounts owed by the municipalities collecting the Fire Department Service fee; in municipalities where this service exists, provided that the fire department has exhausted the conciliation route to subscribe payment plans between both institutions: After the agreement is signed, non-compliance with one of the payment installments shall result in the application of the retention of the total amount owed from the next transfer, provided that the balances are reconciled by both institutions;

• 2)

  Association of Municipalities of Honduras (AMHON), calculated on one percent (1%) of actual current municipal income from the previous year;

• 3)

  Intercommunal Associations of Municipalities, the amounts corresponding to statutory fees or contributions of the Municipalities; prior to the application of the retention by said organisms, they must present the document or other requirements established in the DGFL that support the settlement or clarification of accounts of all funds received by the member municipalities.

• 4)

  Continue with the transfer of one percent (1%) that is deducted from the transfer of ten percent (10%) to the Municipalities; according to Article 91 of the Law of Municipalities; the Municipalities benefited by Decree No. 72-86 dated May 20, 1986 (4% or 8% of port municipalities) and must contribute equally with one percent (1%) of their annual transfers; with the same purpose established in said Article. Said percentage must be credited to the Superior Court of Accounts by Internal Resolution of the Secretary of State in the Office of Finance and using the automatic billing procedure in the Integrated Financial Administration System (SIAFI), as the disbursements to the municipalities are made; and,

• 5)

  Honduran Social Investment Fund (FHIS); upon request of the latter, the percentage corresponding to the local contribution; of municipalities benefiting from projects financed with funds from loans and donations subscribed with international organizations. Such retention shall be carried out only on municipalities that fail to pay the municipal counterpart. ARTICLE 152.- Any debit that the Central Bank of Honduras makes to the accounts of the Treasury of the Republic for payments corresponding to the municipal councils in the form of transfers according to law, shall be charged to the account of the municipal corporations that owe them, exclusively in the cases indicated in Article 156 of this Law. ARTICLE 153.- Municipal Corporations may commit up to Thirty percent (30%) of the transfer funds for payment of loan installments, when it is a matter of financing works whose investment is recoverable and the debt is not greater than the government period, otherwise it must be approved by the National Congress.

In the case of the distribution and destination of the transfer established by the third paragraph of Article 91 of the Law of Municipalities and specifically with the fifteen percent (15%) for annual own administrative expenses... and that in the case of municipalities whose annual own revenues, excluding transfers, do not exceed Five Hundred Thousand Lempiras (L.500,000.00), they may allocate for said purposes double this percentage. That is, thirty percent (30%) shall be allocated for own administrative expenses, understanding these as administrative and operational expenses in equal parts, fifteen percent (15%) each; within the percentage of operational expenses consider thirty percent (30%) for salaries, wages and fees provided that it is proven that the annual current revenues received by the Municipality were increased in the same percentage. ARTICLE 155.—With the purpose of maintaining a reliable and timely database on contingent debt, Municipal Corporations are obligated to provide to the State Department in the Office of Finance (SEFIN), through the General Directorate of Public Credit, all information related to their public credit operations. Such as: loan agreements, issuance of securities, disbursements and debt service payments, shall be sent via fax, email or other means no later than thirty (30) days after the operation occurs. Municipal Corporations selected that have requested it shall provide their collaboration to the State Department in the Office of Finance in the Implementation of the Integrated Municipal Administration System (SAMI). In case of non-compliance with what is indicated in this Article, the State Department in the Office of Finance is authorized to withhold any type of payment or transfer in favor of the corresponding Municipality.

The transfers of four or eight percent (4% or 8%) of port municipalities and of ten percent (10%) established in the Law, which must be transferred during the year 2013, to the municipalities of the country, are exempt from any deduction coming from investments of the Departmental Development Fund or any other pertinent one, except those obligations of the municipality originating from deductions from the Income Tax, according to the National Institute of Retirements and Pensions of the Employees of the Executive Branch, deductions to its workers and the payments of public services in concept of potable water, electrical energy, telephone services or any other public service provided by municipal corporations.

