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Article 146.- The Office of the Comptroller General, as an autonomous and central body forming part of the National Control System, oversees the implementation of the Public Sector Budgets, the operations of public debt and the administration and usage of public resources and assets.
The Comptroller General is appointed by the Senate, at the proposal of the President of the Republic, for a six-year term. The Senate can remove him from office for misdemeanour.
The law lays down the organisation, powers and responsibilities of the National Control System.
Article 1.- This Decree Law establishes the National Control System through which the concept, scope, organisation and processes of activities concerning national public control are regulated.
Article 2.- Control includes the acts of prior prevention and subsequent verification of the correctness of human, material and financial resources administration and to what extent the administration of the public entities forming the National Public Sector has attained the desired results, as well as the use of public funds by other entities regardless of their legal nature.
Article 3.- Control is carried out by:
a) The authorities of the entities themselves who are in charge of administrative action, each one within their own field of responsibility and functional authority and in accordance with the legal rules and regulations and, in accordance with the additional criteria of accuracy and efficiency laid down by the Central Offices and the Administrative Systems.
b) The Central Offices of the different Administrative Systems in accordance with the legislation and regulations framed by their own authority in the field of their competence; and
c) The Office of the Comptroller General of the Republic, in accordance with the provisions of this Decree Law on the integrated process of control, the maximum authority of the same being vested in the Comptroller General of the Republic, against whose decisions no appeal can be filed through executive action.
Article 4.- A priori control of resources and products is the responsibility of each institutional authority as an inherent function in the process of direction and administration.
The following steps shall be included in a priori control:
a) Control of the timely administration of all types of resources, which is primarily the responsibility of the General Office for Administration of each entity, in accordance with the regulations and procedures laid down by the Central Offices of the respective Administrative Systems; and
b) Control of the process for attaining the desired results. This is the responsibility of the Programmes Headquarters.
Article 5.- Notwithstanding the institutional responsibilities laid down in the foregoing Article, the control of Public Administration acts shall be conducted by:
a. The Central Offices of the Administrative Systems, through intervention in the approval of their respective budgets;
b. The Minister of Economy and Finance through the preparation and up-dating of a treasury plan meant to establish the amounts and schedules for disbursement by public entities;
c. The Planning System Offices by approving the production goals for assets and services vis-ŕ-vis their suitability to development plans, that shall be implemented once they are approved by the Executive on the terms and the scope envisaged by the Law; and
d. The Office of the Comptroller General of the Republic in the cases specifically indicated by this Decree Law.
Article 6.- A posteriori control includes the examination, checking, revision and report on the accuracy and the timeliness with which each entity has applied the prevailing legal rules and regulations and has used its discretionary legal authority in the scheduling and use of human, material and financial resources and in attaining the planned goals and results through the application of the norms, methods and procedures indicated by the Office of the Comptroller General of the Republic.
It also includes the fixing responsibility on public servants when the need arises.
Article 7.- It shall be the function of the Office of the Comptroller General of the Republic to carry out the a posteriori control of the administrative acts and processes as indicated in the previous Article.
Article 8.- It is the job of the National Public Sector entities, through their Inspection Divisions and their active Control organs, to conduct internal audits in accordance with the regulations framed by the Office of the Comptroller General of the Republic.
Article 9.-The Central Offices of the Administrative Systems shall compulsorily submit reports on evaluations conducted in public entities to the Office of the Comptroller General of the Republic, within the sphere of their respective functional competence.
Article 10.- The officers in charge of Control in the National Public Sector entities must, through proper channels, inform the superior of the concerned person, and must directly inform the Comptroller General of the Republic, about the violations discovered in the course of performance of their duties. They can not be removed from their posts unless there is a justified and proven cause, after informing the Office of the Comptroller General of the Republic.
Article 11.- The Office of the Comptroller General of the Republic is the highest entity in charge of control of the National Public Sector. It is autonomous in the exercise of its functions, has administrative and functional independence, and has its own authority as defined by the Law.
