Regulations on Budget Provisions 2009

For effective application of the General Budget Provisions and this Regulation, the following Terms and Definitions shall be understood: 1. ACTIVITY: In the area of institutional functioning, it is the lowest level programmatic category, and is indivisible for purposes of resource allocation. Its product (Good or Service) is always intermediate. It is classified as: Central Activity, Common Activity, and Specific Activity. 2. CENTRAL ACTIVITY: This name is given when the Goods or Services produced by the activity condition all programs of an Institution. 3. COMMON ACTIVITY: It is that where the Goods or Services produced by the activity condition two or more programs, but not all that make up the Institution. 4. SPECIFIC ACTIVITY: It is that where the product it originates is aimed exclusively at achieving the terminal goods or services of a program, sub-program, or project. The real and financial resources of specific activities are additive to obtain the real and financial resources of the respective program, sub-program, or project. 5. PUBLIC ADMINISTRATION: For purposes of budget classification and based on Articles 2, numeral 1 and 17, numeral 2 of the Budget Organic Law, the Public Administration is constituted by the Organs of the Executive Branch (Secretaries of State and Deconcentrated Organs), Judicial Branch, Legislative Branch, and Constitutional Organs without specific attachment such as: The Public Ministry, the Supreme Electoral Court, the Superior Court of Accounts, the General Advocacy of the Republic, and other public entities of similar legal status. 6. AUTOMATIC EXPANSION ALLOCATIONS: These are budgetary allocations that may be expanded with the product of income received by dependents authorized to operate under this system and that have not been contemplated in the General Budget of Income and Expenditures of the Republic. 7. GLOBAL ALLOCATIONS: These are those that include budgetary resources destined to be transferred to specific objects of current or capital expenditures during execution, as well as those that for special reasons cannot be itemized in the General Budget of Income and Expenditures of the Republic and that shall be executed by directly affecting such allocations. 8. SCHOLARSHIPS: These are financial resources provided by Institutions of the Public Sector for the formation, improvement, and academic, scientific, and/or technical betterment of natural persons of the country. 9. NATIONAL COUNTERPART: It is the budgetary allocation destined to fulfill the percentage of contractual commitments that, according to loan or donation agreements, must be financed by the State. 10. EMPLOYER CONTRIBUTION: It is the obligation paid by the State in its capacity as employer to institutions of assistance and social welfare, in accordance with what is established in the respective laws. 11. DONATION: It is the contribution in cash, in kind, or provision of services that the State accepts to receive or deliver, without implying reimbursement by the recipient. 12. ADMINISTRATIVE MANAGEMENT: It is the area in charge of budget administration, human resources, and general materials and services, including the purchasing and supplies function. 13. INSTITUTION: A unit that forms part of the Public Sector and performs Legislative, Judicial, or Executive functions, providing goods and/or services to the community. It is classified as: Centralized and Decentralized Administration Institutions. 14. PAYMENT ORDER: It is the administrative document by which the Institutions of Centralized and Decentralized Public Administration order the payment of goods and/or services received, or in their case the payment of expenses without effective consideration, with definitive allocation of the respective budgetary credits. 15. PURCHASE ORDER: It is the administrative document issued by institutions of Centralized and Decentralized Public Administration, for the purpose of contracting purchases of goods and/or services prior to compliance with legal requirements and that commits State resources. 16. BUDGET LINE: It represents the set of fields, composed of alphanumeric digits that is used to systematically order budgetary information of income and expenditures; it is also known as budget line items; normally it is the union or interrelation of budget catalogs and classifiers. 17. LOAN: It is financing resulting from internal or external negotiations that the State delivers or receives and must pay or receive according to the conditions agreed with natural or legal persons who are creditors or debtors. 18. ITEMIZED EXPENDITURE BUDGET: It is a document of mandatory compliance for Central Administration and Decentralized Institutions, in which the estimates of the Expenditure Budget are detailed. This detail contains the expense structures approved for the present Fiscal Year at the level of programmatic categories, the description and purpose of the same, and the amounts to be executed. 19. ITEMIZED REVENUE BUDGET: It is a document of mandatory compliance for Central Administration and Decentralized Institutions, in which the estimates of the Revenue Budget are detailed at the level of line items. 20. TASK OR STAGE: It is an input-product relationship to which resources are not formally assigned in the budget and therefore is not a programmatic category but is a basic element of programming since, from its definition and quantification, the real and financial resources assigned to each activity or work are calculated, as the case may be. The products of tasks and stages are combined to achieve a qualitatively different product that represents the result of an activity and work, respectively. 21. EXECUTING UNIT: It is the unit responsible for the execution, monitoring, and achievement of objectives and goals with the resources and the anticipated costs. From the point of view of budget administration, it constitutes the area responsible for a dependency or entity, with faculties to issue, in its own name, certified accounts receivable and to cover commitments acquired or contracted. This organizational and functional figure is established for purposes of budgetary exercise. In its broadest sense, it represents the entity responsible for the administration and execution of programs, sub-programs, and projects. II. CONCERNING BUDGET EXECUTION AND EVALUATION

