Agreement 59-2019

PURPOSE OF THE REGULATION. This Regulation is of public order and social interest, and has the purpose of establishing the procedures for the assignment, management, control, monitoring, and liquidation of resources intended for the execution of Municipal infrastructure works, financed through transfers that the Secretariat of State in the Offices of Governance, Justice and Decentralization shall make to the Municipalities.

PREEMINENCE. This regulation takes preeminence over any other General or Special Regulation that addresses the same matter, guaranteeing through the same the transparency of the use of resources, accountability, and the satisfaction of the needs of the population to whom said resources will be allocated.

PRINCIPLES OF APPLICATION: The general principles of application are:

• 1)

  Principle of legality;

• 2)

  Principle of due process;

• 3)

  Principle of good faith;

• 4)

  Principle of celerity;

• 5)

  Principle of transparency;

• 6)

  Principle of efficiency and effectiveness; and, 7. Principle of good governance.

TERMS, ABBREVIATIONS AND DEFINITIONS: For the purposes of application of this Regulation, the following are understood as: 1. MUNICIPAL MAYOR: The legal representative and the highest executive authority within the municipal term, competent to execute contracts. 2. CONTROL AND EXECUTION: Two forms of executing expenditure are established: a) through the levels of the corresponding budgetary allocation; and, b) in the specific projects carried out for each one of them. 3. FORMAT: Set of technical characteristics and presentation of a document. 4. GUIDELINES: Set of measures, norms and objectives that must be respected within an Institution. 5. LIQUIDATION: Process consisting of the presentation in a timely manner and form of physical and financial reports with the pertinent original documentation as support. 6. TO LIQUIDATE: The final phase by which an operation on values is concluded, through the delivery of the work by the executor and of the funds by the contractor. 7. MUNICIPALITY: A population or association of persons residing in a Municipal term, governed by a Municipality that exercises and extends its authority in its territory and is the basic territorial structure of the State and immediate channel for citizen participation in public affairs. 8. MUNICIPALITY: The governing and administrative body of the municipality, endowed with legal personality, of public law and whose purpose is to achieve the well-being of the inhabitants, promote their integral development and the preservation of the environment, with the faculties granted by the Constitution of the Republic and other laws. 9. TECHNICAL STANDARDS: A document approved by a recognized organization that establishes technical specifications that must be complied with in certain products, processes or services. 10. PROJECT: The programmatic category that expresses the realization of a capital asset, which once its construction is completed is capable, by itself, of producing goods or services. 11. INFRASTRUCTURE PROJECTS: Projects related to water and sanitation, electrification, roads, among others. 12. SGJD: Secretariat of Governance, Justice and Decentralization. 13. TSC: Superior Court of Accounts. 14. SIAFI: Integrated System of Financial Administration. 15. UCSEL: Unit of Control, Monitoring and Liquidation. CHAPTER II SCOPE OF APPLICATION

UCSEL: The Unit of Control, Monitoring and Liquidation, created by Legislative Decree No. 4-2019, dated the fourteenth (14) day of February of the year two thousand nineteen (2019), published in the Official Gazette La Gaceta No. 34,876, dated the twentieth (20) day of February of the year two thousand nineteen (2019), shall be attached to the Secretariat of State in the Offices of Governance, Justice and Decentralization, and its competence shall be at the national level.

TECHNICAL TEAM OF THE UCSEL: The Unit shall be comprised of a multidisciplinary team, under the responsibility of a Coordinator, Technical Assistant of Control and Monitoring, Administrative Assistant, Audit and Control Officers, Legal Officers and other technical-administrative personnel necessary for its operability.

POWERS OF THE UCSEL: This Unit shall be in charge of the control, monitoring, liquidation and transparency of the execution of funds to be transferred to the Municipalities, for the development of infrastructure works; preparation of formats, technical standards, guidelines and other instruments necessary for transparent, timely, proper, effective and efficient liquidation; it shall maintain a record of the transfers made to the Municipalities. CHAPTER III TRANSFER OF RESOURCES TO THE MUNICIPALITIES

PRIOR ACTIVITIES: The Municipal Mayor, with the purpose of carrying out efficient and effective management, prior to receiving the transfer must present to the SGJD through the UCSEL the following:

• 1)

  The Municipal Mayor by means of a note shall present the project profile, the investment plan and the request for resources for the execution of the project;

• 2)

  On-site Inspection by the UCSEL, another official designated by it or representation of a social organization;

• 3)

  Environmental authorization issued by the Municipal Environmental Unit or Environmental Management Unit of the Municipality where the project is to be carried out;

• 4)

  The Municipal Mayor must sign a Commitment Act with the SGJD through the UCSEL, which stipulates that the resources shall be allocated solely for the execution of the approved project, and the manner in which they shall be disbursed until the project is completed; and in case of non-compliance, the respective actions shall be detailed;

• 5)

  Opening and presentation of a unique checking account, with joint signature of the Mayor and Municipal Treasurer, registered in the SIAFI; and, 6. Economic matching funds on the part of the Municipality for the payment of project supervision.