The accounting subsystem in Local Governments shall be managed through the Integrated Municipal Administration System (SAMI), which shall be the official and mandatory tool of use in all Local Governments of the country that shall be incorporated gradually. XI. IMPROVEMENT OF REVENUES. ARTICLE 160.—The purchases of goods and/or services of the State in which the payment of Sales Tax applies, the value of this shall be retained in each payment document. This value shall be paid into the General Treasury of the Republic within twenty (20) days following the transaction. What is established in the Previous Paragraph is applicable for both the Central Administration and for Decentralized and Deconcentrated Institutions and all Project Executing Units without any exception, who as Withholding Agents must deliver to the supplier of goods and/or services, the corresponding withholding certificate, so that it accredits before the Executive Board of Revenue (DEI) the values paid for this concept. The State Department in the Office of Finance, by means of the General Accounting Office, shall have available the Single Chart of Accounts and the Accounting Manual for the Public Sector, which shall be mandatory for use by all Local Governments. ARTICLE 161.—When a State Institution must make any payment in favor of third parties, these must present proof of solvency in the payment of taxes and tax obligations; said certificate must be issued by the Executive Board of Revenue. This provision complements and is in accordance with what is indicated in Article 196 of this same Decree. ARTICLE 158.—For the formulation of the 2014 budget, the institutions that make up the Local Government Sector (Municipalities, Intermunicipal Associations and Municipal Companies) shall gradually adopt the uniform Budget Methodology of the Public Sector, whose director in matters of financial administration is the State Department in the Office of Finance (SEFIN), which in coordination with the State Department in the Offices of the Interior and Population, Superior Court of Accounts and Association of Municipalities of Honduras, shall provide the necessary technical assistance. This provision complements and is in accordance with what is indicated in Article 195 of this same Decree.

Based on the Fiscal Emergency established in Legislative Decree No. 18-2009 of March 28, 2010, containing the Fiscal and Financial Emergency Law, for Fiscal Year 2013, Decree No. 368-2005, Executive Revenue Decree (DED) is ordered suspended. In the event that it is not found applicable, the Public Institution shall apply the corresponding withholding. XII. MISCELLANEOUS PROVISIONS - ARTICLE 162: The Secretariat of State in the Offices of Interior and Population, in compliance with what is established in Ministerial Agreement No. 770-A-2003 dated September 10, 2003, shall collect a fine equivalent to the minimum salary of the highest category in the country for all those Non-Profit Non-Governmental Associations that do not present their financial and annual activity reports to the Registry and Monitoring Unit of Non-Governmental Associations (URSAG), a department of said Secretariat of State, without prejudice to what is established in the eighth provision of said Agreement.

Exempt the Central Bank of Honduras from the payment of all types of taxes related to the importation or purchase of paper currency.

All institutions of the Public Sector must register in the Integrated Financial Administration System (SIAFI) duly certified by SEPLAN the appropriate adjustments to their POA-Budget within thirty (30) calendar days after the publication of the General Budget of Income and Expenses of the Republic and of the Decentralized Institutions, accompanied by their corresponding Procurement and Contracting Plan as a prerequisite for the allocation of the respective quota, both from external resources and from their national counterpart. Likewise, in order to ensure proper efficiency in the use of public resources intended for this purpose, they must send to the General Directorate of Public Investment of the Secretariat of State in the Office of Finance, the Institute of Access to Information (IAIP) and the Informative Office of State Contracting and Acquisitions (ONCAE) for plans with the purpose that the latter incorporates them into HONDUCOMPRAS. In the case of programs and projects with external funds, they must be registered in the FEPEX module of SIAFI, for the respective financial monitoring.

When it is a matter of acquisition of real estate and improvements that the Secretariat of State in the Offices of Public Works, Transportation and Housing (SOPTRAVI), requires for the construction, expansion and improvement of the road system, whether these are urban or rural, the purchase price of the real estate shall be determined by the appraisal provided for in Article 10 of Legislative Decree No. 274-2010 of January 13, 2011, through which the General Directorate of National Assets shall proceed.

ARTICLE 166.- The use of official vehicles is prohibited on non-business hours and days; the official who violates this provision and does not demonstrate to the competent authority the corresponding authorization or permit that validates said use, shall be suspended from his duties for a period of fifteen (15) days without pay, and recidivism shall give rise to dismissal without any liability for the State. The authorization for the use of vehicles shall be granted solely by the heads of the dependent agencies.

ARTICLE 167.- All vehicles owned by the State and by municipalities that are assigned to the different institutions of the Public Sector must be duly identified with the National Flag and the emblem or logo of the institution to which they belong; the Superior Court of Accounts shall ensure strict compliance with this provision. The Superior Court of Accounts shall present quarterly reports to the Budget Commission of the National Congress and to the Secretariat of State of the Presidential Office on compliance with this Provision.

