Decree 182-2020

Be it approved as an Estimate of Revenues of the Central Administration for the Fiscal Year 2021, the sum of ONE HUNDRED SIXTY-TWO THOUSAND FOUR HUNDRED THIRTY-FIVE MILLION SIX HUNDRED EIGHTY-NINE THOUSAND SEVEN HUNDRED FIFTY-THREE LEMPIRAS EXACT (L162,435,689,753.00), according to the detail described below:

- 2 - SIXTY-TWO THOUSAND FOUR HUNDRED THIRTY-FIVE MILLION SIX HUNDRED EIGHTY-NINE THOUSAND SEVEN HUNDRED FIFTY-THREE LEMPIRAS EXACT (L162,435,689,753.00) according to the detail described below: DESCRIPTION VALUE TAX REVENUES 96,388,129,631 Income Tax 24,784,277,638 Income Tax on Natural Persons 389,970,935 Income Tax on Legal Entities 2,679,541,580 Installment Payments 7,239,086,991 Withholding at Source 5,105,903,910 Withholding (Art. 5 and 25) 5,151,043,170 Withholding for Late Payment (Art.50) 729,280,852 Withholding Interest (Art.9) 966,724,756 Capital Gains 632,700,120 Solidarity Contribution 418,258,764 Capital Gains (Zolitur) 18,287,521 Housing Rental 10% 21,000,000 10% On Excess of Private Educational Center Operations 35,390,930 ISR Advance Withholding 1% 331,623,181 Advance Perception Natural Income 100,000 Advance Perception Legal Income 100,000 Installment Payments Solidarity Contribution 1,065,264,928 Property Tax 582,300,000 On the Conveyance of Real Property 425,900,000 On Net Assets 156,100,000 On the Conveyance of Land Ownership 300,000 Tax on Production, Consumption and Sales 47,796,900,000 On Beer Production 1,380,900,000 On Aguardiente Production 148,200,000 On Compound Liquor Production 87,000,000 On Forest Production 500,000 On Production and Consumption of Carbonated Water 1,100,000,000 On Sales 15% 41,538,900,000 On Sales 18% 1,960,000,000 On Cigarette Sales 518,100,000 On Selective Consumption of Various Items 500,400,000 On Selective Consumption of Vehicles 525,900,000 On Sales (18%) Air Transport Tickets 35,000,000 On Sales (5%) Electronic Lottery Tickets, Raffles and Drawings 2,000,000 Tax on Services and Specific Activities 18,465,651,993 On Gaming Casinos, Betting or Gambling 2,000,000 On the Sale of Contracting Stamps 5,000,000 On Asset Revaluation 45,000,000 On Tourist Services 75,451,993

- 3 - DESCRIPTION VALUE Contribution for Social Programs and Road Preservation 14,979,500,000 LPG Gas Tax 290,000,000 Other Taxes and Licenses On Various Activities 2,000,000 Contribution 0.2% On Financial Transactions for Public Security 2,703,900,000 Mobile Telephony Contribution for Public Security 52,800,000 Mining Contribution for Public Security 70,000,000 Fast Food Contribution for Public Security 25,000,000 Casinos and Slot Machines Contribution for Public Security 5,000,000 Cooperative Sector Contribution for Public Security 25,000,000 Ecotax on Import of Used Vehicles 100,000,000 Social Contribution of Cooperative Sector 70,000,000 Social Contribution of Social Economy Sector 15,000,000 Tax on Imports 4,740,300,000 Land Importation 2,340,300,000 Maritime Importation 2,200,000,000 Air and Postal Importation 200,000,000 Tax on Windfall Benefits and Gambling 18,700,000 On National Lottery Prizes 3,000,000 On Slot Machine Prizes 7,300,000 On Electronic Lottery Prizes 8,400,000 NON-TAX REVENUES 3,545,104,008 FEES 911,613,539 Migration Control 5,342,032 Vehicle Inspection 900,000 Vehicles with Foreign License Plates 3,000,000 Marine Recovery Services 8,566,664 Stamps 60,000,000 Consular Services 73,553,442 Customs Papers 30,000,000 Notarial Paper 34,216,000 National Flight Protection Service 20,700,000 Geological and Shipping Inspections 8,000,000 Environmental Monitoring 1,200,000 Authentication and Translation Service 24,600,000 Issuance of Certifications, Certificates and Others 188,400,000 Environment and Security Conservation (Zolitur) 32,452,541 Fee per Foreign Call (US$0.03) 231,682,860 Administrative Acts 25,000,000 Various Fees 164,000,000 RIGHTS 896,374,685 Passport Booklet 426,753,086 Merchant Marines Identification Card 37,252,584 Trademark Registration 18,200,000 Money Lender Registration 1,000,000 Incorporation of Commercial Companies 200,000

- 4 - DESCRIPTION VALUE National Merchant Marine 4,205,330 Driver's Licenses 198,000,000 Other Licenses 90,000,000 Shipping Agent Licenses 200,000 Migration Permits and Renewals 40,000,000 National Firearms Registry 15,500,000 National Registry of Persons 64,063,685 Various Rights 1,000,000 ROYALTIES AND CONCESSIONS 669,700,000 Radio-Electric Concessions and Frequencies 642,100,000 Water Use Royalty 2,600,000 Territorial Canon 25,000,000 FINES 612,238,156 Tariff Import Fines 36,000,000 Commutation and Judicial Fines 15,000,000 Fine for Breach of Contract 2,300,000 Transportation Fines 13,400,000 Labor Fines 6,000,000 CONATEL Sanctions and Violations 2,000,000 Police and Traffic Fines 225,000,000 Fines for Violation of Migration and Nationality Law 56,538,156 Sanctions by General Mining Law 2,000,000 Fines, Surcharges and Interest Applied Tax Code 55,000,000 Sanctions for Transfer Pricing 9,000,000 Various Fines and Penalties 190,000,000 OTHER NON-TAX REVENUES 455,177,628 Auction Revenues 10,000,000 Customs Repairs 1,000,000 Various Repairs 19,000,000 Waiver of Notices 100,000 Refunds from Previous Fiscal Years for Excess Payments 65,000,000 Compensation for Loss of Movable Assets 300,000 Customs Auctions 1,933,000 Other Non-Tax Revenues 357,844,628 SALES OF GOODS AND SERVICES OF GENERAL GOVERNMENT 587,199,297 SALE OF GOODS 59,000,000 Sale of Printed Materials 3,000,000 Sale of Agricultural Materials and Products 1,000,000 Sale of Various Items and Materials 55,000,000 SALE OF SERVICES 528,199,297 Other Services in Ports 500,000 Printing 71,304,064 Security Services to Private Sector Companies 31,000,000 Revenues from Hospital Centers 83,697,833 Revenues from Educational Centers 7,277,069 Sale of Various Services CESCCO 2,300,000

- 5 - DESCRIPTION VALUE Hondutel Data Transport 121,620,331 Sale of Various Services 210,500,000 PROPERTY INCOME 2,023,547,375 Interest on Loans to the Public Sector 2,011,747,635 Interest on Loans from Public Financial Institutions 21,434,937 Interest on Loans to Non-Financial Public Companies 1,990,312,698 Interest on Deposits 100,000 Interest on Internal Deposits 100,000 Interest on Securities 299,740 Commissions on Securities 299,740 Benefits from Business Investments 200,000 Dividends on Shares 200,000 Rentals 11,200,000 Rental of Land and Real Estate 9,600,000 Rental of Buildings, Premises and Facilities 1,200,000 Equipment Rental 100,000 Other Rentals 300,000 CURRENT TRANSFERS AND DONATIONS TO PUBLIC SECTOR INSTITUTIONS 60,000,000 CURRENT TRANSFERS AND DONATIONS FROM COMPANIES 60,000,000 Current Transfers from Public Companies 60,000,000 CAPITAL TRANSFERS AND DONATIONS 3,302,821,129 Capital Transfers and Donations from External Sector 3,302,821,129 Capital Donations from International Organizations 723,840,708 Capital Donations for Debt Relief - Paris Club (Foreign Governments) 320,294,729 Capital Donations for Debt Relief - MDRI (International Organizations) 2,258,685,692 FINANCIAL ASSETS 24,978,300 RECOVERY OF LONG-TERM LOANS 24,978,300 Recovery of Long-Term Loan from Public Financial Institutions 24,978,300 DEBT SECURITIES 22,733,800,000 PLACEMENT OF SECURITIES AND BONDS AT LONG-TERM 22,733,800,000 Placement of Long-Term Internal Debt Securities and Bonds 22,733,800,000 LOANS 33,770,110,013 OBTAINMENT OF LONG-TERM LOANS 8,542,080,013 Obtainment of Long-Term Loans from External Sector 8,542,080,013 OBTAINMENT OF SECTORAL LONG-TERM LOANS 25,228,030,000 Obtainment of Sectoral Long-Term Loans from External Sector 25,228,030,000 TOTAL REVENUES CENTRAL ADMINISTRATION 162,435,689,753

Be it approved as an estimate of Revenues of the Decentralized Administration for the Fiscal Year 2021, the sum of ONE HUNDRED TWENTY-SIX THOUSAND FOUR HUNDRED THIRTY-FIVE MILLION FOUR HUNDRED TWENTY-SEVEN THOUSAND THREE HUNDRED SIXTY-TWO LEMPIRAS EXACT (L126,435,427,362.00), according to the detail described below: Item Details of Revenues 11 National Treasury 12 Own Resources External Funds Total 12000 NON-TAX REVENUES - 644,658,397 644,658,397 12100 FEES - 181,766,107 181,766,107 12121 Issuance of Certifications, Certificates and Others 169,599,241 169,599,241 12199 Various Fees 12,166,866 12,166,866 12200 RIGHTS - 28,000 28,000 12299 Various Rights 28,000 28,000 12300 ROYALTIES AND CONCESSIONS - 228,000,000 228,000,000 12308 Electronic Lottery Concession 228,000,000 228,000,000 10 FINES - 112,647,994 112,647,994 12499 Various Fines and Penalties 112,647,994 112,647,994 12800 OTHER NON-TAX REVENUES - 122,216,296 122,216,296 12899 Other Non-Tax Revenue 122,216,296 122,216,296 13000 CONTRIBUTIONS TO SOCIAL SECURITY - 21,898,958,436 21,898,958,436 13100 CONTRIBUTIONS FROM PRIVATE SECTOR TO RETIREMENT AND PENSION SYSTEM - 2,511,083,411 2,511,083,411 13101 Employer Contributions 1,453,840,242 1,453,840,242 13102 Personal Contributions 873,749,477 873,749,477 13103 Other Income from Affiliation Agreements 183,493,692 183,493,692

Be it approved as an estimate of Revenues of the Decentralized Administration for the Fiscal Year 2021, the sum of ONE HUNDRED TWENTY-SIX THOUSAND FOUR HUNDRED THIRTY-FIVE MILLION FOUR HUNDRED TWENTY-SEVEN THOUSAND THREE HUNDRED SIXTY-TWO LEMPIRAS EXACT (L126,435,427,362.00), according to the detail described below:

- 7 - Item Details of Revenues 11 National Treasury 12 Own Resources External Funds Total 13200 CONTRIBUTIONS FROM PUBLIC SECTOR TO RETIREMENT AND PENSION SYSTEM - 11,819,080,732 11,819,080,732 13201 Employer Contributions 6,942,354,601 6,942,354,601 13202 Personal Contributions 3,859,326,131 3,859,326,131 13203 Other Affiliation Agreements 1,017,400,000 1,017,400,000 13300 CONTRIBUTIONS FROM PRIVATE SECTOR TO SOCIAL INSURANCE SYSTEM - 5,062,248,739 5,062,248,739 13301 Employer Contributions 3,329,715,137 3,329,715,137 13302 Personal Contributions 1,732,533,602 1,732,533,602 13400 CONTRIBUTIONS FROM PUBLIC SECTOR TO SOCIAL INSURANCE SYSTEM - 2,506,545,554 2,506,545,554 13401 Employer Contributions 1,660,019,110 1,660,019,110 13402 Personal Contributions 846,526,444 846,526,444 14000 CONTRIBUTIONS TO OTHER SYSTEMS - 1,727,510,463 1,727,510,463 14100 CONTRIBUTIONS TO PROFESSIONAL TRAINING SYSTEM - 1,085,596,913 1,085,596,913 14101 Employer Contributions to INFOP 1,085,596,913 1,085,596,913 14200 CONTRIBUTIONS TO COOPERATIVE SYSTEM - 35,758,904 35,758,904 14201 Contributions from Cooperative System to CONSUCOOP 35,758,904 35,758,904 14300 CONTRIBUTIONS TO INSURANCE SYSTEM - 606,154,646 606,154,646 14301 Contributions from Insurance System 606,154,646 606,154,646 15000 SALES OF GOODS AND SERVICES OF GENERAL GOVERNMENT - 859,126,327 859,126,327 15100 SALE OF GOODS - 705,684,571 705,684,571

- 8 - Item Details of Revenues 11 National Treasury 12 Own Resources External Funds Total 15107 Major Lottery Tickets 27,000,000 27,000,000 15108 Minor Lottery Tickets 386,320,000 386,320,000 15199 Various Revenues 292,364,571 292,364,571 15200 SALE OF SERVICES - 153,441,756 153,441,756 15299 Sale of Various Services 153,441,756 153,441,756 16000 OPERATING REVENUES - 41,953,359,229 41,953,359,229 16100 GROSS SALES OF GOODS - 2,080,195,607 2,080,195,607 16199 Gross Sales of Various Goods 2,080,195,607 2,080,195,607 16200 GROSS SALES OF SERVICES - 36,803,143,073 36,803,143,073 16298 Gross Sales of Energy Services 34,444,639,410 34,444,639,410 16299 Gross Sales of Various Services 2,358,503,663 2,358,503,663 16300 REVENUES FROM FINANCIAL INSTITUTIONS - 2,569,225,114 2,569,225,114 16301 Interest on Loans 910,373,317 910,373,317 16302 Commissions on Exchange Services 599,191,321 599,191,321 16303 Commissions on Banking Services 1,045,758,292 1,045,758,292 16399 Other Revenues from Financial Institutions 13,902,184 13,902,184 16900 NON-OPERATING REVENUES - 500,795,435 500,795,435 16999 Various Non-Operating Revenues 500,795,435 500,795,435 17000 PROPERTY INCOME - 21,327,184,992 21,327,184,992 17100 INTEREST ON LOANS TO PRIVATE SECTOR - 4,672,578,302 4,672,578,302 17101 Interest on Loans to Private Sector 4,672,578,302 4,672,578,302 17300 INTEREST ON DEPOSITS - 8,873,623,460 8,873,623,460 17301 Interest on Internal Deposits 4,669,705,470 4,669,705,470 17302 Interest on External Deposits 4,203,917,990 4,203,917,990

- 9 - Item Details of Revenues 11 National Treasury 12 Own Resources External Funds Total 17400 INTEREST ON SECURITIES AND BONDS - 7,311,179,513 7,311,179,513 17401 Interest on Internal Securities and Bonds 7,281,855,797 7,281,855,797 17402 Interest on External Securities and Bonds 29,323,716 29,323,716 17500 BENEFITS FROM BUSINESS INVESTMENTS - 244,286,004 244,286,004 17501 Dividends on Shares 244,286,004 244,286,004 17600 RENTALS - 225,517,713 225,517,713 17601 Rental of Land and Real Estate 58,146,744 58,146,744 17603 Rental of Buildings, Premises and Facilities 156,179,986 156,179,986 17604 Equipment Rental - - 17605 Other Rentals 11,190,983 11,190,983 18000 CURRENT TRANSFERS AND DONATIONS TO PUBLIC SECTOR INSTITUTIONS 8,377,097,653 73,644,000 35,994,718 8,486,736,371 18100 CURRENT TRANSFERS FROM GENERAL GOVERNMENT 8,377,097,653 73,039,000 - 8,450,136,653 18101 Current Transfers from Central Administration 8,377,097,653 8,377,097,653 18102 Current Transfer from Decentralized Institutions 72,839,000 72,839,000 18103 Current Transfers from Social Security Institutions 160,000 160,000 18104 Current Transfers from Universities 40,000 40,000 18200 CURRENT TRANSFERS AND DONATIONS FROM EXTERNAL SECTOR - - 35,994,718 35,994,718 18204 Current Donations from International Organizations 35,994,718 35,994,718 18400 CURRENT TRANSFERS AND DONATIONS FROM COMPANIES 345,000 345,000

- 10 - Item Details of Revenues 11 National Treasury 12 Own Resources External Funds Total 18402 Current Transfers from Public Companies 345,000 345,000 18500 CURRENT TRANSFERS AND DONATIONS FROM PUBLIC FINANCIAL INSTITUTIONS - 260,000 260,000 18501 Current Transfers from Public Financial Institutions 260,000 260,000 21000 OWN CAPITAL RESOURCES - 6,208,214 6,208,214 21100 SALE OF REAL ESTATE - 6,208,214 6,208,214 21101 Sale of Lands and Real Estate 6,208,214 6,208,214 22000 CAPITAL TRANSFERS AND DONATIONS 171,790,645 - 1,578,664,696 1,750,455,341 22100 CAPITAL TRANSFERS FROM GENERAL GOVERNMENT 171,790,645 - 1,578,664,696 1,750,455,341 22101 Capital Transfers from Central Administration 171,790,645 1,578,664,696 1,750,455,341 23000 FINANCIAL ASSETS - 25,283,399,592 25,283,399,592 23100 SALE OF SECURITIES AND BONDS - 11,408,323,795 11,408,323,795 23111 Sale of Securities and Bonds to Private Sector 10,470,138,795 10,470,138,795 23121 Sale of Long-Term Securities and Bonds to Private Sector 938,185,000 938,185,000 23300 RECOVERY OF SHORT-TERM LOANS - 11,504,391,843 11,504,391,843 23301 Recovery of short-term loans to private sector 11,504,391,843 11,504,391,843 23400 RECOVERY OF LONG-TERM LOANS - 2,370,683,954 2,370,683,954

- 11 - Item Details of Revenues 11 National Treasury 12 Own Resources External Funds Total 23401 Recovery of Long-Term Loans Private Sector 2,345,321,554 2,345,321,554 23402 Recovery of Long-Term Loans to Central Administration 25,362,400 25,362,400 32000 LOANS - - 2,497,830,000 2,497,830,000 32300 OBTAINMENT OF SECTORAL LONG-TERM LOANS - - 2,497,830,000 2,497,830,000 32302 Recovery of Short-Term Loans to Private Sector - 2,497,830,000 2,497,830,000 Total Revenues Decentralized Administration 8,548,888,298 113,774,049,650 4,112,489,414 126,435,427,362 CHAPTER II OF THE EXPENDITURES OF PUBLIC ADMINISTRATION

The expenses of the Public Administration for the Fiscal Year 2021, by Institution, Sectorial Cabinet and Financing Source, are approved for the sum of TWO HUNDRED EIGHTY-EIGHT THOUSAND EIGHT HUNDRED SEVENTY-ONE MILLION ONE HUNDRED SEVENTEEN THOUSAND ONE HUNDRED FIFTEEN LEMPIRAS EXACTLY (L288,871,117,115.00), according to the detail described below: CHAPTER II OF THE EXPENDITURES OF PUBLIC ADMINISTRATION

The expenses of the Public Administration for the Fiscal Year 2021, by Institution, Sectorial Cabinet and Financing Source, are approved for the sum of TWO HUNDRED EIGHTY-EIGHT THOUSAND EIGHT HUNDRED SEVENTY-ONE MILLION ONE HUNDRED SEVENTEEN THOUSAND ONE HUNDRED FIFTEEN LEMPIRAS EXACTLY (L288,871,117,115.00), according to the detail described below:

- 12 - Code Institution Name of Cabinet / Institution National Treasury Own Resources External Sources Total Sources 1 Governance Cabinet 5,548,464,403 222,081,694 2,600,000,000 8,370,546,097 State Secretariat in the Offices of Internal Governance, Justice, and Decentralization (SEGOB) 4,149,618,314 4,174,385 2,600,000,000 6,753,792,699 80 State Secretariat of Foreign Relations and International Cooperation (SEREXT) 921,461,325 88,073,625 - 1,009,534,950 300 State Secretariat in the Office of Human Rights (SDH) 88,797,925 - - 88,797,925 Inter-institutional Commission Against Commercial Sexual Exploitation and Human Trafficking (CICESCT) 6,741,800 - - 6,741,800 500 National Agrarian Institute 319,558,208 25,750,000 - 345,308,208 505 Honduran Institute of Anthropology and History 24,907,428 32,779,920 - 57,687,348 National Committee for Prevention Against Torture, Cruel, Inhuman and Degrading Treatment 12,379,403 - - 12,379,403 2 Social Cabinet 50,733,545,112 1,282,831,104 9,803,544,624 61,819,920,840 26 National Institute of Youth (INJ) 14,152,597 - - 14,152,597 50 State Secretariat in the Office of Education (SEDUC) 28,463,211,345 3,893,220 3,767,781,444 32,234,886,009 60 State Secretariat in the Office of Health (SESAL) 13,005,658,014 78,054,626 5,134,726,892 18,218,439,532 62 Health Regulatory Agency (ARSA) - 110,441,277 - 110,441,277 240 State Secretariat in the Offices of Social Development and Inclusion (SEDIS) 1,486,211,488 - 852,177,579 2,338,389,067 242 Directorate of Childhood, Adolescence and Family (DINAF) 135,981,999 - - 135,981,999 244 National Directorate of the Woman City Program (PCM) 73,946,056 - 9,203,991 83,150,047

- 13 - Code Institution Name of Cabinet / Institution National Treasury Own Resources External Sources Total Sources 504 Educational Credit Institute (EDUCREDITO); - 18,634,953 - 18,634,953 508 National Board for the Protection of Children (PANI); - 693,338,938 - 693,338,938 512 National Institute for Women (INAM) 43,115,331 - - 43,115,331 511 National University of Forest Sciences (UNACIFOR) 113,987,701 20,614,200 - 134,601,901 701 National Autonomous University of Honduras (UNAH); 4,717,180,311 249,030,575 - 4,966,210,886 702 National Pedagogical University Francisco Morazán (UPNFM); 555,120,927 50,000,000 - 605,120,927 703 National University of Agriculture (UNA) 450,596,019 41,501,075 3,660,000 495,757,094 708 School Hospital 1,674,383,324 17,322,240 35,994,718 1,727,700,282 3 Economic Cabinet 5,870,696,379 74,541,565,486 8,600,750,903 89,013,012,768 National Institute of Forest Conservation and Development, Protected Areas and Wildlife (ICF). 320,392,697 18,122,779 93,357,101 431,872,577 35 Honduran Institute of Geology and Mines (INHGEOMIN) 27,841,866 40,333,300 - 68,175,166 37 Tax Administration Service (SAR) 719,814,631 12,339,000 290,997,105 1,023,150,736 39 National Service of Entrepreneurship and Small Businesses (SENPRENDE) 258,527,502 - - 258,527,502 51 National Center for Work Education (CENET) 15,763,953 832,000 - 16,595,953 100 State Secretariat in the Office of Finance (SEFIN) 1,917,717,133 - 4,560,237,279 6,477,954,412 102 Administrative Commission Free Trade Zone Tourism Bay Islands (ZOLITUR) - 50,928,974 - 50,928,974 104 National Directorate of State Assets (DNBE) 21,740,855 - - 21,740,855

- 14 - Code Institution Name of Cabinet / Institution National Treasury Own Resources External Sources Total Sources 130 State Secretariat in the Offices of Labor and Social Security (SETRASS) 498,527,044 100,300 83,518,319 582,145,663 140 State Secretariat in the Offices of Agriculture and Livestock (SAG) 865,357,286 10,124,814 1,074,811,099 1,950,293,199 141 Directorate of Agricultural Science and Technology (DICTA) 83,167,443 1,500,000 - 84,667,443 145 National Service of Agricultural and Food Safety and Health (SENASA) 70,500,681 133,236,335 - 203,737,016 State Secretariat in the Offices of Natural Resources and Environment (MY ENVIRONMENT) 185,236,537 48,794,928 - 234,031,465 170 State Secretariat in the Office of Tourism (SETUR) 182,292,914 - - 182,292,914 290 State Secretariat in the Office of Economic Development (SDE) 192,771,500 7,057,393 - 199,828,893 310 State Secretariat in the Office of Energy (SEN) 104,996,710 4,780,000 - 109,776,710 501 Honduran Institute of Tourism (IHT) 173,203,220 1,773,251 - 174,976,471 503 Institute of Professional Training (INFOP); 1,188,950 1,091,076,499 - 1,092,265,449 506 National Supervisory Council of Cooperatives (CONSUCOOP); 10,009,043 46,791,224 - 56,800,267 514 Commission for the Defense and Promotion of Competition (CDPC) 25,385,544 12,166,866 - 37,552,410 515 Honduran Institute of Sciences, Technology and Innovation (IHCIETI); 56,560,541 - - 56,560,541 601 Honduran Social Security Institute (IHSS); 8,068,000 12,882,102,437 - 12,890,170,437 602 Institute of Pensions and Retirement Benefits of Executive Branch Employees (INJUPEMP); - 11,664,655,700 - 11,664,655,700 603 Institute of Teaching Pensions (INPREMA); 5,969,863 24,311,753,894 - 24,317,723,757 604 Military Pension Institute (IPM); 91,225,000 9,159,710,000 - 9,250,935,000

- 15 - Code Institution Name of Cabinet / Institution National Treasury Own Resources External Sources Total Sources Social Security Institute of Employees of the National Autonomous University of Honduras (INPREUNAH) - 1,785,718,240 - 1,785,718,240 806 Honduran Agricultural Marketing Institute (IHMA); 2,789,000 181,078,556 - 183,867,556 807 National Supplier of Basic Products (BANASUPRO); 6,337,450 904,890,016 - 911,227,466 901 Honduran Bank of Production and Housing (BANHPROVI); 25,311,016 3,376,431,985 2,497,830,000 5,899,573,001 902 Central Bank of Honduras (BCH); - 7,593,569,039 - 7,593,569,039 903 National Bank of Agricultural Development (BANADESA); - 516,683,178 - 516,683,178 950 National Commission of Banking and Insurance (CNBS); - 685,014,778 - 685,014,778 4 Infrastructure, Services and Public Enterprises Cabinet 6,440,001,739 38,540,479,111 6,180,115,634 51,160,596,484 22 Honduran Social Investment Fund (FHIS) 346,643,191 - 1,443,491,889 1,790,135,080 29 Commission for the Promotion of the Public-Private Partnership Alliance (COALIANZA) - - - - 31 Strategic Investment of Honduras (INVEST-H) 2,593,122,666 - 2,003,179,654 4,596,302,320 33 National Housing Commission and Human Settlements (CONVIVIENDA) 354,366,929 - - 354,366,929 61 Regulatory Entity of Water and Sanitation Services (ERSAPS) 8,555,757 4,918,663 - 13,474,420 101 National Commission of Telecommunications (CONATEL) 147,732,235 - - 147,732,235 120 State Secretariat in the Offices of Infrastructure and Public Services (INSEP) 2,263,550,943 117,557 792,753,908 3,056,422,408 123 Honduran Institute of Land Transportation (IHTT) 131,687,307 46,714,641 - 178,401,948 144 National Program of Sustainable Rural and Urban Development (PRONADERS) 481,194,338 - 251,532,013 732,726,351

- 16 - Code Institution Name of Cabinet / Institution National Treasury Own Resources External Sources Total Sources 153 Electric Energy Regulatory Commission (CREE) - 98,930,000 - 98,930,000 241 Institute of Community Development, Water and Sanitation (IDECOAS) 34,650,515 - 114,153,474 148,803,989 801 National Electric Power Company (ENEE) - 34,704,639,410 1,575,004,696 36,279,644,106 803 National Port Company (ENP) - 1,172,698,888 - 1,172,698,888 804 Honduran Telecommunications Company (HONDUTEL) - 1,417,085,890 - 1,417,085,890 805 National Water and Sewerage Service (SANAA) 1,519,564 1,027,192,733 - 1,028,712,297 808 National Railroad of Honduras (FNH) 3,055,615 12,358,626 - 15,414,241 809 Mail Company of Honduras (HONDUCOR) 73,922,679 55,822,703 - 129,745,382 5 Prevention, Security and Defense Cabinet 17,967,443,282 635,750,578 478,708,651 19,081,902,511 25 National Program of Prevention, Rehabilitation and Social Reinsertion (PNPRRS) 7,530,169 - - 7,530,169 36 Executive Directorate of Culture, Arts and Sports (DECAD) 190,003,924 387,768 - 190,391,692 41 Permanent Contingencies Committee (COPECO); 564,395,534 - - 564,395,534 42 Fire Department of Honduras (CBH) 292,887,581 76,790,817 - 369,678,398 44 National Penitentiary Institute (INP) 1,200,698,724 - - 1,200,698,724 45 National Migration Institute (INM) 519,715,217 - - 519,715,217 46 National Institute for the Care of Minor Offenders (INAMI) 15,827,540 - - 15,827,540 70 State Secretariat in the Office of Security (SESEGU) 6,044,871,777 447,000,000 478,708,651 6,970,580,428

- 17 - Code Institution Name of Cabinet / Institution National Treasury Own Resources External Sources Total Sources 72 Directorate of Police Disciplinary Affairs (DIDADPOL) 45,405,615 - - 45,405,615 90 State Secretariat in the Office of Defense (SEDENA) 8,436,944,242 28,004,964 - 8,464,949,206 91 Honduran Agency of Civil Aeronautics (AHAC) 230,500,132 16,409,531 - 246,909,663 121 General Directorate of the Merchant Marine (MARMER) 53,526,628 50,024,578 - 103,551,206 161 Center of Garinagu Culture of Honduras (CCGH) 10,447,914 - - 10,447,914 243 National Directorate of Parks and Recreation (DNPR) 35,725,655 - - 35,725,655 350 Cabinet of Prevention, Security and Defense (GPSD) 245,024,462 - - 245,024,462 Honduran Institute for the Prevention of Alcoholism, Drug Addiction and Pharmacodependence (IHADFA) 15,317,425 2,944,000 - 18,261,425 National Commission Pro-Sports Facilities and Improvement of Sports (CONAPID) 34,371,029 14,188,920 - 48,559,949 510 Autonomous Sports Confederation of Honduras (CONDEPAH) 24,249,714 - - 24,249,714 97 Entities Not Part of the Executive Branch 8,804,997,420 294,703,703 101,465,520 9,201,166,643 1 National Congress (CN) 1,208,000,000 - - 1,208,000,000 2 Supreme Court of Auditors (TSC) 371,120,906 89,500,000 - 460,620,906 3 National Commissioner of Human Rights (CONADEH) 83,469,126 - - 83,469,126 4 National Electoral Council (CNE) 1,504,453,131 - - 1,504,453,131 5 Electoral Justice Court (TJE) 95,263,380 - - 95,263,380 10 Judicial Branch (PJUD) 2,630,296,306 94,586,498 - 2,724,882,804

- 18 - Code Institution Name of Cabinet / Institution National Treasury Own Resources External Sources Total Sources 180 National Registry of Persons (RNP) 658,744,283 64,063,685 101,465,520 824,273,488 190 Public Ministry (MP) 2,105,475,158 - - 2,105,475,158 200 General Attorney of the Republic (PGR) 148,175,130 46,553,520 - 194,728,650 98 Entities with Attribution to the Presidential Secretariat 609,743,166 226,208,475 - 835,951,641 Ministerial Office of Socialization and Digital Accompaniment of Presidential Projects (DMSADPP) 58,240,095 - - 58,240,095 400 Honduras Customs Administration (AAH) 551,503,071 226,208,475 - 777,711,546 99 Entities Without Attribution to a Cabinet 35,962,453,991 4,730,916 13,420,835,224 49,388,020,131 20 Presidency of the Republic (PREREP) 981,327,779 - - 981,327,779 30 State Secretariat in the Office of the Presidency (SEPRE) 765,019,174 - - 765,019,174 32 Institute of Access to Public Information (IAIP) 38,796,606 - - 38,796,606 220 Public Debt (DEPU) 27,310,287,380 - 12,642,209,523 39,952,496,903 280 General Coordination Secretariat of Government (SCGG) 265,052,779 - - 265,052,779 282 School of High Public Management (EAG) 10,000,000 - - 10,000,000 402 Strategic Agency of Productive Environmental Projects (AEPPA) - - 577,421,784 577,421,784 449 Financial Services of the Central Administration (SFAC) 6,512,794,280 - 201,203,917 6,713,998,197 513 National Institute of Statistics 79,175,993 4,730,916 - 83,906,909 Subtotal Cabinets 86,560,150,915 115,222,707,973 27,663,119,812 229,445,978,700

- 19 - Code Institution Name of Cabinet / Institution National Treasury Own Resources External Sources Total Sources Subtotal Outside of Cabinets 45,377,194,577 525,643,094 13,522,300,744 59,425,138,415 Total General Budget of Public Administration Expenses (Central Administration + Decentralized Administration) 131,937,345,492 115,748,351,067 41,185,420,556 288,871,117,115 By instructions of the Ordinary Commission of Budget of the National Congress and through the use of forms of budget modifications (FMP-05) of the Integrated Financial Administration System (SIAFI), it authorizes the State Secretariat in the Office of Finance to carry out the necessary adjustments to the General Budget of Income and Expenses of the Republic for Fiscal Year 2021, affecting the structures that are necessary.

