Article 222.- The Office of the Comptroller General of the Republic is a auxiliary entity under the Legislative Power, enjoying functional and administrative autonomy, which is solely responsible for the a posteriori audit of the Public Treasury; and shall have, among others, the following powers:

1) To verify the administration of public funds and assets and review the accounts of the officers and employees handling the same.

2) To audit the financial administration of the departments of the Public Administration, decentralised institutions, including municipalities, government establishments and those entities that meet their expenses through money obtained from the national treasury or receive subsidies or grants from the same.

3) To scrutinise the accounting system of the State, and the accounts that the Executive Power presents to the National Congress on the management of the Public Treasury, and submit the corresponding report to the National Congress.

4) To perform the rest of the functions stipulated in the organic law.

Article 223.- The Office of the Comptroller General of the Republic shall be headed by one Comptroller and one Deputy Comptroller, both elected by the National Congress, who shall have the same ineligibility’s and shall enjoy the same prerogatives as Supreme Court Judges.

The requirements to be the Comptroller or Deputy Comptroller are:

1) To be a citizen of Honduras by birth.

2) To be more than twenty-five years of age.

3) To be a citizen in full exercise of his rights.

4) To be a person of acknowledged honesty and competence.

5) To have a Master’s degree in Legal Sciences, Economics, Public Administration, Auditing and Public Accounting or to be a Commercial Appraiser and Public Accountant.

The Comptroller and the Deputy Comptroller shall be elected for a five year term and can not be re-elected for the subsequent period.

Article 224.- The Comptroller and the Deputy Comptroller shall be answerable to the National Congress for the acts carried out in the performance of their duties and can be removed only by the National Congress itself when it has been furnished ample proof of the commission of serious irregularities or offences.

Article 225.- The a posteriori audit of the Banco Central de Honduras in respect of the management of State funds, shall be conducted by the Office of the Comptroller General of the Republic that, in turn, shall report to the National Congress about such audit.

The a posteriori audit of other credit institutions that are recipients of State funds, in so far as the use of such funds in operations or business that is strictly of banking nature is concerned, shall be done by the Office of the Superintendent of Banks and in the rest of the cases by the Office of the Comptroller General of the Republic.

Article 226.- The Comptroller General’s Office shall, within the first forty days of the financial year ending, submit a report to the National Congress giving details of the work done during that financial year, along with such opinions and suggestions considered essential to achieve greater efficiency in the management and control of public funds and assets.

This report, a copy of which shall be simultaneously sent to the President of the Republic, must be published by the Comptroller General’s Office either in a detailed or a summarised form, except those parts concerning military secrets and other aspects that could affect national security.

Notwithstanding the above, the Comptroller General’s Office may submit special reports to the National Congress and, in certain cases, also to the President of the Republic.

Article 227.- All matters pertaining to the organisation and functioning of the Office of the Comptroller General of the Republic shall be governed by law.

ORGANIC LAW ON THE OFFICE OF THE COMPTROLLER GENERAL OF THE REPUBLIC

Article 1.- The Office of the Comptroller General of the Republic has been created to carry out the a posteriori audit of the administration of the National Treasury. It shall be conferred with the powers to:

a) Check the handling of public funds and assets and gloss the accounts of the civil servants managing the same in keeping with the provisions of this Law and its Rules;

b) Audit the administration of the departments of Public Administration, including autonomous and semi-autonomous institutions, government establishments, municipalities and districts and other entities receiving funds from the State Treasury or receiving grants or subsidies from the same. This audit must be done in conformity with the provisions of this law;

c) Scrutinise the State accounting and the accounts submitted by the Executive Power to the National Congress on the administration of the Public Treasury, and report the results of such scrutiny to the National Congress; and

d) Perform other duties assigned to it by these laws.

Article 2.- The basic purpose of a posteriori auditing, which must be carried out on the premises of the department being investigated, is to determine whether the law was correctly applied in the management of public funds and assets, and primarily to find out whether detriment was caused or losses were suffered because of the management of the State wealth, while also recommending suitable measures to correct the irregularities found and, at the same time, fixing definitive pecuniary responsibilities, and informing other concerned persons about irregularities of other types that might be deduced.