The officials who use personal security and whose cost is covered by the State, shall limit themselves to a maximum of three (3) persons and avoid the use of vehicles additional to that assigned to said official. This provision shall be exempt from what is contemplated in Decree No. 376-2005 of January 20, 2006 and its reforms.

ARTICLE 169.- The official head of the Nominating Authority or any other official or public employee is personally and jointly responsible for negligence or carelessness that gives rise to judicial sentences that condemn the State and cause disbursements of financial resources.

6.- The institutions of the public sector that require services such as those provided by Correos de Honduras (HONDUCOR), National Enterprise of Graphic Arts (ENAG), Honduran Telecommunications Enterprise (HONDUTEL) and the Military Industry of the Armed Forces (IMFFAA), shall mandatorily request quotations for said services in those places where these companies have coverage, giving them preference to obtain them, if the prices are equal to or lower than those offered by other companies operating in the market. In light of the principles of publicity, transparency and free competition, this obligation must be included in the notice of invitation or call that the institutions make. Prior to the process related to the acquisition of the services mentioned in the preceding paragraph, the Administrative Managers must verify that the departments requesting them attach the quotations as reference.

ARTICLE [number].- All institutions of the Public Sector that currently have pending debts with the National Enterprise of Graphic Arts (ENAG) for publications in the Official Gazette and for printing work, must make the payment effective with the corresponding budget item of the present Fiscal Year 2013; Non-payment of their obligations shall cause late payment interest and legal expenses, which shall be paid by the Superior Court of Accounts to the responsible official.

When the Administrative Authority manages public services on behalf of municipalities, or any other institution that according to what is established in the Constitution of the Republic or the Law corresponds to a percentage or value as a transfer, such payment must be imputed to the corresponding budgetary credit, considering the type of transfer that by Law corresponds to it. Likewise, the product of income generated by the Judicial Power and autonomous institutions for the services they provide and must provide a projection of said income to the State Secretariat in the Office of Finance is considered part of the aforementioned percentage and value, for its monitoring.

Public Sector institutions are authorized to contract, at the expense of their respective budget, individual fidelity bonds in favor of each of the natural persons who administer public goods and resources, to protect State funds and property, with the amounts of said bonds to be determined by the Internal Audit departments of each institution. In the insurance contract it shall be stipulated that the insurer will collect from the public officials authorized the payments made in favor of the State as a consequence of misuse and infidelity in the management of public goods. The collection actions carried out by both the State and the insurance company must be performed in accordance with the reports issued by the Internal Audit units of each institution and/or the Superior Court of Accounts. The payment made by the insurance company to the State as compensation for the infidelity of the public official or employee in the management of public goods or resources, or for their civil, administrative or criminal liability as may correspond by Law.

The Interinstitutional Commission for the Purchase of Medicines (CIM) created by Executive Decree No. PCM-01-2007 dated January 13, 2007, is responsible for guiding, supervising, controlling and verifying the medicine acquisition processes carried out by the State Secretariat in the Office of Health, through the procedures established in the State Contracting Law. For these purposes, the State Secretariat in the Office of Health through the Administrative Management, must implement procedures that expedite the processing of adjudication, receipt, commitment and payment of medicine purchases and report monthly to said Commission on the status of payments to medicine suppliers.

Without prejudice to the provisions established in Article 31, numeral 2), letter c) of the Tax Equity Law, the Regulations of these Provisions must determine which other officials are recognized for the payment of cellular telephone service, as well as the maximum monthly limits authorized. When the official responsible for the use of the cellular exceeds the authorized consumption, the administration of each institution must make the deduction from their respective assigned monthly salary.

Any natural or legal person that is contracted under the modality of Personal Services of Professionals and Technicians, Object of Expense 1.2100, 12900 and Consulting Services, Group of Expense 24000, financed with resources from loans or donations, is obligated to pay the Income Tax, except for those that the financing agreement expressly exempts.

In order to comply with the annual settlement of the General Budget of Income and Expenses of the Republic and of Decentralized Institutions, the Secretary of State in the Office of Finance is authorized to use, through the "Budget Modification Form," the available balances of allocations of various kinds that remain at the end of the Fiscal Year in the different Secretaries of State and Deconcentrated Agencies, in order to carry out the budget increases or creations that may be necessary. The available balances of budget allocations must be used at the end of the month of December, so as not to hinder the achievement of the objectives and goals established in the respective program and Annual Operating Plan.