For Fiscal Year 2021, the following articles of the Budget Execution Rules of the General Budget of Income and Expenses of the Republic 2020 contained in Decree No. 171-2019 and its reforms Decree No. 7-2020 are ratified, even though their wording may change, present or add new changes, which do not modify the spirit of these. 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 5 5 65 66 130 138 198 200 6 6 66 67 131 139 199 201 262 259 7 7 67 68 132 140 200 202 263 263 8 9 69 69 134 141 201 203 265 265 9 10 71 72 135 142 202 204 266 272 10 11 72 73 136 143 204 205 267 284 11 12 73 74 137 144 205 206 277 164 13 14 74 75 138 145 206 207 145 150 14 15 76 77 139 146 207 208 68 256 15 16 77 78 140 147 208 209 75 76 16 17 78 79 141 148 209 210 125 133 17 18 80 81 143 149 210 211 165 170 18 19 81 82 144 150 211 212 166 171 20 21 82 84 146 151 212 213 167 172 21 22 83 85 147 152 213 217 22 23 84 86 148 153 214 218 23 24 85 87 149 154 215 219 25 25 86 88 150 155 216 220 26 27 87 89 151 156 217 221 27 28 88 90 152 157 218 222

For Fiscal Year 2021, the following articles of the Budget Execution Standards of the General Budget of Income and Expenses of the Republic 2020 contained in Decrees No. 171-2019 and its reforms Decree No. 7-2020 are ratified, even if their wording changes, present or add new changes, which do not modify the spirit of these. 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 5 5 65 66 130 138 198 200 6 6 66 67 131 139 199 201 262 259 7 7 67 68 132 140 200 202 263 263 8 9 69 69 134 141 201 203 265 265 9 10 71 72 135 142 202 204 266 272 10 11 72 73 136 143 204 205 267 284 11 12 73 74 137 144 205 206 277 164 13 14 74 75 138 145 206 207 145 150 14 15 76 77 139 146 207 208 68 256 15 16 77 78 140 147 208 209 75 76 16 17 78 79 141 148 209 210 125 133 17 18 80 81 143 149 210 211 165 170 18 19 81 82 144 150 211 212 166 171 20 21 82 84 146 151 212 213 167 172 21 22 83 85 147 152 213 217 22 23 84 86 148 153 214 218 23 24 85 87 149 154 215 219 25 25 86 88 150 155 216 220 26 27 87 89 151 156 217 221 27 28 88 90 152 157 218 222 With instructions from the Ordinary Budget Commission of the National Congress and through the use of Budget Modification Forms (FMP-05) of the Integrated Financial Administration System (SIAFI), it authorizes the State Secretary in the Finance Office, so that the necessary adjustments are made to the General Budget of Income and Expenses of the Republic for Fiscal Year 2021, affecting the structures that are necessary.

For Fiscal Year 2021, the following articles of the Budget Execution Standards of the General Budget of Income and Expenses of the Republic 2020 contained in Decrees No. 171-2019 and its reforms, Decree No. 7-2020, are ratified, even if their wording changes, present or add new changes, which do not modify the spirit of these.

- 20 - 28 29 89 91 153 158 219 275 29 30 90 92 154 159 220 223 30 31 91 93 155 160 221 224 31 32 92 94 156 161 222 225 32 33 93 95 157 162 223 226 33 34 94 96 158 163 224 227 34 35 95 97 160 165 225 228 35 36 96 98 161 166 226 229 36 37 97 99 162 167 227 230 37 38 98 100 163 168 228 231 38 39 99 101 164 169 229 232 39 40 100 103 168 173 230 233 40 41 101 104 169 174 231 234 41 42 102 105 170 175 233 235 42 43 103 106 171 176 234 236 43 44 105 107 172 177 235 237 44 45 106 108 173 178 236 238 45 46 107 109 174 179 237 239 46 47 108 110 175 180 238 240 47 48 109 111 177 181 239 241 48 49 110 112 178 182 240 242 49 50 111 113 179 183 241 243 50 51 112 114 182 184 242 244 51 52 114 115 184 186 243 245 52 53 115 116 185 187 245 246 53 54 116 117 186 188 246 247 54 55 117 118 187 189 247 248 55 56 118 119 188 190 248 249 56 57 119 120 189 191 249 250 57 58 120 124 190 192 250 251 58 59 121 127 191 193 251 252 59 60 122 128 192 194 254 253 60 61 124 132 193 195 255 254 61 62 126 134 194 196 256 255 62 63 127 135 195 197 257 257 63 64 128 136 196 198 258 258 64 65 129 137 197 199 259 280

CHAPTER III TITLE I OF THE BUDGET EXECUTION STANDARDS

The failure to comply with and violations of the Standards established in this Law, when not specifically sanctioned, shall be penalized with fines ranging from three (3) minimum wages to thirty (30) minimum wages, which shall be imposed by the Office of the Attorney General of the Republic (PGR) on the violators, based on the administrative procedure that the Court of Accounts (TSC) applies for such purposes, according to its severity, without prejudice to other administrative, civil and criminal liabilities that may apply. The amounts from fines established herein shall be deposited in the General Treasury of the Republic and these revenues shall be allocated to the Court of Accounts (TSC) and to the Office of the Attorney General of the Republic (PGR) up to twenty percent (20%) for each institution, for the purpose of financing expenses related to review and compliance actions with this Law. Therefore, the State Secretary in the Finance Office is empowered to refer all cases of non-compliance and/or violations of this Law to the Court of Accounts (TSC) so that it may take the actions that correspond to it in coordination with the Office of the Attorney General of the Republic (PGR).

The General Coordination Secretariat of Government (SCGG), through the Presidential Directorate of Monitoring and Evaluation, shall conduct monitoring of national planning, through reports containing the level of progress of medium and long-term results, defined in the strategic planning instruments, as well as the linked public policies. For this purpose, it shall prepare an annual report on the progress of overall results and respective indicators established in the Government Strategic Plan. Said report shall be published on the SCGG website and shall be presented to the President of the Republic, to the Superior Court of Accounts (TSC), to the Institute of Access to Public Information (AIP) and to the National Congress through the Ordinary Budget Commission. In order to comply with what is established in the preceding paragraph, information relating to progress in the indicators must be registered periodically by the corresponding bodies in the Presidential System of Results-Based Management (SGPR) and presented through reports by the Deputy Coordinators of Sectoral Cabinets containing the progress in policy measures, at the request of the General Coordination Secretariat of Government (SCGG).

The General Coordination Secretariat of Government (SCGG) shall conduct monitoring of institutional planning at the level of results and the production of goods and services delivered to citizens. For this purpose, the SCGG shall generate monthly reports from the Presidential System of Results-Based Management (SPGR) on the progress of physical execution of institutions and shall prepare the respective quarterly reports and an Annual Report. Said reports and reports shall be based on the programming that public sector institutions carry out in the SPGR. These must present information relating to budget execution generated by SIAFI. Monthly reports shall be sent to the Heads of public institutions in order to improve their management. Quarterly Reports shall be sent to the Deputy Coordinators of the Sectoral Cabinets, as well as to the Secretariat of Finance. In order to comply with what is established, information must be registered by Public Sector institutions mandatorily in the Presidential System of Results-Based Management no later than ten (10) calendar days after the end of the month.

The General Coordination Secretariat of Government (SCGG), through the Presidential Directorate of Monitoring and Evaluation (DPME), shall conduct ex ante evaluations of selected institutional programs, those to which monitoring is conducted through the Presidential System of Results-Based Management (SPGR). Each quarter, at least 10 institutions shall be selected to prepare and report the ex ante evaluation of the program chosen for this purpose. For this purpose, it shall prepare a comprehensive report that will contain a synthesis of the results of the ex ante evaluations contained in the reports of each program prepared by the institution responsible for it. For this purpose, institutions shall use the Design Evaluation Guide of the Presidential Directorate of Monitoring and Evaluation (DPME). Said report shall be sent to the Heads of public institutions and the Deputy Coordinators of the Sectoral Cabinets in order to contribute to improving their management, derived from a greater understanding of the respective programs. In order to comply with what is established in the preceding paragraph, the ex ante evaluation reports of each institutional program must be uploaded to the evaluation module of the Presidential System of Results-Based Management (SPGR) created for this purpose. Said reports must be uploaded within the first 15 days of the first month of the quarter following the one being reported. For purposes of the ex ante evaluation, each institution selected to report in the corresponding quarter must select at least one program per quarter to be evaluated; this activity must be included in its institutional planning until all programs in execution under its responsibility have been completed.

All institutions of the Central, Decentralized, and Deconcentrated Government shall officially submit within the first fifteen (15) days of the month following the end of the quarter to the Secretary of State in the Office of Finance, the quarterly report in digital format through the delivery of 3 CDs, containing their respective physical and financial execution of the Annual Operating Plan and Budget, as well as any other relevant information that facilitates the analysis of said report, this same information must be available on the WEB sites of each institution. These reports shall be prepared quarterly and cumulatively by each institution in compliance with the principle of Self-Evaluation. The monitoring and evaluation of the Annual Operating Plan and Budget shall be carried out by institutions of the Central, Decentralized, and Deconcentrated Government, without exception, in accordance with the Technical Standards and Procedure Manuals of the Subsystems of Budget, Treasury, Accounting, Public Credit and Public Investment approved by the Secretary of State in the Office of Finance, based on information mandatorily recorded in the Integrated Financial Administration System (SIAFI); financial information must be recorded by each institution no later than the last day of each month and physical information within the first 5 business days after the end of the month. Likewise, consideration must be given to information available in the National Public Investment System of Honduras (SNIPH), the Human Resources Management System (SIARH), Public Employee Registry System (SIREP), Teaching Administration System (SAD), Debt Management and Administration System (SIGADE) and the Monitoring and Evaluation System (SME). When the results obtained are not in accordance with what was programmed, the Secretary of State in the Office of Finance is empowered to reduce the amounts allocated for Quarterly Spending Quota (CGT), as well as reduce the pending budget to be committed for accrual. Prior to the Secretary of State making the decision to reduce said amounts, it shall inform the Secretary of General Coordination of Government and it shall be this Secretary who must ensure that such measure does not affect the achievement of Government priorities. The Secretary of State in the Office of Finance shall submit no later than thirty (30) days after receiving the information, the quarterly report on monitoring and evaluation of institutional budget execution in digital format through the delivery of one CD (in total 12 CDs) to each of the following bodies: Secretary of the National Congress (1), Secretary of State in the Office of General Government Coordination (1), to the Superior Court of Accounts (TSC) (1), to the Institute for Access to Public Information (1), to the Ordinary Legislative Budget Commission (1) and to the heads of each of the Congressional Caucuses (7). Likewise, the Secretary of State in the Office of Finance shall make said reports available to the general public, publishing them on its internet portal and on the transparency page of said Secretary of State. Once said reports have been analyzed, the Ordinary Legislative Budget Commission, based on the powers of the National Congress, shall carry out the actions that, based on law, it considers pertinent. The Ordinary Legislative Budget Commission together with the representations of the different accredited caucuses that make up the National Congress, shall analyze the reports and when necessary shall hold Public Hearings with institutions of the Central, Decentralized, and Deconcentrated Government, in order to exercise a controlling, financial and operational function, for which they shall require from the Office of the Presidency, the Secretary of General Coordination of Government, the Secretary of State in the Office of Finance and the Superior Court of Accounts the technical support deemed appropriate. TITLE II. GENDER PERSPECTIVE IN THE GENERAL BUDGET OF INCOME AND EXPENSES OF THE REPUBLIC.

The Gender Budget is a democratic tool of affirmative action in the allocation of resources intended to implement actions to close the discrimination gap between men and women, ensuring that funds are used equitably from a gender perspective. The State, in order to achieve equal opportunities between men and women, shall promote in a cross-cutting manner the application of the Second Plan for Equality and Gender Equity in Honduras 2010-2022 (II PIEGH) and the National Plan Against Violence Against Women 2014-2022, through the incorporation of the gender perspective in the design, implementation and evaluation of policies, plans and budgets of the Public Administration. For such purposes, the departments and entities must consider the following:

• 1)

  In their institutional Strategic Plan at the level of objectives and results, reflect the commitment to reduce gaps of substantive inequality between men and women;

• 2)

  In their Operating Plan, contemplate products and activities/works with budget allocations, under the logic of the public value chain and production, that account for concrete actions to achieve gender equality in each public entity;

• 3)

  Generate information disaggregated by gender (sex, ethnicity, age, department, municipality, among others) through programs, projects, services and activities carried out by public entities;

• 4)

  Define and apply indicators that allow visualizing progress regarding the implementation of the Woman City Program, II PIEGH and the National Plan Against Violence Against Women 2014-2022;

• 5)

  In order to promote and monitor the implementation of the Second Plan for Equality and Gender Equity in public management and the guidelines of this article, in accordance with Article 8 of the Regulation of the Law of Equal Opportunities for Women, each Institution must create the Gender Unit financing its creation with resources from its own budget, without demanding additional resources for its operation, following the guidelines issued by the National Institute for Women in the Manual of Organization and Functions of Gender Mechanisms. The National Institute for Women (INAM) as the Governing Body of Policies in favor of women's rights and gender equity, must issue technical and operational guidelines for the formulation of planning and budgets with a gender approach, in coordination with the entities that govern the Planning and Budgeting processes (Secretary of General Coordination of Government through the Presidential Directorate of Strategic Planning, Results-Based Budgeting and Public Investment and the Secretary of State in the Office of Finance). The Secretary of State in the Office of Finance shall issue Budget Policy Guidelines for the Formulation of Public Sector Budgets, incorporating the consensual contributions of the Governing Body for Gender Policy. The National Institute for Women (INAM) shall apply annually the gender equity investment index as an internal mechanism for monitoring and evaluation of public management in matters of gender equity. For this purpose, state institutions must submit a report on their budget allocation and execution with a gender perspective. The application of this Index shall also constitute a mechanism of encouragement for public entities that meet the goals and plans of gender equity, either through the expansion of budget ceiling or by avoiding budget cuts in the following period to those institutions that report greater investment in gender; to facilitate this process, INAM shall seek targeted support from international cooperation organizations to assist the Finance Secretary in the development and implementation of the Budget Classifier on Gender Matters, in order to comply with the international commitments assumed by the State of Honduras on gender matters. The Legislative Budget Commission in coordination with the Legislative Commission on Gender Equity of the National Congress and the National Institute for Women (INAM), shall conduct semi-annual monitoring of the execution of public management expenses on gender equity matters, through public hearings. For such purposes, government departments and entities shall be convened to said public hearings and shall have the responsibility to prepare reports on their investment in favor of women's rights and gender equality. The Gender Equity Commission and the Budget Commission of the National Congress shall coordinate this process with the National Institute for Women (INAM) and representatives of Women's Civil Society Organizations, who shall be invited by the National Congress to the public hearings for budget execution review on a mandatory basis.

The National Directorate of the Woman City Program (Institution No. 244), the entity in charge of national coordination of the Presidential Woman City Program, constitutes one of the relevant operational programs to advance the implementation of public Gender policies, created by Executive Decree No. PCM-031-2016 of March 15, 2016 and elevated to the rank of National State Policy by Legislative Decree No. 159-016 of November 29, 2016 with the purpose that it be mandatory compliance for all governments that assume the conduct of the State. To comply with the foregoing, each of the State institutions involved and participating in the Program is instructed to cover the necessary expenses in accordance with the responsibilities established in the Program's Operating Manual, Interinstitutional Framework Cooperation Agreement for the Enablement, Operation, Regulation and Sustainability of the Woman City Program, care protocols and other regulations that support the Woman City Program, to ensure the proper functioning of the program and the management model in the different modules within its competence in each Woman City Center, including the payment of supplies and personnel assigned, as established in the Program's Operating Manual, Interinstitutional Framework Cooperation Agreement for the Enablement, Operation, Regulation and Sustainability of the Woman City Program and in the operating protocols. Said budget must be allocated in a differentiated manner at the level of Activity/Work and identified in the Annual Operating Plan of each of the participating institutions; funds allocated to the different Woman City modules must be used only to cover expenses related to the operation of said modules; consequently, participating institutions are prohibited from making transfers to cover commitments of a different purpose. For the foregoing, the Secretary of State in the Office of Finance shall provide the technical support necessary in this process; and the Secretary of General Coordination of Government shall ensure compliance with the contents of this Article.

The failure to comply with Articles 6, 7, 8, and 9 of this Law by the official head of the State Secretariats, Decentralized Bodies, and Decentralized Institutions, in addition to the sanctions established in Article 5 of this Law, shall give rise to censure by the National Congress, of which the President of the Republic shall be informed; likewise, disbursements shall be suspended by the State Secretariat of the Treasury Department to the offending institutions until said situation is remedied. TITLE III OF REVENUES

All institutions of the Public Administration that generate or receive income, whether from their own activities, eventual activities, or derived from current laws, shall deposit in the General Revenue Account that the General Treasury of the Republic maintains in the Central Bank of Honduras (BCH), the total thereof no later than five (5) days after receipt, using for this purpose the procedures of the Revenue Execution Module of the Integrated Financial Administration System (SIAFI) and the official online receipt TGR-1 defined by the General Treasury of the Republic. In the case of Decentralized Institutions that based on their Special Law of creation are obligated to remit their own resources in the General Revenue Account of the General Treasury of the Republic, they must proceed based on the aforementioned mechanism. The State Secretariat of the Treasury Department (SEFIN) may authorize up to fifty percent (50%) of the net income generated by activities of its own nature and that refer to the sale of goods and services, so that they can be used by the departments that generated them, provided that the collection thereof is demonstrated; from these resources the amounts charged by the Banking System shall be deducted in concept of collection service fees. The institutions described below are excepted from the foregoing paragraph; to which the following percentages shall be authorized: No. Institution Assigned Percentage Source of Income Criterion/Legal Basis National Registry of Persons (RNP) one hundred percent (100%) The income it receives for the concept of services it provides Shall be incorporated after verification of the existence of corresponding deposits in the Integrated Financial Administration System (SIAFI), by the State Secretariat of the Treasury Department through the General Budget Directorate. Chapter II of RNP Patrimony, Art. 116 of the Creation Law. The National Registry of Persons is a Constitutional Entity of National Security and not a public company. National Center for Education for Work (CENET) one hundred percent (100%) The income it receives for the concept of services it provides Creation Law Decree 84-2001 Article 11 CENET Patrimony, numeral 3 Funds from the sale of technical services to institutions and development organizations, as well as rents and proceeds from its assets. Agreement No. 0042-PE-04 Regulation for the Administration of Own Resources. Free Tourist Zone of the Bay Islands one hundred percent (100%) The income it receives for the concept of services it provides Decree No. 181-2006, Chapter II Numeral 3 National Agricultural Health Service (SENASA) one hundred percent (100%) The income it receives for the concept of services it provides PCM-038-2016, Article 14 literal C. The State Secretariat of the Treasury Department (SEFIN) may authorize up to fifty percent (50%) of the net income generated by activities of its own nature and that refer to the sale of goods and services, so that they can be used by the departments that generated them, provided that the collection thereof is demonstrated; from these resources the amounts charged by the Banking System shall be deducted in concept of collection service fees. The institutions described below are excepted from the foregoing paragraph; to which the following percentages shall be authorized: No. Institution Assigned Percentage Source of Income Criterion/Legal Basis 5 Judicial Power one hundred percent (100%) The income from the amounts collected for services rendered and sale of fiscal stamps. Issuance of Background Certificates, Authentication Service and various fees (processing of summons, notifications, requests, among others). Decree No. 75 of April 7, 1911 and its reforms, Financial Balance and Social Protection Law, Article 26. Agreement No. 1-2008 of the Regulation of the Authentication Law, Agreement No. 1-2016 amending Article No. 60 of the Regulation of the Electronic Documentation and Information Center, regarding the cost of the background certificate), and Agreement No. 09-2017 regulation of the procedure for summons, service, notifications and requests. National Enterprise of Graphic Arts (ENAG) one hundred percent (100%) The income it receives for the concept of services it provides These resources shall be used for operative expenses and regularized through the General Treasury of the Republic, according to the amounts that the Institution executes. Honduras Fire Department one hundred percent (100%) The income from the amounts collected from the Municipal Tax. Legislative Decree 294-93 Law of Creation of the Honduras Fire Department Chapter VIII Article 40 and Decree No. 134-90 Law of Municipalities, Article 83 Fire Service. General Directorate of National Merchant Marine one hundred percent (100%) The income from the registration in the Ship Registry and from the issuance of the Navigation Patent collected abroad, as well as any other own income it generates. Organic Law of the Merchant Marine Decree No. 167-94 and its reform according to Decree Number 200-97, of January 31, 1998, Gazette No. 28,478 establishes in Article 84.-The rates to which this Chapter refers shall be paid in the General Treasury of the Republic or in the banking institution that it has authorized for that purpose. Health Regulatory Agency (ARSA) one hundred percent (100%) The income it receives for the concept of services it provides Executive Decree No. PCM 032-2017 Electrical Energy Regulatory Commission (CREE) one hundred percent (100%) The income it receives for the concept of services it provides Legislative Decree No. 404-2013, Article 3 literal G. Public-Private Partnership Regulatory Superintendence (SAPP) one hundred percent (100%) The income it receives from the contribution for regulation of the subscription of Public-Private Partnership Contracts Legislative Decree No. 143-2010, Article 29 State Secretariat of Health one hundred percent (100%) The income from the amounts it receives through Primary Health Care Units (UAPS), Comprehensive Health Centers (CIS), Polyclinics, Hospitals, and the Department of Surveillance of the Health Regulatory Framework within its scope of competence. These resources shall be allocated to cover operating expenses, in accordance with the regulations and procedures approved for that purpose between the Health Secretariat and SEFIN No. Institution Assigned Percentage Source of Income Criterion/Legal Basis State Secretariat of Education one hundred percent (100%) The income from the amounts it receives through official Educational establishments. These resources shall be allocated to cover operating expenses, in accordance with the regulations and procedures approved for that purpose between the Education Secretariat and SEFIN National Institute for Forest Development and Conservation, Protected Areas and Wildlife one hundred percent (100%) Income from the various activities carried out by its departments. Forest, Protected Areas and Wildlife Law Decree No. 156-2007, Article 32 All income generated by the institute, whether from its own or eventual activities, must be deposited in the account that the General Treasury of the Republic maintains in the Central Bank of Honduras. Decree No. 87-2013 Article No. 16 numeral 1 It decrees that the National Institute for Forest Development and Conservation, Protected Areas and Wildlife (ICF), shall be assigned 100% of the income from the various activities carried out by its departments. Regulatory Entity of Potable Water and Sanitation Services one hundred percent (100%) Income from the collection of supervision, surveillance and advisory services, collected by Potable Water and Sanitation providers. Legislative Decree 118-2003 Framework Law of the Potable Water Sector and maintenance in Chapter VIII, art. 34; of the Regulation, Chapter IV, art. 15, 17 and 18 and Chapter XII art. 50 subsection A. 16 Security Secretariat one hundred percent (100%) Income received for the concept of arms registration. Based on the provisions established in Article 4 of Legislative Decree No. 187-2004. 17 National Defense Secretariat one hundred percent (100%) The income received by the Military Industry of the Armed Forces (IMFFAA), the Military Hospital, the University of Defense of Honduras. For the use of these resources, the Defense Secretariats shall present to the Finance Secretariat, the Budget and the Plan of Expenses, which must include prevention programs. Economic Development Secretariat one hundred percent (100%) Own Income generated by the National Quality System Executive Decree No. PCM-042-2017, published on August 5, 2017, Gazette No. 34,409 Secretariat of Foreign Relations and International Cooperation one hundred percent (100%) Income received for Consular Tuition and Income from the various activities carried out by its dependencies, includes the implementation of electronic apostilles. Decree No. 263-2011, which establishes that all consular fees for services rendered by Consular officials must be canceled through advance payment and shall enter in full to the General Treasury of the Republic.

- 36 - No. Institution Assigned Percentage Source of Income Criterion/Legal Basis 20 Finance Secretariat (SEFIN) one hundred percent (100%) Income received by PPICPU through collections made for Artistic Presentations, Sale of Artistic Products, Donations, among others. Comprehensive Pilot Program to Combat Urban Poverty (PPICPU) belonging to the Finance Secretariat, Program 01, Administrative Management 01 and Activity 04 Directorate of Culture Arts and Sports one hundred percent (100%) Income from services rendered Executive Decree Creation Law No. PCM-021-2014 and Legal Opinion No. USL-03-2020 22 Energy Secretariat one hundred percent (100%) Income received for services rendered and shall be recognized through deposits made with TGR-1 and validated by the General Budget Directorate of the Finance Secretariat. Executive Decree No. PCM-048-2017 of August 7, 2017 (Creation of the Energy Secretariat); Agreement No. 22-2019 published on April 10, 2019 (Categorization and Creation Agreement for Services Rendered) State Secretariat of Energy, Natural Resources, Environment and Mines up to ninety percent (90%); Income received for the concept of environmental tariffs, fees, certifications or certificates and any other income related to its competencies. The TGR1 and attached documents presented by MI AMBIENTE to the Finance Secretariat under the Other Licenses category shall be validated with the date of submission by the taxpayer. The TGR1 of the other categories shall be validated based on Article 19 of this Law Directorate of Agricultural Science and Technology up to ninety percent (90%) Income received for the concept of the sale of goods and services provided to the agricultural sector. Decree No. 1046 of October 15, 1980, in Article 35 discusses Resources, which in addition to those allocated in the General Budget of the Republic, shall have available collections for services that can be rendered to private individuals or private companies Commission for the Defense and Promotion of Competition (CDPC) ninety percent (90%) The income it receives for the concept of Economic Concentration Verification Fee. Decree No. 4-2015, Article 63-B. 26 Security Secretariat up to eighty percent (80%) Income from the various activities carried out by its departments. For the use of these resources, the Security Secretariat shall present to the Finance Secretariat, the Budget and the Plan of Expenses, which must include prevention and rehabilitation programs, as well as inform the National Congress. 27 National Defense Secretariat up to eighty percent (80%) Income from the various activities carried out by its departments. For the use of these resources, the Defense Secretariat shall present to the Finance Secretariat, the Budget and the Plan of Expenses, which must include prevention and rehabilitation programs, as well as inform the National Congress.

- 37 - No. Institution Assigned Percentage Source of Income Criterion/Legal Basis General Prosecutor's Office of the Republic (PGR) up to eighty percent (80%) Income from the various activities carried out by its departments. ORGANIC LAW OF THE PGR Decree 74, Article 7.- The functions of the General Prosecutor's Office of the Republic are autonomous, except in cases that, in accordance with the law, it must follow special instructions. The Budget of the General Prosecutor's Office of the Republic and its dependencies shall appear in a special section of the General Budget of the Republic. Honduran Civil Aviation Agency up to eighty percent (80%) Income generated by the collection of Civil Aviation Security Services In accordance with Article 101 of its Law; these resources must be invested in operational expenses. The State Secretariat of the Treasury Department shall facilitate its connectivity to the Integrated Financial Administration System (SIAFI) to operate directly. Decree No. 55-2004 reformed through Decree No. 65-2017, Article 27. Honduran Land Transportation Institute (IHTT) eighty percent (80%) The income it receives for the concept of services it provides Legislative Decree No. 155-2015, Article 64 Secretariat of Agriculture and Livestock Seventy-Five percent (75%) From the income generated by DIGEPESCA and PRONAGRI Programs, by land rental for shrimp farming, marketing licenses, sport fishing, sale of fingerlings, fines from the Fishing Law, licenses for artisanal fishing, provision of laboratory services, among others. Resources granted based on Article 13 of this Law. National Telecommunications Commission (CONATEL) fifty percent (50%) The income received from the services it provides Once the collection has exceeded the target set in the General Budget of Income and Expenses of the Republic, the percentage established here shall be assigned from the surplus of the collected amount. In order for the State Secretariat of the Treasury Department to authorize the incorporation of these values into the CONATEL budget, it must present the detail of the resources obtained and the expenses to be incurred. Honduran Institute of Geology and Mines up to fifty-five percent (55%) Income from the various activities carried out by its departments. Mining Law of Honduras by means of Decree No. 238-12 and its reform by Legislative Decree No. 109-2019 of November 25, 2019. Commission for the Defense and Promotion of Competition (CDPC) twenty percent (20%) The income it receives for the concept of Fines that under procedures established in the Law and its Regulation are applied. Decree No. 4-2015, Article 63-C. All institutions that have received the percentage of own income generated referred to in the previous table and that do not use it in the Fiscal Year must return the surplus amounts to the General Treasury of the Republic, no later than the first five (5) business days after the end of the Fiscal Year. In the present Fiscal Year and in duly justified cases, the State Secretariat of the Treasury Department (SEFIN) may authorize the incorporation of fifty percent (50.0%) of own resources that have been received, incorporated and not executed in the previous period, the General Treasury of the Republic must immediately prioritize the F01s generated against these resources.

Authorization is granted to all State institutions that receive deposits in the national banking system on behalf of citizens and companies for the concept of payments for services rendered within their competence, which may come through electronic payments, among others. All resources must be incorporated into the unified State account no later than ten (10) days after the end of each month.

The State Secretary in the Finance Department is authorized to incorporate into the budget of the Customs Administration entity one hundred percent (100%) of the amounts deposited by companies as operational fees for the customs supervision and surveillance service provided by this Institution to Companies covered under special regimes, deposit warehouses, temporary deposits and other resources collected from own activities, contingent activities or derived from current laws and transferred to the receiving account of the General Treasury of the Republic and likewise concerning income established according to articles 50 and 51 of Decree No. 17-2010 dated March 28, 2010 and published in the Official Gazette "La Gaceta" on April 9, 2010, Edition No. 32,183. These amounts shall be treated as own resources to cover contractual salary payments and collateral benefits for human resources working in the aforementioned functions, as well as overtime and other benefits; also payment of travel allowances, transportation expenses and any other expense necessary to conduct supervision activities directly or through third parties. In the same manner, it may allocate the necessary resources to implement control mechanisms in the supervised companies and any other expense required for the proper functioning of the institution.

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 certified for the use of the Official Receipt (TGR-1) of payment defined by the TGR. Income that the National Telecommunications Commission (CONATEL) collects abroad from the issuance of Radio Licenses paid by ship or vessel owners and lessors, as well as income from registration in the Ship Registry and from the issuance of the Navigation Patent collected abroad by the General Directorate of the National Merchant Marine must be registered in the Income Execution Module of the Integrated Financial Administration System (SIAFI) through direct internet access and deposited in Correspondent Banks abroad, who shall transfer these amounts 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 collection.

The non-tax income payment receipt TGR-1 online must be used as a mandatory voucher for all payments that must be made in favor of the National Treasury and payments of Own Resources of Secretariats and Institutions included within the scope of the Single Treasury Account.

The revenues received from actions executed by the General Prosecutor's Office (PGR) before the Courts or Tribunals resulting from operations carried out by the Superior Court of Accounts (TSC) must be deposited in the General Treasury of the Republic in accordance with what is established in Article 13 of this Law. From such revenues, a percentage may be distributed to the Superior Court of Accounts (TSC) and to the General Prosecutor's Office (PGR) as established in Article 34 of the Law for the Organization of Public Finance, Control of Exemptions and Anti-Evasion Measures, Decree No. 278-2013 dated December 21, 2013. The revenues received from the intervention of the General Prosecutor's Office (PGR), at the request of other Institutions, must be deposited in the single account of the General Treasury of the Republic and they shall be granted up to ten percent (10%) of such revenues. In the case of sanctions imposed by the State Department of Labor and Social Security and in which the General Prosecutor's Office (PGR) intervenes, companies that commit infractions shall be assigned to said Department ninety percent (90%) of the percentage established in the previous paragraph. When the revenue is due to a finding that caused a detriment to the assets of a Municipality or an institution created by it, ninety percent (90%) of the recovered funds must be reintegrated to the Municipality.

All Institutions of the Public Administration to which a percentage is assigned for the expansion of their budget based on the own resources mechanism established in Article 13 of this Law must present to the General Budget Directorate (DGP) within thirty (30) calendar days of the month following the month in which such revenues were generated, the necessary documentation to prove that the amounts generated have been deposited in the General Treasury of the Republic (TGR); failure to comply with the deadline established in this rule results in the loss of the right to claim such resources; the State Department of the Finance Office as the governing body may request the original supporting documentation.