For the deposit of the income referred to in Article [referenced article] of the Law, the various dependents shall use deposit or payment vouchers authorized by the Secretary of State in the Ministry of Finance through the Current Income Payment Receipt TGR 1; a copy of the same must be attached when making the deposit at the General Treasury of the Republic or at the Institutions of the National Banking System authorized. This provision shall remain in effect as long as the Own Income Execution Module in the Integrated Financial Administration System (SIAFI) is not implemented. When specifically established by law, Decentralized Institutions shall deposit the total of income generated or received, on the same terms and conditions that Article [referenced article] of the Law provides for other dependents.

For purposes of the collection and allocation of own income mentioned in Article 9 of the Law, the goods and services provided by the following institutions: Secretaries of State in the Offices of Natural Resources and Environment, Agriculture and Livestock, General Direction of Transportation, General Direction of National Merchant Marine, General Direction of Public Works, Property Institute, shall be paid at their cost by the state dependency that has ordered them, using for this purpose the administrative procedure called "Registration of Income Captured by Expenses." If the goods and services have been made at the request of natural persons or private legal entities, their price shall be determined following the procedure used in similar cases by analogous private entities. Article [referenced article].- The refunds of income collected illegally or in excess in previous years mentioned in Article 10 of the Law shall be executed by the Secretary of State in the Ministry of Finance, prior Opinion of the Executive Direction of Revenue, using the Expenditure Execution Forms (F-01), without need of Executive Agreement. From the amount to be refunded, the debts that the taxpayer has with the State must be deducted. To carry out the aforementioned refund, it must be charged to the accumulated results account through Institution 449 Financial Services of Central Administration. For the refund of income collected illegally or in excess during the present year, the income sub-account that gave rise to the amount received shall be used.

All Institutions of the National Banking System that receive income from the dependents of the different institutions of the Public Sector referred to in Article 11 of the Law shall be obligated to inform the General Direction of Budget about the amounts collected within the deadline established in said article, using for this purpose the forms called "Daily Detail of Tax Collections (PA-01)" and "TGR-1 Current Income Payment Receipt." This provision shall remain in effect as long as the Own Income Execution Module in the Integrated Financial Administration System (SIAFI) is not implemented.

For purposes of the management of deposits and/or securities and simultaneous reporting referred to in Article 11 of the Law, the Central Bank of Honduras and the Institutions of the National Banking System, in application of the clauses contained in the respective correspondent contracts, shall remit to the General Direction of Budget the corresponding daily report of tax collections and to the General Treasury of the Republic, the report of tax income credited to the General Account of the Central Government. Income from the payment of customs policy settlements must be deposited in authorized banking agencies, using for this purpose the Single Customs Declaration (DUA) form or the Single Payment Receipt (CUP) form, which shall be issued for each import and export proceeding.

The period to carry out the transfer of funds referred to in the Third Paragraph of Article 12 of the Law shall be at the close of operations of the day.

The beneficiaries of public services payments referred to in Article 15 of the Law shall be only the Institutions that provide such services; consequently, payments may not be made for these concepts in favor of the Executing Units themselves, and it shall correspond to the Administrative Managers/Internal Auditors of each Institution to ensure compliance with the payment of these services and to present the evidence of budget execution.