DESTINATION OF THE TRANSFER: The transfer of funds under this regulation shall be solely and exclusively for Municipal development infrastructure projects. CHAPTER IV APPROVAL OF DISBURSEMENTS

INITIAL DISBURSEMENT: The initial disbursement shall be made through a transfer made by the SGJD through the UCSEL to the unique checking account registered in the SIAFI system of the requesting Municipality. Disbursements shall be made in the manner established in the Commitment Act.

REQUIREMENTS FOR SUBSEQUENT DISBURSEMENTS: For each subsequent disbursement, the Municipality shall submit to the UCSEL the following:

• 1)

  Request for transfer of funds, in accordance with the terms established in the Commitment Act;

• 2)

  Receipt addressed to the UCSEL, for the value of the requested transfer;

• 3)

  Liquidation of executed funds in accordance with the progress of the work;

• 4)

  Report signed and sealed by the project supervisor, which details the progress of the infrastructure work, being in conformity for the next disbursement; and,

• 5)

  Endorsement of the UCSEL to proceed with the subsequent disbursement.

ADDITIONAL INFORMATION: The UCSEL of the SGJD shall be empowered to request at any time additional information that it deems necessary from the requesting Municipality.

RESPONSIBILITY OF THE MUNICIPALITIES: The requesting Municipality in accordance with the Law of State Contracting and its Regulation, shall be solely responsible for the processes of selection, adjudication, contracting, guarantees, execution, payments, fines, closure and liquidation of infrastructure projects. The allocation of resources for the financing of the aforementioned projects does not exempt the requesting Municipality from complying with the legal, tax and normative provisions regarding the transparency and proper use of the funds that are assigned and transferred to it, as well as the other obligations to which they are subject in the accountability process. CHAPTER V CONTROL, MONITORING AND LIQUIDATION

CONTROL AND MONITORING: The UCSEL shall conduct directly or indirectly through assignment on-site inspections, in order to verify the progress of the work, in relation to the transfers disbursed.

OVERSIGHT OF RESOURCES: The execution of transferred funds shall be the exclusive responsibility of the requesting Municipalities and shall be subject to any type of Internal Audit review by the SGJD, the TSC as the governing body of the system of control of public resources, or any other authorized oversight agency.

SETTLEMENT REPORTS OF DISBURSEMENTS: Every Municipality that has received disbursements shall submit settlement reports and original supporting documentation of each estimate according to the progress of the work and its completion before the UCSEL of the SGJD.

The settlements of the amounts disbursed in accordance with this Regulation and the Commitment Act shall be governed in the following manner:

• 1)

  The requesting Mayor shall submit financial and physical settlement reports before the UCSEL, in accordance with the progress or completion of the infrastructure work;

• 2)

  The maximum deadline for submission of these reports by the Municipality shall be within five (05) business days following the request for the subsequent disbursement, the Municipality being responsible for causing the retention of disbursements at the moment of non-compliance with the settlement reports. If there is any delay, the requesting Municipality shall justify the same and submit the report within an additional period not exceeding five (05) calendar days; and, 3. In the event that the settlements are not presented, the Municipality shall reimburse the money transferred up to that moment, in accordance with the Commitment Act, within a maximum term of twenty (20) calendar days.

FINANCIAL SETTLEMENT REPORT: The settlement report submitted by the Municipality shall be prepared in accordance with the guidelines established in the financial settlement format approved by the UCSEL, for which it shall contain at a minimum the following information: 1. Period covered by the execution 2. Description of the project subject to settlement 3. Approved project budget 4. Amount transferred 5. Amount executed 6. Pending settlement; this value must be equal to the availability presented in the bank account statement; if there are differences, these shall be reconciled 7. Breakdown of the expense of the allocated amount 8. Other information that the UCSEL deems convenient.

PHYSICAL SETTLEMENT REPORT: The settlement report submitted by the Municipality shall be prepared in accordance with the guidelines established in the physical settlement format approved by the UCSEL, for which it shall contain at a minimum the following information: 1. Period covered by the physical execution report 2. Detail of the project executed 3. Number of persons projected to have been benefited 4. Minutes, memoranda, and lists of participants that evidence the supervision of the project with the participation of the community, focus groups, or other citizen participation techniques 5. Before and after photographs 6. Other information that the UCSEL deems convenient. CHAPTER VI TRANSPARENCY AND ACCOUNTABILITY

The requesting Municipality shall be subject to social oversight, the Law on Transparency and Access to Public Information and its Regulation, the General Law of Public Administration, the State Contracting Law and its Regulation, and the reviews required by the Internal Audit of the SGJD and the UCSEL.

The requesting Municipality is responsible for the selection, award, contracting, supervision, closing, and settlement of the projects in execution.

The SGJD through the UCSEL shall issue the technical standards, formats, guidelines, and other instruments necessary for the monitoring and transparent, timely, and effective settlement of financial resources transferred to the Municipalities. SECOND: This Agreement 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, on the twenty-eighth (28) day of the month of February of the year two thousand nineteen (2019). MARTHA VICENTA DOBLADO ANDARA General Coordinator Minister of Government, By Executive Agreement No. 023-2018 HÉCTOR LEONEL AYALA ALVARENGA Secretary of State in the Offices of Governance, Justice and Decentralization