July 2008 1

USAID HONDURAS

FISCAL TRANSPARENCY

ACTIVITY

Quarterly Performance and Financial Report

July 1, 2018 – September 30, 2018

Submission Date: October 30, 2018

Contract Number: AID-522-TO-17-00003

Contract/Agreement Period: September 2017 – September 2020

COR Name: Denia Chavez

Submitted by: Paul Sisk, Chief of Party

Deloitte Consulting LLP

USAID HONDURAS

FISCAL TRANSPARENCY

ACTIVITY

Quarterly Performance and Financial Report

July 1, 2018 – September 30, 2018

Prepared for:

USAID/Honduras

Prepared by:

Contract No. AID-522-TO-17-00003

October 30, 2018

The opinions of the author expressed in this publication do not necessarily reflect the opinions of the United States Agency for International Development nor those of the Government of the United of America.

TABLE OF CONTENTS

1. Project Overview ...................................................................................................... 1

2. Sector Context ......................................................................................................... 2

a. Summary .......................................................................................................... 2

b. 2019 Budget ...................................................................................................... 2

c. Transparency .................................................................................................... 3

d. Anti-Corruption Initiatives and Corruption Cases ............................................... 4

e. Appointments .................................................................................................... 5

3. Program Highlights ................................................................................................... 6

a. Key Activities ..................................................................................................... 6

4. Achievements and Major Activities ........................................................................... 7

a. Cross Cutting Support ....................................................................................... 7

b. Component 1: Improve Transparency and Effectiveness of Public Spending .. 10

c. Component 2: Institutionalize Public Private Dialogue on Transparency, Fiscal Policy, and Anticorruption issues ............................................................................. 20

d. Component 3: Steps taken to professionalize the civil service ........................ 23

5. Planned Activities for Next Quarter......................................................................... 25

6. Administration and Budget information ................................................................... 26

7. Problems encountered and proposed remedial actions .......................................... 28

8. Subcontractor Progress .......................................................................................... 29

9. Monitoring, Evaluation and Learning ...................................................................... 30

a. M&E Software ................................................................................................. 30

10. Collaborative Learning and adapting (cla) .............................................................. 31

11. Integration and collaboration with other USAID Activities ....................................... 34

12. Coordination with other Donor Agencies and Activities ........................................... 34

13. Annexes ................................................................................................................. 35

a. Table of Counterparts by Result ...................................................................... 35

b. In-Country Training ......................................................................................... 36

c. (F Indicator) 24 ................................................................................................ 36

d. Meetings with Government Officals ................................................................. 37

ACRONYMS

AWP Annual Work Plan BANASUPRO Supplier of Basic Food Stuffsi CEH Association of Economists of Honduras (Colegio de Economistas de Honduras) COP Chief of Party COSO Committee of Sponsoring Organizations CSO Civil Society Organization DARA Customs Directorat (Dirección Adjunta de Rentas Aduaneras) DGSC Civil Service Directorate (Dirección General de Servicio Civil) DPE Ethics and Probity Division (División de Probidad y Ética) DTME Presidential Directorate of Transparency and Modernization

(Director Presidencial de Transparencia y Modernización del Estado)

FLAI Latin American Federation of Internal Audit (Federación Latinoamericana de Auditoría Interna)

FT Fiscal Transparency GEIS Gender Analysis and Gender Inclusion Strategy GOH Government of Honduras HICD Human and Institutional Capacity Development INTOSAI International Organization of Supreme Audit Institutions IP Implementing Partner JOH Juan Orlando Hernández MACCIH Mission to Support Anti-corruption and Fight Impunity (Misión de

Apoyo contra la Corrupción y la Impunidad en Honduras) PEA Political Economy Analysis PFM Public Financial Management PN Partido Nacional OBI Open Budget Initiative OECD Organization of Economic Cooperation and Development OGP Open Government Partnership ONADICI National Office of Internal Control (Oficina Nacional de Desarrollo

Integral de Control Interno) ONCAE National Procurement Office (Oficina Nacional de Contrataciones

y Adquisiciones del Estado) OTA Office of Technical Assistance (US Treasury Dept) RFA Request for Application SAG Ministry of Agriculture (Secretaria de Agricultura)

SCGG General Coordination Ministry (Secretaria de Coordinación General del Gobierno)

SEFIN Ministry of Finance (Secretaría de Finanzas) SLT Sustainable Learning Transformation SICOP Suppliers, Inputs, Process, Outputs, and Customers TF Fiscal Transparence (Transparencia Fiscal) TSC Supreme Audit Organization (Tribunal Superior de Cuentas)

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1. PROJECT OVERVIEW

The United States Agency for International Development (USAID) Mission in Honduras has launched the Fiscal Transparency (FT)1 Activity to assist the Government of Honduras (GOH) to implement transparency and anti-corruption commitments made in the Alliance for Prosperity of the Northern Triangle (A4P) Plan and Open Government Partnership (OGP) Third Action Plan (2016-2018) to ensure that public money is spent most economically and efficiently, with minimal waste and theft.