Representation expenses for officials of Central Administration referred to in Article 17 of the Law are those that have direct relation to the position held. The amount to be recognized for this concept shall be L. 30,000.00 for Secretaries of State and L. 15,000.00 for Sub-Secretaries of State. In the case of Heads of Decentralized Institutions, the amount to be recognized shall be L. 30,000.00 and shall apply only to those officials whose monthly salary is equal to or less than that earned by the Secretaries of State. In both cases, Representation Expenses must be liquidated monthly; if this requirement is not met, a new allocation may not be obtained: the foregoing in observance of what is established in the Second Paragraph of Article 258 of the Constitution of the Republic.

In the case of Embassies and Consulates, the expenses referred to in Article 17 of the Law are classified for budgetary purposes into Representation Expenses and Operating Expenses. Representation expenses are those that have direct relation to the mission or position held. Operating expenses are those necessary for the normal functioning of Embassies and Consulates, such as: Purchase of office supplies, fuels and lubricants, payment of public services, ordinary maintenance and repair of equipment, rental of Embassy or Consulate buildings, and similar items. The resources allocated for this purpose may only be used for this purpose, being subject to the rendering of accounts to the Secretary of State in the Ministry of Foreign Affairs, through monthly submission of receipts justifying the expenditure. Ambassadors and Consuls may not incur commitments exceeding the allocations approved in the General Budget of Income and Expenditures of the Republic, in observance of what is provided in Article 34 of the Budget Organic Law. For the acquisition of fixed assets, the procedure established by the General Accounting Office of the Republic shall be followed for its registration and custody.

In order to comply with what is established in Article 20 of the Law, the Institutes of Security and/or Social Welfare shall remit to the Secretary of Finance the payment requirements of those institutions that are in arrears; arrears being understood as those accounts that have more than one month without transferring the corresponding withholdings. III. TREASURY OPERATIONS

The registration of exchange differentials referred to in Article 25 of the Law shall be carried out on the basis of the Expenditure Execution form F-01 that gave rise to it; and SIAFI shall automatically generate and register the Execution Modification Forms F-07 that correspond. IV. PUBLIC CREDIT OPERATIONS

In relation to what is established in Article 29 of the Law, to maintain a sustainable level of public debt in the short, medium, and long term and consistent with monetary policy, the balance of total public debt in nominal terms with respect to the Gross Domestic Product at market prices shall not exceed 35% during the present fiscal year.

For the conversion of debt referred to in Article [referenced article] of the Law, applicable to the balance of short-term loan owed by the Secretary of State in the Ministry of Finance to the Central Bank of Honduras, granted to address liquidity situations due to seasonal variations in Tax Revenue; the parties shall execute an addendum to loan contract No. 060-2009 dated May 4, 2009, with the relevant modifications. Article 15.- The refinancing, exchange, or conversion of bonds in whole or in part, established in Article 34 of the Law, of the maturities corresponding to the second half of the present fiscal year, shall be carried out by issuing the respective regulation.

For the application of Article 35 of the Law, the Secretary of State in the Ministry of Finance shall request from the Central Bank of Honduras, in its capacity as Fiduciary of the PETROCARIBE Trust, the reimbursement of resources transferred by the General Treasury of the Republic to different public institutions for the objectives provided in Legislative Decrees Nos. 39-2008, 137-2008, and 164-2008; for which purpose, it shall attach to the request note the following documentation: contracts for Project or Program execution executed with national or international companies or with international organizations; the SIAFI reports of "Expenditure Budget Execution by Source of Financing and Financing Organization" and "Expenditure Budget Execution by Source and Organism"; or failing that, photocopy of the accounting documentation that proves the realization of the transaction, from each of the institutions that received transfers charged to resources originated from the PETROCARIBE Energy Cooperation Agreement. The reimbursable resources destined to create and execute the program referred to in Article 35 of the Law shall be itemized through Agreement of the President in Council of Ministers, and it must be communicated to the National Congress within ten days after its approval.