Article 3.- In accordance with the previous Article, the Comptroller’s Office shall be empowered to:

a) Inspect and check the assets, accounting books and documents, in the offices of the departments coming under its jurisdiction, as and when it may deem appropriate in the performance of its duties;

b) Keep a watch over the safekeeping and movement of such assets through regular or surprise stock taking;

c) Summon witnesses and obtain statements in respect of any investigation it is engaged in;

d) Exercise a reasonable level of discretion while performing its audit duties, so as to cause the least amount of hindrance to the activities of the office being investigated;

e) Publicise its reports, once the National Congress and the President of the Republic are cognisant of them;

f) Establish regulations for its own internal organisation, and,

g) Any other powers that may be inherent to the objectives of the Comptroller’s Office.

Article 4.- The Office of the Comptroller General of the Republic shall be headed by a Comptroller General and a Deputy Comptroller, both elected by the National Congress from two lists of three names each as proposed by the Executive Power. In order to hold the post of Comptroller General or Deputy Comptroller General, a candidate must be a citizen of Honduras, be at least 25 years of age, be a citizen in the exercise of his rights, be a qualified lawyer or post-graduate in Economics or Commercial Appraiser and Public Accountant, he should be neither a creditor nor debtor of the Public Treasury, he should have no pending accounts with the same, and must not be a contractor or a distributor. The term of office of the Comptroller General and Deputy Comptroller General shall be eight years; they shall take charge on the first of January and may be re-elected; they shall have the same prerogatives as the Congress Members (called Deputies) and will be subject to the same disqualifications as those laid down for the latter.

In the absence of the Comptroller, the Deputy Comptroller, who shall be vested with the same powers, shall replace him. In the event of the temporary absence of both of them, the President of the Republic shall appoint a person to be in charge for a period of not more than ninety days and shall inform the same to the Congress. In the event of the Deputy Comptroller also being permanently absent, the President of the Republic shall appoint a person to be in charge, while the Congress decides. In either case, the person in charge must meet the same requirements and shall have the same disqualifications, limitations, powers and responsibilities as the Comptroller. The Comptroller General and the Deputy Comptroller General will be exempted from military service during their term of office, and they can not be arrested nor tried without a prior show cause notice served by the National Congress.

Article 5.- The Comptroller can be removed only by the Congress for official and common-law crimes if two-thirds of the total number of members give an affirmative vote to that effect.

Article 6.- The Office of the Comptroller shall have the staff it requires to perform its duties, and the appointment of such staff shall depend solely on the decision of the Comptroller. The organisation of departments according to the specialised tasks they must perform, the manner of appointment and requirements to be met by the officers and employees, leave, reasons and procedures for their dismissal, shall be laid down in the Rules.

Article 7.- Relatives of the Comptroller and Deputy Comptroller, within four degrees of blood relationship, and second degree of other relationship, can not be appointed to any post involving the handling of government property.

Article 8.- The Comptroller, Deputy Comptroller and other officers and employees working in the Comptroller’s Office are barred from:

a) Exercising liberal professions.;

b) Taking part in political activities other than the simple casting of their vote;

c) Holding other public offices, whether in the Government of the Republic or in any other body falling under the jurisdiction of the Comptroller’s Office, whether remunerated or honorary, except if there is express legal provision to the contrary. Non-administrative teaching positions are exempted. The same ban is applicable to employment in private companies; and,

d) Intervening in matters in which they or their relatives, within the degrees defined by the law, have a direct or indirect personal interest. Any violation of this rule shall render the act committed null and void.

Article 9.- The preparation and implementation of the Expenditure Budget for the Comptroller’s Office will be entirely at the prerogative of the Comptroller: a) The General Treasury of the Republic shall make available to the Comptroller the funds that he requests every three months, in advance, through the Special Disbursement Office of the Legislative Power and these shall be charged to the allocations made for the said Comptroller’s Office in the General Budget of Expenditure and Receipts of the Republic. The Special Disbursement Office of the Legislative Power shall make the corresponding payments for the expenses authorised by the Comptroller General of the Republic; b) The Comptroller General of the Republic shall submit the Budget of the Comptroller’s Office to the Managing Committee of the National Congress, or to the Standing Committee, and shall provide a detailed monthly report on all the expenditure incurred to be charged to its Internal Budget; and c) The Comptroller and the Deputy Comptroller shall be personally responsible for their actions which they shall have to justify to the National Congress or to its Standing Committee, as the case may be, in the Annual Report submitted for their approval".