When the Current Revenues of the Central Administration are greater than the amounts estimated in the General Budget of Income and Expenditure of the Republic, the Executive Power is authorized to, through the State Department of the Finance Office (SEFIN), periodically incorporate the surpluses into the General Budget of Income and Expenditure of the Republic through the budget expansion procedure, and must notify the National Congress through the First Secretary. These resources shall be allocated exclusively for:

• 1)

  Economic Reactivation post COVID-19, ETA and IOTA;

• 2)

  Social Protection;

• 3)

  Reduce the use of internal or external credit;

• 4)

  Cancel the debt balance that has less favorable conditions;

• 5)

  Pay the Debt Service; and,

• 6)

  To address matters of national interest and priority. All the aforementioned amounts shall be incorporated into the Institution "449 Financial Services of the Central Administration". Within the framework of Budget Discipline, the State Department of the Finance Office is authorized to apply what is established in Article 39 of Legislative Decree No. 83-2004.

For purposes of this Law, Net Income is understood to be the result of subtracting from Total Income the following items:

• 1)

  The amount of loans received from both domestic and foreign sources;

• 2)

  Internal and/or external transfers and donations;

• 3)

  The recovery of loans;

• 4)

  The values generated by the application of Decree No. 105-2011 dated June 23, 2011, amended by Decree No. 166-2011 dated September 6, 2011 (Law of Population Security);

• 5)

  The amounts collected as own resources;

• 6)

  The values paid to the national banking system for collection services;

• 7)

  The return of taxes;

• 8)

  Refunds for overpayments made in previous fiscal years;

• 9)

  The applicability of Credit Notes;

• 10)

  The collection of 4.0% Tourist Fee allocated exclusively for the IHT;

• 11)

  Values assigned to cover the Civic Government Center; and,

• 12)

  Those intended to fulfill specific social commitments such as the Better Life program, Security Fee, among others.

The transfers that must be granted to the different institutions of the Public Sector based on a percentage established by Law shall be made in accordance with the programming of the General Treasury of the Republic (TGR) and to the extent that the corresponding collection is carried out, respecting the contents of the Constitution of the Republic, special Laws, Agreements and Conventions.

The granting of Transfers in favor of Public Sector institutions that appear approved in the General Budget of Income and Expenditures of the Republic shall be subject to the amount collected in the present fiscal year, regardless of the approved amount, as established in the preceding article; in this sense, the State Secretariat in the Ministry of Finance shall notify the amounts that will not be granted so that institutions may reprogram their Annual Operating Plan and Budget, both in the Integrated Financial Administration System (SIAFI) and in the Presidential Results-Based Management System. The provisions of this rule are also applicable to transfers made to private sector institutions that are financed with resources from the National Treasury.

Any additional requirement for resources from the National Treasury (11) by the Institutions of the Central, Deconcentrated and Decentralized Administration, aimed at satisfying unavoidable needs not foreseen in the Objectives and Results of the Annual Operating Plan and the approved Budget, must be met 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. To make such reprogramming, counterparts of projects that are being financed with External Funds should not be considered.

When a State institution must make a payment in favor of third parties, they must present proof of solvency in the payment of taxes and tax obligations, said proof must be issued by the Tax Administration Service (SAR), in case the tax obligor is not solvent, the public institution shall apply the corresponding withholding.

All amounts received by the Institutions of Public Administration (Central, Deconcentrated, Decentralized and Constitutional Bodies) in advance, as their own resources, transfers and any other concept of income, that were not used at the end of the Fiscal Year, these must be deposited to the General Treasury of the Republic within five (5) business days after the end of the Fiscal Year, the same that will be incorporated in the institution Financial Services of the Central Administration (449). This provision is also applicable to private institutions that receive resources from the Central Administration, which must present the liquidation of expenses incurred. From the aforementioned mechanism, Transfers that are granted based on percentages established in the Law of Municipalities, the Constitution of the Republic and the Cooperative System Law are excepted.

Without prejudice to what is established in Article 24 of Agreement No. 1341 containing the Norms of the Budget Subsystem and for the purpose of expediting Budget Modifications, the FMP-05 "Budget Modification Document" generated by the Integrated Financial Administration System (SIAFI) shall be used in all cases, which shall have the same effect as an Internal Resolution or an Opinion issued by the State Secretariat in the Office of Finance. To comply with what is established in the previous paragraph, all public institutions shall submit via electronic mail the budget modification request that is required along with all its supporting documentation duly scanned; all original documents that support the budget modification must remain in custody at the requesting institution for purposes of internal and external controls, accountability, and addressing the requirements of the corresponding justice operators.

For the purpose of preventing overdrafts in approved budget allocations; all institutions of the Central, Decentralized and Deconcentrated Government, when required, must make the necessary budget modifications prior to the execution of expenses, no institution shall make payment commitments without having the respective budget allocation. The State Secretariat in the Office of Finance through the General Budget Office shall not process any budget modification request after the respective institution has made expenditures that it must allocate to the objects of expense subject to approval, for which reason the State Secretariat in the Office of Finance shall refrain from issuing an opinion in this regard and shall refer the case to the Superior Court of Accounts (TSC) in accordance with what is established in Article 5 of this Law.

Without prejudice to what is established in Article 36 of the Organic Law of the Budget, for purposes of expediting the incorporation of external resources from Donations, the Form (FMP-05) "Budget Modification Document" generated by SIAFI shall have the same effect as an Internal Resolution and shall be added to the General Budget of Income and Expenses of the Republic for the present Fiscal Year, provided that the national counterpart is available, when applicable. Donation resources, non-reimbursable Budget Support and other external sources other than Loans shall be incorporated following the procedure established in this Article, provided that said resources are received in the present Fiscal Year and/or are required to regularize the income and expenses made in the present year. In the event that these resources were received in previous years, the procedure for seeking Budget Space for their incorporation must be followed, submitting to the analysis of the Budget Incorporation Committee of the State Secretariat in the Office of Finance, which shall be composed of the General Directorate of Public Investment, General Directorate of Macro Fiscal Policy, General Budget Office and General Directorate of Public Credit, which shall issue the Technical Note for external fund budget incorporation.

In order to avoid the incorporation of external funds from loans, public institutions shall review the level of execution within their budget and shall identify, based on the corresponding prioritization, the budget space transfers required and shall submit to the Ministry of Finance the corresponding request for budget modification for the issuance of the Opinion. Likewise, the State Secretariat in the Ministry of Finance shall conduct the corresponding analyses in accordance with the fiscal policy goals defined for the present Fiscal Year and shall identify the Budget Space in the institution that requires it and shall reduce it from another, by means of the Form (FMP-05) "Document of Budget Modification" generated by SIAFI based on the Technical Note issued by the Committee on Budget Incorporations of the State Secretariat in the Ministry of Finance, based on Articles 29 and 103 of this Law.

For the purpose of maintaining sound administration, at the time of making a budget modification, the respective Annual Operating Plan shall be readjusted in the cases that correspond, the corresponding information in the Integrated Financial Administration System (SIAFI); in the Presidential System of Results Management of the State Secretariat of General Coordination of Government, the monthly spending programming (PGM), the Quarterly Spending Cap (CGT) and the Annual Plan of Purchases and Contracting (PACC).

In addition to what is established in Article 25 of the Technical Standards of the Budget Subsystem in force, the institutions of the Central Administration and Decentralized Administration are authorized to effect transfers or allocations of budget credits between items of the Non-Personal Services and Materials and Supplies groups among different programs of the same institution, inclusive the Poverty Reduction Strategy. Notwithstanding the foregoing, in order to effect transfers affecting project structure, the Executing Units shall submit to the General Directorate of Public Investment the corresponding request, signed by the highest authority and the Budget Modification Form FMP-05 attaching the justification that permits the prior analysis to the approval of the Opinion in SIAFI.

In order to achieve sound administration of resources, a maximum of forty (40) budgetary modifications per year is restricted, derived from internal transfers carried out by institutions of the Public Sector. The transfers made by the Secretariat of State in the Ministry of Finance are excepted from the foregoing, following prior analysis with a favorable Opinion or Resolution in response to requests submitted by institutions of the Public Sector.

Budgetary modifications that affect allocations assigned for capital expenditures to finance current expenses from any source of financing shall not be permitted.

For the purpose of implementing the transfers authorized by the President of the Republic in accordance with what is established in Article 37, numeral 2 of the Organic Law of the Budget, the Secretariat of State in the Ministry of Finance is authorized to execute the necessary operations in order to make said transfers effective.

In order to guarantee and optimize the resources allocated to the Ministry of Health for payments of transfers to decentralized health service managers, budget modifications shall be permitted from one transfer beneficiary to another, solely and exclusively those that provide health services at the primary level of care (departmental regions). TITLE V. 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 State Secretariat in the Office of Finance. The Central Bank of Honduras shall not effect any debits to the accounts in the name of the General Treasury of the Republic and of the State Secretariat in the Office of Finance that do not have the express authorization of this Office, except as agreed in agreements and/or contracts executed prior to this provision. For these exceptional cases the Central Bank of Honduras must:

• 1)

  In Direct Internal Public Debt, deliver to the State Secretariat in the Office of Finance, through the General Directorate of Public Credit, copies of the documents that support the amounts paid for amortizations, interest and commissions, disaggregated in accordance with 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 warranty granted based on Article 78 of the Organic Budget Law, notify the State Secretariat in the Office of Finance, through the General Directorate of Public Credit of the following situations: a) With twenty (20) business days in advance, the insufficiency or non-availability of funds in the accounts of the debtor institution, for purposes of programming the cash flow of the Single Account; and, b) With seven (7) business days in advance, the failure to present the debt service payment letter by the debtor institution, as well as the availability of funds in the bank accounts thereof.

• 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 State Secretariat in the Office of Finance, debiting the bank accounts of the debtor institution to make the payment directly; and,

• 4)

  Immediately notify the General Treasury of the Republic and 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 by Public Sector Institutions in accounts of the Banking System (National and Foreign in cases where applicable) including Trusts and fixed-term deposits, savings accounts and checking accounts in accordance with what is ordered in numerals 7) and 8) of Article 94 of the Organic Budget Law, banking institutions shall send daily to the General Treasury of the Republic, bank statements in electronic format, related to the movement of such accounts, for the automatic bank reconciliation process in the Integrated Financial Administration System (SIAFI), which must include the executing units and projects financed with external funds.

For expenditures that the State makes 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. The exchange rate differentials that result from these operations shall be generated and recorded automatically in the Integrated Financial Administration System (SIAFI) through form F01 in the same previously affected allocations. Any differential in favor of the State must be credited to the originally affected expenditure structure and shall generate form F07 of the reversal type.

All funds that Public Administration Institutions (Central, Decentralized, Deconcentrated, and Constitutional Bodies) have received in advance, as own resources, transfers, and any other concept of income, that were not used at the end of the Fiscal Year, these must be deposited with the General Treasury of the Republic within five (5) business days after the end of the Fiscal Year. This provision is also applicable to private institutions that receive resources from the Central Administration, which shall present the settlement of expenses incurred. From the foregoing mechanism, Transfers that are granted based on percentages established in the Law of Municipalities, the Constitution of the Republic, and the Cooperative System Law are excepted.

To suspend Article 7 of the Special Law for the Simplification of Public Infrastructure Investment Procedures, contained in Decree No. 58-2011 dated May 18, 2011.

Once the General Budget of Income and Expenditure of the Republic for Fiscal Year 2021 enters into force, all institutions of the Central, Decentralized and Deconcentrated Government, through their Executing Units, must enter their original Monthly Expenditure Programming document (PGM) in SIAFI, based on the planning of their expenses from January to December, this provision is applicable for source 11 National Treasury; for the execution of the Budget, institutions of the Central, Decentralized and Deconcentrated Government must relate the Quarterly Expenditure Quota (CGT) assigned by the General Treasury of the Republic to the Monthly Expenditure Programming (PGM).

When there are Attachments levied on the Single Account of the General Treasury of the Republic (TGR) at the Central Bank of Honduras (BCH), due to actions brought against the various State Institutions, the Secretary of State in the Office of Finance is empowered through the General Treasury of the Republic (TGR) to suspend payments affecting the budget of such Institutions until they carry out the regularization and/or registration thereof. TITLE VI OF PUBLIC CREDIT OPERATIONS

The Executive Power, through the Secretary of State in the Office of Finance, during the present Fiscal Year, may pay by means of bonds up to a maximum of fifty percent (50%) of the fees that the State as employer must contribute to the Social Security Institutes; if necessary, authorization is granted to negotiate percentages different from this one. Likewise, the Secretary of State in the Office of Finance is authorized to pay by means of bond issuance, the obligations of employer contributions pending payment from previous fiscal years, subject to negotiation with the Social Security Institute.

The negotiation of securities shall be governed through the General Regulation for the Negotiation of Government Securities of the Government of Honduras approved by Executive Agreement No. 301-2018 of March 5, 2018, published in the Official Gazette "La Gaceta" on March 12, 2018.

In line with the Public Debt Policy document for the Period 2020-2023, in compliance with agreements negotiated with the International Donor Community, in accordance with Monetary Policy and for the purpose of maintaining a level of public debt of the Non-Financial Public Sector under conditions of financial stability and sustainable over the medium and long term, a maximum ceiling is established for the present value balance of debt of the Non-Financial Public Sector of fifty-five percent (55.0%) in relation to Gross Domestic Product (GDP).

Public sector institutions that receive Non-Reimbursable External Cooperation resources shall incorporate them into the General Budget of Income and Expenditures of the Republic through the Integrated Financial Administration System (SIAFI) and in the Presidential System of Results-Based Management, for their respective monitoring. Likewise, these shall be executed through SIAFI, using the Cash Pooling principle which indicates that all public sector funds must be deposited into the Single Account of the General Treasury of the Republic, with the exception of those cases in which the International Agreement expressly establishes how it should be managed.

The State Department of the Office of Finance (SEFIN) is authorized to carry out liability management operations, with the purpose of mitigating financial risks and/or improving the maturity profile of the public debt portfolio. Liability management operations include forgiveness, conversion, consolidation, renegotiation, refinancing, exchange or swap, early purchase or redemption, and subscription of financial derivatives contracts. In the case of swap or refinancing operations of bonds maturing within the year 2021, they must be recorded as a charge against this General Budget of the Republic. For bonds with a maturity date after the year 2021, such operations shall not affect the General Budget of the Republic for the present Fiscal Year. Should there be a nominal increase in the debt balance as a result of liability management operations, it shall represent an automatic increase in the public debt ceiling and authorized spending in this General Budget of the Republic, for which the State Department of the Office of Finance is authorized to make the corresponding budgetary modifications.

The State Department of the Office of Finance is authorized to carry out the placement of available balances from the issuance of public debt securities and instruments, established in Article 1 of Decree No. 171-2019, as well as the borrowing authorized in Decree No. 33-2020. The resources obtained from this concept shall be allocated to finance the floating debt of the Central Administration at the close of Fiscal Year 2020, as well as the purposes authorized in Decree No. 33-2020 and its amendments.

In order to ensure the proper use of funds from external credit and external donations subscribed by the State Department of the Office of Finance, the persons authorized to request disbursements of these resources shall be exclusively the Heads of Public Sector Institutions that are designated in the respective agreements as Executing Units. Administrative procedures may be carried out by the Directors, Coordinators, Administrative and/or Financial Managers of the Program or Project. Executing Units of programs and projects financed with external funds must conduct periodic and final audits according to the financing agreements subscribed, and must submit to the General Directorate of Public Credit of the Finance Department the results of the audits conducted on their financial statements no later than 15 days after the date of receipt thereof, with the purpose of supervising the proper use of resources from external credit. Persons responsible for the administration and execution of programs and projects that incur authorization of ineligible expenses shall be jointly and severally liable for such authorizations, without prejudice to civil, criminal, and administrative actions, and the Public Sector Institution to which the Executing Unit that presents findings in its audited financial statements belongs must suspend disbursement requests to the Financing Organization and carry out the corresponding proceedings to reimburse the ineligible project expenses to the organization, identifying them within the budget of said institution. The Finance Department through the General Directorate of Public Credit shall refrain from issuing budgetary availability confirmation and/or inclusion in the disbursement schedule for new external credit disbursements, until the Executing Unit remedies its financial execution. Likewise, when losses are generated due to exchange rate differentials in the execution of programs and projects financed with external funds, the Public Sector Institution to which the Executing Unit belongs must identify the resources within its budget and carry out the corresponding proceedings for their reimbursement, unless the Financing Organization does not require their return.

Bonds acquired by Public Sector Institutions, including State Enterprises, may be negotiated in the primary or secondary securities market without intermediaries when between institutions of the same Public Sector and the operation is carried out for the purpose of investment in their own portfolio, without further purposes of speculation in the market; likewise, it is explicitly recognized that securities in the securities market vary in price according to market conditions, for which reason the sale or purchase price may be at par, below par or above par, fluctuating according to the specific conditions on the date of negotiation.

Notwithstanding the provisions of Article 68 of Decree No. 17-2010 of March 28, 2010 containing the Law for Strengthening Income, Social Equity and Rationalization of Public Spending, and for the purposes of contracting external financing that is deemed necessary and for which no financial source exists that permits the weighted concessionality required; non-concessional debt may be contracted, provided that the portfolio of total current external debt maintains a minimum weighted concessionality of twenty percent (20%), preferably the new borrowing should be contracted in currencies in which the country's international reserves are constituted, a provision that is consistent with the current Public Debt Policy Guidelines.

Public debt authorized through bond issuance and obtaining loans is of a fungible nature and therefore may be redistributed when financial and market conditions exist that promote such fungibility from internal to external source and vice versa, on the other hand, with respect to the internal or external market, type of currency, terms and other conditions that impact financing, provided that it does not exceed the amount authorized in this Law, for which the corresponding budgetary modifications must be made. The Secretary of State in the Office of Finance, through the General Directorate of Public Credit, may redistribute, reallocate, reorient or reject funds from external credits, which must ensure that such measure is consistent and feasible with Government priorities.

Natural fluctuations in exchange rates or inflation that occur on securities and financial instruments placed against the amount authorized in this Law shall be considered as of the date of placement of the security in foreign currency (or indexed) and indexed to inflation.

Municipal Corporations, Decentralized and Autonomous Institutions and Public Trusts, prior to formalizing new borrowing, are obligated to request an Opinion on Borrowing Capacity from the State Secretary in the Ministry of Finance through the General Directorate of Public Credit (DGCP). Municipal Corporations, Decentralized and Autonomous Institutions and Public Trusts that request an Opinion on Borrowing Capacity for obtaining loans or debt restructuring with national and/or international entities duly recognized in the financial sphere in order to address investment plans and projects shall present the necessary documentation based on established requirements; Municipal Corporations enrolled in the Integrated Municipal Administration System (SAMI) must have budgetary and financial information mandatorily available in the system to request such Opinion. The Opinion on Borrowing Capacity issued by the DGCP must comply with the established indicators and shall not constitute a guarantee on the part of the Central Administration; this provision is complementary to what is provided in Article 82, Numeral 4 of the Organic Budget Law and Articles 19 and 39 of the Technical Standards of the Public Credit Subsystem and its reforms. The State Secretary in the Ministry of Finance has a maximum of sixty (60) business days to issue opinions once the complete request is received from the municipalities and a maximum period of ninety (90) days to resolve pending opinions; the Attorney General of the Republic (PGR) shall monitor compliance. Municipal Corporations, Decentralized and Autonomous Institutions and Public Trusts must present reliable information related to contracted obligations no later than thirty (30) days after the operation is contracted. In order to maintain updated and reliable information on the totality of public borrowing, Municipal Corporations, Decentralized and Autonomous Institutions and Public Trusts must mandatorily present, upon request of the State Secretary in the Ministry of Finance through the General Directorate of Public Credit, information related to contracted borrowing. Non-compliance with this provision shall result in the suspension of any proceedings conducted before the State Secretary in the Ministry of Finance related to the issuance of the Opinion on Borrowing Capacity required by the entities mentioned above. Likewise, for Local Governments it may result in temporary withholding of the transfer granted by the Central Government until compliance with the requirements is met.

Institutions that execute programs and projects financed with external funds must have budget provision in the current Fiscal Year prior to requests for disbursements. The State Secretary in the Ministry of Finance through the General Directorate of Public Credit shall verify that requests for external credit disbursements whether in cash, direct payment or direct charge have such budget provision and/or are contemplated in the disbursement programming and shall confirm it in writing prior to sending it to the Financing Organization, in order to guarantee compliance with the disbursement ceilings established in the Current Public Borrowing Policy. Institutions must attach to their disbursement request the payment schedule to be made in the 6 months following the disbursement. Cash disbursement requests (other than direct payment or direct charge) scheduled for the last quarter of the fiscal year must consider the budgetary availability contained in the preliminary budget of the following fiscal year. Once a direct payment or direct charge has been made, the Institution that executes programs and projects financed with external funds must record its budgetary execution in the Integrated Financial Administration System (SIAFI), no later than fifteen (15) days after the disbursement is made. The Institution that fails to comply with this Provision must suspend disbursement requests before the Financing Organization; likewise, the Ministry of Finance through the General Directorate of Public Credit shall refrain from issuing confirmation of budget provision and/or inclusion in the disbursement programming for new external credit disbursements, until the Executing Unit records the direct payment/charge made.

The State Department of Finance (SEFIN) is authorized to issue Sovereign Bonds of the Republic of Honduras in the international capital markets, if it deems it convenient, charged against the borrowing amount authorized in this budget, under the modality of reopening or new issuance and under the financial conditions prevailing in the market at the time of negotiation, and may be placed at a premium, discount, or par. The State Department of Finance (SEFIN) reserves the right to choose the timing of the transaction, in accordance with resource needs and market conditions.

When it comes to external sovereign bond transactions, referred to in Articles 48 and 57 of this Law, the State Department of Finance (SEFIN) is authorized to directly contract the following services: one or more investment banks specialized in the structuring, marketing, pricing and placement of sovereign bonds, brokerage firms, financial and/or legal advice, printing companies for the offering circular, one or more banks that provide the services of fiscal agent, exchange agent, information agent, closing agent, registrar and paying agent, legal registry entities, securities markets that will list the transaction, credit rating firms, and Bloomberg financial platform and services, for a maximum term equal to the maturity of the bonds and in accordance with market practices. Likewise, the State Department of Finance (SEFIN) is authorized to identify and allocate the necessary budgetary space for the payment of such services. The debt service of sovereign bonds, as well as payments for services provided stated in the first paragraph of this Article, shall be exempt from all types of taxes, rights, rates, surcharges, municipal levies, contributions, fees, honorariums or public, governmental or municipal contribution, the foregoing applies solely to natural or legal persons residing abroad. Notwithstanding the above, natural or legal persons residing in the country shall be subject to complying with the tax obligations, formal and material, determined by the laws in force in Honduras. The issuance and placement shall be carried out in accordance with international practices and the legislation of the place where the bond placements are registered.

In accordance with the provisions of Articles 83 and 84 of the Organic Budget Law and Article 27 of its Regulation, the State Department of Finance is authorized, through the General Directorate of Public Credit, to transfer to the Single Account of the General Treasury of the Republic, the available resources at the end of Fiscal Year 2020 in the accounts opened at the Central Bank of Honduras (BCH), from the remaining funds from reimbursable and non-reimbursable external cooperation whose return has not been requested by the corresponding Financial Organizations.

The State Secretary of the Finance Office (SEFIN) and the Central Bank of Honduras (BCH) are authorized to refinance or exchange government securities up to a maximum nominal value of THREE BILLION HONDURAN LEMPIRAS EXACTLY (L3,000,000,000.00) maturing in 2021, through the issuance of a new government security under the same financial conditions of the Recapitalization Agreement of the Central Bank of Honduras (BCH) approved by Decree No. 38-2014. Likewise, the State Secretary of the Finance Office (SEFIN) and the Central Bank of Honduras (BCH) are authorized to renegotiate any obligation, security or agreement that is in force and executed between both institutions. TITLE VII OF THE CONTROL OF TRUSTS AND PUBLIC-PRIVATE PARTNERSHIPS (APP)

In all investment contracts that constitute Public-Private Partnerships or in possible modifications of those contracts, in which the State of Honduras grants endorsements or a contingent liability, prior authorization from the State Secretary of the Finance Office shall be required before their execution, who shall grant it following an Opinion issued by the Fiscal Contingencies Unit.

The State Secretary of the Finance Office, through the General Directorate of Public Investments, shall participate during the pre-investment phase of projects under the Public-Private financing modality (APP) through the registration of the project in the National System of Public Investment of Honduras (SNIPH) and subsequent issuance of the Priority Note prior to the opinions of the Fiscal Contingencies Unit, which shall participate in all stages of the project cycle under the public-private financing modality (APP); as well as the review of cost-benefit analysis, fiscal risk analysis and other risks related to this type of investment and the payment capacity of the public entity participating under this modality. The General Directorate of Public Investments shall maintain the registry and control in the National System of Public Investments (SNIPH) of Trusts that finance investment projects and that are not under the modality of Public-Private Partnerships (APP). Likewise, of the funds allocated through a Trust to finance investment projects, up to a maximum of 10% may be used for operational or administrative expenses of the allocated budget.

All concessionaires are obligated to present, no later than ten (10) business days after the end of the month, to the Fiscal Contingencies Unit of the State Department in the Finance Ministry (SEFIN) and the Superintendency of Public-Private Partnerships (SAPP), all financial information of the Projects' operations together with monthly supervision reports.

For the purpose of promoting transparency processes, accountability, monitoring and verification by the State Department in the Finance Ministry (SEFIN) and the Public-Private Partnership Superintendency (SAPP), all operators and/or concessionaires of projects under the Public-Private Partnership (PPP) modality that carry out collection activities through toll collection are instructed to provide unrestricted access to the information contained in their control systems to the aforementioned bodies. SEFIN and SAPP shall request no later than the first five days of the month following the corresponding month, information requirements through the design of a standard format or any other process or technological means defined by said institutions, which in an illustrative but not limiting manner shall include: Direct access to the operator's systems, creation of link interfaces with the operator's systems - SEFIN and SAPP, online platforms, applications, among others. The information presented shall contain at minimum data related to collection by vehicle category, detail of collection disaggregated by gross income, taxes and net income, including detail of amounts for surplus concepts, daily vehicle capacity report by sub-section, date and time, means of payment, tariff applied to each vehicle category including differentiated tariffs, classification or category of vehicles, report of incidents by evasion, observations on seasonality and fortuitous cases in each period. SEFIN and SAPP may request explanations and clarifications they deem pertinent, as well as request additional information requirements if necessary. All information presented shall be subject to audit processes that SAPP and the TSC may arrange for verification. The periodicity in the presentation of information shall be defined by SEFIN and/or SAPP according to the methodology applied described in the second paragraph of this provision. The denial, malicious withholding or delay in the delivery periods or access to information shall be subject to sanctions of up to fifteen (15) minimum salaries per non-compliance event; sanction that shall be applied by SAPP.

All public administration institutions are ordered to register in the Integrated Financial Administration System (SIAFI) the operations derived from Trust contracts executed. All public sector institutions that have established Trusts in previous fiscal years shall proceed to liquidate the trust funds to the General Accounting Office of the Republic and to the Departments of the State Department in the Finance Ministry involved in the processes. The trustees, fiduciaries and settlors are responsible for complying with this regulation. The State Department in the Finance Ministry, through the General Accounting Office of the Republic, shall send quarterly reports of the State's Trust operations to the Ordinary Budget Commission of the National Congress. The fourth quarter report shall be presented after the close of the fiscal year's accounting and after the official presentation of the figures as part of the Accountability Report.

Trusts established by Public Sector Institutions must be reflected in the General Budget of Income and Expenses of the Republic and the operations derived from these Contracts must be registered in the Integrated Financial Administration System (SIAFI) by each Executing Institution, complying with the Trust Registration procedure approved by the State Secretariat of the Office of Finance (SEFIN), including those expenses that by their economic classification are defined as capital and are required for their registration as current expense, without prejudice to what is established in Article 34 of this Law. Likewise, the State Secretariat of the Office of Finance (SEFIN) is authorized to incorporate the resources of the different Trusts into the General Budget of Income and Expenses of the Republic for the present Fiscal Year. The foregoing does not limit the financial flow in the operation of the trusts already defined in the contracts executed by the settlor and trustee. The administration of these trusts shall be based on what is established in the Commercial Code. In the case of Trusts that contain Investment projects, these shall be registered in the National Public Investment System (SNIPH) within the framework established by the General Directorate of Public Investments coordinated with the General Directorate of Trusts. The State Secretariat of the Office of Finance, through the General Directorate of Trusts, is responsible for participating in the creation or structuring of trusts, control and monitoring of their execution, providing technical support to the Technical Committees and participating when appropriate in the liquidation of all existing and current public trusts in the Republic; as well as those that are to be constituted or shall be constituted in the future, and in the same way shall maintain control and monitoring of the registration of each of the Trusts, in accordance with the manuals or procedures approved by the State Secretariat of the Office of Finance (SEFIN).

The State Secretariat of the Office of Finance is authorized to give continuity to the Solidarity and Social Protection Fund for the Reduction of Poverty in the General Budget of Income and Expenses of the Republic with the returns from the application of the Law for the Ordering of Public Finances, Control of Exemptions and Anti-Evasion Measures. The returns from the aforementioned Law shall be reviewed quarterly and as they are collected, they shall automatically be incorporated into the budget and allocated to said Fund until reaching FOUR BILLION FIVE HUNDRED MILLION LEMPIRAS (L.4,500,000,000.00), the amounts collected after this value is completed shall be used to finance programs and projects aimed at health, education, security and infrastructure and others in accordance with Article 45 of Decree No. 278-2013 Law for the Ordering of Public Finances, Control of Exemptions and Anti-Evasion Measures and Article 10 of the Framework Law of the Social Protection System. Likewise, the State Secretariat of the Office of Finance may make the budgetary transfers that are necessary to incorporate into the budget of the different institutions that execute funds from this Trust, authorized through a circular issued by the State Secretariat of General Coordination of Government (SCGG) considering the relevance, sustainability, efficiency, effectiveness and impact on the programs that are financed through this mechanism. From the aforementioned fund, the Trusts that are financed with this Solidarity and Social Protection Fund for the Reduction of Extreme Poverty to be executed by the Government of the Republic shall be increased.

The use and administration of the funds from the Population Security Rate shall be applied in accordance with Decree No. 105-2011 containing the Population Security Law and its amendments; favoring actions in favor of the security of women, therefore an amount of Ten Million Lempiras (L10,000,000.00) must be allocated from the Population Security Rate for the construction, equipment and maintenance of Shelter Houses for women survivors of domestic violence and Five Million (L.5,000,000.00) for actions to prevent violence against women, resources that shall be administered by the National Institute of Women, as the governing body of public gender policies.

To authorize the National Agricultural Development Bank (BANADESA), in its capacity as fiduciary bank, to proceed with the liquidation of Management Agreements and/or Trust Contracts that as of this date have concluded their term or it is evident beyond doubt that they had no operation whatsoever. After the respective liquidation is carried out, all assets and resources, as well as the trust patrimony or funds under administration, shall form part of the patrimony of the National Agricultural Development Bank (BANADESA), with said bank being responsible for the recovery, control and monitoring of these assets, with the exception of Trust 2KR granted by the People and Government of Japan, executed by the SAG. The State Department of Finance (SEFIN) is authorized to enter into a liquidation agreement with the National Agricultural Development Bank (BANADESA) for a period of up to ten (10) years for the aforementioned purposes.