For the application to Article 35 of the Law, the Secretary of State in the Ministry of Finance shall request from the Central Bank of Honduras, in its capacity as Fiduciary of the PETROCARIBE Trust, the reimbursement of resources transferred by the General Treasury of the Republic to different public institutions for the objectives provided in Legislative Decrees Nos. 39-2008, 137-2008, and 164-2008; for which purpose, it shall attach to the request note the following documentation: contracts for Project or Program execution executed with national or international companies or with international organizations; the SIAFI reports of "Expenditure Budget Execution by Source of Financing and Financing Organization" and "Expenditure Budget Execution by Source and Organism"; or failing that, photocopy of the accounting documentation that proves the realization of the transaction, from each of the institutions that received transfers charged to resources originated from the PETROCARIBE Energy Cooperation Agreement. The reimbursable resources destined to create and execute the program referred to in Article 35 of the Law shall be itemized through Agreement of the President in Council of Ministers, and it must be communicated to the National Congress within ten days after its approval.

External contracts in the form of loans up to 9% of the balance of the external debt in force as of December 31, 2008, to which Article 37 of the Law refers, must have prior opinion from the Central Bank of Honduras and be approved by the National Public Credit Commission. V. CONTRACTS OF PUBLIC ADMINISTRATION

The commitments constituted by Purchase Orders for Goods and Services shall be issued in favor of a single supplier or service provider. For the issuance of said commitments, the number of quotations made in the market established in the penultimate paragraph of Article 38 of the Law shall be used as a basis, as the case may be, except in the case of exclusive distributors or sole providers and always that such fact is proven; likewise the cases of standard prices fixed by the Central Government such as fuels, lubricants and others.

In purchases made, the fragmentation of expenditure is prohibited for the purpose of evading compliance with the Fourth Paragraph of Article 38 of the Law. Administrative Managers shall be personally responsible for payment in case of expenditure fragmentation, independent of the penalty that may apply in accordance with the provisions of Article 113 of the Law.

The fine referred to in Article 41 of the Law shall be established for each day of delay on the total amount of the contracts, in accordance with the following ranges: 0.01 to 500,000.00 Lps. 850.00 per day; 500,000.01 to 2,500,000.00 Lps. 1,275.00 per day; 2,500,000.01 to 5,000,000.00 Lps. 1,700.00 per day; 5,000,000.01 to 10,000,000.00 Lps. 3,400.00 per day; 10,000,000.01 to 20,000,000.00 Lps. 5,100.00 per day; 20,000,000.01 to 30,000,000.00 Lps. 6,800.00 per day; 30,000,000.01 to 40,000,000.00 Lps. 8,500.00 per day; 40,000,000.01 and above Lps. 13,600.00 per day.

The percentage agreed upon as an advance in accordance with what is established in Article 42 of the Law shall be granted proportionally, according to the quantity and value of the work to be executed in each period, charging it to the corresponding budget structure, using Form F-01 Expense Execution Form with Budget Allocation, and its amortization shall be made at the time of payment of work estimates, proportionally to the amount of the estimates being paid. In case the work is not executed, the contractor must return the advance to the General Treasury of the Republic, for which the Executing Unit shall use Form F-07 Modification of Expense Execution Form with Budget Allocation, Reversal type, related to Form F-01 through which the advance was granted, accompanied by the deposit receipt for the corresponding discharge. In case the contractor does not effect the return, the guarantee granted for said advance shall be executed. In those cases where quantities still exist retained as guarantee according to a contract clause, these shall be returned to the contractor once the corresponding final acceptance records have been issued and quality guarantees rendered when applicable, provided that the contractor has satisfactorily proven that all obligations contracted by him or by the project subcontractors have been fulfilled. Similarly, prior to the return of guarantee retentions, the Executing Units must verify that the advances granted to contractors have been amortized both accounting and financially in their entirety. Once the return request is presented, which must be accompanied by a photocopy of the final acceptance record, the Administrative Management of the respective State Secretariat, after verification of the corresponding documentation, shall authorize through the General Treasury of the Republic the effectiveness thereof. The Final Acceptance Record and Final Settlement shall be issued in favor of the company and not the legal representative, establishing the date of delivery of the works. In all requests the numbers of the Payment Order in which the retention was made must be indicated, attaching for verification the respective photocopy, the exact values per estimate or payment, number and date of Agreement, and the complete name of the contractor. The foregoing procedure shall apply in the case of payments made with national funds. Regarding payments made with external funds, the corresponding retentions shall be carried out by the financial entity, and their return shall be subject to all applicable aspects of this same procedure.