Article 12.- The duties of the Office of the Comptroller General of the Republic are:
a) To perform the a posteriori external control on the acts and processes of the Public Sector entities, as well as on the use of public funds by other entities, regardless of their legal status;
b) To frame technical regulations to be followed in the control process;
c) To take the necessary temporary measures that would guarantee a complete determination of responsibilities when, in the course of conducting an audit, mistakes have been identified;
d) To state the responsibilities for the lapses committed by public sector servants in the performance of their duties, to apply the sanctions, and report such facts to the Judicial Power that are likely to be classified as illegal with a view to fixing civil and penal responsibility;
e) To convey the results of the audits conducted to the Ministers and the Heads of the audited entities;
f) To inform the concerned party and the Head of the corresponding sector about all the cases of infraction of legal provisions and the rules in respect of any aspect concerning their functions of control, and ordering publication of the same in the Official Gazette;
g) To submit an auditor’s report to the Legislature on the General Account of the National Public Sector;
h) To formulate recommendations that would facilitate reforms in the Public Administration to the Central Offices of the Administrative Systems;
i) To report on the drafts of legal norms that would give rise to new systems of Administrative and Financial nature.
j) To provide reports on the drafts of legal regulations with regard to Control;
k) To frame the necessary provisions in order to ensure the proper functioning of the integrated control process; and,
l) To give a prior opinion on the operations, bonds, sureties and other guarantees to be executed by the State, including the drafts of contracts, that in any way would affect its credit or financial capacity, whether it is a question of negotiating them in the country or abroad. The Law on the National Public Sector Budget must determine which cases shall come under this provision.
Article 13.- No other National Public Sector entity can create or maintain posts with the name of Comptroller or departments called the Comptroller’s Office.
Article 14.- The Comptroller General of the Republic is the highest officer in the field of Control and he does not come under the imperative mandate of any authority. He shall be appointed by the Legislature from a shortlist of three names proposed by the Executive for a period of seven (7) years, extendible by one more term, and shall be sworn in by the Supreme Court of the Republic. He has the rank of a Minister of State and enjoys the corresponding prerogatives and privileges. (Text of the Decree Law No. 21486).
Article 15.- In order to be the Comptroller General of the Republic, the following requirements must be met:
a. Be Peruvian by birth;
b. Be of not less than 35 years of age;
c. Hold a professional degree issued by a Centre for Higher Education and have a minimum of 5 years experience in the Public Sector;
d. Not to have been sentenced for a crime against public wealth, nor to have been dismissed from a public job due to a crime committed in the performance of his duties;
e. Not to have acted as the leader of a political party in the last ten years; and,
f. To not have accounts pending to be rendered to the Public Administration.
Article 16.- The Comptroller General shall have to:
a. Represent the Office of the Comptroller General of the Republic;
b. Plan, direct and co-ordinate the activities of the Office of the Comptroller General of the Republic;
c. Decide the internal organisation of the Office of the Comptroller General of the Republic;
d. Appoint, suspend, remove or dismiss members of the staff working in the Office of the Comptroller General of the Republic;
e. Frame the technical regulations for control and the provisions that would ensure the proper functioning of its integrated process;
f. Order audits and special examinations, determining their frequency and scope, and to appoint the required Commissions;
g. Directly get in touch with any employee in the National Public Sector entities, for purposes of facilitating the timely management of control;
h. Take a final decision through executive action in respect of fixing the responsibility of the Public Sector employees in case objections appear in the auditor’s reports;
i. Apply the sanction as determined by the Law according to the decision fixing responsibility;
j. Bring those cases to the notice of the Judiciary where, as a result of the audit conducted, there are reasonable indications of crime having been committed;
k. Formulate and authorise the execution of the Budget Bill of the Office of the Comptroller General of the Republic, in accordance with the prevailing legislation;
l. Fix the remuneration of the staff of the Office of the Comptroller General of the Republic according to the relevant general provisions;
m. Present legislative initiatives in respect of the National System of Control; and,
n. Have access to all types of secret and confidential administrative documents in the National Public Sector, except those pertaining to the Armed Forces that might compromise national security, while maintaining the confidentiality required by the legal stipulations in each case.