Article 10.- "The Comptroller General’s Office must, within the first forty days after the end of the financial year, present a complete report to the National Congress or to the Standing Committee, as the case may be, containing details of the work done during the said year and such opinions or suggestions it deems necessary in order to achieve greater efficiency in the management of public funds and assets; evaluation and supervision measures required to enable the projects in the Budget of the Central Government and Institutions to be implemented with a higher degree of precision and economy; and also, the chart showing the accounts, in a detailed manner, of the Internal Budget of the Institution".

Article 11.- The following entities shall come under the jurisdiction of the Comptroller’s Office:

a) All the State departments that meet their costs from funds allocated in the General Budget of Expenditure and Receipts of the Republic, such as: 1) The National Congress; 2) The President of the Republic; 3) the Secretaries of State and their departments; and 4) the Supreme Court of Justice and other Courts of the Judicial Power;

b) Municipalities and Districts;

c) Government establishments, autonomous, semi-autonomous or any other category of bodies and institutions;

d) Any other entity that meets its expenses through public funds; and,

e) Entities that receive benefits or subsidies from the State. In these cases, the audit shall be limited to those activities meeting their expenses through the grants or subsidies, at the discretion of the Comptroller’s Office, unless otherwise provided by the law.

Article 12.- Those bodies coming under the jurisdiction of the Comptroller’s Office shall be obliged to furnish, without delay, any reports, balance sheets, accounts, documents and vouchers or copies, or certificates of the same, or any other information, mainly those that would justify receipts, commitments or expenditure, that the Comptroller or his auditors might require from them, if considered essential in the exercise of the functions assigned to them by this law. If it is deemed convenient to transfer the documents to the Comptroller’s Office, they must be returned as soon as the audit is over, and given their nature, they must be remain in the safekeeping of a specific agency.

Article 13.- All sufficiently high-ranking officers or employees of the Legal and Political branches shall be obliged to afford their co-operation, on receipt of a written request, to the Comptroller or to his representatives, when they so require in the exercise of their audit duties.

Article 14.- The powers of investigation vested with the Comptroller’s Office shall extend to all aspects of the financial administration of the bodies subject to its jurisdiction, as well as natural persons or artificial persons receiving money in advance in order to make payments on behalf of the Government, including State moneys or assets that are transferred to other entities or bodies in conformity with the law.

To this end, the contracts, agreements and other accords entered into by the Executive Power, that have a bearing on the Public Treasury, shall not limit the exercise of audit functions of the Comptroller’s Office.

The scope of this investigation may be as wide as required to fulfil the objectives of this law.

Article 15.- Those persons or entities that are responsible for handling State moneys or other assets, as well as those persons that are outside the State but are in charge of the Government, by temporary or special commission, or are involved in the implementation of financial laws in other ways, shall be subject to audit by the Comptroller’s Office, such as:

a) Persons who make payments, collect, safekeep, administer, distribute or are otherwise involved with public funds or other public assets.

b) The liquidators or auditors of public expenses, including commitments and payments;

c) Those that are in charge of assets in kind or values belonging to the National Treasury, or that are controlled by the State;

d) The person, his heirs or legal representatives against whom legal proceedings have been initiated or will be initiated in accordance with the law; and,

e) Any other person or entity handling moneys or other assets belonging to the Treasury, or who for other reasons is required to submit accounts to entities that in turn are subject to the jurisdiction of the Comptroller’s Office.

Article 16.- The audit of the Comptroller’s Office shall include:

a) The financial and tax accounting of bodies or persons under its jurisdiction, including their transactions, registers, books, balance sheets and other documents that are part of the accounting or have a bearing on the same;

b) All acts involving receipts, including payment of taxes, duties, prices, etc., as well as the issue of public credit documents or treasury documents and other operations affecting their inventory;

c) All acts affecting State property, regardless of what type of act it may be, whether it is a commitment, obligation, payment, guaranty, or sale of national resources;

d) Funds or assets that, while being alien, are the responsibility of the bodies coming under the jurisdiction of the Comptroller’s Office;

e) Any act that terminates relations involving property or finances between the Government and other natural or artificial entities;

f) The procedures that are followed for collection and disbursement of public funds, including those related to purchases and supplies, mainly as far as internal control is concerned;

g) Public investments, repairs and all contracts for providing services to the Government;

h) Verification that all State assets are duly guaranteed, through sureties or other such means, by those that manage them or are responsible for the same; and,

i) The report that the Executive Power submits to the National Congress.