The purpose of FT, a 36-month USAID project implemented by Deloitte Consulting LLP, is to contribute to fighting corruption and impunity by building strong accountable institutions, improving procurement, and strengthening public expenditure management. By fostering transparency and accountability and the implementation of anti-corruption legal frameworks, this Activity will contribute to improving the business-enabling climate in Honduras to promote a level playing field for investment.

Table 1. Activity Details

Activity Name Fiscal Transparency Activity

Activity Start / End Date September 15, 2017 - September 14, 2020

Name of Prime Implementing Partner

Deloitte Consulting LLP

Contract/Agreement Number AID-522-TO-17-00003

Name of Subcontractors/Sub-awardees:

Deloitte Honduras

Geographic Coverage

(Governorates / Districts) Honduras / National Government Counterparts

Reporting Period July 1, 2018 to September 30, 2018

Components

Component 1 Improve transparency and effectiveness of public spending

Component 2 Institutionalize public-private dialogue on transparency, fiscal policy & anticorruption issues

Component 3 Steps taken to professionalize the civil service

1 The Public Accountability Activity (PAA), AID-522-TO-17-00003, will be referred to as Fiscal Transparency (FT) in this report.

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2. SECTOR CONTEXT

A. SUMMARY

In July, just as SEFIN managed to balance its finances for the current year and the macro framework of budget for 2019, the transport operators called a nation-wide strike in response to increases in the vehicle registration fees but went on to demand a reduction in the excise tax on petroleum. The new administration of JOH and the new Minister of Finance, Rocio Tábora, faced a severe political and fiscal test with the transport strike. It was clear that the Government had no substitute for the income it would lose in excises so it held its ground and, while transportation was disrupted for several days, an agreement was soon reached. Over this period SEFIN offered to enter into a fiscal pact but civil society and private sector organizations uniformly rejected the offer, seeing it as a ploy to substitute for the national dialogue, which was stalled. This position set back rapport with civil society that had been building with 2019 budget consultations, supported by the Fiscal Transparency Project (FT).

Fortunately, as SEFIN went forward with its budget outreach activities and political parties returned to the National Dialogue, rapport was restored by the end of the quarter with good participation of civil society and private sector representatives in the budget presentations in September. SEFIN had other gains in the quarter with the budget and the IMF negotiations going as scheduled and, on a wider front, the Government announced its new Integrity and Transportation Policy and launched the IV Open Government Plan. These developments and others on transparency and anti-corruption are outlined below in more detail.

B. 2019 BUDGET

Consultations on the Budget. On July 2, SEFIN announced it would revive its efforts for citizen participation in the budget formulation, an element in Open Budget Initiative (OBI) and other measurements of transparency, after a poor response to calls for participation early in the year. Minister Tábora outlined plans for the eight workshops planned for civil society and the private sector, four consultations and four to socialize the 2019 budget. Specifically, groups representing the social sector of the economy, women’s groups, academia and ex-ministers would be invited. The approach followed the advice provided by FT.

On July 16, the Minister Tábora opened the first of four-planned consultations, with FT support, where former finance ministers, ex-presidents of the Central Bank of Honduras (BCH), technical teams from FT and SEFIN, gathered to discuss fiscal transparency. Minister Tábora explained that this part of a series of steps aimed at expanding the mechanisms of citizen participation and transparency in the General Budget of the Republic. On July 17, representatives of women’s group participated in a similar exercise. The participants of both events provided their recommendations on how to improve budget transparency which will form the basis of an action plan to be proposed by SEFIN before year-end. The two remaining consultations, one with private sector groups and another with NGOs, will be conducted over November or December, 2018.

Presentation of the 2019 Budget. On September 7, 2018 SEFIN presented to the press the preliminary draft of the General Budget of Revenues and Expenditures of the Republic for Fiscal Year 2019. This was followed by a series of sessions to inform different sectors on the composition of the 2019 national budget which included

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meetings in San Pedro Sula with the private sector and in Tegucigalpa with civil society and private sector groups.

Fiscal Pact. On July 27, Minister Tábora announced that the government proposal to discuss the formation of a new Fiscal Pact must be presented before Congress by September. Minister Tábora recalled that progress has already been made in the technical round tables consisting of personnel from SEFIN, BCH, the Revenue Administration, the IMF, and the G-16. On July 29, the IMF commented to the press that it was positive that the Honduran government aimed to discuss public finance issues within the framework of a Fiscal Pact. The spokesperson mentioned that for the last five years, a group of ex-presidents of BCH, former finance ministers, organizations working on the subject and experts in economics have been promoting this project. On July 31, however, the Promoting Group of the Fiscal Dialogue (GPDF), made up of 13 former public officials and support organizations, reported that conditions for a Fiscal Pact were not present. On August 1, Honduran businessmen agreed with other sectors that at this moment there are no conditions to discuss a fiscal pact.