In relation to what is established in Article 46 of the Law, in consulting contracts financed with external sources that the State enters into with private parties, the purchase of vehicles, machinery, and equipment may be agreed upon only when so established in the respective loan or donation agreements, in which case the consultants who have received reimbursement of the amount paid must return said assets to the State once the execution of the respective contract has been finalized, and they must be evaluated according to their technically calculated possible depreciation and the State must make the corresponding claims and deduction. The State Secretariat that signs this type of contract shall not authorize the final payment to these consultants without said evaluation and return having been effected.

For the purposes of Article 47 of the Law, the following is understood as: Service Contracting: Refers to the contracting of network services, equipment maintenance, and software in general. Informatic Applications: Refers to any informatic tool, Database, and pre-elaborated software that contains budget, accounting, and administrative financial aspects. Development of Informatic Systems: Refers to developing applications that do not conflict with the SIAFI.

The maximum date for the delivery of priority notes referred to in Article 50 of the Law shall be November 30, 2009.

For the purposes of physical and financial monitoring referred to in Article 56 of the Law, the State Secretariat in the Ministry of Finance, through the General Directorate of Public Investments as the coordinating technical body for public investment, shall carry out actions aimed at improving efficiency in the allocation and use of public resources, especially those destined for public investment, such that the Government of the Republic has reliable and timely information for decision-making. For this purpose, an Interinstitutional Task Force was organized for the physical and financial monitoring of priority public investment programs and projects (Task Group), and the General Directorates of Budget and Public Credit, Institutional Technical Links, and Financing Agencies shall also be integrated into this Commission, in accordance with policies of accountability, performance evaluation, and transparency in the use of financial resources and state interventions in public investment. The Task Group shall have as its objective to support the executing institutions in order to contribute, strengthen, and improve the levels of execution of public investment, through the support and strengthening of institutional capacities, monitoring the execution of priority and strategic programs and projects that make up the Public Investment Program corresponding to the 2009 fiscal year, in order to improve production, the generation of direct and indirect employment, and consequently greater development and economic growth of the country. VI. HUMAN RESOURCES ADMINISTRATION

In relation to Article 61 of the Law, the payment of the Thirteenth Month as Bonus shall be paid in accordance with what is established in Legislative Decrees Nos. 973 of July 14, 1980 and 112 of October 28, 1982, and the payment of the Fourteenth Month granted by Decree No. 135-94 shall be made effective in the month of June of each year in the same manner in which the Thirteenth Month as bonus is made effective. Every public servant who has any claim regarding the payment of said benefits must present it properly substantiated and with the evidence deemed pertinent before the corresponding Administrative Management, which shall be responsible for deciding whether or not it is warranted. The term for submitting such claim shall be that established in the corresponding legal body. In cases where such payment is deemed to be warranted, the Administrative Managements shall have the maximum term established by the Law to send to the General Directorate of Budget the respective payment roll, while the Human Resources Administration Subsystem (SIARH) is implemented in its entirety.

For the purposes of Article 62 of the Law, if the State Secretariats have cases as indicated in such rule, they shall have a period of three months counted from the date of effectiveness of the General Budget of Income and Expenses of the Republic to validate the personnel movements that were made after the presentation of the 2009 Budget Project to the National Congress.

The creation of positions by merger referred to in Articles 62 and 63 of the Law must be understood as the merger of two or more positions that will give rise to a new position. There shall be no creation of positions by merger after September 30, 2009.