Article 17.- The audit undertaken by the Comptroller’s Office shall determine:

a) Whether arithmetical mistakes were made in the transactions, or whether they suffer from mistakes of form in their recording and presentation;

b) If each receipt was correctly recorded and credited to the appropriate head;

c) Whether all the funds in respect of the public wealth were collected or received as taxes, contributions, duties or any other means of receipt as laid down by the law or by contract;

d) Whether amounts of money were charged in excess of what was legally due;

e) Whether all liabilities or expenditures were correctly recorded, and whether the corresponding head or allocation was enough to cover them;

f) Whether the payments were made on receipt of an order from an authorised person, on the basis of sufficient legal documents and pursuant to the rules laid down by the law.

g) Whether the accounts and reports correctly reflect the transactions and payments from the budget, the situation of the Public Account, fiscal assets, liabilities and other details of the Public Treasury.

Article 18.- The Comptroller shall lay down the auditing methods to be followed by the auditors, as determined in the rules of this law.

Article 19.- Normally the audit is based on orders, vouchers, documents and accounts that have already been prepared in the departments being audited. However, if there are no bills or other elements to prove that the transaction was carried out, the Comptroller’s Office shall officially ask that all the necessary steps be taken to throw light on the facts and, to this effect, shall be afforded the co-operation of all the public or private offices connected with the department, and the officer or employee who did not render the account or documentation in accordance with the law. The auditors shall be empowered to try to correct the mistakes or clarify the confusing or dubious transactions and to demand that the officers or employees under investigation provide necessary explanations and documents as they may deem fit.

Article 20.- In the performance of their duties, the auditors can directly communicate with the departments or bodies subject to the jurisdiction of the Comptroller’s Office, in accordance with the law as well as the instructions and constraints that the Comptroller may impose in this respect. Any auditor misusing the powers of his position shall have to bear civil and criminal responsibility, and will be liable to legal sanctions.

Article 21.- The Comptroller must immediately inform the Executive Power, through the Secretary of Economy and Treasury, about the existence of irregularities he has observed, and also indicate the necessary steps that could help in bringing about more order and legality in the management of public assets.

Article 22.- When the Comptroller finds that an officer or employee is responsible for the misappropriation of funds, illegal extortion or other criminal acts of omission or commission in the handling of funds or assets entrusted to him, he shall immediately inform the Prosecutor in the Treasury, and maintain the required discretion, so that the guilty person does not have a chance to escape before the said functionary can bring the corresponding civil and criminal cases against him.

Article 23.- The auditor shall prepare a provisional report of his examination in which he shall explain the scope and period covered, the methods of work followed, the objections and other lacunae found, as well as the lacunae that have already been cleared, extracts from the laws that were violated, and make relevant observations and recommendations.

Article 24.- A copy of the provisional report shall be sent to the officer, employee or body under investigation, and to the concerned Secretary of State, so as to enable them to challenge it before the Comptroller or his delegate, offer explanations and present any type of probatory evidence that would disprove the objections that were formulated, explain the shortcomings pointed out or object to the recommendations contained in the report. The period for refutation will be sixty (60) working days to be counted from the date on which the officer, employee or body being investigated receives a copy of the report by any means of communication existing in the country. For this purpose, the Postal Authorities must send to the office of the Comptroller General of the Republic, proof of the date of delivery of each report, on pain of twenty-five (L 25.00) to one hundred lempiras (L 100.00), that will be deposited in the Public Treasury of the Republic, or deducted by the same from their respective salaries.

Article 25.- At the end of the period mentioned in the previous Article, if no objection is received, or in view of the objection received and the elements of proof forwarded in the same, the Comptroller shall issue his final report.

In the final report, the Comptroller shall confirm the objections, observations and recommendations made in the provisional report that were not cleared within the objection period.