The fiduciary and the beneficiary shall certify the funds corresponding to resources received by the fiduciary that have not been executed, as well as those that have been transferred to the beneficiary and are deposited in their accounts. With these certifications, the State Department of Finance (SEFIN) is authorized to proceed to incorporate these resources into the budget of the settlor or beneficiary in the present Fiscal Year as appropriate. Trusts that have an accounting transaction document (OPC) that were not executed in the previous year shall be regularized in the present Fiscal Year affecting the current year's budget. TITLE VIII OF PUBLIC ADMINISTRATION CONTRACTS

For the purposes of applying articles 38 and 63 numeral 3) of the State Contracting Law and other applicable laws, the required amounts are established for applying bidding processes, contests or quotations: - 74 - TITLE VIII OF PUBLIC ADMINISTRATION CONTRACTS

For the purposes of applying Articles 38 and 63, section 3) of the State Procurement Law and other applicable laws, the required amounts are established for applying public bids, contests or quotations: No. Description Contracts managed in Honducompras 1 Contracts managed electronically in Honducompras 2 Contracting Method Contract Amount Contracting Method Contract Amount Regardless of the purpose of the work contract and investment projects Public Bid L. 5,000,000.01 onwards Public Bid L. 8,000,000.01 onwards Private Bid L. 3,000,000.01 to L. 5,000,000.00 Private Bid L. 5,000,000.01 to L. 8,000,000.00 3 Quotations L. 0.01 to L.3,000,000.00 Automatic quotation invitations via Honducompras 2 (1 minimum offer) L. 0.01 to L.5,000,000.00 2 Real estate lease contract Public Bid L. 2,400,000.01 onwards Public Bid L. 4,000,000.01 onwards Private Bid L. 1,200,000.01 to L. 2,400,000.00 Private Bid L. 2,400,000.01 to L. 4,000,000.00 3 Quotations L. 0.01 to L. 1,200,000.00 Automatic quotation invitations via Honducompras 2 (1 minimum offer) L. 0.01 to L. 2,400,000.00 Consulting Contracts, Feasibility Studies and Construction Works Public Contest L. 5,000,000.01 onwards Public Contest L. 8,000,000.01 onwards Private Contest L. 3,000,000.01 to L. 5,000,000.00 Private Contest L. 5,000,000.01 to L. 8,000,000.00 3 technical proposals, accompanied by quotation L. 0.01 to L.3,000,000.00 3 technical proposals, accompanied by quotation L. 0.01 to L.5,000,000.00 Supply Contracts for Goods and Services with the exception of section 5 Public Bid L. 600,000.01 onwards Public Bid L. 1,000,000.01 onwards Private Bid L. 270,000.01 to L. 600,000.00 Private Bid L. 600,000.01 to L. 1,000,000.00 3 Quotations L. 85,000.01 to L. 270,000.00 Automatic quotation invitations via Honducompras 2 (1 minimum offer) L.0.01 to L. 600,000.00 2 Quotations L. 10,000.01 to L. 85,000.00 1 Quotation L.0.01 to L. 10,000.00 Contracts for Supply of Fuel, Airline Tickets and Mechanical Workshops for Fleet Vehicle Maintenance, Food for penal centers, Goods and services directly related to the security of penal centers Public Bid L. 600,000.01 onwards Automatic quotation invitations via Honducompras 2 (1 minimum offer) Regardless of the amount Private Bid L. 270,000.01 to L. 600,000.00 3 Quotations L. 85,000.01 to L. 270,000.00 2 Quotations L. 10,000.01 to L. 85,000.00 1 Quotation L.0.01 to L. 10,000.00 Internal control for the application of contracting ceilings shall be carried out by the Administrative Manager or equivalent, who shall be responsible for verifying prior to authorizing a disbursement, that the contract is published on the "Honducompras" platform and that its amount corresponds to the ceiling assigned according to the version of the system used. Non-compliance with contracting ceilings, according to the system in which the contract has been managed and published, shall result in a fine to the Administrative Manager, equivalent to the value of the contract; with all officials who have participated in any stage of the contractual or financial management process being jointly and severally liable. The quotations referred to in this Article must be from unrelated providers, in accordance with what is typified in Decree No. 232-2011 of December 8, 2011, contained in the Transfer Pricing Regulation Law and the quotation document must contain the general data of the provider, as well as the number of the National Tax Registry (RTN). In Private Contests and Bids, once the invitation is published, the participation of potential bidders who request it in writing must be permitted, and they must be provided with an invitation, the terms and conditions and any other document relating to it, of which a record shall be kept in the contracting file. In those cases where precertification requirements exist, participation must be permitted for potential bidders who have been precertified by the body responsible for procurement. In compliance with Article 4 of the Transparency and Access to Public Information Law, all contractor selection processes must be disseminated in the "Honducompras" System and must comply with the principles of open procurement promoted by the Open Contracting Partnership. The evaluation and award of the fuel contract shall be made to the bidder who complies with the participation conditions and presents the best qualified offer based on objective evaluation criteria which must be credit conditions, distance between institution and fuel station, service hours, quantity and location of available service stations. Special care must be taken to ensure that unit prices correspond to prices compatible with market prices. The evaluation and award of the airline ticket contract shall be made to the bidder who complies with the participation conditions and presents the best qualified offer based on objective evaluation criteria which must be price, flight route, number of stops, travel time. Special care must be taken to ensure that unit prices correspond to prices compatible with market prices. The evaluation and award of the fleet vehicle maintenance contract shall be made to the bidder who complies with the participation conditions and presents the best qualified offer based on objective evaluation criteria which must be the workshop's area of specialization, labor cost per hour, certifications, number of vehicles with capacity to service, warranty conditions, convenience and safety of facilities. Special care must be taken to ensure that unit prices correspond to prices compatible with market prices. In compliance with the principles of transparency, publicity, equality and free competition, it is the responsibility of the Administrative Managers or their equivalents to promote among their regular suppliers their subscription to HONDUCOMPRAS 2. Interpret Article 70 of the State Procurement Law in relation to the first paragraph of Article 25 of the same, in the sense that projects can be carried out in stages or sections, in different years or fiscal periods, according to budget availability, provided that said stages or fractions are capable of being used or functional. A stage shall be considered functional when each one serves for the completed work or for it to be in operation; functional meaning understood as any work or part of the work that serves or is essential for the completion or proper functioning of the project.

The amount of contracts executed by the State includes the payment of corresponding taxes, except for exemptions expressly determined by a National Law or International Agreement.

When at the beginning of the present Fiscal Year the required bidding process for a new contract has not been completed, exceptionally and without prejudice to the liability that corresponds in those cases where there is a serious risk of damage to public and institutional interests, the continuation of the effects of the contract may be authorized for the time that is strictly necessary up to a maximum of three (3) months, within which period the said process must have been completed, except in cases where said process has been declared void or failed in accordance with Law, in which case the aforementioned contract may be extended under the same conditions and until a final period of three (3) additional months. The extension shall be made by agreement between the parties, prior to the opinion of the administration containing legal, technical and financial opinion of the respective Institution and shall be formalized through an 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 Procurement Law; or the special law applicable according to the nature of the contract.

In order to guarantee and optimize the resources allocated to the State Secretariat of Health (SESAL) linked to the contracting of Decentralized Health Service Managers of the first and second level of care through Expense Object 24130 Medical Services, while the bidding processes required for the contracting of said services have not been completed, exceptionally and without prejudice to the responsibility that corresponds, in cases where there is a serious risk or damage to the public interest, it may be authorized by means of a resolution issued by the highest institutional authority, prior to a ruling from the SESAL administration that contains legal, technical and budgetary opinion, the continuation of the effects of the agreement for the present Fiscal Year, and the contracting process must be carried out for the following fiscal year. The Health Commission of the National Congress, the State Secretariat of Health and the Association of Municipalities of Honduras (AMHON) may present proposals for new models of health decentralization. The foregoing shall also apply to other Public Institutions that need to contract third-party services for the fulfillment and efficiency of their management, charging the corresponding expense object within Expense Subgroup 24000.

For the purpose of complying with the provisions of Article 84 of the Organic Budget Law, which establishes the operability of the Single Account of the General Treasury of the Republic, the State Secretariat of Finance is authorized to, through the direct contracting procedure, execute Agreements for the Provision of Financial Services with the National Banking System by virtue of the fact that said institutions participate in these Agreements upon simple compliance with technical requirements for communication between the Systems of each financial institution and the Integrated Financial Administration System (SIAFI). Said process must be supervised by the Superior Court of Accounts (TSC). Likewise, the State Secretariat of Finance is empowered to, in coordination with the Tax Revenue Management System (SAR), proceed to renegotiate the Tax Collection and Collection Contract, executed with the Central Bank of Honduras, which must reflect the actual costs of the collection and collection services of said Bank.

In observance of the provisions of Article 72, second and third paragraphs, of the State Contracting Law, the applicable daily fine is set at zero point thirty-six percent (0.36%), in relation to the total amount of the contract balance for non-compliance with the deadline and the same must be specified both in the terms and conditions and in the Construction and Supervision of Public Works contract, that is, it must be established in every contract and every purchase order. This same provision must be applied to all goods and services contracts entered into by Public Sector Institutions. The applicable daily fine is set at zero point thirty-six percent (0.36%) which must be applied to all contracts or purchase orders for goods and services entered into by Public Sector Institutions, including purchases made through electronic catalog. The daily fine is excepted from contracts or purchase orders of the Catalog of Products and/or Services of the Entrepreneur, MSMEs and Social Sector of the Economy. Penalties for non-compliance shall be established in the Regulations issued for this purpose or in the provisions established in circulars issued by ONCAE.

Only payments authorizing advance of funds for public works contracts shall be authorized in accordance with the provisions established in the State Contracting Law, which shall not exceed twenty percent (20%) of the total contract amount. In the case of advances in purchase orders from the catalog of entrepreneurs, micro, small and medium enterprises and organizations of the social economy sector, the authorized percentage and its amortization method shall be regulated in accordance with what is established in the Regulation issued for this purpose or in circulars issued by the ONCAE. Foreign contractors may only be granted advances when the respective projects are financed at least eighty percent (80%) with external funds. The Executive Power agencies are authorized to pay as advance, in the rental 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 rental contract of the property, without the need to require a guarantee for advance. In the case of rental contracts for properties abroad, intended for the operation of Embassies, Permanent Missions and Consular Offices, the amount to be paid for deposit, administrative expenses and real estate commission shall be that determined for this purpose by the legislation of the receiving State, or in its case, by the real estate market. The same condition shall apply for the residence of the Heads of Mission. In the case of advances in purchase orders from the Catalog of Products and/or Services of the Entrepreneur, MSMEs and Social Economy Sector, the authorized percentage and its amortization method shall be regulated in accordance with what is established in the Regulation issued for this purpose or in circulars issued by the ONCAE. To prevent budget imbalances, it is prohibited for the Central, Deconcentrated and Decentralized Government agencies to enter into rental contracts within the country in a currency other than the Lempira; those established in International Agreements are excepted from the foregoing.

In every contract financed with external funds, the suspension or cancellation of the loan or donation may give rise to the rescission or termination of the contract, without any obligation on the part of the State other than the payment corresponding to the works or services already executed as of the effective date of the rescission or termination of the contract. The same shall apply in case of budget cuts in national funds that are made due to the country's economic and financial situation, the estimation of income perception lower than projected expenses, and in case of unforeseen needs or emergencies. The provisions of this Article must be mandatorily stipulated in the specifications, terms of reference, and in the contract itself.

In accordance with applicable laws, based on their budgetary allocations and with the purpose of promoting decentralization in the Secretariat of State for Health, the acquisitions of one hundred percent (100%) of the resources allocated in the expense items for: Food and Beverages for Persons (3110) and its auxiliary (31110) Food and Beverage Products and Instrumentals, Medical Materials and Supplies, Minor and Laboratory (3950) and its auxiliaries (39510 Minor Surgical Medical Instruments and 39520 Instruments and Laboratory Materials), must be carried out by the administrations of the departmental regions and hospitals of the country. Authorization from the ONCAE shall not be necessary for purchases outside the electronic catalog, when the product is not found in the list of products described in the electronic catalog enabling circular. However, medicine purchases must be carried out by the Administrative Management of the Secretariat of State for Health at the central level in ninety percent (90%), through the Trust Established for this purpose; hospitals that have completed their decentralization process are excluded. The remaining ten percent (10%) shall be acquired by each Hospital and Departmental Region of the Secretariat of State for Health, according to budgetary allocation. The subdivision of contracting processes is prohibited in acquisitions carried out by the administrations of the Departmental Regions, Hospitals of the country and the Administrative Management of the Health Office. Those cases are excepted in which it is evident that the subdivision is not carried out for the purpose of evading the contracting ceilings established in this Law, for which a favorable opinion from the corresponding internal audit must be issued. Additionally, the bidding processes established in the Law are excepted for expense items 35610 and 35620 for the Secretariat of State for Health, which only need quotations to meet the needs of the National Health System and when hemodialysis and peritoneal dialysis services are declared void or unsuccessful in accordance with articles 59, 60, 61, 62, 63, 65 and 68 of the Constitution of the Republic that guarantees health as a fundamental right. In this case, the payment for the service shall be recognized through an administrative claim. The Secretariat of State for National Defense, in order to comply with national defense plans and in application of the laws and regulations that govern the Armed Forces of Honduras, executes its budgetary allocations under operational decentralization of some budgetary items intended for its operation as a mechanism of public management, typical of a modern state maximizing the achievement of positive results and optimal use of state resources, for which reason acquisitions of one hundred percent (100%) of the resources allocated in the expense items for: Food and Beverages for Persons, Fuels and Lubricants, Fats and Oils, Goods, Materials and Services for the Military Health System, Spare Parts, Accessories and Services for Military Equipment, must be carried out by the different programs and subprograms at the national level. Purchases of food and beverages for persons, fuels and lubricants, oils and fats shall be acquired giving preference to local suppliers, the geographic location shall be fully accredited in the administrative file and in its monthly expense statements. For local purchases, invitations to submit quotations shall be extended to entrepreneurs, micro, small and medium enterprises and organizations of the social economy sector that are part of this catalog, applying the provisions established in the Regulation issued for this purpose or in circulars issued by the ONCAE. All material goods and services of the military health system and spare parts, accessories and services of military equipment must have evidence that the subdivision is not performed for the purpose of evading contracting ceilings and must be justified by the corresponding opinion of the competent body with a favorable opinion from the corresponding internal audit.

In accordance with the preference margin for all National Industry established in the State Contracting Law, the Normative Office and Contracting and Acquisitions of the State of Honduras (ONCAE), shall ensure that in all sections of the Catalog priority is given to offers of goods and services of National Production; for which the Normative Office and Contracting and Acquisitions of the State of Honduras (ONCAE), must issue guidelines that allow all institutions to determine the goods and services that according to the information of the supplier registry have been identified within the offer of National Products. Likewise, with the purpose of promoting internal production, protection of existing jobs and generation of new employment opportunities, public sector institutions are instructed to make purchases through the Catalog of Products and/or Services of Entrepreneurs, Micro, Small and Medium Enterprises (MSMEs) and Social Sector of the Economy, based on Article 7 of the Special Law for Economic Acceleration and Social Protection against the Effects of Coronavirus COVID-19 and the natural phenomena that affected the country. In compliance with Article 25 of the Law for the Promotion and Development of Competitiveness of Micro, Small and Medium Enterprises (MSMEs), Decree No. 135-2008, preference shall be given to those that are part of the Catalog of Products and/or Services of Entrepreneurs, Micro, Small and Medium Enterprises (MSMEs) and Social Sector of the Economy with at least 30% of State purchases. These shall be carried out to the extent that entrepreneurs, micro, small and medium enterprises (MSMEs) and organisms of the social sector of the economy, ensure the required quality standards and offer prices within the framework of the State Contracting Law. Contracting related to the Catalog of Products and/or Services of Entrepreneurs, Micro, Small and Medium Enterprises (MSMEs) and Social Sector of the Economy shall be conducted applying what is established in the Regulations or in the circulars issued for this purpose by the Normative Office and Contracting and Acquisitions of the State of Honduras (ONCAE). The Normative Office and Contracting and Acquisitions of the State of Honduras (ONCAE), shall conduct monthly monitoring of the national contracting system to verify compliance with this provision and shall notify the Superior Court of Accounts (TSC) quarterly for the application of the sanctions established in Article 5 of this Law.

Contracting charged to Expense Subgroup 24000 Professional Services (Consultants), shall be carried out under the responsibility of the head of each institution, provided that there is availability in the budgetary allocation of the current Fiscal Year, and the nature of the services to be provided is in accordance with the classification of the expense item to be charged. This type of obligation shall be formalized through a Contract. The contractor under this modality shall not be considered for any purpose as a Permanent or Temporary employee of the institution. In order to regulate contracting charged to Expense Subgroup 24000, increases through budgetary modifications are prohibited for expense items belonging to this subgroup; this norm applies exclusively to resources from source 11 National Treasury. Excepted from this provision are contracts for medical, health and social services (expense item 24100) and contracting charged to expense subgroup 24000 that may be necessary to carry out by the Superior Court of Accounts (TSC) with the Municipal Transparency Funds approved in Article 197 numeral 4) of this Law. It is also prohibited to contract legal professionals as external consultants to address lawsuits filed in the Courts of the Republic when the institution has legal departments; if an exception to this rule is required, a request must be made to the Attorney General of the Republic who shall determine whether it deems their contracting appropriate or not; if authorized, it shall be to safeguard national interests, and must issue a favorable Opinion that shall contain the amount of their fees for contracting and charged to the budget of the corresponding institution. The regulations of this law shall classify the cases referred to in this paragraph. Likewise, the Honduran Bank for Production and Housing (BANHPROVI) is excepted, which due to its banking operations of portfolio recovery and lawsuits for cases of default may contract legal professionals as external consultants whose fees shall be paid in accordance with the current legal professional fee schedule. Also excepted is the Central Bank of Honduras (BCH) so that it may contract external legal professionals who carry out the recovery of eventual assets that the BCH has received or receives as a consequence of payments for cases of illiquidity of institutions in the financial system or insurance and reinsurance institutions. The prohibitions and disqualifications for contracting established in Articles 15 and 16 of the State Contracting Law shall apply to all contracts entered into by the Public Administration, regardless of their modality.

All natural or legal persons contracted under the modality of Personal Services expense group 10000 and Professional Technical Consulting Services, in Expense Subgroup 24000, financed with resources from National Funds (National Treasury and Own Resources), Loans and/or Donations, are obligated to pay Income Tax.

All officials may administratively interpret the scope of their functions for the purpose of fulfilling them. The interpretations they carry out may only be considered illegal when they usurp functions of other authorities or it is evident that they go far beyond the powers expressly granted by law.

Public Sector Institutions may enter into contracts for the provision of professional services or consulting with national consultants under the following conditions:

• 1)

  The services are provided by companies, professionals and specialists without a relationship of dependence with the institution, whose activities and/or products due to their degree of specialization or other qualified reason, cannot be performed by the institution's own personnel.

• 2)

  It is prohibited to enter into contracts of this nature to perform directive, administrative, technical, operative or support functions that are proper to employees who do have a relationship of dependence.

• 3)

  In their hiring, more weight shall be given to the result or activity executed than to time; due to the nature of the contract, the consultant has no right to vacations, thirteenth month as a bonus, fourteenth month as social compensation and other rights proper to employees that are financed through Group 10000 Personal Services. The head of each institution that executes this type of contract and grants any of the benefits mentioned in the previous paragraph shall be financially and jointly liable, without prejudice to civil, administrative and criminal actions before the supervisory bodies.

• 4)

  All consultants must be registered and paid through the Integrated Financial Administration System (SIAFI); and, A National Consultant shall be understood as the professional who carries out their activity with permanent residence in the national territory.

The hiring of international consultants for programs or projects shall be done 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 credit agreements, letters, agreements, memoranda of understanding or donation agreements. The fixing or estimation of fees shall be recorded in the budgets agreed between the executing entity and the financing or cooperating organization. An International Consultant shall be understood as one who has performed consulting work in a country other than that of their nationality and whose permanent residence is different from that of the national territory. Consultants of foreign nationality may not perform directive, administrative, technical, operative or support functions proper to employees with a relationship of dependence with the institution.

The Registration of pre-commitment is an act of internal administration useful for keeping record, certifying or verifying the availability of budgetary credits and, making the reservation thereof at the beginning of a procedure (request) for expenses, a purchase or a contract. Likewise, accrual implies the definitive allocation of the corresponding budgetary credits, a qualitative and quantitative modification in the composition of the patrimony originated by transactions with economic-financial impact; the arising of an obligation of immediate or deferred payment for the receipt of goods and services or for having fulfilled the administrative requirements established for cases of expenses without consideration. Such documents shall conclude with the process in the name of the final beneficiary within a maximum period of 45 days. The Secretariat of State in the Office of Finance is authorized through the Directorate of Transparency to automatically revert in the SIAFI all documents of expense F01 that have not been concluded within the maximum established period. Without prejudice to the administrative, civil and/or criminal liability incurred, the Administrative Managers of each institution shall be responsible for the damages that they cause to the State for any commitment or accrual registered that does not have the legal supporting documentation. All of the foregoing does not apply in the event that the document has been generated through the HONDUCOMPRAS interface with the budgetary execution of the SIAFI.

Every supplier and/or contractor of the State at the time of the purchase order or start of work must demand a copy of the Expense Execution Form F-01, registered in the Integrated Financial Administration System (SIAFI), in the stage of approved commitment, in order to ensure that the contracting institution has budgetary availability to honor the commitments acquired; otherwise the Government of the Republic, through the Secretariat 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 violate the provisions of this Article shall be jointly and financially responsible for honoring all debts generated by not having the corresponding credit reserves.

The amount of a real estate lease contract shall be calculated by the total of its annual rent. Exempted from the obligation to submit to public bidding are contracts intended for 1) the rental of real estate abroad, intended exclusively for the operation of the Embassies, Permanent Missions and Consular Offices of Honduras. To this end, the Secretariat of Foreign Affairs and International Cooperation is authorized to execute lease contracts abroad for a period of up to three (3) years, provided that the value of the monthly rent remains unchanged and/or free of indexation during said period; 2) lease contracts for public sector real estate, when they represent higher costs to the institution due to mobilization, price, location and quality of service. In these cases, the extension of contracts executed by annuities is authorized, said extensions may not exceed a period of four (4) years, and after this extension must be submitted to a new bidding process. Public institutions that have accumulated extensions for four (4) or more years at the entry into force of this Law must proceed to carry out the new bidding process. Said extension shall be authorized pursuant to an Opinion that contains legal, technical and financial opinion issued by the Institution and shall be formalized through Ministerial Agreement in the case of State Secretariats or Resolution for Decentralized or Deconcentrated Institutions. Exempted from the provisions established in the third paragraph of this Standard are all public institutions that will move to the Government Civic Center, as well as those institutions that have begun or will begin in the year 2021, construction projects of their own building.

It is prohibited to enter into lease contracts for luxury real estate properties

air transport expenses in first class using resources from external and internal sources (national treasury and own resources), as well as to make payments for cellular telephone services from external sources. For purposes of what is established in the preceding paragraph, buildings whose conditions, characteristics, and location in areas whose monthly rental cost exceeds Fifteen Dollars (US$15.00) or its equivalent in Lempiras per square meter shall be understood as luxury properties; the official who carries out this type of contracts and payments shall be responsible for this with the amount of his salary, which shall be automatically deducted and shall be financially and jointly liable, without prejudice to the civil, administrative and criminal actions in which he may incur. The following are excepted from what is established in this provision: 1) The Ministry of State in the Offices of Foreign Affairs and International Cooperation, regarding the rental of real estate abroad, intended exclusively for the operation of Embassies, Consular Offices and Permanent Missions of Honduras, likewise, those intended for the Residence of the Head of Mission. The value of the aforementioned real estate shall depend on the cost of living and the prices set by the real estate market in the zones permitted or determined by each receiving State; and, 2) The Honduran Bank for Production and Housing (BANHPROVI) and the National Bank for Agricultural Development (BANADESA) which, due to their banking business and business strategy, must be governed by the provisions established in Article 15 of the Financial System Law, which establishes that financial institutions may establish branches/agencies or other means of providing financial services anywhere in the Republic, provided that the premises where such services are provided offer sufficient security and confidence to the public user. Likewise, the following cases are excepted from what is established in this provision regarding first class air transport expenses: 1) When due to circumstances (travel dates, season, urgency of the mission or due to lack of availability of spaces in executive or economy classes) it is necessary to purchase such a ticket or air transport expense, duly documented. 2) When the public servant requests this alternative air transport, having to pay the difference resulting from the cost of the ticket. The Ministry of Foreign Affairs and International Cooperation is authorized to enter into contracts for real estate that exceed Fifteen Dollars (US$15) or its equivalent in Lempiras per square meter, by virtue of the fact that the Diplomatic Corps assigned to the Foreign Service of Honduras, by its nature, performs its functions in foreign countries. Likewise, officials who are actively engaged in work in the foreign service may enjoy the benefits of health-hospital insurance because they are excluded from the health system of the Receiving State.

Regardless of the amount, acquisitions made through electronic catalogs shall be made through the issuance of a direct purchase order, which shall be generated in the Electronic Catalog module found in the National System of Purchases and Contracts "HonduCompras". The ONCAE is authorized to issue guidelines that allow for greater opportunity for competition within the catalog, for those acquisitions that, due to their amount, can provide greater savings benefits for the State. Purchases of goods or services that are available in the electronic catalog shall be null when these are made outside the system regardless of the amount, unless authorization from the ONCAE is obtained, as established by this regulatory office and complying with article 44-C of the reform of the Regulations of the State Contracting Law in accordance with Executive Agreement 028-2018, which must have the approval of a Certified Public Buyer (CPC) in the documents issued by the ONCAE, as proof that they substantially conform to the current regulatory framework. The Administrative Manager or equivalent who fails to comply with the above shall be financially and jointly liable, without prejudice to civil, administrative and criminal actions before the supervisory entities. Municipalities are excepted from this provision.

Regardless of the source of financing and the amount, all institutions in the public sector must publish in the HONDUCOMPRAS system managed by the ONCAE and the respective transparency portal of the institution the process for the selection of contractors, consultants and suppliers, in all its stages. In accordance with Article 79 of the Regulations of the State Contracting Law, it is the responsibility of the Administrative Manager or equivalent to ensure compliance with what is established in the preceding paragraph. The violation of this provision, in addition to the sanctions established in the Law of Transparency and Access to Public Information, shall result in sanctions for non-compliance with this Law ranging from three (3) minimum salaries to thirty (30) minimum salaries.

The Institute for Access to Public Information (IAIP) shall verify that said processes were published in the Honducompras System when the contracts are loaded in their transparency portals and if they are not found published, shall apply the corresponding sanction.

The coordination of the preparation, publication, execution and modification of the PACC is the responsibility of the Administrative Manager, or whoever acts in that capacity, and of the highest authority of the institution, in accordance with what is established in Article 5 of the State Contracting Law. For this purpose, ONCAE will provide the guidelines for the development of said plans. The updated PACCs must be published by the institutions in the "HonduCompras" system within the following thirty (30) calendar days after the publication of the General Budget of Income and Expenses of the Republic in the Official Gazette "La Gaceta". They must also publish the PACC in their respective transparency portal. The total amount of the updated PACC will correspond to 100% of the sum of the amount of the objects of expenditure of goods and services contracting, in accordance with ONCAE Circular-027-2019. ONCAE will notify the Superior Court of Accounts (TSC), State Department of Finance (SEFIN) and the Institute of Access to Public Information (IAIP), no later than twenty (20) calendar days after the expiration of the aforementioned deadline, the list of institutions that complied with said obligation. In addition to what is established in Article 30 of the same Law, the PACC can also be modified or updated for the purpose of timely satisfying needs for contracting of goods, works, consulting and services and in order to comply with the POA. All modifications or updates of the PACC must be published by the contracting bodies in the "HonduCompras" system and in their institutional portals in accordance with ONCAE guidelines. Such modifications can only be made in accordance with the closure rules issued by the State Department of Finance (SEFIN). The institutions will carry out monitoring and control of the execution of the PACCs published in "HonduCompras" in accordance with the indicators that ONCAE publishes on its portal, in order to efficiently manage its budget and the provision of goods and services in a timely manner for compliance with the POA. The Administrative Manager or equivalent and/or Institutional Administrator User is responsible for coordinating the quality of data and information published in the HonduCompras system. Municipalities are excepted from this provision.

ONCAE will send to the General Coordination Secretariat of Government, to the State Department of Finance and to the Budget Commission of the National Congress the consolidated information of all PACCs of the current Fiscal Year that have been published by the institutions in the "Honducompras" System until February 28. The information sent by ONCAE must be taken into account by the institutions that receive it, for cash flow planning, evaluation of compliance with goals and budget allocations in order to be efficient with payment to contractors.

ONCAE, in accordance with the best interests of the State, will define and notify which joint purchases will be mandatory in nature, for all institutions that acquire the goods or services included in the catalog. All institutions that adhere to the joint purchase must comply with what is established in article 44-C of the Reform of the State Contracting Law Regulations in accordance with Executive Agreement 028-2018, through the Request for Incorporation in Joint Purchases which must have the Approval of the Certified Public Buyer (CPC) in the documents issued by ONCAE, as proof that they substantially conform to the current regulatory framework. For this purpose, ONCAE must notify said information to the institutions through the "HonduCompras" portal. The Central Bank of Honduras is excepted from being part of the joint purchase when it comes to the acquisition of armored vehicles for the transport and custody of valuables. The Secretary of Foreign Relations is authorized to be able to acquire vehicles, which will be necessary to carry out functions of protection to Honduran Migrants on the migratory route between Guatemala, Mexico and the USA. The Secretary of Foreign Relations and International Cooperation is excepted so that it may acquire or lease vehicles for Diplomatic and Consular Representations under the legislation of the accredited state, the acquisition process will be in accordance with national law. However, the purchase or rental of vehicles whose displacement exceeds 2,000 cubic centimeters is prohibited. Municipalities are excepted from this provision.

All direct contracting covered by an emergency decree must be carried out in accordance with what is established by the State Contracting Law and its process must be published in "HonduCompras". Emergency decrees must contain the scope, amount, and validity period of the same, as well as the source of financing. It is prohibited to carry out direct contracting covered by emergency decrees whose objective is different from that which motivates the emergency, as well as contracts whose effects extend beyond the emergency itself. When as a result of an emergency decreed within the scope of application of Article 9 of the State Contracting Law, an event occurs that can only be confronted with exceptional measures, taking into account the significant number of loss of human lives and the severity of material damages. The institutions responsible for rescue, relief, and restoration of services may carry out the strictly necessary contracting to address the catastrophe, being able to regularize up to 30 days after the activities prior to contracting established in the State Contracting Law. The failure to regularize contracts executed in a catastrophic situation shall result in a fine to the Head of the Institution, equivalent to the value of the contract; with all officials who participated in any of the stages of contractual or financial management being jointly and severally liable. On a transitional basis, for contracts executed to address the catastrophes caused by hurricanes "Eta" and "Iota", the 30-day period established in this Article shall be counted from the effective date of this Decree.

The ONCAE through approval of evaluation to those interested who accredit the established requirements, shall be responsible for accrediting the condition of Certified Public Buyer (CPC). The ONCAE may revoke the certification at any time, if it is conclusively established that it has carried out conduct that does not substantially comply with the current regulatory framework of public contracting, if its integrity is compromised by investigations or public questioning relating to actions contrary to ethics and the Code of Conduct of the Public Servant, or the CPC has criminal and police records for any reason. In the same manner, the ONCAE shall certify users of the HonduCompras system through the approval of evaluation prior to receiving an online course. Non-certified users shall not be able to have access to the system. The ONCAE through the Annual Capacity Building Plan shall publicize the dates on which courses and evaluations shall be offered, which shall be conducted in a structured manner for each State institution.

The Dispute Resolution Board (MRD) referred to in Article 3-A of the State Contracting Law is an instance for conflict resolution, formed by one or three (3) persons as designated in the Contract. For contracts with an initial contracting amount equal to or greater than FIFTY MILLION LEMPIRAS (L50,000,000.00), the contracting parties must jointly appoint a Dispute Resolution Board (MRD) on the date established in the contract. The remuneration conditions of the sole member, or of each of the three (3) members, including the remuneration of any expert whom the Dispute Resolution Board (MRD) consults, must be determined by mutual agreement between the contracting parties when agreeing to the conditions of appointment. Each contracting party shall be responsible for paying half of this remuneration, for which reason, each State institution that in its Annual Plan of Purchases and Contracting (PACC) has scheduled to execute contracts for initial contracting amounts equal to or greater than FIFTY MILLION LEMPIRAS (L50,000,000.00) must make the provision of funds in the Budget of Expenditures to make the corresponding payments.

The submission of bids and envelopes referred to in Article 111 of the State Contracting Law Regulations shall be presented electronically on the "HonduCompras 2.0" platform. ONCAE shall issue the corresponding Circulars, which shall establish the guidelines and graduality for the use of the new National Contracting System "Honducompras 2.0". In order to guarantee the sustainability of the National Contracting System "Honducompras", in its different versions, for the current fiscal year 2021, each institution that is a user of the system is instructed to transfer to the General Coordination Secretariat of Government, the amount corresponding to 1.5% of the total amount of contracts managed, which includes the amounts awarded or contracted depending on the stage in which it is published in HonduCompras, through this system during the year 2020. In accordance with the previous paragraph, SCGG through ONCAE shall officially communicate to the user institutions and to the State Secretariat in the Office of Finance, the total amount that must be transferred to ONCAE. If by no later than February 17, 2021, the participating institutions have not made the aforementioned transfer effective, the State Secretariat in the Office of Finance (SEFIN) is authorized to take the necessary measures to comply with what is ordered here. The amounts transferred to ONCAE shall be allocated to cover payments arising from the contract for the support service and updating of the "Honducompras 2.0" platform, consulting services necessary for training, deployment, interoperability with other systems, infrastructure, user accreditation, digital signature certification and any other service necessary for the correct operation of the system.

Public Sector Institutions of the Central Government, Decentralized Sector and Local Governments, prior to the acquisition of information systems and/or development of computer systems in administrative, financial and accounting matters, shall require an Opinion from the State Secretariat in the Office of Finance, which may be signed by the means authorized by the Institution, to guarantee that such functions do not compete with the SIAFI, SAMI, SNIPH or other national systems governed by this Secretariat; in the event that the opinion is favorable, the Finance Secretariat shall subsequently provide the guidelines to guarantee interoperability or information exchange between the systems; said opinion must be issued within a maximum period of 30 business days from the date of receipt of the request, accompanied by detailed technical and functional specifications of the systems being evaluated. The acquisition of Hardware, Licenses and Software not related to the functionalities described in this article do not require the issuance of an opinion.