For compliance with what is provided in

of the Law, while the new Human Resources Subsystem within SIAFI is completed, some payments corresponding to basic salaries and wages, variable salary, vacations, thirteenth and fourteenth month of salary, grants, pensions and retirement benefits, correction payroll for payment of salaries of officials and employees abroad, shall be prepared by the State Secretariat in the Ministry of Finance, through the General Directorate of Budget, based on the Appointment Agreements, personnel movements, and other legal supporting documentation provided by the respective State Secretariats. The same procedure, to the extent applicable, shall be used for payments of contract personnel and daily workers; in these cases the Contracts, Agreements, and Internal Resolutions, notified by the respective State Secretariats, shall be used as a basis. The following are excepted from the above: the payment of grants, pensions, retirement benefits, leaves, and salary rolls of teaching and teaching-administrative personnel who work in the different educational centers and at the central and departmental level, which shall be prepared and processed by the Sub-Management of Teaching Human Resources, dependent on the State Secretariat in the Ministry of Education, and shall be subject to the review of the Department of Pre-intervention of Personal Services of the General Directorate of Budget. In order to prepare and process the payment rolls of teaching personnel, said Sub-Management must be framed within the procedure approved by the State Secretariat in the Ministry of Finance, through its Computer System. In case some rolls present inconsistencies in the information provided, the General Directorate of Budget is authorized to make partial remittances to the General Treasury of the Republic, so that payment of the other salaries of such teachers is not interrupted.

For the purposes of application of Article 64 of the Law, for the preparation of salary rolls that must be submitted monthly to the mechanized process, the Sub-Managements of Human Resources of those institutions that still do not carry out this activity through SIAFI shall send to the General Directorate of Budget, within the first five (5) days of each month, the change notifications, reporting the personnel movements that have occurred, such as: appointments, transfers, promotions, leaves, cancellations, and any other modifications, as well as leaves granted to employees and officials who have had the need to receive the benefits of the Honduran Institute of Social Security, with the exception of Diplomatic and Consular Personnel of the State Secretariat in the Ministry of Foreign Affairs, which must be presented no later than the last day of each month. To make these movements, the respective legal support documents must be attached, such as: Photocopy of the Identity Card, Agreements, Taking of Office, Personnel Actions, Reintegrations, Certificate from the Superior Court of Accounts, and Resolutions, in cases that correspond, and signatures when the position requires it. The same obligation shall be held by said Sub-Managements to remit within the specified period the necessary information in the case of Grants, Pensions, Retirement Benefits, or Contract Personnel, Subsidies, Daily Workers, and others, whose payment rolls must be prepared by the General Directorate of Budget. Article 31. In relation to Article 65 of the Law, work performed in extraordinary hours shall be remunerated when the corresponding State Secretary previously authorizes it prior to its performance, who must take into account the necessity, urgency, and magnitude of the work to be performed. Extraordinary work added to ordinary work may not exceed eleven daily hours, except in special cases of qualified necessity as determined by the respective chief and approved by the State Secretary; in all cases remuneration shall be subject to the procedure and control established by the internal personnel regulations of each administrative agency, in addition to the daily attendance control cards that must be kept. The quotient resulting from dividing the monthly salary by 160 hours of the monthly workday shall be the remuneration for each extraordinary hour. Extraordinary hours shall not be remunerated when the employee dedicates them to correcting errors attributable solely to him or to finishing any work that due to neglect or negligence he did not complete during ordinary hours. When overtime work is warranted, shifts shall be established that do not exceed the legal schedule and whose execution is not possible to finish during ordinary hours. Payment of extraordinary hours shall be limited to those activities that are necessary. In cases that warrant it, the maximum time to be paid for overtime shall not exceed 30 hours per month per employee, provided that they are duly justified, with the exception of what is established in Article 65 of the Law and Article 31 of the Tax Equity Law contained in Decree No. 51-2003 dated April 10, 2003. Compensatory time may be recognized to employees who work extraordinary hours, in those cases where such values cannot be paid due to lack of funds in the budget allocation, or when they are authorized to work under this compensation system by the person responsible for the Executing Unit.

While the new Sub-System of Human Resources Administration (SIARH) is being implemented, transfers of teaching positions made in accordance with Article 67 of the Law shall be notified to the General Budget Office by the Sub-Management of Teaching Human Resources for purposes of registration, control, and payment through the use of Form 3B, no later than 5 days after the transfer is made. Any improper payment resulting from non-compliance with the foregoing or any information provided in an erroneous manner shall be the responsibility of the Sub-Management of Teaching Human Resources, dependent upon the Secretariat of Education. When the transfer of positions is from one department to another, in addition to the use of the aforementioned form, a request for budget modification shall be sent to the General Budget Office.