In respect of the confirmed objections implying pecuniary liabilities to the Public Treasury to be charged to the employee or officer under scrutiny, the final report of the Comptroller shall be treated as the plaintiff’s right of execution for purposes of bringing the necessary civil action against the same.

Article 26.- The final report of the Comptroller’s Office shall be brought to the notice of the officer, employee or body that was investigated and to the notice of his immediate superior, the Secretary of State under which he works and the Auditor General of the Treasury.

The superior of the respective officer, employee or office that was investigated shall see to it that the recommendations of the Comptroller are implemented, and both he as well as the investigated person shall inform the Comptroller about the action taken in this respect.

The Auditor General of the Treasury, through legal action, shall recover the amounts to be deducted in case they can not be recovered by administrative action.

The relevant Secretary of State and the Comptroller’s Office shall render all necessary co-operation so that the Auditor General of the Treasury can put the legal actions of the case into effect.

Article 27.- The report laid before the Congress, a copy of which shall be handed over to the President at the same time, must be published in a detailed or summarised manner by the Comptroller’s Office, except those parts that could concern military secrets and other aspects possibly affecting national security.

Article 28.- The audit of the Comptroller’s Office itself shall be carried out at least once a year by auditors that are specially appointed for this purpose by the National Congress.

Article 29.- The officers, employees or bodies coming under the jurisdiction of the Comptroller’s Office shall be obliged to implement the Comptroller’s final decisions and recommendations within a reasonable period of time as may be indicated for such purpose. The Auditor General of the Treasury shall furnish a monthly report to the Comptroller on the progress of the steps taken to apply the law. In the event that, in the opinion of the Comptroller, the irregularities are not rectified, his recommendations are not being observed, or there is unwarranted delay in implementing the measures contained in the report mentioned in Article 25, he must bring this fact to the notice of the Executive Power and the National Congress.

Article 30.- The Executive Power, in his annual message to the Congress, shall give an account of such measures, recommendations or acts of the Comptroller’s Office that he did not endorse. The National Congress, on the basis of the reports from the Comptroller’s Office and the Executive Power, shall proceed to give a ruling in the case and announce the pertinent measures.

Article 31.- All officers or employees who are in charge of funds or assets belonging to the nation, will be accountable for their value in case of lose, as well as damage or deterioration arising from carelessness or negligence in the maintenance of the same.

Article 32.- The people covered under Article 15, as well as others that are legally required to do so, shall provide surety, to be fixed and defined by the Office of the Comptroller of the Republic, after the ruling of the Auditor General of the Treasury. The amount and type of surety, as well as its form and modality, shall be determined by the rules and regulations of this law, and it shall also specify who will be responsible for the safekeeping of the deeds in question.

Article 33.- The bodies and offices coming under the jurisdiction of the Comptroller’s Office shall not allow such officers or employees as mentioned in Article 15, to take up their posts unless they have first furnished the surety mentioned in the previous Article.

Article 34.- The surety or guarantee can not be cancelled unless and until the Office of the Comptroller General of the Republic issues the corresponding release document.

Such release document can not be issued unless the a posteriori audit has been completed, and the person has been declared free of debt to the State in the handling of public assets, and he has accepted responsibility for the irregularities, obstructions, fraud or other acts of commission or omission resulting in pecuniary losses for the State.

Once the release document has been issued, the person in whose name it has been issued shall cease to have any responsibility in respect of the management of the public funds or resources that he was in charge of during the period of his administration.

Article 35.- Until a person has not been declared free of debt to the State in the management of public property and funds, he can not be appointed for any employment in bodies or offices that are subject to the jurisdiction of the Comptroller’s Office, unless it is a case of transfer to another position of equal level.

Article 36.- The accounts of public officers or employees who managed funds or values until December 31st, 1956, shall be audited in accordance with the provisions of the Law of the High Court for Accounts.

GENERAL PROVISIONS

Article 37.- The Comptroller General of the Republic shall prepare the Rules and Regulations for this Law, and the same shall be adopted by the National Congress.

Article 38.- This Law shall come into effect from the first of January nineteen fifty-seven, and from that date the Organic Law of the High Court for Accounts, passed by Legislative Decree No. 37 on the 13th of February, 1928, and its reforms, stand revoked, except the provisions contained in Article 36. All other legal provisions that are contradictory to the same also stand revoked.