State purchases of goods and/or services in which the payment of Sales Tax applies, the value of this shall be withheld in each payment document, this amount shall be paid into the General Treasury of the Republic within ten (10) calendar days following the transaction. For the purposes of the aforementioned deadline, no withholding Institution may make use of these resources to finance expenses of any nature. The provisions of the previous paragraph are applicable both to Decentralized and Deconcentrated Institutions and all Project Executing Units without exception, who as Withholding Agents must deliver to the provider of the goods and/or services, the withholding receipt, so that they may claim before the Tax Administration Service (SAR) the amounts paid for this concept. The foregoing results in an automatic operation at the time of making the payment of the corresponding F-01 document, in the case of the Central Administration and Decentralized Institutions that operate in the CUT.

All institutions in the Public Sector in budget execution must provide information that allows for the identification of goals and indicators foreseen in planning and their relationship with what was budgeted, including acquisition and contracting data duly reflected in the Purchase and Contracting Plan (PACC).

The Secretariat of State in the Office of Transparency through the National Office for Comprehensive Internal Control Development (ONADICI), will support and provide technical assistance to public institutions in internal control mechanisms, with emphasis on purchases and contracting of goods and services, as well as in the administration of human resources, as these are the principal lines of budgetary expenditures in State entities. For other expenditures, all public institutions must carry out the prioritization of expenses in accordance with what is strictly necessary and that these are oriented toward the fulfillment of institutional objectives, safeguard assets and public information giving strict compliance with current legal regulations. Contributing in this way to the transparency and accountability of resources allocated by the State to each public institution. TITLE IX ON PUBLIC INVESTMENT

Every initiative for a program and/or project, to be financed with resources from the national treasury; loan resources; donations and any other source; must have the Strategic Alignment analysis, issued by the Presidential Office of Planning, Results-Based Budget and Public Investment, of the Secretariat of General Government Coordination, which will issue an Opinion that will certify the Alignment of the program or project to Government priorities within a maximum period of ten (10) business days, provided that the request for Strategic Alignment Opinion is accompanied by all required documentation. The failure to issue it within the established timeframe will authorize proceeding with the subsequent steps. This certification shall be a requirement to continue with the different regulatory requirements by the Secretariat of State in the Office of Finance. The Secretariat of State in the Office of Finance, through a Committee of Budget Incorporations made up of the General Office of Public Investment, General Office of Macrofiscal Policy, General Office of Budget and General Office of Public Credit, will issue a Technical Note jointly, in order to determine whether there is fiscal space for financing with external credit and donation funds for a new project. In the case of Treasury and/or Own Resources, these must have availability within the budget of the executing institution which must evidence the budgetary structure in the current fiscal year. For subsequent years the fiscal space of National and/or Own Funds must be framed within the Medium-Term Macrofiscal Framework. Every institution requesting fiscal space must submit the executive summary of the Project and the respective Alignment certification issued by the SCGG to the Secretariat of State in the Office of Finance through the General Office of Public Investments.

The General Directorate of Public Investment shall issue the respective Priority Notice for new Investment Projects, regardless of the financing modality, for which the requesting Public Sector institutions must submit the Project document within the Framework of the General Methodological Guide (GMG) for Formulation and Evaluation and register in the National System of Public Investment of Honduras (SNIPH). The Priority Notice does not constitute an obligation for the State of Honduras; it is issued for financing management purposes and has a validity of two (2) years from the date of its issuance, when the process of Management and Negotiation of Project Financing is not completed. The Priority Notice shall be issued within a maximum period of fifteen (15) business days provided that the Document accompanying the request meets all technical, methodological, and legal requirements. Once the Priority Notice is issued by SEFIN, the executing unit must conclude the Priority Notice cycle in the SNIPH.

The State Secretariat of the Office of Finance is authorized to consider, through the General Directorate of Public Investment, as part of the process of prioritizing new investments, integral disaster risk management indicators, climate change, gender equity, specific programs aimed at women 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 and its focus on the purposes of the Strategic Government Program 2018-2021.

Following the issuance of the Priority Notice issued by the Secretariat of Finance, through the General Directorate of Public Investment, when it is necessary to modify technical aspects in the project formulation, Public Sector institutions must request from the Secretariat of Finance a "Technical Opinion on Amendment to the Priority Notice," in the following cases: inconsistencies in the project name (provided that it does not affect its objective and scope), Change of Executing Unit, coverage, geographic location, increase or decrease in project cost, and Source of Financing. For this purpose, it will be required that Public Sector institutions, through the UPEGs, attach the corresponding supporting documentation that justifies and permits the technical analysis for the issuance of the corresponding Opinion that includes the accumulated physical and financial progress. In the event that a change in objective and/or scope is required, it should be considered as a new Project.

Notwithstanding the provisions established in Article 12, numeral 5), literal b) of the Technical Standards of the Public Credit Subsystem, the National counterpart of projects when required by the financing agency shall be established in loan agreements of up to ten percent (10%) of the total amount of the agreement. In the case of donation counterparts, this shall be up to twenty percent (20%) and preferably shall be agreed in kind. Every institution executing programs or projects shall consider within its budget the values corresponding to counterparts when required. In exceptional cases, the State Secretary in the Office of Finance is authorized to raise the percentage limit of National Project counterpart funds that considers special treatment in accordance with the budgetary and financial capacity of the Institution.

Administrative spending shall not exceed ten percent (10%), regardless of the source of financing of the total project cost, which shall be clearly reflected in the budgetary structure corresponding to administrative expenses of the Executing Unit and in the case of Project Management Units UAP the combined sum of projects under its administration. Non-compliance with this Article shall result in temporary disablement of the BIP Code until surplus Current Spending resources are transferred to investment.

The State Secretary in the Office of Finance through the General Directorate of Public Investment; the Secretariat of General Government Coordination through the Presidential Directorate of Strategic Planning, Results-Based Budgeting and Public Investment, Presidential Directorate of Monitoring and Evaluation and the Presidency of the Republic through the Presidential Office for Project Monitoring, shall meet periodically to review Public Investment Projects in alert status, in order to issue a consensus opinion for timely decision-making in relation to programs and projects, said opinion shall be submitted to the corresponding authorities.

Expansions, execution closure deadlines, and project disbursement periods, regardless of the source of financing, must have the Technical Opinion of the General Directorate of Public Investments of the State Department of Finance. This Directorate will issue a Technical Opinion prior to management before International Organizations by the General Directorate of Public Credit (in the case of external financing) which must be established in International Agreements. In the case of national and own funds, the corresponding executing institution will be notified. For this purpose, it is mandatory to present to the General Directorate of Public Investments, prior to the issuance of the aforementioned Opinion, the following:

• 1)

  Report of accumulated physical and financial execution of the project;

• 2)

  Reprogramming of activities that include costs per activity, and in the project closure stage must only contemplate administrative and accounting personnel; and,

• 3)

  Demonstrate that administrative expenses do not exceed 10% of the total investment.

• 4)

  Have seventy-five (75%) of the committed resources (regardless of the Financing Source) according to the contract signed of the total project amount; and,

• 5)

  Corresponding justifications.

For projects in closure, only the administrative and accounting personnel necessary to comply with the closure activities must be maintained in the executing unit, and must send to the DGIP six (6) months before the project closure date the payroll of the essential personnel for the closure of the same. To comply with the above, the General Directorate of Public Investments of the State Department of Finance will issue a Technical Opinion at the request of the institution, in which it will evaluate the necessity of human resources and the time necessary to complete pending activities, and must attach the comparative analysis of personnel reduction.

Once the deadline extensions, disbursement periods, project closures, grace periods are authorized by the Financing Organizations and amendments to the Priority Notes authorized by the Finance Department, the project executing units will have ten (10) business days to carry out their registration with the corresponding changes in the computerized tool of the National System of Public Investments of Honduras (SNIPH), with supporting documentation.

Public Sector Institutions that execute public investment projects regardless of their source of financing must adjust their programming of commitments and payments strictly to their Current Budget. The supervision of any project carried out by Public Sector institutions must be conducted by the public body related to the work being developed.

All Public Sector institutions that execute Public Investment projects, whether with national and/or external sources, shall have the obligation to formulate and register based on the General Methodological Guide for Project Formulation and Evaluation (GMG) and keep updated the physical and financial information thereof in the information technology tool of the National System of Public Investments of Honduras (SNIPH). Non-compliance with this provision shall result in the Secretary of State in the Office of Finance, through the General Directorate of Public Investments, proceeding with the temporary disabling of the BIP code assigned in the SNIPH until compliance with what is established in this Article. In the case of Public-Private Partnership (PPP) Modality, these must register in the SNIPH the formulation based on the GMG.

All Public Sector Institutions that execute public investment projects whether with national and/or external funds must register the main Milestones of the contract in the National System of Public Investments of Honduras (SNIPH), once the Monitoring Sub-module is implemented. When the project is financed with national funds, the analysis shall be based on the State Contracting Law; in case it is financed with external resources, the regulations of the corresponding financing organization shall be applied, in accordance with Article 1 of the State Contracting Law. Non-compliance with this provision shall be the direct responsibility of the Project Executing Unit and shall result in the Secretary of State in the Office of Finance through the General Directorate of Public Investments proceeding with the temporary disabling of the code assigned in the SNIPH until compliance with what is established in this Article.

Project Executing Units shall not execute contracts for works, goods, services or supplies whose closing date extends beyond the project completion date. Likewise, contracts regardless of their source of financing that extend beyond the Government Period must be approved by the National Congress.

Modifications between investment categories and components with external credit must previously have the Technical Opinion of the General Directorate of Public Investment (DGIP). Project executing units shall manage with the financing agency the Non-objection of the change between Investment categories. It is a mandatory requirement that the Executing Unit present to the General Directorate of Public Investment the following information:

• 1)

  Approved budget and proposed modification by investment category/component;

• 2)

  Resources committed and project availabilities by investment category/component;

• 3)

  Report of accumulated physical and financial execution of the project; and,

• 4)

  Corresponding justifications.

The Secretary of State in the Ministry of Finance is authorized to transfer to Institution 449 "Financial Services of the Central Administration," prior to the opinion of the General Directorate of Public Investment, the available balances of national counterpart of Public Investment projects that have met the validity period of the agreement and completed their liquidation, for the purpose of optimizing State resources, in order to address requirements of other projects.

All public investment contracts, subject to the State Procurement Law or Efficient Purchases Law through Electronic Means, that the Public Administration enters into, as well as their modifications, must be registered in the HonduCompras System, no later than 30 days after being signed and must submit a certified copy of each construction contract to the General Directorate of Public Investments of the State Department in the Office of Finance.

To guarantee the sustainability of works, goods and services generated by Public Investment projects that are completed physically and financially registered in the National Public Investment System (SNIPH), the governing institutions of the Public Sector shall be responsible for identifying within their budget the necessary resources for operation and maintenance during the implementation or production stage.

In the case of Public Investment Projects that are in the process of complying with the Legal Framework established for their incorporation into the Public Investment Program (PIP) 2021, their budget shall be consistent with what is established in the Medium-Term Macro Fiscal Framework (MMFMP) 2021 – 2024. Once the technical and legal requirements have been met, they may be incorporated into the corresponding Executing Institution through the preparation of a Technical Note approved by the Budget Incorporation Committee of the State Department in the Office of Finance (SEFIN). TITLE X OF HUMAN RESOURCES ADMINISTRATION

The salaries of employees and officials of the Institutions of Decentralized Administration and Deconcentrated Entities, whether of a permanent nature, by contract or any other modality that enter public service during the validity of this Decree, must be in relation to the remuneration earned by those of equal category in the Central Administration. No appointments or hiring of personnel with salaries greater than those established in Legislative Decrees No. 17-2010 containing the Law for the Strengthening of Income, Social Equity and Rationalization of Public Spending for Management positions and No. 219-2003, Law for the Rationalization of Public Finances for the rest of the personnel shall be permitted. This provision is also applicable when new positions are created in any public institution.

To carry out the monitoring and follow-up of salaries and wages of the Institutions of Decentralized Administration and Deconcentrated Entities without any exception, they must send to the General Budget Office of the State Department of Finance (SEFIN), the complete payroll that contains the permanent, confidential, temporary and daily wage personnel, within fifteen (15) days following the expiration of each quarter. Likewise, for statistical and control purposes, Decentralized Institutions must send monthly the personnel list in the formats provided to the General Budget Office and to the General Office of Decentralized Institutions broken down into their different categories and classified by gender; said list must be consistent with the data entered by the institution in the Registration and Control System of Public Servants (SIREP). The State Department of Finance (SEFIN), through the Registration and Control System of Public Servants (SIREP), must submit to the National Institute for Women (INAM) an annual report at the beginning of the year with updates in the first and second semester of the year on the breakdown of the total of public servants in order to determine the number of officials who are in decision-making and intermediate management positions disaggregated by sex, in view of the fact that this is an indicator that is registered in the National Gender Observatory-ONAG managed by the National Institute for Women (INAM), thus complying with what is established in Article 10 of this Law.

Modifications to the structure of positions in the institutions of Central Administration and Deconcentrated entities reviewed by the General Office of Civil Service or others governed by Special Laws must be authorized by Internal Resolution of the State Department of Finance. These modifications must be financed with the budget approved for each Executing Unit. In the case of modifications to the position structure of Decentralized Institutions, these must be authorized by their Superior Bodies based on their Special Laws and they must not have a budgetary effect, in accordance with what is established in Article 144 of this Law. If they have a budgetary effect, they must have the same within their budget and submit the authorization request to the State Department of Finance prior to its execution, which will issue the corresponding Internal Resolution. Modifications of both Central, Deconcentrated and Decentralized Administration that are authorized must be updated in the Detailed Annex of Salaries and Wages or its equivalent based on what is stipulated in Article 142 of this Law. If any modification of personnel structure is in process related to existing or newly created positions, as long as it has not been completed and applied in the Detailed Annex of Salaries and Wages of the Institution, these may not be occupied; therefore, the effectiveness of the agreement must be dated after the end of the management of the appointment process. Violation of this Article shall be subject to the provisions of Article 5 of this Law.

The merger of positions to create a new one shall be permitted provided that it generates savings of thirty percent (30.0%) of the total amount of the merged positions; and, the creation of positions originating from the division of a single position is prohibited.

Appointments of personnel in vacant positions shall be permitted in compliance with what is established in Article 141 of this Law. No official or employee may be appointed unless the position is created or vacant within the Detailed Annex of Salaries and Wages of the Institution or its equivalent. Nor shall they be appointed permanently in a position that is subject to legal proceedings or vacant due to leave.

For administrative personnel of the Central and Decentralized Administration 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). In the case of Teaching Personnel of the Ministry of Education, it must be done through the Teaching Human Resources Administration System (SIARHD). Prior to initiating these processes, there must be a position structure and allocated budget, which must be confirmed by the State Secretariat in the Ministry of Finance through the General Directorate of Budget. The position structure shall be generated in the General Directorate of Civil Service or in the General Subdirectorate of Teaching Human Talent as appropriate, and prior to the creation of new positions in the Detailed Annex of Basic Salaries and Wages, the General Directorate of Civil Service or the General Subdirectorate of Teaching Human Talent shall proceed to classify them.

For administrative personnel of the Central and Decentralized Administration, the preparation of payroll for personnel incorporated into the Civil Service Regime, Excluded Service, Daily Wages and Contracts, as well as other statutes and special laws, with the exception of those governed by the Fundamental Law of Education and the Honduran Teaching Statute, shall be subject to the new Human Resources Administration System (SIARH), which is directed by the General Directorate of Civil Service, as a module of the Integrated Financial Administration System (SIAFI). The Teaching Human Resources Administration System (SIARHD) must have or develop interfaces with the Integrated Financial Administration System (SIAFI), for purposes of registration and electronic payment.

Cancellation or transfer of positions in the Teaching Directive function is not permitted, unless the number of positions exceeds what is stipulated in Articles 41, 42 and 51 of Executive Agreement No. 1361-SE-2014 (Regulation of Educational Centers).

The contracting of temporary personnel (expense subgroup 12000) shall be limited to the allocations and amounts approved in the General Budget of Income and Expenses of the Republic. In order to regulate these allocations, budget modifications are prohibited for this expense subgroup, with the exception of adjustments for minimum wage provided that the institution has budget availability, reimbursements by court order, negotiated salary adjustment for public employees and back wages; as well as exceptional cases for the Health sector, when due to the nature of its functions the contracting of medical personnel is required for normal operations while the competitive process is concluded (object 12910 Special Contracts). This rule applies to all sources of financing, except for resources from Donations. The heads, the Heads of Executing Units, and the contracting Administrative Managements are directly and exclusively responsible for personnel selection, which must be carried out based on competencies, abilities, skills, academic merit, integrity and other suitability requirements considered necessary for the efficient performance of the position. This type of contracting shall be formalized through an Internal Agreement (Contract) of each institution of the Central, Decentralized and Autonomous Administration; in that Agreement no payment of vacation bonuses shall be agreed upon; these contracts are valid only within the present Fiscal Year, and personnel hired under this modality should not be considered permanent for any purpose, and their effectiveness shall be counted from the date this personnel takes possession of the position and the Contract has been signed by both parties. Contracts may be entered into with natural persons when the assigned tasks cannot be performed by regular or career personnel (permanent). It is prohibited to hire non-permanent personnel (12000) when in the Detailed Annex of Basic Salaries and Wages of the Secretaries of State or their equivalent in other Public Sector Institutions there are approved positions for the performance of the functions subject to the contract, nor in positions such as that of the Maximum Authority of an Institution, or Executives, who in compliance with the General Law of Public Administration or Special Laws must be at the free appointment and removal of the President of the Republic. Officials who breach this Article shall be jointly and severally liable financially for all obligations they generate.

Non-permanent personnel contracted under Specific Object 12100 Basic Salaries may only have their contracts renewed a maximum of two times in the same fiscal period, and the salaries agreed upon in the first contract of said period must be maintained, except in the cases exempted in the second paragraph of the aforementioned article 129.

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 contracting of personnel whose functions are different from those corresponding to the nature of work as daily wages is prohibited, in such cases direct responsibility shall fall on the official or officials who violate the provisions of this Article. This personnel is not classified as permanent for any purpose, likewise, vacation bonification should not be considered in the corresponding resolution.

Central Administration servers who have worked consecutively for the State shall be granted indemnification in accordance with the benefit granted to employees governed by the Civil Service Law. The indemnification established in the Civil Service Law shall be equated based on Decree No. 189-59 and its reform Decree No. 150-2008. This benefit shall also apply to those public servants who hold excluded service positions.

Specific Object 12910 special contracts, allocation for personnel contracts for a period not exceeding ninety (90) days in the fiscal period, are personnel contracts that complement the proper activity of each institution and obligate monthly payments. It includes hiring to cover absence of personnel due to the enjoyment of acquired rights in accordance with current regulations such as: sick leave, maternity, scholarships, paid leave, as well as special cases to cover emergency declarations, medical personnel while the recruitment process is concluded or other cases that according to the type of operability of the Institution are duly justified and approved by SEFIN. Such hiring must have the legal support that justifies it. Due to the nature of the contract, it has no right to vacation, thirteenth month as severance pay, fourteenth month as social compensation and other rights of employees that are financed through other objects of Subgroup 12000.

For the payment of salaries of diplomatic, consular or representative personnel abroad, after corresponding deductions are made, it shall be applied in accordance with the Diplomatic and Consular Service Law. Any additional charges generated by exchange differential or banking commissions for the transfer must be covered with its own budget. These must not be added to the integral salary of the official or employee.

Retirees from any institution of the State may be hired, with national or external funds to provide their personal and/or professional services, as well as to hold elected offices, without prejudice to their retirement benefits.

The institutions of the Central Government, Decentralized and Deconcentrated, shall not be able to allocate funds from loans or donations for the purpose of making salary supplements or increases or granting additional compensation to public servants.

All officials of the Central Government and Deconcentrated Institutions included in Article 3 of the Civil Service Law shall enjoy the right to enjoy annual unpaid vacations granted in accordance with the periods established by said Law, provided that the following circumstances occur: 1) That it is outside the Regime established by the Civil Service Law and its Implementing Regulations; and, 2) This right is acquired after completing the first year of service without interruption. In the event that due to work requirements the Officials of the Central Government and Deconcentrated Institutions have not enjoyed their vacation time in accordance with the Law, they shall have the right to payment for the same. For these purposes, they must comply with the requirements established in Article 128 of the Regulations of the Civil Service Law.

The appointment of personnel by Agreement in the capacity of excluded, in positions that are not included in Article 3 of the Civil Service Law, is prohibited.

Public Servants who have been terminated and who have sued the institution in which they worked may, during the time the case is in process and pending judgment, work under temporary employment arrangements in any institution of the Public Sector. The official who violates what is established in the preceding paragraph and makes an appointment under the modality of agreement shall be subject to the application of a fine equivalent to ten (10) minimum salaries.

For the purpose of promoting greater efficiency and effectiveness in the performance of the institutions of the Central Administration, Decentralized Bodies and Decentralized Institutions, at least sixty percent (60%) of the vacant positions existing on December 31, 2020 must be filled, except for those positions of Direction, teaching service, health care and security, likewise, cases duly justified before the Ministry of Finance. The General Directorate of Civil Service and equivalent bodies in the rest of the institutions of the Public Sector must submit to the State Secretariat in the Office of Finance and to the Superior Court of Accounts (TSC) no later than January 30, 2021 the corresponding reports demonstrating the actions taken in compliance with this norm. The Administrative Managements of each institution through the Human Resources Sub-managements must comply with what is established in this norm.

The institutions of the Central Administration, Decentralized and Decentralized Entities shall present to the State Secretariat in the Office of Finance, specifically to the General Directorate of Budget, no later than January 6, 2021, the Detailed Annex of Salaries and Wages corresponding to the Fiscal Year 2021 in accordance with the format provided by the State Secretariat in the Office of Finance and based on what was approved budgetarily. This shall contain the positions of permanent, trust, temporary and daily wage personnel, collaterals and other benefits granted to them regardless of the source of financing. Likewise, said annex or equivalent must contain only the changes that have previously complied with what is stipulated in Articles 122, 124, 126, 127, 141, 144, 149, 150, 152, 154 and 155 of this Law and shall be updated in accordance with the changes authorized during the present Fiscal Year and based on what is currently budgetarily in effect. The Heads of each Institution shall be responsible for ensuring compliance with what is established in this norm.

In order to guarantee compliance with Executive Decree PCM-021-2016, which contains Guidelines related to the registration and control of public servants, payroll schedules for salaries, collateral benefits and benefits of all officials and employees of Public Sector institutions, except Local Governments, Presidency of the Republic, Legislative Branch, Judicial Branch and Constitutional Bodies, must be validated month by month in the System for Registration and Control of Servers (SIREP) in accordance with their payment mechanism (fortnightly, monthly, biweekly, among others), contracting method, expense object and source of financing to be charged. Likewise, prior to uploading payroll, they must keep the records updated in the Server Registration Module, for which the supporting documentation that applies in each case will be required; the foregoing for everything affected in the Personal Services Group regardless of its source of financing. For contracts and resolutions for new personnel entries under Subgroup 12000 in institutions that do not generate their payroll in the SIARH, prior to signing the document and beginning service provision, they must consult SIREP to determine if the candidate has any employment relationship with another institution; and if the position to be filled is related to the compensation earned by those of equal category (Article 122 of this Law) when the salary is equal to or greater than L25,000.00. The Directors, Heads of Executive Units, Administrative Managers and Human Resources Managers who carry out this type of hiring without complying with what is stated in the preceding paragraph shall be directly and exclusively responsible for the commitment they acquire, without prejudice to civil, administrative and criminal actions before the supervisory entities. Likewise, all Consultants who receive professional fees and who are registered under the Non-Personal Services expense Group (subgroup 24000) financed from any source must be registered in this System, this solely for the purpose of having better control of resources allocated to consulting and without these being considered under any circumstance as permanent or temporary employees of State institutions, in accordance with what is established in Article 84 of this Law. Non-compliance to the satisfaction of the updating of records and validation of payroll in a timely manner as stated in this provision shall result in reporting to the Competent Body and/or that the General Treasury of the Republic shall not make transfers for payroll payments or that the payment delegation held by non-compliant Institutions be disabled until the pending matter is remedied. Likewise, Administrative Managers and Human Resources Managers or Sub-managers who violate these provisions shall be jointly and severally liable for an amount of 10 minimum salaries.

Decentralized Institutions shall be limited to the number of positions and amounts that have been approved in their budget and that appear in the Opinion approved by the State Secretariat for Finance; notwithstanding the foregoing, the General Budget Directorate shall review said positions based on the report corresponding to vacant positions established in Article 141 and the update of the Itemized Annex established in Article 142 of this Law, with the purpose of validating the number of positions with which the institution will have for the current Fiscal Year. The reassignment of functions and renaming of positions is an administrative management matter of each Decentralized Institution, so it is the exclusive responsibility of the institutional authority to carry out these actions, which must previously have the authorization of the highest decision-making body; this type of actions should not involve elimination or duplication of functions in key positions, nor in the amount of the position due to salary increases, if so they must request the corresponding authorization from the State Secretariat for Finance, in accordance with what is established in Article 124 of this Law. Decentralized Institutions that carry out the administrative actions described above must make the corresponding adjustments in SIREP; likewise, they must take into consideration the legal regulations in force regarding Human Resources.

The obligations arising from the employment relationship, such as benefits, severance and indemnification established in the Law, shall be assumed and paid by the State, with the budget allocated to the institution where the public servant provided their services. Each institution must assume payment for final judgments regardless of their nature. In the event that the State is defeated in court in payment for the concepts referred to in this Article, the head of the nominating unit, the officials and/or employees who intervene in the administrative acts that give rise to the payment shall not be personally or jointly liable.

Public Institutions are authorized so that, when a State employee resigns, is dismissed or separated and has not caused the payment of the Thirteenth Month Salary as a Christmas Bonus, Fourteenth Month Salary, as social compensation, vacations or any other benefit that according to Law or Collective Bargaining corresponds; the proportional payment of these shall be made effective at the moment of dismissal or resignation; without waiting for the months established to make the settlement.

The payment of the Thirteenth Month Salary as a Christmas Bonus and Fourteenth Month Salary as social compensation shall also be granted to officials, daily wage and contract personnel of the Public Sector, who are included in Group 10000 of Personal Services, with the exception of the object of expenditure 12910.

For the calculation of extraordinary hours, compliance must be made with the provisions of the Regulations of this Law. Without prejudice to the provisions of Article 31 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 Honduran Civil Aeronautics Agency and Security, Transport and Issuance and Treasury Personnel of the Central Bank of Honduras, as well as BCH personnel related to the conduct of the National Survey of Income and Expenses of Households (ENIGH) and the National Agricultural Development Bank, linked to the work of custody, transfer and handling of valuables, are incorporated within the exceptions referred to in said legal provision, related to the authorization and payment of overtime. The following officials are excluded from the payment of overtime: State Secretaries and Under-Secretaries, General Secretary, Presidential Directors and Sub-Directors, General Directors and Sub-Directors, Directors, Head and Sub-Head of Internal Audit, Administrative Manager, Managers, Sub-Managers, Legal Advisor, Executive Presidents, Executive Secretaries and Rectors and similar positions regardless of the job title.

Savings in basic salary allocations for Permanent Personnel, derived from: cancellation of positions, creation of positions through merger, positions

temporarily vacant, positions that earn a lower salary than budgeted or from the cancellation of supernumerary personnel in the Public Sector, should not be used for: salary increases, adjustments, leveling, and/or appointment of personnel nor be transferred for another purpose; except for:

• 1)

  The creation of positions subject to a favorable opinion from the State Department in the Office of Finance, through the General Budget Directorate, when it comes to personnel who, by the nature of their functions, are required for the normal functioning of any State body;

• 2)

  To satisfy urgent and unforeseen needs, such as:

  • a)

    Emergency Expenses, decreed by the President of the Republic;

  • b)

    Internal unrest or public calamity;

  • c)

    Payment of labor benefits and/or severance;

  • d)

    Payment of Labor Claims by court order, in cases where there is no other source of financing;

  • e)

    Cover Minimum Wage;

  • f)

    In the case of the State Department in the Office of National Defense, indemnities to personnel established in the legal framework of the Armed Forces and recognition for services rendered to the nation equivalent to the amount resulting from the application of Severance Assistance may be covered, and,

  • g)

    Negotiated salary adjustment for public employees. 3) Likewise, with the savings generated by positions that remain vacant due to retirement, pension, death or any other cause of teaching personnel of the State Department in the Office of Education, these shall be reinvested one hundred percent (100%) in the programs and projects of the same Department to improve the coverage and quality of Education in coordination with the State Department in the Office of Finance, in the same way, positions for first-time teaching staff may be created by assigning them the base salary established by Law; and, 4) With the savings generated by positions that remain vacant due to voluntary retirement and restructuring of the National Police, the same shall be reinvested one hundred percent (100.0%) in the programs of the Security Department to create positions for first-time police officers by assigning them the base salary established by Law.

Based on what is established in Decree No. 18-2010 of March 28, 2010, containing the Fiscal and Financial Emergency Law

and the Health Emergency caused by COVID-19 in 2020 that severely affected the country's economy, for the present fiscal year, salary increases financed with resources from the national treasury in the State Departments, Decentralized Institutions and Decentralized Institutions are frozen. Excepted from the above are decentralized institutions that have the respective financial and budgetary availability (Own Resources) that supports the benefit to be granted, for which the decentralized Institution without exception, prior to granting said benefit, must present to the Finance Department the Economic and Financial Study that certifies the sustainability of said benefit and the same cannot exceed the consumer price index (CPI) average established by the BCH at the end of 2020, except in those cases that are the result of a restructuring and/or reengineering process. This benefit should not be applied to personnel who have been appointed in the present Fiscal Year. Excepted from the application of the CPI established by the BCH at the end of 2020, are those decentralized institutions with Collective Agreements already negotiated and in force that establish a different percentage, provided that they can be covered both budgetarily and financially without implying an expenditure by the National Treasury. In the case of salary leveling, these cannot exceed the average salary of positions of equal category or competence in the Central Administration, in accordance with the range of the institution, provided that it performs the functions of the position and has a seniority of not less than one year in the position. The State Department in the Office of Finance through the General Budget Directorate shall proceed to conduct the corresponding review and analysis and shall issue the respective Opinion. Likewise, this Directorate shall issue opinions on adjustments to the minimum wage that are intended to be granted in order to ensure compliance with the Minimum Wage Law. The increases that are authorized must be updated in the Itemized Annex of Salaries and Wages or its equivalent based on what is established in Article 142 of this Law.

Every Decentralized Institution that conducts a new collective negotiation or review of its economic clauses must request, prior to the Termination of the Collective Agreement at the State Department in the Offices of Labor and Social Security (SSTS), the corresponding Opinion from the State Department in the Office of Finance

(SEFIN) through the General Directorate of Decentralized Institutions, said Opinion shall be exclusive to the content of the articles referred to in the negotiation. The State Department in the Offices of Labor and Social Security (SSTS) must request as part of the documents accompanying the Minutes of the new negotiations of Collective Agreements the Opinion issued by the State Department in the Office of Finance (SEFIN) referred to in the preceding paragraph prior to giving authorization or termination of any new collective negotiation. New collective negotiations shall consider salary increases that can be covered budgetary and financially by the requesting institution without implying any expenditure to the National Treasury. The requesting institution must accompany the Opinion request that it sends to the State Department in the Office of Finance with the complete economic and financial study that certifies the sustainability of the benefit to be granted, and any other information required by the General Directorate of Decentralized Institutions to issue the Opinion on the corresponding new collective negotiation.

The salaries earned by positions with the rank of Secretaries and Under-Secretaries of State shall be those approved in the Detailed Annex of Basic Salaries and Wages of the Central Administration or its equivalent, which is an integral part of the General Budget of Income and Expenses of the Republic.

The Honduran Community Education Program (PROHECO), as of the year two thousand seventeen (2017), must pay the salaries corresponding to the (male and female) teachers hired by said program through deposit to their respective bank accounts. For this purpose, it must have the technological platform that enables the making of payments and connectivity with the financial administration systems and human resource control of the State; such as SIAFI and SIREP. Compliance with the above shall be the responsibility of the Secretary of State in the Office of Education through the administration of the aforementioned program and coordinated with the General Directorate of Human Talent of the same Secretariat.

In the Teaching Sector (teaching staff), the division of teaching positions, arising from retirements, pensions, deaths, resignations, cancellations and dismissal by final judgment shall not be permitted for the purpose of supplementing teaching hours of teachers; authorization is only granted when they are destined for the hiring of teachers strictly working directly with students to which the base salary would be assigned to meet the needs in single-teacher and two-teacher schools in the pre-basic and basic modalities.

For personnel who do not meet the requirements to apply for a teaching position and who for this reason are hired as interim teachers, the contract period shall be effective starting in the month of February and concluding in the month of November of each year.