The holders of Decentralized Organisms, prior to the execution of any action that entails budgetary effects such as salary movements, personnel appointments, must request the favorable opinion from the State Secretary in the Ministry of Finance; in case said expense is appropriate and as long as they have the respective budgetary availability.

In consonance with Article 118, numeral 1) of the Organic Law of the Budget, for purposes of prior control of budgetary execution, the State Secretary in the Ministry of Finance is instructed to continue with the function of control and monitoring of spending, payment of taxes, levies, rates and surcharges on goods and services.

Institutions, programs and projects related by their performance with services of assistance, protection and social development, must incorporate the guidelines of the Policies of Social Protection and Comprehensive Development of Early Childhood, in their Institutional Strategic Plans, as well as in their Annual Operating and Budget Plans. The State Secretary in the Ministry of Social Development shall be responsible for evaluating quarterly compliance with commitments in matters of assistance and social protection provided to the population subject to care, for which purpose personnel dependent on said State Secretary may be assigned to the State Secretariats of the Ministries of Health, Education, Public Works, Transportation and Housing, National Electric Company (ENEE), Supreme Electoral Tribunal, National Registry of Persons or in any other institution of the Public Sector that circumstances warrant. The Pre-Controllers shall be assigned by the State Secretary in the Ministry of Finance in the different Administrative Management offices and have the power to review, prior to the acquisition of any commitment of goods and services, all procedural actions in order to verify if there is budgetary support and other necessary requirements for the realization of spending, with emphasis on aspects related to personnel contracting and contracts for original public works and extensions, for these purposes the signature and seal of the Delegated Pre-Controller must be carried.

Resources allocated to cultural and social institutions without profit motive must not be transferred to a purpose different from that for which they were assigned or executed in favor of a beneficiary different from the transfer recipient. For the first payment, presentation of the disbursement plan and a report on the liquidation of funds executed in the previous Fiscal year will be required.

Suspend Decrees Numbers 263-98 dated October 30, 1998 and 313-98 dated December 15, 1998, issued by the National Congress as a consequence of natural disasters caused by Hurricane and Tropical Storm Mitch, and related to the expiration of the corresponding evaluation instruments. Therefore, institutions, programs, and projects shall submit within a period of five (5) calendar days after the end of the quarter, a report on compliance with the Policies for Social Protection and Comprehensive Development of Early Childhood.

All public institutions are ordered, including Project and Program Executing Units, to standardize and apply their regulations on travel allowances and other travel expenses in accordance with the Regulation on Travel Allowances and Other Travel Expenses for Officials and Employees of the Executive Branch in force, approved by Executive Agreement Number 0696 dated October 27, 2008, no later than January 31, 2013, leaving without force and effect the travel allowance regulations that oppose this provision. The Superior Court of Accounts shall verify compliance with this Article during the first quarter, sending a report to the Ordinary Budget Commission of the National Congress.

All the Public Sector Institutions that send to Congress Final Contracts, Agreements, Draft Decrees and any other legislative initiative for approval, must attach the same in physical and digital form so that it can be published on the portal of this Power of State and be projected on screen at the time of its discussion. ARTICLE 185.-The acquisition processes of Insurance of the Public Sector must be carried out within the procedures established in the State Contracting Law. Public institutes of Social Security are prohibited from direct contracting of Insurance and Bonds on assets of their property and those related to their credit portfolio through agents, brokers or brokerage companies in compliance with what is established in Article 99 of the Law of Insurance Institutions and Reinsurance. The contracting of insurance and bond policies for patrimonial assets and those related to credit portfolios and the services of agents or brokerage companies for insurance and bond services, must be subject to public bidding in compliance with the State Contracting Law and the regulations issued by the National Banking and Insurance Commission (CNBS).

With basis in Article 9, fourth paragraph and Article 23, numeral 2 of the Budget Law, the Multi-Year Budget for the period 2014-2016 is established as a guiding instrument of medium-term fiscal policy, which will be updated annually in accordance with policy guidelines, the behavior of macroeconomic variables, the anticipated financial flows, as well as matters related to projections of income and expenses of the Central Administration and the Non-Financial Public Sector. The Multi-Year Budget 2014-2016 is framed in the Law for the establishment of a National Vision and the adoption of a National Plan for Honduras and is part of the General Budget of Income and Expenses of the Republic and of the Decentralized Institutions for the Fiscal Year 2013. ARTICLE 187.-Extend the validity of Legislative Decree No. 18-2010 of March 28, 2010 containing the Fiscal and Financial Emergency Law during the current Fiscal Year and render without value or effect the Executive Agreement No. 1570-2010 dated September 2, 2010.