The allocations of positions and transfers referred to in Article 69 of the Law shall apply exclusively to teaching personnel of the Secretariat of Education.

In personal services contracts that affect Expense Item 12100 "Basic Salaries" (Non-Permanent Personnel) mentioned in Article 72 of the Law, payment of vacation benefits may not be agreed upon. No professional hired under this modality may take possession of his or her position without having presented the Sworn Declaration of Assets, when required by the Organic Law of the Superior Court of Accounts.

For a person to be hired affecting the Sub-Group of Expense 24000 Professional Consulting Services, it shall be a requirement that said hiring be recorded in the approved Annual Operational Plan. Likewise, for hiring and payment, compliance with the provisions set forth in Article 73 of the Budget Provisions of 2009 and Article 94 of the State Contracting Law shall be required.

of the Provisions of the 2009 Budget. 94 of the State Contracting Law.

In accordance with the provisions of Article 75 of the Law, the General Treasury of the Republic, as soon as it receives the salary rolls of Diplomatic and Consular personnel, shall send said information to the Central Bank of Honduras, so that it may proceed with the issuance of drafts in United States Dollars or in Euros, as appropriate.

The scholarships referred to in Article 76 of the Law shall be paid by payroll, supported by the existence of the budget allocation and by the authorization agreement for the corresponding scholarship.

The salaries and wages of Employees and Officials of Decentralized Institutions and Deconcentrated Bodies referred to in Article 84 of the Law shall maintain their validity based on the levels approved in the salary roll of said institutions. For appointments or hiring in new positions, the relationship with those of equal rank in the Central Administration that appear in the Detailed Annex of Basic Salaries and Wages shall be maintained.

The economic study referred to in Article 85 of the Law shall be prepared by the Decentralized Institution itself, prior to obtaining the opinion of the Secretariat of State in the Office of Finance.

of the Law, shall be prepared by the Decentralized Institution itself, prior to obtaining the opinion of the Secretariat of State in the Office of Finance.

The Institutions referred to in Article 86 of the Law shall make the transfers effective as follows: 50% no later than July 31 of the present year and the remaining 50% in equal monthly installments from August to November 2009. In the case of the HONDUTEL transfer, its value approved in the budget may not be reduced if there has been overpayment due to the amount of Income Tax.

The funds referred to in Article 94 of the Law, to be transferred to the Municipal Corporations of the country, do not constitute a new allocation, given that these are remainders from previous fiscal years.

For debits made by the Central Bank of Honduras to the accounts of the General Treasury of the Republic for payments corresponding to Municipal Mayors' Offices, the Secretariat of State in the Office of Finance, through the General Directorate of Public Credit, shall notify the Secretariat of State in the Offices of Interior and Justice, so that the corresponding withholdings may be made from the transfers referred to in Article 100 of the Law.

In relation to the provisions of Article 102 of the Law, the Executive Directorate of Revenue (DEI) and the Petroleum Administration Commission (CAP) shall be responsible for controlling the compensation mechanism and the reimbursement request granted to fuel-importing companies and domestic and vehicular LPG gas bottling companies, ensuring that the amount allocated in the budget does not exceed said amount due to refunds or compensations.

For purposes of the provisions of Article 106 of the Law, the following is understood as: Traditional Incoming International Long Distance Telephone Calls: Voice communications originated outside the national territory and terminated within the national territory at the Terminal Equipment of a User connected to the Telecommunications Network of the Telephone Service, Mobile Cellular Telephone Service, or Personal Communications Service (PCS); Terminal Equipment that has been assigned a telephone number within the National Numbering Plan approved by the National Telecommunications Commission (CONATEL), and that use any type of technology or routing to route said traffic to the end user. For purposes of this charge, each incoming call shall be rounded up to the minute. Non-Traditional Incoming International Long Distance Telephone Calls: Communications terminated on personal computers for non-commercial purposes or in communications registered in small businesses such as internet cafés and other similar establishments duly registered with CONATEL. The validity of payment of the rate for incoming international long distance telephone calls of three cents of United States dollars (US$0.03) per each minute of traffic is applicable for the fiscal year 2009.