For teachers under the modality of the Distance Secondary Education System (SEMED), hiring shall be carried out for the periods of January to June and July to December of each year in their case and provided that they hold a degree in education at the bachelor's level.

Every action of transfer of position or teaching personnel, prior to its approval, must have the position or the person who will replace it, and must previously notify the State Secretariat in the Office of Finance so that it may issue the Internal Resolution, the budgetary modification and the Detailed Annex of Basic Salaries and Wages. For this purpose, the justification of the movement must be attached. In relation to the State Secretariat in the Office of Health, any person who for any reason has been transferred to a zone, region or area different from where the position is budgeted, must return to the place where they were appointed. The positions for which the body that accepted the transfer assumes budgetary responsibility are excepted, without prejudice to the responsibility that originally made the appointment.

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 service provider declares in said appointment that it is Ad honorem and that it generates nor will generate any economic responsibility to the State. Violation of this rule shall make the officials or employees who authorize such actions personally responsible for payment of these services.

Public sector officials or employees who must participate in official events outside the country, invited by international institutions or organizations, may do so in accordance with the following: a) If travel allowances and other travel expenses are covered in their entirety by the sponsors, only the payment of airport exit taxes shall be recognized, provided that they are not included in the cost of the airline ticket. b) When it comes to special missions carried out in representation of the country there shall be no limits to their representation, provided that they are authorized by the Presidency of the Republic, through Executive Agreement. Municipalities are excluded from this provision, which must have the necessary resources in their current budgets to cover participation in official events outside the country. And be approved by their respective Municipal Corporations. The National Banking and Insurance Commission (CNBS), Central Bank of Honduras (BCH), Public Ministry (MP), Secretariat of Foreign Affairs and International Cooperation (SRECI), the Legislative Power, Supreme Court of Justice (CSJ) and Justice Operators are exempted from the provisions of this disposition due to their work in financial supervision, formulation, development and execution of the country's monetary, credit and exchange policy and national security, in addition to managing bilateral, multilateral, economic, cultural and international cooperation policy relations of the country, which they carry out jointly with entities at both national and international levels, maintaining links with regional and world institutions necessary to fulfill their main duties. These institutions for all their foreign travels must be governed by the provisions contained in the Travel Allowances and Other Travel Expenses Regulations of their own institution.

Budget allocations for scholarships may be used provided that the following is taken into consideration:

• 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 public sector institutions, aimed at obligating the latter, in reciprocity for the financial aid received, to work for the agency that nominated him for a period of time equal to the duration of the financial aid for the completion of studies, to the reliable proof of having obtained the respective degree or credentials. In case of non-compliance with these conditions, the scholarship recipient is 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 time of the obligation to return them. Only for reasons of force majeure sufficiently proven at the discretion of the Administration through the institution that nominated him, shall the scholarship recipient be exempt from said responsibility;

• 2)

  That the State guarantee the permanent scholarship 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 salary corresponding to their level of studies achieved; and,

• 3)

  That scholarships granted within and outside the country be for permanent personnel (item 11100). Notwithstanding what is provided herein, for purposes of computing the time referred to in numeral 1 of this article, the time that the beneficiary has provided their services in a government agency different from the one that granted the scholarship shall be taken into account, provided that the agency that sponsored the scholarship has authorized the leave or permit to suspend the employment relationship during that time. Scholarship applications where the applicants are women who have sponsorship of partial or total financing from national, international institutions or cooperating governments shall have preference, being able to grant full or partial scholarships to private individuals, provided that there is an agreement with such organizations that expressly establishes it. The State reserves the right to contract these persons, after the scholarship ends and the respective degree is obtained. In case the duration of this benefit does not exceed one (1) month or when it comes to scholarships, studies or seminars to be developed in the country or abroad, its granting shall be formalized through an official memo from the head of the agency in the Central Administration, in Decentralized Institutions, it shall be done through an official memo from the head thereof and in the Judicial Power and Legislative Power it shall be done through their internal regulations. If the duration of the scholarship exceeds one (1) month, authorization or extension shall be granted through Ministerial Agreement, when it comes to State Departments, in the case of Deconcentrated Bodies and Decentralized Institutions authorization shall be granted through a resolution of the Governing Body, in the Judicial Power and Legislative Power it shall be done through their internal regulations. In all cases the financing of studies must be provided with the resources allocated for this purpose in the budget of each institution of the Central Administration, Deconcentrated Bodies and Decentralized Institutions. In the case of the Secretariat of State in the Ministry of National Defense, the concept of scholarship shall also include travel and travel expenses, in accordance with the scholarship student's study allocation. The agencies responsible for compliance with this article must submit an annual report to the National Institute of Women, disaggregated by sex, age and origin of the beneficiary persons.

The State's obligation to make payment in the amount of one-half percent (1/2 of 1%) of the total amount of permanent salaries and wages of the Central Administration, as employer contribution to the National Institute of Professional Training (INFOP), shall be limited to the allocation approved in the Budget of the Secretariat of State in the Office of Labor and Social Security for the present Fiscal Year.

The employer contribution paid by the State to the Social Welfare Institutes cannot exceed the percentage established in their respective Laws. The allocations intended for the payment of the employer contribution to the aforementioned Institutes cannot be transferred for another purpose, unless savings are identified in these allocations, which may be directed to finance what is established in numeral 2, literal g) of Article 149 of this Law. Likewise, both employer and labor contributions of public servants must be paid in full to the welfare institutes in the corresponding month, being strictly prohibited to allocate them for other purposes, the same applies to deductions for loans made to public servants. Non-compliance with this Provision shall be subject to the sanctions stipulated in Article 5 of this Law. The Heads and Administrative Managers or whoever acts in their place, who fail to comply with this Article shall be jointly and severally liable financially for all obligations generated without prejudice to civil, administrative and criminal liability.

Deductions of the Income Tax from officials, employees and contractors of the public sector and any other type of deduction or withholding made from payments to suppliers of goods and/or services or employees must be paid in full by the respective institutions in the corresponding month, being strictly prohibited to allocate them for other purposes. The Heads and Administrative Managers or whoever acts in their place, who fail to comply with this Article shall be jointly and severally liable financially for all obligations generated without prejudice to civil, administrative and criminal liability.

In compliance with the provisions of articles 256 to 259 of the Constitution of the Republic, Civil Service Law, Executive Decree PCM No. 28-2014 containing the creation of the commission for the reform of the Centralized and Decentralized Public Administration; Executive Decree PCM No. 21-2016, containing the SIREP guidelines and Executive Decree PCM No. 08-97, containing the regulations on the competencies of the Executive Power, the Secretary of State in the Office of Finance (SEFIN) is instructed, in coordination with the Secretary of State in the Office of the Presidency through the General Directorate of Civil Service, to regulate the organization and administration of human resources and its budgetary effect for which the guidelines on salary matters shall be defined and detailed for both the appointment and hiring, as well as any modification to the structure of positions or personnel actions for the Non-Financial Public Sector (SPNF) for both institutions governed by the Civil Service Directorate or special laws. The application of the provisions of this Article shall be governed by what is established in the regulations of this Law; in the meantime, until said regulations enter into force, the Secretary of State in the Office of Finance (SEFIN) is authorized to issue the corresponding guidelines preventively through a circular for compliance with the provisions of this Article. TITLE XI OF DECENTRALIZED INSTITUTIONS

Without prejudice to the limit established in Article 51 of the Organic Budget Law and for the purpose of expediting financial investments by Social Security Institutions and State Financial Institutions, these institutions are authorized to incorporate the surpluses of their income into the budget of income and expenditures of the present fiscal year, with prior authorization from their Corporate Governance bodies and to invest these resources in securities and financial instruments with high safety, profitability and liquidity. The National Banking and Insurance Commission (CNBS) through its specialized technical body must supervise that the financial investments made by these institutions comply with the established technical standards and/or criteria.

For the execution of the budget of the present Fiscal Year, the social security institutes, INPREMA, INJUPEMP, INPREUNAH and IPM, must obtain a Net Loan Concession equal to or less than zero, that is, loan disbursements must be equal to or less than the amount of recovery thereof; this provision shall apply to the IHSS in the event that this Institute is authorized to grant loans to its affiliates. In exceptional cases and with prior opinion from the National Banking and Insurance Commission, the aforementioned institutes may have a net concession other than zero.

The Surplus reflected by the Public Social Security and Welfare Institutes may be used for financial investments in the purchase of securities, Treasury letters of the General Treasury of the Republic and Central Bank of Honduras, time deposits, purchase of shares and any other instrument classified in the Investment Regulations of Public Pension Funds, as well as the limits established by instrument in the same Regulations (Act No. 1148 of the CNBS, published in La Gaceta No. 34,418 of August 16, 2017).

The Public Social Security and Welfare Institutes, prior to any modification in the structure of benefits to active affiliates, pensioners and retirees of their systems, including changes in the frequency of payments and increases in pension amounts, must obtain authorization from the National Banking and Insurance Commission (CNBS), for which they must submit the corresponding request to the CNBS, 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, supported by the corresponding actuarial technical study.

The Public Social Security and Welfare Institutes shall submit to the General Directorate of Decentralized Institutions of the State Secretariat in the Office of Finance on a monthly basis no later than ten (10) days after the end of the month, the details of the financial investments they maintain in the National Financial System.

The National Port Enterprise (ENP) must transfer to the Central Administration the amount of SIXTY MILLION LEMPIRAS EXACTLY (L60,000,000.00). The value described in this Article must be paid to the General Treasury of the Republic, in accordance with the payment schedule to be jointly prepared between it and the Institution aforementioned, which must be agreed upon no later than January 31, 2021; the maximum payment date must not exceed the last day of each month and the final installment must be deposited no later than November 30. In case of non-compliance with this obligation, the Secretary of State in the Office of Finance is authorized to request the Central Bank of Honduras (BCH) to automatically debit from the bank accounts that this institution maintains in said Bank and/or in the rest of the National Financial System the amounts of pending payment installments. Notwithstanding the provisions of the preceding paragraph and based on what is established in Article 269 of the Constitution of the Republic, the Executive Power through the Secretary of State in the Office of Finance may authorize and allocate, in case the financial situation of this Institution permits it, additional or complementary funds to address programs and projects that the Government deems necessary. The National Port Enterprise (ENP) is prohibited from transferring said Transfer toward a purpose other than that for which it was approved in accordance with this Law or executed in favor of a different beneficiary.

Of the transfer consigned in the preceding Article from the National Port Enterprise (ENP) for the Central Administration, an amount of EIGHTEEN MILLION LEMPIRAS EXACTLY (L18,000,000.00) shall be allocated to finance the operations of the National Commission for Port Protection (CNPP), in accordance with what is established in Article 2 of Executive Decree PCM-050-2013, which amends the Law Creating the CNPP PCM-002-2004. The CNPP must adjust its 2021 POA and Budget to the amount approved in this decree, and must also present to the Secretary of State in the Office of Finance, through the Administrative Management, the corresponding monthly reports of both physical and financial progress; the foregoing shall be a condition for the corresponding disbursements.

Of the transfer consigned in

of the present Law, coming from the National Port Enterprise (ENP), shall transfer to the Presidency of the Republic an amount of TEN MILLION EXACT LEMPIRAS (L10,000,000.00) for the fulfillment of the functions of the Logistical Execution Technical Unit (UTEL) of the National Logistical Council (CNL), created by Executive Decree No. PCM-053-2018, Articles 1, 7 and 9 of said Law. Likewise, allocate from the transfer consigned in Article 170 of the present Law an amount of TWENTY-FIVE MILLION EXACT LEMPIRAS (L25,000,000.00) to the Secretary of Agriculture and Livestock for the Agricultural Research program through the Honduran Foundation for Agricultural Research (FHIA). In the same manner, from the transfer consigned in Article 170 of the present Law an amount of SEVEN MILLION EXACT LEMPIRAS (L7,000,000.00) is allocated to the Secretary of Investments created by Decree PCM-009-2019, with the purpose of contributing to the generation and development of projects for the benefit of the Honduran population.

The budgetary modifications of the Decentralized Institutions are governed by the provisions of Article 51 of the Organic Budget Law, as well as by the Technical Rules of the Budget Subsystem. Those operations related to debt service and exchange rate variations, carried out by the Central Bank of Honduras (BCH), are excepted, which must be approved by its Board of Directors and reported to the State Secretary in the Ministry of Finance for purposes of monitoring and control. Notwithstanding the foregoing, Decentralized Institutions that generate their own resources are authorized to proceed with their incorporation, exempting them from the application of Article 51 of the Organic Budget Law, provided that the availability of the resources to be incorporated is demonstrated and that the total of the projection of approved income has been collected at one hundred percent (100.0%). In case of requiring incorporation of income generated in previous years, these must be charged to the allocation approved in the present Fiscal Year, provided that their existence is demonstrated; once the collection goal is reached, additional income may be incorporated.

The National Electric Energy Enterprise (ENEE) is authorized to conduct liability management operations of existing bonds, with the purpose of minimizing risk and improving the debt portfolio profile. Liability management operations conducted by the National Electric Energy Enterprise (ENEE) shall not count against the budgetary ceiling for borrowing authorized for the present year and may be carried out through swap operations, refinancing, early redemption of securities, loan contracting or other legally viable financial mechanism, being able to access the domestic and international market.

It is prohibited for the National Electric Power Company (ENEE) to decrease the amount allocated in the following expenditure items: 21120 referred to Electric Energy for Resale, Bunker (35660) and Diesel (35670) the portion corresponding to energy generation; movements to these expenditure items shall only be authorized when they are to increase said allocations.

All institutions of the Decentralized Administration are obliged to present no later than ten (10) days after the end of the month, the Financial Statements and other information necessary for the continuous monitoring of their financial situation, complying with the requirements established in International Accounting Standards; said information must be sent in digital format or through the tool for consolidation of Financial Statements to the State Secretariat in the Office of Finance specifically to the General Accounting Office of the Republic, to the General Budget Directorate, to the Macrofiscal Policy Directorate and to the General Directorate of Decentralized Institutions.

In order to generate savings, the meetings of Board of Directors or Governing Bodies of Decentralized Institutions must be held with the members and representatives provided for in their respective Laws, and likewise additional expenses derived from the holding of sessions carried out outside their headquarters should be avoided.

All institutions of the Decentralized Administration that have transfers allocated in their budget for the Honduran Institute for the Prevention of Alcoholism, Drug Addiction and Substance Dependence (IHADFA), must make effective said transfer before the end of October 2021, as well as any other transfer allocated in their budgets. To carry out the payment management of said transfer, IHADFA must send to each institution the corresponding receipt with the total amount of the transfer or with the value that has been agreed between the parties (IHADFA and Institution) as programming. In the particular case of social security and pension institutes (IHSS, INPREMA, INJUEMP, IPM and INPREUNAH), said transfer must be financed with the additional resources received by said institutions, resources other than the contributions and/or fees they receive from affiliates to the system. Likewise, all public sector institutions that currently have pending transfers from previous years to IHADFA, must proceed to make effective payment of the same with the budget of the Present Fiscal Year, making a reprogramming within it. Non-compliance with these payments will result in the sanction established in Article 5 of this Law.

Public Service Companies are ordered to proceed, within a period of one year effective from the validity of this Law, to clear pending accounts receivable for the provision of services, having the option of carrying out subrogation for debt recovery in default or to arrange a payment plan. The results of these actions must be reported quarterly to the Superior Court of Accounts, to the Institute for Access to Public Information and to the State Secretariat of the Office of Finance, through the General Directorate of Decentralized Institutions and to the General Accounting Office of the Republic. The Administrative Managers of said companies shall be responsible for carrying out the actions referred to here; otherwise, the sanctions established in this Law shall be applied to them.

All institutions of the Central Government, Deconcentrated and Decentralized that currently have pending debts with the Honduran Telecommunications Company (HONDUTEL), for the different services offered by the company, must make effective payment of the same with their respective budget in the present Fiscal Year. Non-compliance with these payments will result in late payment interest and legal expenses attributable to the institutions and officials who breach this provision.

The Central Bank of Honduras (BCH) is authorized to use resources approved within its budget, during the pilot period and implementation of the new National Survey of Household Income and Expenditures 2019-2021 (ENIGH 2019-2021), to establish a mechanism for monetary recognition to households that have been selected in the statistical sample of that survey and properly complete its questionnaires, with the purpose of encouraging the effective and complete participation of selected households, for the benefits and relevance that this information has for updating the System of National Accounts, the basket of products and weightings of the Consumer Price Index and all derived socioeconomic indicators. Likewise, the Central Bank of Honduras (BCH) is authorized to contract goods and services through the direct contracting mechanism in case of contingencies, as well as the rental of vehicles for activities related to said survey.

Exempt the Central Bank of Honduras (BCH) from the payment of all types of taxes related to the import of bank bills and coins, as well as to the export of bills in foreign currency.

The funds collected under the concept of four percent (4%) for tourist services, established in Article 43 of Decree No. 131-98 of April 30, 1998, must be incorporated to the State Secretariat in the Office of Tourism by the State Secretariat in the Office of Finance to be transferred to the Honduran Tourism Institute (IHT) which will be used expressly for promotion and development of Tourism in the Country and to promote and encourage the self-sustainability of said Institute. The funds generated from these incorporations shall be prioritized by the General Treasury of the Republic within a maximum period of (15) calendar days. From the aforementioned four percent (4%) for tourist services, one percent (1%) shall be allocated to the creation of a fund for the promotion of municipal tourism projects. Likewise, the incorporated and unexecuted values at the close of the fiscal year may be incorporated for execution in the current fiscal year before March 30, otherwise the values shall remain in the common fund of the General Treasury of the Republic.

The National Directorate of State Assets (DNBE) is ordered to proceed with public auction to sell national movable and immovable assets that provide no utility to the State, in accordance with the Opinion issued by said Directorate. Likewise, the DNBE is ordered to assist the municipalities in the process of asset discharge, a procedure that must be executed in the current fiscal year to reflect financial statements as accurate information. From sales generated through public auction, the National Directorate of State Assets (DNBE) shall obtain a Canon of TWENTY PERCENT 20.0% on the amounts collected for such purposes, as the managing body of said processes. From the funds generated as a product of the Canon related in the preceding paragraph, the National Directorate of State Assets (DNBE) is authorized to incorporate them into its approved budget for both income and expenses in the month following collection within the present Fiscal Year, said amounts may be allocated to the hiring of certified appraisers by the National Banking and Insurance Commission (CNBS), as well as temporary personnel and the acquisition of equipment required for any other financial need that the National Directorate of State Assets (DNBE) deems appropriate for the purpose of fulfilling the objectives established in its Law. The National Directorate of State Assets (DNBE) shall act in accordance with its Regulation of Organization and Operation (Executive Agreement No. 226-2017) and shall report to the Superior Court of Accounts (TSC) of the respective sales (30) thirty days after the same is carried out. The DNBE shall publish these sales on its WEB page.

Authorization is granted in the first six (6) months of the year 2021, for the introduction of all those vehicles that complied with the introduction requirements in the year 2020 and that due to the pandemic and its consequences it was not possible to introduce them in the previous fiscal year.

The Honduran Customs Administration is ordered to proceed, in coordination with the National Directorate of State Assets, to the direct sale of merchandise abandoned in the different customs offices of the country remaining from auction, as well as in customs warehouses in the following cases: 1) Merchandise not awarded in public auction conducted by the Customs Administration Entity that due to its physical conditions cannot be donated to state institutions or public charity; and, 2) Vehicles that entered the national territory whose importation is prohibited by Law, in accordance with Article 21 of Decree 17-2010; excluded are those covered by the Special Law on Abandonment of Motor Vehicles contained in Decree 245-2002 dated July 17, 2002, regarding vehicles that are in deposit in the courts of the Republic and other administrative instances. Prior to the sale, the Customs Valuation Unit must issue the corresponding opinion on the value of the merchandise. When the sale corresponds to vehicles, these must be sold as scrap, with the buyer being obligated to dismantle them, which shall be carried out under the supervision of the Customs Authority. The Customs Administration Entity in coordination with the DNBE, within twenty (20) days after the entry into force of this Decree, must issue the Regulation of this Article. Merchandise abandoned and remaining from the auctions held in application of this article and those donated to state institutions shall be exempt from charges or expenses for storage or demurrage that may have been incurred during their stay in the customs warehouses of the country. The financial resources generated from the sales established in this Article and in the preceding one shall be deposited in the Single Account of the General Treasury of the Republic (TGR).

Decentralized and Deconcentrated Institutions operating outside the Integrated Financial Administration System (SIAFI), shall send to the National Office of State Assets (DNBE) no later than January 30, 2021, the inventory of assets for use and consumption existing as of December 31 of the 2020 Fiscal Year, as well as a detailed account of the losses of these inventories. Likewise, in order to guarantee compliance with what is established in Article 6 of Legislative Decree 274-2010, regarding the creation and function of the National Office of State Assets: "The responsibility for the administration of movable and immovable property corresponds to the heads of the administrative management offices of the corresponding institution in coordination with the National Office of State Assets"; and Article 7 of Executive Decree PCM-047-2015, "The responsibility for movable and immovable property that form part of the inventory or have been allocated to each institution or department of the public sector, corresponds to the heads of administrative management offices or administration departments of the same institutions or departments of the public sector. All Institutions of the Central Government, Deconcentrated and Decentralized, must register movable and immovable property in the national assets subsystem of the integrated financial administration system (SIAFI) in accordance with the schedule established in coordination with the National Office of State Assets, likewise, institutions of the Central Administration must prepare and approve manual entries in the accounting module of SIAFI for the registration of write-offs, reversals and transfers of assets in use, biological assets and intangible assets and those related to their reconciliation and present to the General Comptroller of the Republic the reconciliation of assets in use of the balances of the accounting module and the assets in use module of the national assets subsystem; non-compliance with the established activities and dates will affect the timely disbursements made by the General Treasury for each of the institutions. In the case of liquidations, spin-offs, modifications, reorganizations, or suppressions of Public Administration institutions decreed by the President of the Republic in Council of State Secretaries, the Administrative Management offices and/or Executing Units of the liquidated, spun-off, modified, reorganized or suppressed institutions shall remain active in SIAFI until the corresponding Resolution of the National Office of State Assets is issued, by means of which it transfers or reassigns to the corresponding Administrative Management office and/or Executing Unit.

The Institutions of the Centralized and Decentralized Public Sector may develop business models and cooperation agreements between institutions in order to leverage and make more efficient the government's resources and in this way generate greater public value in accordance with the country's objectives. Likewise, Institutions of the Decentralized Public Sector may, subject to the regulations, provisions and supervision of the National Office of State Assets (DNBE), lease, sell and/or auction their infrastructure (productive and unproductive assets) as well as materials and supplies that they do not require for operations and that are in disuse and/or obsolescence, generating direct income to the institution for the maintenance and growth of operations, said income shall be considered as Own Resources and must comply with the norms and guidelines established in this Law and other applicable regulations.

No vehicle that has been sold in parts or as scrap metal may circulate in the National territory, therefore, the Property Institute (IP) shall not authorize the registration of the complete vehicle, but it may register the engine, chassis or cabin.

The value obtained from goods that have been mislaid, damaged or destroyed may be incorporated into the Budget of the institution possessing them, provided that the value is allocated to the repair of the damages caused or the acquisition of goods of the same nature. TITLE XIII OF THE STRATEGY FOR THE REDUCTION OF POVERTY

The values and resources for executing programs and projects of the Strategy for the Reduction of Poverty (ERP) must be incorporated in each executing unit of the different institutions of the Public Sector after the approval of the SCGG and the General Coordinators of Attached Government, in accordance with the provisions of the Technical Standards of the Budget and Public Investment Subsystems.

Resources from debt relief within the framework of the Heavily Indebted Poor Countries Initiative (HIPC), the Multilateral Debt Relief Initiative (MDRI) and insofar as it corresponds to the Paris Club must be allocated exclusively for the carryover projects consigned in the Annex "Strategy for the Reduction of Poverty," which is part of this Budget of Income and Expenditure of the Republic. This allocation must be made in coordination with the SCGG and the Attached General Coordinators as appropriate.

Public Debt Service corresponding to the debt agreements that make up the group of loans subject to reorganization and that improve 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 income that this debt relief concession could generate must be registered in the Integrated Financial Administration System (SIAFI) and the funds thus obtained shall constitute 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 poverty eradication. TITLE XIV OF MUNICIPALITIES

The State, through the State Secretariat in the Offices of Governance, Justice and Decentralization, shall transfer the allocated and authorized amount by monthly installments to Municipal Corporations in accordance with the following distribution:

• a)

  Fifty percent (50%) of transfers shall be distributed equally among municipalities;

• b)

  Twenty percent (20%) by projected population in accordance with the latest Population and Housing Census conducted or projected by the National Institute of Statistics (INE); and, c) Thirty percent (30%) for poverty, in accordance with the proportion of poor population in each municipality based on the Unmet Basic Needs (UBN) method and in accordance with the latest Population and Housing Census conducted or projected by the National Institute of Statistics (INE). Of the total amount of the Central Government transfer, Municipal Corporations shall allocate the resources of said transfers in accordance with what is established in the Municipalities Law or what is contained in the Municipal Pact for a Better Life, signed between the Association of Municipalities of Honduras AMHON and the Executive Branch. They must notify their decision to the General Directorate of Municipal Strengthening (DFGM) of the State Secretariat in the Offices of Governance, Justice and Decentralization through a certification of a Point of Minutes, attaching it to the current Municipal Budget. The destination of funds under the Municipal Pact for a Better Life shall be applied as follows:

  • 1)

    Thirty-five percent (35%) for investments that improve the living conditions of the population through programs and projects for the care of social assistance to children, with special attention to returned migrants, adolescence and youth, sector of special disabilities, guidelines for municipal investment in pre-basic, basic, third cycle education, primary family and community care in health, water and sanitation, electrification and improvement of housing, for families in extreme poverty situations, all in accordance with the BETTER LIFE PROGRAM; - Of this, ten percent (10%) to finance investment programs aimed at strengthening the Providers of Drinking Water and Sanitation Services in urban and rural areas (Water Management Boards) and municipal infrastructure with the objective of guaranteeing principles of quality, equity, solidarity, continuity, generality, environmental respect and citizen participation in the provision of water services in a coordinated manner and under the supervision of ERSAPS through the subscription of investment plans, as well as to finance the Annual Operating Plan of the Unit of Supervision and Local Control with its respective Technician in Regulation and Control of the municipality (TRC) with functions of local control of drinking water and sanitation service providers in each municipality, in the application of the framework law and regulatory requirements.

  • 2)

    Five percent (5%) allocated to programs, projects or municipal services for full access of women to their human rights, in the different stages of the cycle and spheres of their lives, under the principle of non-discrimination by age, ethnicity, socioeconomic level, origin, opinion, belief, sexual orientation or any other condition that causes distinction, exclusion, restriction or oppression. For the allocation and execution of the amount corresponding to 5% of the Central Government transfer, in accordance with the Axes of the II Plan for Gender Equality and Equity 2010-2022, as follows: a) VIOLENCE PREVENTION AXIS. 20.0%, prioritizing actions for prevention and care of violence against women, based on gender and access to knowledge of women's human rights. b) ECONOMY AXIS. 30.0%, prioritizing at least the following: c) Women's economic initiatives to promote and guarantee their autonomy. d) Municipal services for care initiatives, to promote shared responsibility for care and free up women's time for the exercise of other rights. e) SOCIAL AND POLITICAL PARTICIPATION AXIS, 10%, considering at least initiatives to achieve women's empowerment in the social, economic and political spheres, for the full exercise of their citizenship. f) HEALTH AXIS, 20.0%, prioritizing direct care for women's comprehensive health in different stages of their life cycle, with emphasis on sexual and reproductive health and chronic non-communicable diseases and care for acute illnesses as a consequence of COVID-19. Access to knowledge of sexual rights and reproductive rights. g) EDUCATION AXIS, 10.0%, considering affirmative actions in Formal and non-formal Education for women in situations of vulnerability. h) ENVIRONMENT AXIS, 10.0%, prioritizing at least livelihood initiatives and the promotion of agricultural practices with measures to mitigate climate change. The Municipality may review the percentage distribution and adjust it in accordance with the municipal context, caring for the principle of percentage balance among the axes, provided that the proposals are presented by the women's networks of the municipality and approved in an open women's town hall. Municipalities that carry out this process must inform INAM. Additionally, municipalities with the presence of indigenous and Afro-descendant peoples must address the demands of indigenous and Afro-Honduran women in a differentiated manner.

  • 3)

    Twenty percent (20%) to strengthen the social fabric under a prevention approach, promoting a culture of peace, justice and coexistence in municipal territories, in accordance with the ALL FOR PEACE PROGRAM, through the revitalization of public spaces for the promotion of sports, cultural activities, training in values and human rights for citizens, community surveillance and any other actions that allow addressing the particular conditions for violence prevention, so that in the short and medium term there are results of impact and measurable outcomes in municipalities;

  • 4)

    Ten percent (10%) to improve the municipal investment climate, promoting territorial competitiveness through productive infrastructure works, fostering the Micro, Small and Medium Enterprise (MSME) sector in rural and urban areas, for the generation of employment sources, administrative simplification processes, standardization of tax collection plans, municipal cadastres, strengthening of administrative, budgetary and treasury capacities, execution of projects, formulation of local economic development agendas, which are integrated with central government initiatives through the PROHONDURAS Program, seeking public-private coordination, supporting the infrastructure of agricultural, tourist and business development corridors, among others. The Central Government shall promptly make transfers to Municipal Corporations on a monthly basis to ensure payment for the execution of programs and projects of municipal investment in Social, economic and security matters, including programs and projects from the better life platform, all for peace and Pro-Honduras. Municipal Corporations shall support the initiatives of the President of the Republic for connectivity of a better life by implementing community technology centers that promote human development;

  • 5)

    One percent (1%) for the Municipal Transparency Fund (FTM) allocated to the Superior Court of Accounts (TSC), as municipal counterpart. Decision-making regarding the use and destination of said funds shall be done through meetings of the Committee created for this purpose, composed of the State Secretariat in the Offices of Governance, Justice and Decentralization who presides over it, the Association of Municipalities of Honduras (AMHON) serving as Secretary and the Superior Court of Accounts (TSC) who administers it; with these financial resources, Municipal Management trainings and Municipal Financial Administration Systems implemented by SEFIN shall be conducted, Technical Assistances on-site, monitoring, compliance with recommendations and greater coverage of municipal audits. It is understood that while resources from other sources are identified to fulfill these 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 Operating Plan (POA) of the Municipal Transparency Fund Committee (CFTM);

  • 6)

    Municipalities that fail to transfer 5% of funds for women's programs shall be sanctioned by Ten (10) minimum wages until said non-compliance is remedied. Likewise, the Secretariat of Governance, Justice and Decentralization must open a non-compliance file;

  • 7)

    Twenty percent (20%) for Own Administration Expenses; Municipal Corporations whose own annual income, not exceeding FIVE HUNDRED THOUSAND LEMPIRAS (L.500,000.00), excluding transfers, may allocate for said purposes up to twenty-nine percent (29.0%);

  • 8)

    The remainder of resources shall be allocated to investment, to cover the counterpart required by organizations financing the projects; to payment of contributions to the Association of Municipalities of Honduras (AMHON), to payment of contributions that municipalities make to Inter-municipal Associations or Associations prior to decision of Municipal Corporations by affirmative vote of two-thirds of their members and for transfers in goods or services to organized communities for Investment, and in all cases Article 98 of the Municipalities Law must be respected. It should be understood that the expenditures described in items 1), 2) and 3) above must be considered as investment. Likewise, salaries and wages included in health and education areas shall be contemplated as investment;

  • 9)

    Municipal Corporations that enjoy the economic benefit established in Decree No. 72-86 (Port Municipalities), dated May 20, 1986, may adopt the regime established in this Article, provided that they renounce before the State Secretariat in the Office of Finance the benefit established in the aforementioned Decree; and,

  • 10)

    Of the Municipal Budget.- The Secretariat of Governance, Justice and Decentralization, must send to INAM quarterly reports of the transfers presented by Municipalities to the Secretariat of Governance, Justice and Decentralization, on the use of 5%, so that INAM monitors it through the Municipal Gender Investment Index. From this transfer, no municipality may be embargoed by more than Forty Percent (40%) of the transfers received by municipalities. Officials who intervene in the application of enforcement of a seizure ordered by a judge shall have no type of responsibility.

The State Secretariat in the Office of Governance, Justice and Decentralization shall transfer by monthly and advanced installments to Municipal Corporations, through the Central Bank of Honduras (BCH), the amounts for Capital contributions in accordance with the amounts recorded in the General Budget of Income and Expenses for the 2021 Fiscal Year, based on the budget approved by the National Congress; as well as what corresponds to Port municipalities, provided that municipalities accredit having delivered to the State Secretariat in the Office of Governance, Justice and Decentralization through the Directorate of Municipal Strengthening (DFM), the administrative and accounting documents in physical and electronic form in Approved status, as follows: Municipalities registered in the Integrated Municipal Administration System (SAMI) through this system and the remaining municipalities through the Accounting Reporting Subsystem for Local Governments (RENDICIONGL). Municipal corporations must present to the State Secretariat in the Office of Governance, Justice and Decentralization, by January 31 of the current year as the maximum date, for the issuance of the Final ruling prior to transfer management, the following original administrative documents: DOCUMENTS:

• 1)

  For municipalities that are in the process of preparing or updating the Municipal Development Plan for Results Management, present the progress certificate, issued semi-annually, by the General Directorate of Planning and Local Governance (DGPGL) of the State Secretariat in the Offices of Governance, Justice and Decentralization (SGJD), which shall be reviewed in accordance with the activity schedule that each municipality shall present for its development.