Article 17.- The Comptroller General of the Republic can be committed for trial only in the same manner and form as laid down in the Political Constitution for Ministers.
Article 18.- The post of Comptroller General of the Republic shall fall vacant, besides in the case of death, due to:
a. Permanent mental or physical disability to be proven before the Supreme Court of the Republic.
b. Acceptance of his resignation;
c. Judicial sentence entailing loss of freedom in case of committing a crime; and,
d. Desertion of the post.
Article 19.- The Comptroller General of the Republic can not be absent from the country without the knowledge of the Legislature, nor during its recess, without the knowledge of the Executive. The Deputy Comptroller, following a decision taken by the Comptroller General, shall replace him in his absence.
Article 20.- The post of the Comptroller General of the Republic may not be held concurrently with any other post of any nature, remunerated or not, public or private, except a teaching position. The Comptroller General may not, either in his own name or in the name of third parties, perform any functions or do any work of a permanent or temporary nature. This ban does not apply to administrative staff as regards work in the Private Sector outside the normal working hours.
Article 21.- The persons who were working in the Office of the Comptroller General of the Republic and who are no longer holding positions, shall not be allowed to join any National Public Sector entity on which an audit was conducted, for a period of at least two years after such audit.
Article 22.- The authorities of the Republic and the employees of National Public Sector entities, as well as natural or artificial persons, and private persons, having any type of relation with the National Public Sector, are obliged to afford timely and effective assistance to the auditors from the Office of the Comptroller General of the Republic so as to enable them to perform their duties in the best possible manner.
Article 23.- The Legislature, in the exercise of its powers, may order an audit to be conducted on the Office of the Comptroller General of the Republic for which it shall enter into a contract with a private auditing firm.
Article 24.- The Office of the Comptroller General of the Republic shall supervise the destruction and incineration of currency, public debt documents and securities.
Article 25.- No additional budget amounts may be paid out without the prior authorisation of the Office of the Comptroller General of the Republic, except for jobs done under conditions of emergency or force majeure.
Article 26.- The decisions taken by the Comptroller General of the Republic in the exercise of his duties are final, leaving no room for appeal to any authority of executive action. They can only be challenged by legal action in the Supreme Court of the Republic.
Article 27.- No auditor’s report can be released in its final form without first hearing the persons in charge of the audited entity and giving them a chance to submit documented proof, except in the case of fraud or evident embezzlement. Once the auditor’s report has been finalised, the responsible parties shall have a period of 30 calendar days plus the period of distance counted from the date of delivery of the List of Objections, in which to deny the charges. Once this period is over, no evidence for the defence shall be admitted.
Article 28.- Fixing of responsibility or a pecuniary nature entails the obligation of the responsible parties to deposit the amount of the same in the Banco de la Nación to the order of the Public Treasury or the entity concerned, as the case may be.
Article 29.- The Comptroller General of the Republic shall bring the facts that could to be qualified as illegal to the notice of the Judiciary so that, if warranted, the concerned judicial organ may initiate legal proceedings with a view to fixing penal and civil responsibilities.
In such a case, the Public Sector employees shall, at the request of the Comptroller General of the Republic, be suspended by the Head of the entity to whom the list of charges is addressed, until the judicial trial is over.
Article 30.- The Office of the Comptroller General of the Republic shall, whenever it deems appropriate, ask the Attorney General of the Republic to provide information on the status of the trials in which the State is involved as a result of the suits referred to in the previous Article.
Article 31.- The heads of the National Public Sector entities shall enforce the corrective measures indicated in the auditor’s reports of the Office of the Comptroller General of the Republic, as well as punish the public sector employees according to the decision of the Comptroller General of the Republic.