All institutions of the Centralized and Decentralized Sector must be operating in the Integrated Financial Administration System (SIAF).

The allocations included in the budgets of the different State institutions related to international agreements may be reallocated to other State institutions, in order to ensure their efficient execution and achieve optimization of public resources.

Authorize the Ministry of State in the Office of Finance to, after reconciliation of amounts owed between institutions of the Legislative, Executive and Judicial Powers, perform account compensations and, if necessary, affect through the "Budget Modification Form" the line items or transfers approved in this law.

Authorize the Ministry of State in the Office of Tourism and the Honduran Tourism Institute (IHT), so that under the modality of Public-Private Partnership (APP), proceed to contract within the private sector the collection of the tourist tax of four percent (4%) at the national level, funds that must be allocated to the tourism sector, with the purpose of significantly increasing current collection, expanding the base and thus promoting and fostering the self-sustainability of said Institute. These funds collected must be transferred immediately by the Ministry of State in the Office of Finance to the Honduran Tourism Institute (IHT) and shall be used expressly for the promotion of the country. ARTICLE 192. With the purpose that all State institutions comply with the provision contained in Article 25 of the Law for the Promotion and Development of Competitiveness of micro, small and medium enterprises, as well as to expedite public investment, the same must present the demands for Acquisition of works, goods and services, whose amounts do not exceed the limits for direct purchases and private biddings, established in these Provisions, contained in its Annual Acquisitions Plan and in the Operational Plan for 2013, through the use of reverse fairs.

When the State or its entities are condemned to recognize liquid amounts through final judgments, the calculation of commercial and moratory interests established by Article 100 of the Law of Jurisdiction of Administrative Disputes shall be calculated in accordance with passive rates, applying the weighted average rates of savings deposits and certificates of deposits of the national banking system. Regarding the calculation of moratory interests, the rate of twenty percent (20%) per annum shall be applied. All payments derived from final judgments issued by the competent Courts of Justice must be notified to the Superior Court of Accounts so that it determines and monitors the responsibility of public officials for negligence or omission in the principles of legality, transparency, efficiency and effectiveness that must be observed in Public Administration.

The budgetary allocation that appears in the budget of the Secretariat of Public Works, Transport and Housing (SOPTRAVI) allocated to FUNDEV may not be transferred for a different purpose from the one for which it was appropriated.

The Secretariat of State in the Office of Finance (SEFIN) in coordination with the Secretariat of State in the Offices of Interior and Population (SEIP) and the Superior Court of Accounts (TSC), shall make available to the Secretariat of State in the Office of Finance and to the executing institution the corresponding methodology. The Secretariat of State in the Office of Finance shall in turn send quarterly reports of State Trust operations to the Ordinary Budget Commission of the National Congress. Institutions that require regularizing trust operations must request from the administering body thereof the supporting documentation in order to make the corresponding registration in SIAFI.

The Secretary of State in the Ministry of Finance, in compliance with uniform budgetary best practices of the Public Sector for international governments regarding accountability and transparency at the Local level through gradual and mandatory implementation of the Integrated Municipal Administration System (SIAMI), will review mid-year the General Budget of Income and Expenses of the Republic and the Decentralized Institutions, in order to strengthen transparency mechanisms and improve the provision of local public services, the strengthening of their capacities in financial management matters and additionally the system will allow periodic accountability to be rendered in electronic and timely form regarding budget liquidations for the calculation of transfers; as well as the liquidation of the same. To analyze the performance of the different institutions that make up the Public Sector and may make such adjustments as it deems convenient in each budget, using for this purpose the Budget Modifications Form (FMP-05) and inform the National Congress of actions taken.

ARTICLE 200.—The budgetary allocation approved in the budget of the Secretary of State in the Ministry of Finance ARTICLE 196.—To exempt from all kinds of import rights, surcharges, taxes and services the goods received as donations, acquired with resources from loans or donations.

The José Cecil del Valle Dam (Nacaome) will be administered by the National Electric Power Company (ENEE), the financial resources generated by its operation must be deposited in the single account of the General Treasury of the Republic. The Secretary of State in the Ministry of Finance is authorized to create the budgetary allocations for its operation. The foregoing shall enter into force once the existing Contract between the Secretary of State in the Ministries of Public Works, Transportation and Housing (SOPTRAVI) and the ELECNOR Company is concluded definitively.