• 2)

  For municipalities that have already completed the Municipal Development Planning Process for Results Management, present the certification certificate issued by the State Secretariat of General Government Coordination (SCGG) and extended to the Municipality by the General Directorate of Planning and Local Governance (DGPGL) of the State Secretariat in the Offices of Governance, Justice and Decentralization (SGJD), the entire Planning process must be in accordance with what is dictated by the Regulatory Framework for Municipal Development Planning for Results Management, contained in Agreement No. SCGG-00046-2020.

• 3)

  The State Secretariat in the Offices of Governance, Justice and Decentralization (SGJD) and the State Secretariat of General Government Coordination (SCGG) shall continue developing the Territorial Critical Path, which they jointly developed, seeking Territorial Development and compliance with the guidelines established in the Regulatory Framework. Other instances that have an impact on the Municipality may join this effort. All in compliance with their competencies.

• 4)

  Municipalities that, prior to the approval of Agreement No. SCGG-00046-2020 and on their own, in a professionally technical manner, have prepared their Municipal Development Plans with or without the accompaniment of either of the two Secretariats (SGJD and SCGG), duly approved by their Municipal Corporations and the respective Open Town Hall, shall be extended the certification thereof, according to procedure already established.

• 5)

  Quarterly Report of Physical and Financial Progress of projects and executed expenses corresponding to the I, II and III quarters, no later than thirty (30) days after the end thereof and, the IV quarter as maximum date January 31 of the following year; All Municipalities that already have a Master Municipal Development Plan duly approved by their respective Municipal Corporations in Open Town Hall and where the amount of transfer received from the Central Government is less than 7% of their annual current income shall only present the annual accounting report to the Superior Court of Accounts and shall be exempted from the presentation of quarterly accounting reports to the General Directorate of Local Strengthening of the State Secretariat in the Offices of Governance, Justice and Decentralization. Municipal transfers shall not be conditioned to requirements other than those expressly indicated in this decree.

• 6)

  Annual budget of income and expenses for the current fiscal year, in physical form, generated from the Budget Subsystem, approved in the Integrated Municipal Administration System (SAMI), including Municipal Investment Plan and Payroll Book. Municipalities not registered in SAMI shall do so from the Accounting Reporting Subsystem of Local Governments, in approved status.

• 7)

  Cumulative Quarterly Accounting Report, in electronic and physical form, no later than thirty (30) days after the end thereof; for the I, II and III quarters; and the IV quarter as maximum date January 31, 2022.

• 8)

  Final Financial Statements and their annexes in accordance with the date established in the closing standards issued by the General Accounting Office of the Republic for the IV quarter; and,

• 9)

  It is a requirement to receive municipal transfers to present progress in the preparation of emergency plans that are requested from municipalities in different matters. Municipal transfers shall not be conditioned to requirements other than those expressly indicated in this Decree and the Law. The amounts received by Municipal Corporations in concept of Central Government transfers must be liquidated under the terms and procedures established in this Article. Other income shall be liquidated in accordance with the Applicable Legal Framework. In the case of municipalities that are in the process of implementation, SEFIN shall issue a progress report to the Directorate of Municipal Strengthening of the Secretariat of Governance, Justice and Decentralization as a requirement for authorization of the F01 of the corresponding transfer in favor of the Mayor's Office.

All administrative and financial documents mentioned above shall be presented to the Municipal Strengthening Directorate (DFM) of the State Secretariat in the Office of Governance, Justice and Decentralization, in electronic version and physical document in original form, attaching the certification of the municipal corporation approval meeting minutes. The delivery date shall be the one shown on the DFM receipt stamp. The administrative and financial documents referred to in numerals 2), 3) and 4) of the previous article shall be reviewed by the DFM of the State Secretariat in the Office of Governance, Justice and Decentralization, which within a period of thirty (30) business days shall issue an opinion on them and notify the corresponding recommendations to the municipal corporation to make the corrections (updates, implementations, modifications or respective extensions) and shall return them to the same directorate within a maximum period of thirty (30) days counted from receipt of the notification. If it fails to do so, the DFM will not be able to issue the final opinion and therefore the municipality will be causing the withholding of the disbursement of the respective transfer. In order to substantiate 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 DFM of the State Secretariat in the Office of Governance, Justice and Decentralization and to the General Directorate of Public Credit of the Finance Secretariat the detailed records of the loans that municipalities have with the different banking and credit entities in the country, for the purpose of verifying the thirty percent (30%) percentage authorized by Article 199 of this Law, to commit transfer funds to payments of bank loans. The frequency with which the National Commission of Banks and Insurance (CNBS) must send the record of loans held by municipalities is completed each month and whenever necessary at the request of the institutions referred to in this Article.

The State Secretariat in the Office of Governance, Justice and Decentralization is ordered to retain and transfer from the respective transfers granted to Municipal Corporations or port municipalities, among others, the amounts in favor of:

• 1)

  Fire Department, one hundred percent (100%) of the amounts owed by municipalities collecting the Fire Service fee; in Municipalities where this service exists as long as, on the part of the firefighters, the conciliation process has been exhausted to subscribe payment plans between both institutions. After the agreement is signed, the non-compliance with one of the payment installments shall result in the application of the retention of the total amount owed from the following transfer, as long as the balances are reconciled by both institutions;

• 2)

  The statutory fee to the Association of Municipalities of Honduras (AMHON), calculated on one percent (1%) of actual municipal current income contained in the Annual Accumulated Account Rendering of the year prior to the approval of the municipal budget.

• 3)

  Municipal Associations, the amounts corresponding to statutory fees or contributions from the Municipalities; prior to the application of the retention, said organizations must present the document or other requirements established in the DFM that substantiate the collection and budget execution in the Account Rendering Subsystem for Associations.

• 4)

  Continue with the transfer of one percent (1%) that is deducted from the transfer to the Municipalities; in accordance with Article 91 of the Municipalities Law; the Municipal Corporations beneficiaries of Decree No. 72-86 dated May 20, 1986 (4% or 8% of port municipalities), must also contribute 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 (TSC) through Internal Resolution of the State Secretariat in the Office of Finance and using the automatic extension procedure in the Integrated Financial Administration System (SIAFI), as disbursements are made to the municipalities; and,

• 5)

  Prior to request from the Honduran Social Investment Fund (FHIS), National Program for Rural, Urban and Sustainable Development (PRONADERS) or the Community Development Institute for Water and Sanitation (IDECOAS), the percentage corresponding to the local contribution from municipalities benefiting from projects financed with resources from loans and donations subscribed with international organizations, as well as the amounts owed for non-compliance with Agreements and Contracts subscribed with the State financed with national funds. Such retention shall be made prior notification to the municipalities that fail to pay the municipal counterpart and Agreements and Contracts subscribed with the State. Regarding the liquid, firm and enforceable debts that different State Institutions such as ENEE, SANAA, HONDUTEL have with the Municipalities, the State Secretariat in the Office of Finance is ordered to deduct the amounts owed from the budget transferred to these Secretariats, being able to establish a payment agreement that shall not exceed the current fiscal year.

Any debit made by the Central Bank of Honduras (BCH) to the accounts of the General Treasury of the Republic for payments corresponding to those stated in Article 197 of this Law shall be applied to the transfers entered in the General Budget of Income and Expenses of the Republic.

Municipal Corporations may commit up to thirty percent (30%) of transfer funds for the payment of loan installments, when it is a matter of financing works whose investment is recoverable and the debt does not exceed the Government period, otherwise it must be approved by the National Congress.

The Superior Court of Accounts (TSC) is instructed to proceed with conducting audits corresponding to all those municipalities that do not receive municipal transfers, as a result of not having supporting documentation to carry out budget settlements; however, in the audit process the State Department in the Office of Governance, Justice and Decentralization must generate the F01 so that the State Department in the Office of Finance transfers the corresponding resources in accordance with the Law.

In the case of the distribution and purpose of the transfer established in the third paragraph of Article 90 of the Law of Municipalities and specifically with fifteen percent (15%) for annual administration expenses and that in the case of Municipal Corporations whose own annual income, excluding transfers, does not exceed Five Hundred Thousand Lempiras (L.500,000.00), may allocate for such purposes double this percentage. That is, twenty-nine percent (29%), shall be allocated for own administration expenses understanding these as administrative and operating expenses in equal parts, fourteen point five percent (14.5%) each, within the percentage of operating expenses consider thirty percent (30%) for salaries and wages, provided that it is proven that the annual current income received by the Municipality was increased in the same percentage.

In order to maintain a reliable and timely database on contingent debt, Municipal Corporations are obligated to provide to the State Secretariat in the Office of Finance, 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, which must be sent via fax, email or other means no later than thirty (30) days after the operation occurs; and its respective budgetary and accounting record.

Transfers from port municipalities and municipal transfers are exempt from any deduction except those obligations of the municipality arising from Income Tax, Social Security and the National Institute of Pensions and Retirement of Employees of the Executive Branch, deductions to its workers and payments for public services in the concept of drinking water, electrical energy, telephone services or any other public service of municipal corporations. SEFIN shall issue and send to each municipality within fifteen (15) days following the transfer, the corresponding settlement and municipalities that do not agree must submit their objections to the corresponding institutions and these shall resolve within thirty (30) calendar days. The withholdings made by SEFIN must be remitted to the corresponding institutions within a maximum period of five (5) business days, otherwise it shall assume the responsibility that corresponds by law, provided that there are no outstanding accounts on the part of the service provider. Additionally, the State Secretariat in the Offices of Governance, Justice and Decentralization (SDJGD) in coordination with SEFIN shall issue an annual settlement of the amounts transferred to the municipalities and the amounts owed, during the first fifteen (15) days of the month of January of each year.

The Budget, Treasury, Accounting, Public Credit and Investment Subsystems in Local Governments and Municipal Associations shall be managed through the Integrated Municipal Administration System (SAMI), which is the official and mandatory tool for use in the two hundred ninety-eight (298) municipalities in the country, which will gradually be incorporated in its implementation. To achieve this objective, the State Secretariat in the Office of Finance in coordination with the State Secretariat in the Offices of Governance, Justice and Decentralization, the Association of Municipalities of Honduras (AMHON) and cooperating organizations that contribute to the Local Governments Sector, must formulate a consensual plan to promote the implementation of the Integrated Municipal Administration System (SAMI) in compliance with what is established in this Law and, according to previously established agreements. The Municipalities of the Country that have previously made investments in technology and programs and that currently have robust, technological, operational, efficient and effective information systems and software shall be excepted from the previous provision and shall continue to operate their information systems normally. Prior to the implementation of the Integrated Municipal Administration System (SAMI), municipalities and municipal associations must send the details of liabilities in the concept of debt, properly reconciled in accounting and with details of creditors, age and upcoming due dates. Send the documentation to the Secretariat of Finance with the Minutes of the Municipal Corporation through which they confirm that they have met the requirements to begin the SAMI implementation process. Municipal Corporations that have signed an agreement and/or formalized the Implementation of the SAMI System shall render accounts in said system. Municipalities and municipal associations must consider for the Execution of the Budget in the Integrated Municipal Administration System (SAMI), for each Subsystem the following: Budget Subsystem 1) Comply with what is established in article 95 of the Law of Municipalities, regarding Budget formulation of income and expenses; 2) Respect the origin and destination of funds established by the sources of financing to maintain budgetary balance. Accounting Subsystem 1) Record all operations related to the execution of income and expenses at the time the events take place in order to maintain current information; and Treasury Subsystem 1) Respect the origin of the bank accounts approved in the system, considering that the Single Municipal Treasury Account CUT (with Treasury origin) shall be the only one with which all payments corresponding to the obligations contracted by the municipality and its enterprises can be made, except for the expenses and bank commissions generated by each of the accounts it holds; For the development of the implementation, the administration of the system and financial policy shall be conducted by the State Secretariat in the Office of Finance (SEFIN) and the implementation by the State Secretariat in the Offices of Governance, Justice and Decentralization (SGJD).

The State Secretariat in the Office of Finance in coordination with the State Secretariat in the Office of Justice, Governance and Decentralization and the Superior Court of Accounts, shall make available the uniform budgetary methodology of the Public Sector for Local Governments through the mandatory implementation of the Integrated Municipal Administration System (SAMI), which will strengthen the mechanisms of transparency, improvement in the provision of local public services, the strengthening of their capacities in matters of financial management and additionally the system will allow periodic accounts to be rendered electronically and timely on budget liquidations for the calculation of the transfer, as well as the liquidation thereof.

Municipalities are authorized to make adjustments and reclassifications in their accounting to subsequently generate cleaned financial statements which may be audited, as well as to purge and remedy the accounts receivable from the different taxpayers obligated to pay, all in accordance with what is established in articles 106 and 107 of the Law of Municipalities and in consonance with the International Accounting Standards for the Public Sector. They must proceed to carry out the purification of the accounts of the municipal general balances and must comply with international accounting standards (IAS) and which will be verified when financial audits are conducted. Municipalities shall maintain a digital file of all accounting purifications carried out, for verification and transparency.

In compliance with the Fiscal Responsibility Law (LRF), the Municipal Governments that have implemented the Integrated Municipal Administration System (SAMI) with the support of the Finance Secretariat must report figures on budget execution.

Every taxpayer, whether natural or legal person, must present municipal solvency in the place of their domicile; likewise, institutions must request from taxpayers, whether natural or legal persons, the presentation of municipal solvency from the municipality where they pay taxes. Excepting the financial system. Municipal solvency must be presented for the registration of production and real property. Consequently, the registration of inscription of real property and other parties shall not proceed unless the proper municipal solvency is presented by the seller and the buyer. When a real property is sold or a mortgage is made or any other deed transferring ownership, whether it be a donation or other, that real property must be solvent of its municipal obligations.

Without prejudice to what is established in Article 205, Attribution 19) of the Constitution of the Republic, Municipalities are authorized to readjust their debts according to their financial capacity and ability to pay, with national or international financial institutions or organizations, with the best market interest rates, as of the effective date of this Law in order to develop infrastructure projects and other social development purposes. Any Municipal Corporation that transfers a loan contract beyond its government period must go to the National Congress to be approved.

Authorize Municipalities and/or Associations of Municipalities to purchase for exclusive use of the municipality heavy machinery of any kind that does not exceed a depreciation due to use of 12 years; said purchases may not be transferred under any title.

Municipal Governments, within the powers granted to them by the Law of Municipalities, shall prepare municipal emergency plans that contribute to preventing and addressing situations arising from climatic factors. The Permanent Contingencies Commission (COPECO) shall provide technical assistance to Municipal Governments and shall certify said plans. Additionally, it shall coordinate with the Association of Municipalities of Honduras (AMHON) and the State Secretariat in the Offices of Governance, Justice and Decentralization in defining a methodology for the formulation of plans, in accordance with local realities. The formulation of the plans shall be done gradually according to COPECO's capacity to provide technical assistance and support to Municipal Governments and the availability of resources of the municipalities. For these purposes, COPECO, AMHON and the SGJD shall define an annual implementation plan, which shall include the updating of existing plans and the formulation of new ones.

All Municipalities, Municipal Associations and Municipal Enterprises must present to the Superior Court of Accounts (TSC) no later than April 30 the following: 1. Municipalities 1.1 Those registered in the Integrated Municipal Administration System (SAMI): a. Annual account rendering in physical and electronic form, generated from SAMI. 1.2 Those not registered in the Integrated Municipal Administration System (SAMI) the following: a. Annual Account Rendering in physical and electronic form. Generated from the RENDICIONGL Subsystem. All of the above must be presented together with the certification of the Point of Record of the Municipal Corporation and a complete copy of the minutes book where the approval by the Municipal Corporation of the Account Rendering is recorded. In order to verify information on the financial obligations of local governments and strengthen the culture of account rendering, the National Commission of Banks and Insurance (CNBS) must provide to the Superior Court of Accounts (TSC), to the General Directorate of Public Credit and to the Directorate of Municipal Strengthening, detailed records of loans and any other type of operation that municipalities have with the different banking and credit entities in the country. Likewise, all public institutions, private institutions and international organizations that transfer to Local Governments, funds in the form of subsidies, bequests and donations, are obligated to provide this information to the Superior Court of Accounts (TSC) for the purpose of identifying the source of financing, use and destination of the funds. 2. Municipal Associations The annual accumulated account rendering report in physical and electronic form generated from the MUNICIPAL ASSOCIATION RENDERING Subsystem, together with the Certification of the Point of Record approved by the Board of Directors and a complete copy of the minutes book. Municipalities are prohibited from transferring funds to municipal associations that do not present their account rendering in the RMANCOMUNIDAD Subsystem. The Directorate of Regulation, Registry and Monitoring of Civil Associations (DIRRSAC) of the State Secretariat in the Offices of Governance, Justice and Decentralization (SGJD) is obligated to request from municipal associations the rendering in the RMANCOMUNIDAD Subsystem. 3. Municipal Enterprises Financial Statements together with the Certification of the Point of Record approved by the Board of Directors and a complete copy of the minutes book.

The following must be presented to the General Accounting Office of the Republic: Local Governments must present their Financial Statements, Annexes to the Financial Statements and Budget Liquidation with a deadline for submission for consolidation of the financial statements, in accordance with the Accounting Closing Standards issued by the General Accounting Office of the Republic applicable for the current year.

Municipalities shall report to the General Directorate of Decentralized Institutions (DGID) 30 days after the end of the quarter, in digital form, the Personnel Roster that was requested through DGID/SEFIN Circular No. 001-2020, in order to incorporate the figures into the quarterly report on Local Governments prepared by that General Directorate. The foregoing, in compliance with article 20 of the Regulations of the Fiscal Responsibility Law, which establishes that within the State Secretariat in the Office of Finance (SEFIN), the General Directorate of Decentralized Institutions (DGID), is responsible for preparing the Financial Account of the Municipalities following the same methodology used in the preparation of the Financial Account of the Non-Financial Public Sector (SPNF).

Municipalities shall send to the General Directorate of Decentralized Institutions (DGID) the Annual Investment Plan, in digital form, 30 days after the end of the quarter in order to learn about the projects being executed by the municipalities, and to incorporate the figures into the quarterly report on Local Governments prepared by that General Directorate. The foregoing, in compliance with article 20 of the Regulations of the Fiscal Responsibility Law, which establishes that within the State Secretariat in the Office of Finance (SEFIN), the General Directorate of Decentralized Institutions (DGID), is responsible for preparing the Financial Account of the Municipalities following the same methodology used in the preparation of the Financial Account of the Non-Financial Public Sector (SPNF). TITLE XV. OF MISCELLANEOUS PROVISIONS

For purposes of the application of International Financial Reporting Standards (IFRS) in State-owned Public Enterprises and the International Public Sector Accounting Standards (IPSAS), whose Financial Statements must be prepared and presented following the bases of recognition, measurement, fair presentation and disclosure established in the aforementioned standards; the public institutions subject to the implementation of these standards (IFRS and IPSAS) shall present the progress to the General Comptroller of the Republic and to the Technical Board of Accounting and Audit (JUNTEC) the contents of the implementation program as established in the resolutions that apply to the Technical Board of Accounting and Audit (JUNTEC) for such purpose.

All dependencies of the Government: Central, Deconcentrated and Decentralized, shall allocate and execute monthly based on billing notices and charged to their respective Budget, the services provided to them by the Honduran Telecommunications Company (HONDUTEL), the National Autonomous Service of Aqueducts and Sewers (SANAA), the National Electric Energy Company (ENEE) or any other public or private institution that provides these services. Budget allocations intended for the payment of public services must be used solely to cover expenses incurred for these concepts; consequently, it is prohibited to make transfers of these expense items to cover commitments of a different purpose.

In case of non-compliance with said obligations by public institutions, and at the request of the service provider, the Secretary of Finance must retain from the institutions that owe the commitment fees due as of the date of said request until the corresponding obligations are fulfilled. At the end of the current fiscal year, the Secretary of Finance shall make available to the service-providing companies all overdue amounts owed to them by public institutions plus their interest. Administrative Managers or whoever acts in their place shall be financially liable for the debts, charges and interest incurred, without prejudice to civil, administrative and criminal actions. All public institutions must conduct a review of the electric energy meters, water meters 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 or whoever performs this function in the institution; public service companies shall provide all necessary collaboration to carry out this review. The public service institutions mentioned in the first paragraph of this article are obligated to provide the Government's user departments: Central, Deconcentrated and Decentralized, with details of the billing for services provided during the period covered by the respective billing notices; they must also make the corresponding credits in the billing notices when the State has used the compensation mechanism to settle debts between public service providers and public institutions. In case there is no agreement between institutions to execute the compensation mechanism, the principle of non-simultaneity of services or obligations shall apply, therefore each of the institutions is responsible for making the corresponding payments in a timely and proper manner. Quarterly, the Administrative Management offices or their equivalent in the Central, Deconcentrated and Decentralized Sector Institutions shall simultaneously send to the National Electric Energy Company (ENEE), Honduran Telecommunications Company (HONDUTEL), National Autonomous Service of Aqueducts and Sewers (SANAA) and to the General Directorate of Decentralized Institutions of the State Secretary's Office in the Finance Ministry sufficient evidence (F01 and other supporting documentation) of the budget and financial execution of these allocations. The Internal Audit of each of the institutions in question shall ensure compliance with this provision, in accordance with what is established in

Article 119 of the Organic Budget Law.

All centralized public institutions, decentralized institutions, municipalities, including Project and Program Executing Units are ordered to apply the Regulation on Per Diem and Other Travel Expenses of the institution, which must be aligned with the current Regulation on Per Diem and Other Travel Expenses for Officials and Employees of the Executive Branch, approved by Executive Agreement Number 0696 dated October 27, 2008. The values established in the Regulation on Per Diem and Other Travel Expenses of the Executive Branch correspond to the maximum allocations, therefore institutions must adjust to them and to those allocated in their Budgets. 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 Decentralized Institutions must submit to the General Directorate of Decentralized Institutions the Per Diem Regulations that have been aligned with the current Regulation on Per Diem and Other Travel Expenses for Officials and Employees of the Executive Branch no later than February 15, 2021. Excepted from the provisions of the preceding paragraphs are those institutions with collective bargaining agreements negotiated to date and in which different provisions on this matter are established, provided that they can be covered both budgetarily and financially without implying an expenditure by the National Treasury.

The President of the Republic or whoever he delegates shall authorize the Titular Officials of the State Secretaries and the Deconcentrated ones for Per Diem and Other Travel Expenses outside the country; for other employees authorization shall be granted by the head of the respective institution. Every public official or employee shall settle the per diem received with the respective vouchers in accordance with the determination of categories, zones, periods of missions and per diem limits that are established in the Regulation on Per Diem and Other Travel Expenses for Officials and Employees of the Executive Branch. The supporting documentation shall be submitted for review by the Administrative Management office or its equivalent of each institution and in case of falsifications or alterations being verified in the same, the total return of the amount stated 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 responsibility incurred.

Cash refunds of surplus travel allowances and other travel expenses shall be deposited with the General Treasury of the Republic or Institutional Treasury, accompanied by the respective deposit voucher and the travel settlement. If a trip is not carried out, the value of the travel allowances and other expenses that have been granted shall be refunded 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 duties, which are granted to officials according to their position and responsibilities, provided that such position is not appointed Ad Honorem. These expenses are different from those referred to in the Regulation on Travel Allowances and Other Travel Expenses for Officials and Employees of the Executive Branch. Such representation expenses shall be granted only to the officials listed in the following paragraphs and in the amounts established herein:

• 1)

  To the President of the Republic and State Secretaries, Twenty Thousand Lempiras (L20,000.00);

• 2)

  To State Undersecretaries, Fifteen Thousand Lempiras (L15,000.00);

• 3)

  To the Commissioner holding the Presidency in any Public Sector institution, Fifteen Thousand Lempiras (L15,000.00) provided that this official receives a monthly salary equal to or less than that of State Secretaries, in the event that the salary of the President Commissioner is greater than that of State Secretaries, this official shall not be entitled to representation expenses;

• 4)

  To the Head of Decentralized Institutions and Deconcentrated Bodies, Fifteen Thousand Lempiras (L15,000.00), provided that this official receives a monthly salary equal to or less than that of State Secretaries; in case the salary is greater than that of State Secretaries, this official shall not be entitled to such Representation Expenses, and likewise, in cases where officials who intend to make these expenses and who represent institutions that are in precarious financial situations where deficiencies are evident in covering their operating expenses, such representation expenses shall not be granted;

• 5)

  To the Deputy Director or Sub-manager of Decentralized Institutions and Deconcentrated Bodies, Ten Thousand Lempiras (L10,000.00), provided that this official receives a monthly salary equal to or less than that of State Undersecretaries; in case the salary is greater than that of State Undersecretaries, this official shall not be entitled to such Representation Expenses, and likewise, in cases where officials who intend to make these expenses and who represent institutions that are in precarious financial situations where deficiencies are evident in covering their operating expenses, such representation expenses shall not be granted. In the case of Superior Level Bodies other than those of the Executive Branch that generate Own Income, they may grant such Expenses from their own income, without exceeding at any time the maximum level of the amounts previously described for Executive Branch Officials and provided that the officials have a salary equal to or less than that of State Secretaries in the Executive Branch, if the salary is greater than that of State Secretaries, this official shall not be entitled to representation expenses.

The budgetary allocations for the Object Representation Expenses Abroad that appear in the Activities Diplomatic Representations and Consular Representations of the External Promotion and International Management Program of the Ministry of Foreign Affairs shall be used exclusively to cover expenses directly linked to the operation of Embassies and Consulates Abroad and shall be accounted for.

All institutions of the Central, Deconcentrated, and Decentralized Administration must register in the Integrated Financial Administration System (SIAFI) the readjustments to their Annual Operating Plan and Budget within thirty (30) calendar days following the publication of the General Budget of Income and Expenses of the Republic; likewise, they must adapt the Annual Plan for Purchases and Contracting as a prerequisite for the allocation of the respective quota, both for external resources and their national counterpart, said readjustments must have prior authorization from the General Coordination Secretariat of Government. In the case of programs and projects financed with external funds, they must make budget transfers between projects within the institution in accordance with the execution schedule, as well as readjustments to the Annual Operating Plan and make the corresponding registrations in the UEPEX module of SIAFI, for the respective financial monitoring, during the same established time period.

The use of official vehicles is prohibited during non-working hours and days; however, in exceptional cases and duly justified, the heads of departments may authorize the use of vehicles. The Administrative Management or its equivalent in each institution shall be responsible when a public official violates this regulation due to lack of the corresponding authorization or permit that endorses its use during non-working hours and days.

All vehicles owned by the State and municipalities that are assigned to the different institutions of the Central, Deconcentrated, and Decentralized Government must be properly identified with the National Flag and the emblem or logo of the institution to which they belong; the Superior Court of Accounts (TSC) shall ensure strict compliance with this provision. The Superior Court of Accounts (TSC) shall present quarterly reports to the Budget Commission of the National Congress and to the Presidential Office on compliance with this Provision. The following institutions are exempted from this provision: Supreme Court of Justice (CSJ), Public Ministry (MP), National Police (PN), State Secretariat of the National Defense Office and the National Directorate of Investigation and Intelligence (DNII) and officials protected under the Law of Special Protection of Officials and Former Officials at Extraordinary Risk contained in Decree No. 323-2013 of January 15, 2014.

Officials who utilize personal security whose cost is covered by the State shall limit themselves to a maximum of two (2) persons. This provision does not apply to what is contemplated in Decree No. 323-2013 of January 15, 2014, containing the Law for Special Protection of Officials and Former Officials in Extraordinary Risk.

In accordance with Articles 321 and 324 of the Constitution of the Republic, any incumbent official, governing body, or employee of State institutions (central, deconcentrated, and decentralized) is personally and jointly liable for negligence or carelessness that gives rise to judicial sentences condemning the State and causing expenditures of financial resources.

Public Sector institutions may carry out improvements in the physical spaces in which offices, agencies, or service windows operate in which they provide their services, provided that these do not exceed TWO HUNDRED FIFTY THOUSAND LEMPIRAS (L250,000.00) annually per building; improvements being understood as those enhancements that are not of a permanent nature and that allow the physical spaces to be adapted to the needs of the different institutions. Administrative officials must verify that the departments requesting them submit the corresponding quotations.

The institutions of the Central, Deconcentrated and Decentralized Government, as well as national projects approved through trust contracts, that require services such as those provided by: Honduras Mail Company (HONDUCOR), National Graphic Arts Company (ENAG), Honduran Telecommunications Company (HONDUTEL), National Supplier of Basic Products (BANASUPRO) and the Military Industry of the Armed Forces (IMFFAA), shall mandatorily request quotes 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 the interest 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 procedure related to the acquisition of the services mentioned in the previous paragraph, the Administrative Managers must verify that the departments requesting them attach the aforementioned quotes.

All institutions of the Central, Deconcentrated and Decentralized Government that currently have outstanding debts with the National Graphic Arts Company (ENAG), for publications in the Official Journal "La Gaceta" and for printing work must make payment effective with their respective budget of the Present Fiscal Year. Non-compliance with these payments will result in late fees and legal expenses.

When the Central Administration pays public services on behalf of municipalities or any other institution, to which according to the Constitution of the Republic or other special Laws corresponds a percentage or value as a transfer concept, such amount must be charged to the corresponding budget credit, being considered as partial or total payment of the transfer as appropriate. Likewise, the amounts that municipalities or any other institution owe to the tax authority for tax purposes shall be applied using this same mechanism.

The central government institutions, decentralized and deconcentrated entities are authorized to contract, using their respective budgets, individual fidelity bonds in favor of each natural person who administers public goods and resources, to protect State funds and assets, determining the amounts of said bonds based on the Law of the Superior Court of Accounts and its regulations Article 126. In the insurance contract it shall be stipulated that the insurer shall collect from the bonded public officials and employees, the payments made in favor of the State as a consequence of improper use and infidelity in the management of public goods. The collection actions carried out by both the State and the insurance company must be conducted 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 as compensation for the infidelity of the public official or employee in the management of public goods or resources does not exempt them from the civil, administrative or criminal liability that corresponds under Law.

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

In order to comply with the Annual Settlement of the General Budget of Income and Expenses of the Republic, the Ministry of State in the Office of Finance (SEFIN) 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 order to make the budget expansions or creations that may be necessary. The available balances of budget allocations must be used by 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.

Transfer resources with a specific beneficiary cannot be transferred or reduced for a purpose different from the one for which they were assigned or executed in favor of a beneficiary other than that of the transfer. For the first payment, the presentation of the annual disbursement plan and liquidation report of the funds executed in the previous Fiscal Year will be required.

Institutions, programs and projects related by their performance to services of assistance, protection and social development must incorporate the guidelines of the Social Protection Policies and Comprehensive Development of Early Childhood and the Social Protection Framework Law in their Institutional Strategic Plans, as well as in their Operating Plans and corresponding Annual Budgets. The SCGG through the Social Cabinet shall be responsible for evaluating compliance with this provision as well as the Impact of the measures implemented. The State Secretariat in the Offices of Development and Social Inclusion shall be responsible for evaluating quarterly the fulfillment of commitments regarding assistance and social protection provided for the population subject to care, for which it shall generate the corresponding evaluation instruments. Therefore, institutions, programs and projects must submit within five (5) calendar days after the end of the quarter, a report on compliance with the Social Protection Policies and Comprehensive Development of Early Childhood.

When Contracts, Agreements, Draft Decrees or any other legislative initiative are sent to the National Congress for approval, they must be sent in both physical and digital form to facilitate projection at the time of discussion and subsequent publication on the portal of this State Power.

The insurance acquisition processes of the State Powers, Central Government, Deconcentrated and Decentralized sectors, must be framed within the procedures established in the State Procurement Law and the regulations issued by the National Banking and Insurance Commission (CNBS). In compliance with the provisions of Article 99 of the Insurance and Reinsurance Institutions Law, Public Social Welfare Institutes are prohibited from directly contracting Insurance and Bonds on their property and those related to their credit portfolio through agents, brokers or brokerage firms.

Based on Article 9, fourth paragraph and Article 23, numeral 2 of the Organic Budget Law, it is established as a guiding instrument for medium-term fiscal policy for the period 2021-2023, which shall be updated annually in accordance with policy guidelines, the behavior of macroeconomic variables, the financial flows provided, as well as projections of income and expenses of the Central Administration and the Non-Financial Public Sector. The Medium-Term Budget Framework 2021-2023 is framed within the Law for the establishment of a Country Vision and the adoption of a Nation Plan for Honduras and is part of the General Budget of Income and Expenses of the Republic for the current Fiscal Year.