The sanctions fixed by the Comptroller General of the Republic shall be recorded in the personal records of the sanctioned civil servant.
Article 32.- In the case of legal provisions determining the lapses and their corresponding sanctions, these sanctions shall be applied according to the established grading. In the rest of the cases, the sanction shall be established by the Comptroller General of the Republic bearing in mind the seriousness of the lapse, in accordance with the criteria laid down for this purpose in the Rules of this Law.
Article 33. The application of sanctions indicated in this Chapter does not exclude the obligation of the responsible party to refund the total amount of the declared liability to the Public Treasury or to the concerned entity, as the case may be.
First and Only.- The duty assigned to the Office of the Comptroller General of the Republic by Article 110 of Law No. 14816, shall be assumed by the Executive through the corresponding sector.
First.- Given the very large backlog of accounts to be judged, all accounts pending for judgement by the Office of the Comptroller General of the Republic corresponding to financial years prior to 1968 shall be considered closed, except those accounts that are being tried under administrative law initiated pursuant to Law No. 14816. Such cases shall be subject to the stipulations of this Decree Law. The cases that are at the stage of execution of the sentence shall be completed in accordance to the procedures governing them.
Second.-Within a period of sixty days from its promulgation, the Executive Power shall frame the rules for this Decree Law, in accordance with the draft to be presented by the Office of the Comptroller General for this purpose.
First.- Articles 2 and 3 of the Decree Law No. 17126 and Chapter IX of Law No. 14816 entitled "Regarding the Office of the Comptroller General of the Republic and Control of the Functional Budget" are hereby revoked, except for Articles No. 74, 76, 87 and 93 and sub-paras 1) of Article 89 and 2) of Article 90.
Second.- The participation of the Office of the Comptroller General in the tasks pertaining to the formulation and execution of the budget referred to in Articles 51, 56 and 57 and the last paragraph of Article 48 of Law No. 14816, is now abolished.
Third.- All provisions in conflict with to this Decree Law stand revoked.
Fourth.- For the purposes of this Decree Law, the following terms shall have the meanings given below:
Examination of the proposed operations before they are authorised or before the administrative act comes into effect, with the intention of establishing its propriety, legality, correctness and compliance with the budget.A Priori Control.-
Concurrent Control.- Control that is concurrently conducted while the correctness of the operations is being verified.
A Posteriori Control.- Examination of the operations after they have been carried out with the intention of assessing their correctness, integrity, legality, effectiveness and efficiency, and fixing responsibilities if any.
Internal Control.- Is the examination carried out by the entity itself or control body of the Sector concerned on the operations in order to safeguard its assets and ensure that the policy recommended by the Administration is being followed.
External Control.- Examination and assessment carried out by the Office of the Comptroller General of the Republic with the intention of verifying how far the public administration is adapted to the regulatory framework of reference, and the correct and efficient application of the financial and administrative systems.
Audit.- The objective and systematic professional examination of financial and administrative operations, carried out after their execution, with the purpose of evaluating and checking them and preparing a report containing observations, conclusions, recommendations and the corresponding judgement.
Administrative Audit.- Examination and assessment conducted on an entity to confirm the degree of effectiveness and efficiency in the implementation of regulations framed by the administrative support systems, as well as their planning, organisation, direction and internal administrative control.
Financial Audit.- Examination of the books, vouchers and other documents that support the financial balance sheets of an entity, carried out so that the auditor may formulate his opinion on the financial situation, the results of its operations and its compliance with the prevailing provisions.
"The Executive Power is hereby authorised to pass a Supreme Decree, whereby a Fund in favour of the Office of the Comptroller General meant to strengthen this Supreme Institution may be set up.
The resources constituting this Fund shall be determined by the Ministry of Economy and Finance, in conjunction with the Office of the Comptroller General, after receiving the approval of the Joint Budget Committee of Both Houses.