The Secretary of State in the Ministry of Finance is authorized to register in the SIAF the operations derived from Trust contracts established by institutions of the Central Administration. The committees in charge of monitoring and coordinating the trusts must report monthly on such operations to National Defense, specifically in Program 13 Naval Force for the lease with option to purchase of six (6) interceptor boats and two (2) patrol boats, may not be transferred or used for any purpose other than payment of the obligation derived from the signed Contract. ARTICLE 301.—The distribution of the values or assets seized and administered by the Office Administrator of Seized Assets shall be distributed in accordance with the percentages established by Law, only when there is a final judgment for the definitive seizure of the same.

The Administrative Management Units, Executive Units or other entities in the Public Sector that identify providers or contractors of the State that fail to comply with the payment of taxes to the treasury shall report them to the National Banking and Insurance Commission for the corresponding registration in the Risk Center.

Authorize the State Department in the Office of Foreign Relations to coordinate with the State Department in the Office of Finance, the acquisition through long-term external financing of movable and immovable property for the Office of the Embassy of Honduras in Washington, United States of America. The State Department in the Office of Foreign Relations shall reformulate its budget in order to fully meet the commitments derived from the debt to be acquired. The aforementioned action shall be executed by the appointing authority, for which the legal procedure established must be exhausted.

ARTICLE 208.- The State Department in the Office of Finance is not obligated to make any payment whose expense is not included in the respective breakdown at the level of Expense Object, in the General Budget of Income and Expenses of the Republic.

ARTICLE 209.- The National Institute of Statistics (INE) is responsible for conducting the National Census of Population and Housing during the year 2013, this being that these activities are of great importance to have the basic sociodemographic data of the country, and that this is carried out only every 10 years, furthermore it corresponds to the INE to carry out surveys of Places and Multiple Purposes, with which basic indicators of unemployment, family income and others are obtained. Given the relevance of these investigations where the generation of approximately 30,000 temporary jobs is expected, in benefit of the national interest, the INE is exempted from all restrictive measures and expense control established in the General Provisions of the General Budget of the Republic and the expense reduction decrees, for the year 2013; consequently the INE is authorized to carry out the hiring of temporary personnel, the rental and purchase of vehicles, purchase of equipment, fuel expenses, travel expenses, and everything necessary for the execution of the National Census of Population and Housing and the Household Surveys.

ARTICLE 210.- Authorize the State Department in the Office of Finance to enter into cement supply agreements with the Municipal Corporations that request it for the execution of the Pilot Program called "Municipal Kilometer".

For such purposes, the State Department in the Office of Finance shall deduct from municipal transfers the values delivered for this concept, without exception regarding representation of the Political Institute.

ARTICLE 211.- The State Department in the Office of Finance is instructed to adjust the budget of the National University of Agriculture (UNA) according to the following structure: [Budget table with numerical allocations for various expense categories]

The Secretary of State in the Office of Education shall make the adjustments to its POA and Budget no later than January 31 of Fiscal Year 2013 for the implementation of educational reform as a national priority and necessity, as established by the Fundamental Law of Education in its articles 31 to 35, 37 and 83; which implies the execution of a process of administrative, financial and human resource restructuring. To directly support the decentralization and operation of Departmental, District and Municipal Directorates. To manage external cooperation resources based on the needs that arise from the application of the Fundamental Law of Education and its Regulations. The Secretary of State in the Office of Finance and the Secretary of Planning and External Cooperation shall monitor this provision and the Secretary of State in the Office of Education shall submit quarterly reports to the Ad hoc Commission for education reform, to the Budget Commission and to the Monitoring Commission for Educational Reform of the National Congress.