In order to ensure compliance with the provisions of Articles 4, 5 and 47 numeral 5 of the Organic Budget Law (Decree No. 83-2004), all institutions of the Central Government (State Secretariats, Deconcentrated Entities, Decentralized Institutions, State Powers and Constitutional Bodies) and Public Enterprises must be operating in the Integrated Financial Administration System (SIAFI). Decentralized institutions that have an administrative, financial and accounting system must technically design and develop an interface with SIAFI, responding to the needs of integration, consistency and reliability, and must record the execution of income and expenses identifying in the latter the natural or legal person that provides services and/or goods to the Institutions. In case of non-compliance with such criteria, they must implement the Integrated Financial Administration System (SIAFI) to incorporate themselves into the single account system. With each of the institutions of the Decentralized Public Sector that are not operating in SIAFI, the General Directorate of Decentralized Institutions and the General Comptroller's Office, with the assistance of other Governing Bodies in each Subsystem and the support of the corresponding Technical Units, shall establish a schedule of activities for the implementation of the system, and shall provide monitoring for the compliance with its activities and dates. Non-compliance with the aforementioned schedule shall result in the measure of not transferring the national source by the General Treasury of the Republic and/or the restriction of budget modifications by the General Directorate of Budget; the implementation of SIAFI must be carried out gradually, with the accompaniment in the review of processes by the Modernization Unit and the technical support of the Innovation and Technology Unit. All municipalities and municipal associations of the Local Government Sector must be operating in the Integrated Municipal Administration System (SAMI); those that are not operating in SAMI, the Secretariat of Finance through the General Directorate of Decentralized Institutions with the assistance of the Governing Bodies in each Subsystem and the support of the corresponding Technical Units shall establish a schedule of activities for the implementation of the system.

Authorize the Secretary of State in the Ministry of Finance so that, after reconciliation of the amounts owed between institutions of the Executive Branch, it shall perform account compensations and, if necessary, affect through the "Budget Modification Form" the budget items approved in this Law. For the present Fiscal Year, all telecommunications services provided by HONDUTEL to institutions of the Central Administration shall be compensated up to 50.0% with the amount that it owes to the State in concept of radio-electric fees, rate per call abroad (0.03 cents of Dollar), supervision rate, as well as the debt owed to the SAR for tax purposes, among others. All public companies must submit to the General Directorate of Decentralized Institutions of the Secretary of State in the Ministry of Finance a quarterly report on the risks identified in the administrative and operational management of the company with the respective measures that contribute to their reduction.

For purposes of compliance with the Budget Transparency and Accountability Indicators, the Secretary of State in the Ministry of Finance shall make available to the population in digital and printed form the following documents during the Formulation phase: Budget Policy Guidelines, Sector and Institutional Ceilings, Medium-Term Macro Fiscal Framework, Proposal of the General Budget of Income and Expenses of the Republic; during the Approval and Execution phases: Supporting Budget Documents of the Proposal established in Article 23 of the Organic Budget Law, Approved Budget, the Citizen Budget, Quarterly Reports, Mid-Year Review and Year-End Report. Likewise, during budget execution and through the aforementioned documents, social audit shall be conducted through the dissemination of information that promotes population oversight through monitoring, follow-up and evaluation of expenditures.

The budgetary allocation approved in the budget of the Secretary of State in the Ministry of Defense specifically in Program 11 Defense of National Sovereignty and Territorial Integrity Subprogram 03 Defense of Sovereignty and National Security in the Maritime Space Domain 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 the payment of the commitment derived from the signed Contract and its derivatives for maintenance and sustainability in compliance with contractual guarantees.

The distribution of assets or goods seized that are administered by the Office for the Administration of Seized Assets (OABI) shall be distributed in accordance with the percentages established by law to guarantee the activities of Prevention and Protection of Women. The OABI shall report quarterly to the State Secretariat in the Office of Finance and to the Superior Court of Accounts (TSC) and publish on its website regarding the distribution of seized resources and the institutions receiving seized assets shall make the corresponding budgetary and accounting records in the Integrated Financial Administration System (SIAFI), for which reason the State Secretariat in the Office of Finance is authorized to carry out the necessary operations.

In accordance with what is established in Article 22, subsection 1) of the Fiscal Responsibility Law, any commitment acquired by institutions of the Central Government, Decentralized and Non-Centralized, outside of the allocations approved in the General Budget of Income and Expenses of the Republic shall not be recorded in the Integrated Financial Administration System nor shall it be recognized as public debt. The State Secretariat in the Office of Finance shall not process any request for budgetary modification for this purpose and is authorized to establish the pertinent regulations for the rejection of these. Officials who authorize these commitments shall be jointly liable to honor the debts of these expenses.

Policy initiatives or modernization or digital government plans, promoted by the Sectoral Cabinets or by specific institutions of the public sector, shall be brought to the attention of the State Secretariat for General Government Coordination and the Secretariat of Transparency, in order to achieve efficient coordination in their execution.

The General Coordination Secretariat of Government and the Transparency Secretariat through the National Office for Comprehensive Internal Control Development (ONADICI), shall instruct the Senior Authorities of all institutions, programs and projects of the Executive Branch, so that in the execution of the budget, internal control processes are established, in accordance with the policies established in the general norms issued by the Court of Accounts and the regulations developed by ONADICI. These internal control processes shall be subject to permanent and systematic monitoring with the participation of the Institutional Internal Control Committee (COCOIN), the Internal Audit Units and the support of ONADICI. Failure to comply with this obligation gives rise to the administrative sanctions established in the Organic Law of the Court of Accounts.

In compliance with the Fiscal Responsibility Law (LRF), all institutions of the Decentralized Sector must submit within the first ten (10) days after the end of the month, to the Macro Fiscal Policy Directorate (DPMF) of the State Secretary in the Office of Finance, the monthly report on their respective budget execution and the balance sheet in the format of the Single Chart of Accounts of the General Accounting Office of the Republic.

The provisions established in the second paragraph of Article 39 of Decree No. 56-2015, dated May 21, 2015, published in the Official Gazette "La Gaceta" of July 2, 2019, Edition 33,771, containing the Social Protection Framework Law, are hereby suspended.

To amend Article 3, numeral 1), subsection c) of the Fiscal Responsibility Law contained in Decree No. 25-2016 of April 7, 2016, which shall read as follows: "c) Payment arrears that arise during the Fiscal Year from expenses incurred financed with national funds generated by the Central Administration at the close of the fiscal year from the approval of this Law, may not under any circumstances exceed zero point five percent (0.5%) of the Gross Domestic Product (GDP) in nominal terms".

State institutions shall publish on their WEB page, through the Administrative Managements, the settlements presented by beneficiary institutions of all transfers allocated in the budgets prior to making a new disbursement.

The Public Enterprises referred to in Article 53 of the General Law of Public Administration to determine the Income Tax for the present Fiscal Year shall not be subject to the provisions of Article 22-A and its amendments contained in the Income Tax Law, but rather to those provided for in Article 22 of said Law. Likewise, Public Enterprises for the present Fiscal Year shall not be subject to the Advance Payments determined by Article 34 of the Income Tax Law.

In order for all Centralized, Deconcentrated and Decentralized institutions to be able to fulfill legal commitments, the expenditure item 27500 referred to Judicial Expenses may be increased without any type of restriction; however, if it is required to reduce the same, the institution shall submit the request to the State Secretary in the Office of Finance, who shall rule through the General Budget Office whether or not its reduction is appropriate.

It is prohibited for any institution of the Centralized, Deconcentrated and Decentralized Public Sector to reduce the amount allocated in the expenditure subgroup 16000 referred to Benefits and Compensation; movements to this subgroup shall only be authorized when they are for the purpose of increasing said allocation.

In order to comply with the provisions of Decree No. 115-2014, containing the Reform to the Law for the Promotion of Public-Private Partnership; Decree No. 25-2016 containing the Fiscal Responsibility Law and Agreement 288 containing the Regulations of the Fiscal Responsibility Law, by means of which the State Secretary in the Office of Finance is authorized to progressively develop the identification and assessment of fiscal risks generated in the administration of the State, including sources of risk by Judicial Demands Against the State. Likewise, it is established that the Fiscal Contingencies Unit attached to the State Secretary in the Office of Finance shall establish the necessary levels of communication with the institutions involved to define and prepare a standardized historical database, which is required by the fiscal risk assessment methodology for the estimation and quantification of contingent liabilities due to judicial demands. For such purpose, all State institutions without exception shall officially submit on a quarterly basis within the first fifteen (15) days of the month following the end of the quarter, the Matrix of Identification of Judicial Proceedings in Excel format by means of the delivery of 1 CD, containing 100% of the Judicial demands in process, as well as those with final judgment. Institutions that fail to comply with these provisions shall be subject to what is established in Article 5 of this Law.

The State Secretary's Office of Finance is authorized to seek the necessary financing, following the audit conducted by the legal grantor, to make effective the payment of the contingent liability generated by the early termination of the Public Private Partnership contract for the project called "Corredor el Progreso – Tela and San Pedro Sula – El Progreso and la Barca – El Progreso section," with the National Congress to approve the corresponding financing at the appropriate time.

The Certificates or other documents necessary for the issuance of the Visit Card for Persons Deprived of Liberty issued by the different State institutions, including those issued by the Judicial Branch and that form part of the requirements established by the National Penitentiary Institute (INP), shall be issued solely for that purpose at no cost.

The income received from the sale of electrical energy to the National Electric Power Company (ENEE), through the operation of the José Cecilio del Valle Hydroelectric Plant, Nacaome, shall be deposited in the General Treasury of the Republic and shall be incorporated in 100.0% to the budget of the State Secretary's Office of Energy (SEN); said resources shall be allocated to cover the maintenance and operating expenses of the Dam, as well as the cost incurred for pumping and supplying water to the Water Boards in the Zone, and from any remaining funds it may pay operating expenses of said Secretary's Office.

The Public Ministry is instructed to allocate in a labeled and progressive manner in the General Budget of Income and Expenses of the Republic assigned to its institution, the resources for the strengthening of the investigative unit for deaths of women and femicides, as well as those of the Special Prosecutor's Office for Women and the Specialized Comprehensive Care Module (MAIE), in the same way the expansion of coverage for new units; for the foregoing, the State Department of the Finance Ministry shall provide the necessary technical support.

The State Department of the Security Ministry is instructed to allocate in a labeled and progressive manner in the General Budget of Income and Expenses of the Republic assigned to its institution, the resources for the strengthening and creation of the Investigative Units for Violent Deaths of Women and Femicides in the Criminal Investigation Police Directorate (DPI); in the same way this Department shall allocate resources for the reopening of Line 114-Woman specifically for the care of violence against women. For the foregoing, the State Department of the Finance Ministry (SEFIN) shall provide the necessary technical support to achieve this identification.

To facilitate women's citizen participation in the elaboration of the national budget, a Working Group on Gender-Sensitive Budgets shall be formed, composed of: the State Department of the Finance Ministry (SEFIN), the Presidential Directorate of Planning, Results-Based Budgeting and Public Investment (SCGG), the National Women's Institute (INAM), the Budget Commission and the Gender Commission of the National Congress, Women's Organizations linked to budgetary matters, in order to make proposals and monitor investment in gender issues. This Working Group shall be led by the National Women's Institute. In the same way, to monitor the Municipal Budget and the 5%, the Municipal Working Group on Gender-Sensitive Budget shall be formed, composed of the Municipal Mayor, Treasury, Municipal Women's Office (OMM), Women's Organizations and the Citizen Transparency Commission, which shall be led by the Municipal Mayor or Mayoress and the Coordinator of the Municipal Women's Office (OMM).

The State Department of Finance (SEFIN) is ordered, in coordination with the State Department of Economic Development and other involved institutions, to progressively allocate in the General Budget of Income and Expenses of the Republic, the CREDIMUJER fund in such a way that it increases annually.

The Judiciary is instructed to allocate in an earmarked and progressive manner in the General Budget of Income and Expenses of the Republic assigned to its institution, the resources for the strengthening and expansion of specialized courts for domestic violence in cities where there is high incidence of domestic violence, and for this reason the State Department of Finance shall provide the technical support necessary to achieve this identification.

Centralized, Decentralized or Deconcentrated institutions, including the Legislative Branch, Judicial Branch or those created by constitutional provision, must require as a documentary requirement to satisfy the economic obligations that derive from their contractual obligations with providers of goods and services, public works, consulting or professional services, the Tax Document as established in the Billing System Regulation, the Tax Document as established in the billing system regulation, other tax documents and tax registration of printing. The administrative management or the units that perform this function according to the organizational structure of each institution must verify that the tax document mentioned in the previous paragraph is valid and duly authorized by the Tax Administration.

Based on the provisions established in articles 56-A, 76-A, 76-B and 76-C of Decree No. 109-2019 containing the Reforms by Addition of the General Mining Law and Executive Decree No. PCM-008-2013 to support the implementation of the National Organization of EITI-Honduras in the mining sector, the Honduran Institute of Geology and Mines (INHGEOMIN) is authorized to proceed, during the current Fiscal Year 2021, with the organizational restructuring that entails the creation, elimination or merger, adjustment and salary leveling of permanent positions or internal departments, for which purpose the State Department of the Office of Finance (SEFIN) is ordered to increase and redistribute the budgetary caps of groups 11000 and 12000, in accordance with the request of the Honduran Institute of Geology and Mines (INHGEOMIN), and these amounts must be allocated so that they are adjusted progressively in the General Budget of Income and Expenses of the Republic.

The State Department of the Office of Finance (SEFIN) is authorized to conduct a review of accrued documents, recorded in previous fiscal years that are pending payment in the different State institutions, with the purpose that these can be redirected in the same institutions that generated them to cover documented commitments from previous years with the same economic nature of the original expense, with the exception of redirecting current expenses to finance capital expenses. For this purpose, these institutions must document the same and replace them with pending payments recorded from previous years that justified their accrual, through the procedure established by the State Department of the Office of Finance (SEFIN).

All amounts received by Public Administration Institutions (Central, Decentralized, Deconcentrated and Constitutional Bodies) in advance form, as transfers and any other concept of income in fiscal years prior to 2021, that were used and not regularized in the budget of the corresponding fiscal year, must be regularized by affecting the corresponding budgetary structures in the budget approved for the current fiscal year. Resources that were not used must be returned to the General Treasury of the Republic in accordance with the established procedures. The State Department of the Office of Finance (SEFIN) is empowered to define and apply the procedure to be followed regarding advances and other concepts pending regularization, which were granted for projects that have already concluded in previous years, so that the necessary enablements or exceptions are made in the National Public Investment System (SNIPH) and the Integrated Financial Administration System (SIAFI), in order to regularize these amounts in the current budget.

ELIMINATED.

In order to generate a greater impact on the process of rehabilitation, reconstruction and economic and social reactivation of Honduras, Public Sector Institutions are authorized to implement programs and projects with an integrated approach, as a response to the effects caused by the COVID-19 pandemic and tropical storms ETA and IOTA, with the purpose of achieving resilient and sustainable reconstruction, leading to increased productivity, contributing to economic growth, job creation and the well-being of the Honduran population. Likewise, the State Secretariat in the Office of Finance (SEFIN) is authorized to carry out the corresponding actions in a timely manner to manage the necessary financial resources to address the process of rehabilitation, reconstruction and economic and social reactivation of Honduras, which may come from reorientation, resources from national funds, own resources, internal and external credit, placement of debt securities in the domestic or international market, or other public credit operations, as well as other sources that are identified. In order to maintain fiscal discipline, the resources obtained to finance the aforementioned programs and projects must be framed within the Medium-Term Macro Fiscal Framework.

In the budget of Institution No. 60 State Secretariat in the Office of Health, under the following structure: Administrative Management No. 1 Central Management, Executing Unit No. 53 Administrative Management; Program 01; Subprogram 00; Project 00; Activity/Work 05 Administrative and Accounting Services and expenditure object 35220 Vaccines, resources are allocated exclusively for the purchase of vaccines for COVID-19, these resources cannot be used or transferred by the Health Secretariat for purposes other than those indicated here; likewise, the State Secretariat in the Office of Finance (SEFIN) is empowered to carry out the necessary budgetary operations if required and to be able to cover the obligation.

ELIMINATED.

The Millennium Account Honduras/Invest-Heltras is ordered to transfer Forty Million Lempiras (L.40,000,000.00) to the Secretariat of Community Development of Water and Sanitation (SEDECOAS), for the execution of artisanal market projects.

Education credits or reimbursable education scholarships granted by State institutions are considered subsidized credits and are governed by the following rules:

• 1)

  The credit debtor has the right to obtain a copy of the loan contract;

• 2)

  The debtor has the right to file complaints before the National Banking and Insurance Commission (CNBS), and before the Consumer Protection Office for excessive charges not contemplated in their credit contract;

• 3)

  When the obligation is deducted by payroll, the debtor has the right to be informed monthly of the balance of their obligation;

• 4)

  These obligations shall be considered simple loans. In these, only expressly agreed interest can be charged when the current and default interest rate to which they are subject is indicated;

• 5)

  When current and default interest that is not expressly agreed upon is charged, payments made in excess shall be applied to principal and if there is a remainder because the total obligation contracted has been paid due to uncharged fees, reimburse the debtor for excess payments made;

• 6)

  The creditor may not capitalize current interest or default interest;

• 7)

  The creditor may not charge default interest exceeding 2% per annum; and,

• 8)

  The debtor shall have the right to obtain an annual discount of 10% on the capital owed when working in government institutions of social assistance or in State educational institutions; The foregoing rules are applicable to all education credits or reimbursable education scholarships granted by the State that on the date of entry into force of this Decree have an outstanding balance. State institutions that have granted education credits or reimbursable education scholarships must adapt their credits to the provisions of this Article, and when they fail to do so, the interested debtor may appeal the decision before the courts of the republic in civil matters.

The Secretary of Foreign Relations and International Cooperation is authorized to, using its respective budget, proceed to purchase and/or lease motor vehicles in favor of those Embassies, Permanent Missions and Consular Offices that do not possess their own vehicle for official use. For purposes of savings, each vehicle must be acquired in the countries or places where Honduras has Diplomatic representation. To this effect, the contracting processes directly linked with the functioning of our Embassies, Permanent Missions and Consular Offices are exempt from the bidding contracting procedure established in the State Contracting Law and its regulations, additionally, said State Secretariat is authorized to lease vehicles for the displacement of national and foreign delegations on official missions.

The expenditure allocations contained in the structures described below and which by the nature of their functions require an expedited administrative procedure shall be transferred to bank accounts at the Central Bank of Honduras that will be opened for each Institution in the programmatic categories indicated herein, based on the disbursement plan that must be presented quarterly in accordance with the annual plan that is presented to the State Secretariat in the Department of Finance and whose management shall be in charge of the Administrative Manager of the respective Department or Institution, who must present reports of its execution 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. In Institution 70 - State Secretariat in the Department of Security: Program 03 - National Police Management Activities; Program 11 - Police Services for Prevention, Protection and Control; Program 12 - Criminal Investigation Services; Sub-Program 00, Project 00; Activity 02 - Investigation Services; Activity 03 - Investigation Services for Crimes Against Minors; Activity 04 - Anti-Drug Police Services; Activity 05 - Services for Addressing Violence Against Women; Program 13 - Road and Transit Services; Program 14 - Police Educational Services. In Institution 90 - State Secretariat in the Department of National Defense in accordance with Article 31 of the Constitutional Law of the Armed Forces. In Institution 02 - Superior Court of Accounts: Program 11 - Control of Resource Management to Guarantee Integrity of Public Management. In Institution 03 - National Commissioner of Human Rights in its Programs 01 - Central Activities, 11 - Municipalities of Solidarity Welfare, 12 - Protection of Human Rights and 13 - Promotion of Human Rights. In Institution 04 - National Electoral Council in its Program 11 - Electoral Process. In Institution 05 - Electoral Justice Court in its Program 11 - Electoral Justice Policy. In Institution 190 - Public Ministry in its Program 11 - Defense and Protection of the General Interests of Society. In Institution 200 - Attorney General of the Republic in its Program 11 - Legal Advice and Representation of the State. With respect to expenses incurred for the Security of the State, based on what is established in Article 17 of Legislative Decree No. 170-2006, the information derived from the budget allocations corresponding to Institutions 1 – National Congress, 20 – Presidency of the Republic, 350 – Cabinet for Prevention, Security and Defense is classified as reserved, and with respect to Institution 30 – Secretariat of the Presidency, Program 01 – Central Activities, Sub-Program 00, Project 00, Activity 01 – Direction and Superior Executive Coordination, Expenditure Object 99100 – For Current Expenditures. In Institution 044 - National Penitentiary Institute: Program 11 - Penitentiary Security; Sub-Program 00; Project 00; Activity Work 02 - Safeguard and Security of Persons Deprived of Liberty, Program 12 - Progressive Treatment of Persons Deprived of Liberty. In Institution 045 - National Migration Institute: Program 11 - Migration and Foreigners Services, Activity 01 - Direction and Superior Coordination, Activity 02 - Migratory Affairs, Activity 03 – Passport and Activity 04 - Migrant Assistance Centers, only for the Expense Groups: 20000 - Non-Personnel Services, 30000 - Materials and Supplies and 40000 - Capitalizable Assets. In Institution 300 - State Secretariat in the Department of Human Rights: Program 12 - Protection of Human Rights, Activity 02 - Prevention of Risk of Human Rights Violations and Social Conflict; Activity 03 - Inter-institutional Coordination for Protection of Persons Internally Displaced by Violence and Activity 04 - Protection System, only for the Expense Groups: 20000 - Non-Personnel Services, 30000 - Materials and Supplies and 40000 - Capitalizable Assets. Institution 806 - Honduran Agricultural Marketing Institute (IHMA): Program 11 - Marketing of Basic Grains, Sub-Program 00, Project 00, Activity 002 - Operations and Commercialization of the Strategic Reserve, only for the Expense Group 30000 - Materials and Supplies, specifically for Expenditure Object 31120 - Basic Grains for Commercialization, without the obligation to return the balances at the end of the fiscal year, being Own Resources. The following are excepted from the foregoing, the expenditure allocations contained in the Programs and Activities mentioned, regarding: Transfers, Leases, Insurance, Employer Contributions to Social Security and Benefits Institutions, Contracting of Public Works, Public Services and Consultancies, which shall be carried out following the moments of expenditure called: Pre-commitment, Commitment and Accrued which must be carried out to the beneficiaries of these services. It is understood that resources managed through this mechanism must be liquidated annually and the surpluses deposited in the General Treasury of the Republic within five (5) business days after the end of the Fiscal Year.

Standards for the protection of rights. Public or private institutions that benefit from funds approved in this Decree are obliged to protect individual rights and promote national development, therefore, their actions shall be governed by the standards contained in the Constitution of the Republic, the International Treaties subscribed by Honduras, by the laws and regulations in force and by the following provisions: 1. No public or private institution may issue or apply standards that make it difficult for individuals to access public services, opt for professional credentials; restrict, diminish or distort the exercise of rights recognized in the Constitution of the Republic or limit the presumptions of innocence recognized by the Constitution of the Republic by requiring in secondary standards requirements that are not expressly contemplated in the laws of the Republic. 2. When a norm of lower hierarchical level contradicts a norm of higher hierarchical level preventing the development of a program or project of national interest, the officials, employees, public agents or members of collegiate bodies in charge of the program or project must always apply the higher hierarchical norm, invoking in their resolution this provision as an exemption from liability. 3. The provisions that contravene what is stated in this norm are considered inapplicable and null and void by operation of law.

Notwithstanding the provisions established in Article 26 of this Law, the Secretariat of State in the Office of Finance (SEFIN) is authorized to incorporate into the General Budget of Income and Expenses of the Republic for the present Fiscal Year the remainders from previous fiscal years from identified national sources as of the Close of 2020 to cover operating and investment expenses of the institutions that demonstrate they have such funds. These shall be applied to the institutional ceiling approved in the formulation process.

Regarding the Management of Funds for the Construction of the Honduran Oncological Institute and Hospital: Within the framework of the Service Contracting Agreement for Studies, Designs and Construction of Initial Works for the Honduran Oncological Institute and Hospital signed between the Secretariat of State in the Office of Health and the Foundation for the Development of Comayagua pursuant to the Special Contracting Authorization Decree No. 74-2020 published on July 1, 2020 in the Official Journal La Gaceta No. 35,300, and in accordance with Article No. 4 of Decree No. 31-2020 in which the Secretariat of State in the Office of Health is authorized to undertake the immediate construction of the Oncological Institute as part of the Comprehensive Public Network of Health Services, it is hereby approved for the Secretariat of State in the Office of Public Health the sum of Fifty Million Lempiras (L.50,000,000.00) to begin construction of the Oncological Institute through the Foundation for the Development of Comayagua in fiscal year 2021 and at the same time the Secretariats of State in the Offices of Finance and Public Health are authorized to manage funds with international organizations for the completion of the Oncological Hospital.

The National Telecommunications Commission (CONATEL) is ordered to contribute from the Investment Fund in Telecommunications and Information Technologies (ICTs) the sum of EIGHTEEN MILLION SEVEN HUNDRED FIFTY THOUSAND EXACT LEMPIRAS (L.18,750,000.00) for the immediate acquisition and implementation of child pornography blocking software, software to identify grey traffic and recovery of losses.

The Secretary of State in the Ministry of Finance is authorized to use the available funds from the Trust Fund called Investment Fund in Telecommunications and Information Technologies (ICTs) considered as Seed Capital contained in Legislative Decree No. 136-2015 which originates it and from the values that are deposited in the General Treasury of the Republic, to finance the Transformation of the Normal Schools of the Country, Permanent Training Center for Teaching Staff in Service, Higher Level Educational Centers, University Regional Centers or other Higher Education Centers, as well as the Program for the training of Human Resources to support the service outsourcing industry and the operation of priority programs of the Ministry of Education such as: National Literacy Plan, Expansion of Coverage of the Third Cycle of Secondary Education and Higher Education for all Municipalities and Presidential Program "English for a Better Life".

Authorize the Municipal Corporations throughout the country and other State institutions, so that within the framework of the National Emergency generated by tropical storms ETA and IOTA, they carry out the direct purchase of land, which will be destined solely and exclusively for the construction of social housing for the relocation or resettlement of families affected by the natural phenomena ETA and IOTA. For the purchase of the land referred to in the previous paragraph, only approval by the Full Assembly of the Municipal Corporation in question and the respective appraisal carried out by a certified and registered property appraiser with the National Banking and Insurance Commission (CNBS) is required, based on which the purchase price will be established; remaining suspended for these purposes, during the year 2021, the application of provisions or additional requirements established in other laws, regulations and agreements. The land object of purchase must be free of encumbrances or failing that, the clearing must be carried out at the time of the sale-purchase thereof.

The Secretary of State in the Ministries of Interior, Justice and Decentralization (SGJD) is authorized to transfer to the different Municipalities of the country resources that will finance infrastructure works such as water and sanitation, electrification, road infrastructure, among others. Said allocation will be granted under the following budgetary structure: Program 16, Subprogram 00, GA 4, UE 66, Object 55170, Beneficiary 00, contemplated within the budget of the Secretary of State in the Ministries of Interior, Justice and Decentralization (SGJD). For the settlement, control, monitoring, transparency and accountability of the execution of the aforementioned funds, the continuity of the Unit of Control, Monitoring and Settlement (UCSEL) is authorized; attached to the Secretary of State in the Ministries of Interior, Justice and Decentralization (SGJD), within the framework of the Municipal Decentralization Pilot Program; the Secretary of State in the Ministry of Finance (SEFIN) is authorized to create the necessary budget items prior to request from the Secretary of State in the Ministries of Interior, Justice and Decentralization (SGJD), for the execution of transfers and operating expenses including Subgroup 12000 Non-Permanent Personnel and other current expenditure allocations. These may be modified based on current legal regulations, in order to facilitate its operability. The supervision and operating expenses of the Unit of Control, Monitoring and Settlement (UCSEL) must not exceed twelve percent 12% of the allocation approved in the budgetary structure mentioned in the previous paragraph. The Secretary of State in the Ministries of Interior, Justice and Decentralization (SGJD) shall issue technical standards, formats, guidelines and other necessary instruments for transparent, timely, proper, effective and efficient settlement in compliance with this Article. It must update the respective Regulation if necessary, for the use of these resources which must be published.

To interpret Article 1 of Legislative Decree No. 50-2020, published in the Official Gazette La Gaceta, dated May 18, 2020, Edition No. 35,256, in the following sense, that the Executive Power is authorized to define and deliver bonuses to population segments in special conditions such as poverty, social vulnerability, affectation by natural disasters or otherwise, provided that these bonuses are targeted and help individuals or families to emerge from the condition of social or economic vulnerability in which they find themselves according to the policies defined by the President in Council of State Secretaries, using among other mechanisms, monetary transfers through electronic transaction and/or payment mechanisms.

The Executive Power, through the State Secretariat of the Office of Finance, shall regulate the present Budget Execution Norms within a period of thirty (30) working days, counted from the publication of this Law.

All municipal corporations throughout the country are authorized to freely transfer full ownership in favor of the State Secretariat of the Office of Education, in order to constitute through said ownership the legalization of all properties on which a public educational center is built, regardless of the legal nature of said property. The Property Institute (IP) is ordered to proceed with the registry registration of said full ownerships, even if it does not have or the registry antecedent is unknown. In case of a claim by a third party regarding the ownership of the land granted in full ownership by any Municipal Corporation, the decision of the corresponding judicial body shall prevail; proceeding only in favor of the third party, payment of the just price, which shall be made by the State Secretariat of the Office of Education, prior to the appraisal, carried out by an expert certified by the National Commission of Banks and Insurance (CNBS).

Rental payments for local spaces, stalls, establishments or any other denomination given to the premises that form part of any municipal public market corresponding to the year 2020 are hereby exempted or forgiven, under the following provisions:

• 1)

  If the rental of the local is up to three thousand lempiras, 100%.

• 2)

  If the rental of the local is three thousand one lempira and above, 50% is exempted.

• 3)

  Debts owed by tenants from months prior to the year 2020 are forgiven at 50% in relation to the principal debt and are exempted 100% from interest, fines or surcharges.

The Executive Branch is hereby authorized through the different entities that work in cleaning neighborhoods, communities and colonies to dispose of spaces that may be used as dumping grounds for sediments, which were carried away by the strong currents of rivers such as the Ulúa and Chamelecón that flooded extensive areas of the national territory, as a result of Tropical Storms ETA and IOTA, which particularly affected the Sula Valley. The foregoing is without prejudice to environmental damages that may be caused, with the obligation for the Executive Branch that, once said cleaning work has been completed, it may carry out the necessary mitigation works to prevent any negative effect to the environment.

Extend by one more year the benefits and provisions contained in Article No. 39 of Legislative Decree No. 33-2020, containing the Law of Assistance to the Productive Sector and Workers in the face of the effects of the Pandemic caused by COVID-19, dated April 2, 2019, published in the Official Newspaper "La Gaceta" on April 3, 2020, edition No. 35,217 and its amendments.

The Institute for Access to Public Information is instructed to coordinate with the State Secretariat of Transparency and the Superior Court of Accounts (TSC) to enter into an inter-institutional cooperation agreement to coordinate, articulate, and evaluate guidelines, strategies, and policies related to the prevention of corruption, transparency, digital government, and good governance. The State Secretariat of Transparency shall act as a liaison body of the Presidency of the Republic to support the exercise, with efficiency and effectiveness, of the functions and powers of the Institute for Access to Public Information. The challenges derived from the implementation of the agreement must be resolved with autonomy, harmony, and in accordance with the competence of each of the institutions involved, without interference, impositions, or interests of any kind.

To temporarily extend until March 31, 2021 the deadline for the presentation of sworn declarations of various assets and liabilities before the Superior Court of Accounts (TSC), with the purpose of granting additional time for those obligated to make such declaration without fines or surcharges.

To authorize the State Secretariat in the Offices of Foreign Relations and International Cooperation and the National Council for the Protection of Honduran Migrants (CONAPROHM) to allocate resources up to the amount of ONE MILLION DOLLARS OF THE UNITED STATES OF AMERICA (US$1,000,000.00) from the Solidarity Fund with the Honduran Migrant (FOSMIH) created by Decree No. 106-2013 dated June 10, 2013 and its amendments, with the purpose of strengthening the operation of the Consular Network of Honduras in the United States of America in actions related to the expansion of documentation services and support for the Honduran community in the context of its application for migration benefits granted in that country.

This Decree shall enter into force as of its publication in the Official Gazette "La Gaceta". Given in the city of Tegucigalpa, municipality of the Central District, in the Session held by the National Congress in Virtual manner, on the twenty-second day of the month of December of two thousand twenty. MARIO ALONSO PÉREZ LÓPEZ PRESIDENT JOSÉ TOMÁS ZAMBRANO MOLINA SECRETARY ROSSEL RENÁN INESTROZA MARTÍNEZ SECRETARY Therefore: Let it be published.