The deadline referred to in the First Paragraph of

7 of the Law, shall not be applicable to purchases made by the Central Administration, whose values shall be recorded on the same date the payment is made.

For the purposes established in Article 108 of the Law, and without prejudice to what is set forth in Article 58 of this same Law, after July 31, 2009 no remodeling shall be permitted.

The mandatory obligation to obtain quotations and preferably to make use of the services provided by: The Honduras Post Office Company (HONDUCOR), the National Printing Arts Company (ENAG) and the Military Industry of the Armed Forces (IMFFAA), established in Article 110 of the Law, shall be applicable solely in cases where these companies provide the services.

The fines referred to in Article 113 of the Law shall be deposited in the National Banking System to the order of the General Treasury of the Republic, and they must be recorded in the Income Sub-Account "Various Fines and Penalties", using for this purpose the Form denominated "Daily Detail of Tax Collections".

For purposes of allocating one percent (1%) of the amount of the five percent (5%) transfer established in Article 118 of the Law, from each of the payments made in favor of the Municipalities receiving these transfers, the State Secretary in the Offices of Governance and Justice shall withhold said percentage through the administrative procedure called "Recording of Income Captured by Expenses". The Superior Court of Accounts shall request from the State Secretary in the Office of Finances the respective report for the incorporation of these resources in its budget through the automatic expansion procedure. Article 50.- In accordance with what is established in Article 119 of the Law, and without prejudice to what is set forth in Article 31, numeral 2), Section c) of the Tax Equity Law, the officials who shall be recognized for payment of cellular telephone service, as well as the maximum monthly limits, shall be the following: a. President of the Republic $250.00 b. President and Magistrates of the Supreme Court of Justice, Board of Directors of the National Congress, Attorney General and Deputy Attorney General, General Prosecutor of the Republic, General Prosecutor of the Environment, Magistrates of the Superior Court of Accounts, National Commissioner of Human Rights, Magistrates of the Supreme Electoral Court, Chief of the Joint Chiefs of Staff and Board of Commanders. $175.00 c. Department Heads of Decentralized Institutions whose category is equivalent to the rank of Directors of the Central Government, Sub Managers of Human Resources of the Secretaries of the Presidential Office, Finances, Health, Security and Defense, General Treasurer of the Republic and Police Commissioners. $75.00 d. Municipal Mayors of the Country. $75.00

For purposes of applying Article 127 of the Law, the State Secretary in the Office of Finances shall incorporate in the Integrated Financial Administration System (SIAFI), an electronic authorization called SEFIN reviewed, prior to the signature of the Payment Order (F-01) by the Administrative Managers of the responsible institutions.

Of the amount approved for the Departmental Development Fund referred to in Article 138 of the Law, Two Hundred Million Exact Lempiras (L200,000,000.00) are found in the Approved Budget to the State Secretary in the Office of Finances and the Fifty Million Exact Lempiras (L50,000,000.00) remaining appear in the Budget of Institution 449 "Financial Services of the Central Administration", Activity 04 "Financial Allocations for Contingencies", Item 99100 "For Current Expenditures", Beneficiary 4677 "Dialog and Reconciliation Process". VIII. MISCELLANEOUS

All departments are obligated to implement control measures for motor vehicles under their responsibility, and shall submit a quarterly report to the Internal Audit Unit of each Institution for the corresponding purposes, which shall contain at minimum: Name of the department, characteristics of the vehicle, repairs performed and their cost, monthly fuel consumption in gallons and its value. The use of vouchers for fuel supply is strictly prohibited. It shall be mandatory for all Institutions that have Maintenance and Repair Offices or Units for Transportation Equipment to make use of the services that such units provide.

This Regulation shall enter into force as of the date of its publication in the Official Gazette "La Gaceta". Given in the city of Tegucigalpa, municipality of the Central District, on the fourteenth day of the month of August of the year two thousand nine. BE IT COMMUNICATED: ROBERTO MICHELEITI BAÍN THE STATE SECRETARY IN THE OFFICE OF FINANCES, BY LAW LESBIA ARACELY ANDINO AGUILAR