The Secretary of State in the Office of Finance is instructed to adjust the budget of the Ministry of Health according to the following structure:

STRUCTURES TO INCREASE APPROVED INST GA UE ORG PRO SPR PRI AIP OBJECT SEFIN INCREASES ADJUSTED ASSIGNMENT PRES.2013

[Detailed budget table with multiple line items and amounts in Honduran Lempiras, including various budget codes (060, 201, etc.) and corresponding expenditure categories (12100, 12410, 12420, 23500, 24100, 29200, 31100, 35210, 39520, 39530, 39540, 39600, 42140, 42410, 42420, 42600, etc.) with their respective approved amounts, increases, adjustments, and final assignments for fiscal year 2013]

TOTAL: 504,148,383

The Secretary of State in the Office of Finance is instructed to adjust the budget of the Ministry of Environment and Natural Resources according to the following structure:

INCREASED BUDGET STRUCTURE Inst GA UE FTE Pro Act Object Amount

201 01 01 11 11 01 12300 90,000.00 201 01 01 11 11 01 15140 442,481.00 201 01 01 11 11 01 15160 343,749.00 201 01 01 11 11 01 11600 101,485.00 201 01 01 11 11 01 17110 337,111.00 201 01 01 11 11 01 11180 75,999.00 201 01 01 11 11 01 21200 19,000.00 201 01 01 11 11 01 21200 3,700.00 201 01 01 11 11 01 21420 19,000.00 201 01 01 11 11 01 27140 108,400.00 201 01 01 11 11 01 22220 585,181.00

TOTAL INCREASED: 2,036,106.00

DECREASED BUDGET STRUCTURE Inst GA UE FTE Pro Act Object Amount

201 01 01 11 11 01 12300 90,000.00 201 01 01 11 11 01 12420 5,060.00 201 01 01 11 11 01 12420 7,500.00 201 01 01 11 11 01 12550 6,756.00 201 01 01 11 11 01 21430 45,000.00 201 01 01 11 11 01 23200 100,000.00 201 01 01 11 11 01 24900 965,260.00 201 01 01 11 11 01 26210 383,420.00 201 01 01 11 11 01 29100 8,000.00 201 01 01 11 11 01 29200 2,000.00 201 01 01 11 11 01 31100 10,000.00 201 01 01 11 11 01 34400 50,000.00 201 01 01 11 11 01 35610 152,500.00 201 01 01 11 11 01 35620 89,110.00 201 01 01 11 11 01 35650 10,000.00 201 01 01 11 11 01 39300 2,000.00 201 01 01 11 11 01 42120 7,000.00 201 01 01 11 11 01 42600 20,000.00 201 01 01 11 11 01 45100 50,000.00 201 01 01 11 11 01 51220 25,000.00

TOTAL DECREASED: 2,036,106.00

The State Secretary in the Ministry of Finance is authorized through the National Directorate of National Assets to carry out the public auction sale of national movable and immovable assets that provide no utility to the State; likewise, the National Transit Directorate, Public Ministry, and Supreme Court of Justice are instructed to comply with Decree No. 114-2007 as amended regarding abandoned vehicles, with the funds collected to be allocated to payment of internal debt.

The State Secretary in the Ministry of Finance is authorized to transfer from the funds assigned to the State Secretary in the Ministries of Culture, Arts and Sports, specifically from the current transfer to the Iberoamerican Organization of Sciences and Culture, the amount of Two Million Seven Hundred Ten Thousand Eight Hundred Lempiras Exactly (2,710,800.00), and this organization must present to the State Secretary in the Ministries of Culture, Arts and Sports an Operating Plan that reflects the objectives, goals and actions to be achieved with these resources.

The State Secretary in the Ministries of Public Works, Transportation and Housing (SOPTRAVI), through its own budgetary availability, shall allocate a budget of Fifty Million Lempiras (L.50,000,000.00) for mitigation of flooding in the Municipality of Yoro, Department of Choluteca. ARTICLE 219.- The Executive Branch, through the State Secretary in the Ministry of Finance, shall regulate these General Provisions within a period of thirty (30) days, counted from the date this Law takes effect; until such regulations are enacted, the last Regulation approved and published in the Official Gazette La Gaceta shall continue in effect.

This Decree shall enter into force as of the day of its publication in the Official Gazette "La Gaceta". Given in the city of Tegucigalpa, municipality of the Central District, in the Session Hall of the National Congress, on the eighteenth day of the month of January of the year two thousand thirteen. MAURICIO OLIVA HERRERA PRESIDENT ROBERTO CHANG CASTILLO SECRETARY GLADIA AURORA LÓPEZ CALDERÓN SECRETARY. To the Executive Power. Therefore: Let it be executed. Tegucigalpa, M.D.C., 5 February 2013. PORFIRIO LOBO SOSA PRESIDENT OF THE REPUBLIC THE SECRETARY OF STATE IN THE MINISTRY OF FINANCE. WILFREDO CERRATO RODRÍGUEZ