Positions softened to the point that by August 9, the president of the Honduran Council of Private Enterprise (COHEP) Juan Carlos Sikaffy stated that a fiscal pact would have to include topics such as tax reduction and budget reform, and that the fiscal pact would begin after the end of the National Dialogue.

The national (political) dialogue was officially launched last August after six months of preparatory meetings between the main political parties and under the auspices of the United Nations, these political actors that participated in the four roundtables of the dialogue again met in December where from the point of view of the National Party the dialogue is very advanced. However, the dialogue has not resolved sensitive issues such as the National Registry of Persons and the amnesty for crimes committed during the disturbances following the elections. Another critical issue is that of the citizen consultation which the National Party agrees to, although it is not clear what will be in the consultation, while the Liberal party opposes it at this time. It been reported that there is some agreement on electoral reform.

C. TRANSPARENCY

National Policy on Transparency, Integrity and Prevention of Corruption. On July 12, the government presented the National Policy on Transparency, Integrity and Prevention of Corruption to civil society and cooperating agencies integrated in the G-16. The presentation was made at the Presidential Palace to socialize the policy that will strengthen the processes of transparency in the State and contribute to the prevention of corruption. Heidi Fulton, U.S. Embassy Charge d’Affaires, told the press that the move was applauded by the highest authorities of the US Embassy in Honduras.

Open Government Action Plan. In August, the Government presented the IV Open Government Action Plan (PAGAH) 2018-2020, a joint effort of the government, private enterprise and civil society that reflects the commitments of the country to strengthen transparency, governance and empower citizens. The plan commits the government, the Institute of Access to Public Information (IAIP), the Social Forum of External Debt and Development of Honduras (FOSDEH), the National Convergence Forum (FONAC) and the Honduran Council of Private Company (COHEP) to a series of activities to ensure transparency. The Alliance for Open Government (AGA) is a multilateral body that groups 75 countries and has the support of the World Bank, the OECD and the IDB. Honduras joined the Open Government Partnership on August 10, 2011 by signing the

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Letter of Intent, with a strong commitment to fight corruption and strengthen transparency policies, presenting the I Action Plan in September of that year.

Tax Exonerations. President Juan Orlando Hernández stated in September that for the preparation of the next General Budget of the Republic, a thorough analysis must be made on tax exemptions. SEFIN announced on August 21 that it has already registered 2,500 entities in tax exoneration registration platform which is expected to contribute data to future analysis on tax expenditures.

Public Services – Simplification. Following the release of Doing Business 2018 in which Honduras, at position 115, below the other Central American countries, designated presidential advisor, María Antonia Rivera, said that the government will launch a project of administrative simplification.

Negotiations with the IMF. On September 10 the Honduran Economic Cabinet reported that it will meet at the end of the month with the representatives of the lMF in Washington. It was noted that the issues that could be in the program include more transparency in public procurement, social oversight and the wage bill. The IMF representative indicated that Honduras has done a spectacular job from the point of view of macroeconomic equilibrium in recent years, which has been one of the reasons why we increase our contributions to the country.

D. ANTI-CORRUPTION INITIATIVES AND CORRUPTION CASES

US Congress Calls for Anti-Corruption Action. On August 2, Democratic Congressman Eliot Engel and Republican Congresswoman Ileana Ros-Lehtinen - two senior officials of the Foreign Affairs Committee of Congress - as well as three other members of Congress announced that they had signed a letter requesting that the State and Treasury departments of the United States will determine if six individuals from El Salvador, Guatemala, Honduras and Mexico meet the criteria to be sanctioned according to the Magnitsky Global Law. The Magnitsky Global Law allows the United States to sanction officials implicated in corruption and human rights violations. This includes economic sanctions, the suspension of visas and restrictions on access to the United States financial system. The people named in the letter included Congressman Óscar Nájera, who has been linked to drug trafficking activities and the powerful criminal organization Los Cachiros. In testimony before a United States court in New York, the ex-leader of Los Cachiros, Devis Leonel Rivera Maradiaga, implicated Nájera -and other members of the elites-, pointing him out as a collaborator of the criminal group. According to the letter, Nájera allegedly received payments to provide the group with information on accounts and properties that had been seized by the authorities.

The Pandora Case. On July 8, the first public announcements on a new major corruption case emerged, known as the Pandora case. There is reason to believe that this may shed some light on why Congress has been opposed to MACCIH. Information in the press indicates that 38 politicians and officials will be charged with diverting government funds to the governing party’s 2013 election campaign. Those named include former government ministers, powerful members of President Juan Orlando Hernández’s National Party and his brother-in-law. The plot was also said to have directed money to the opposition Liberal Party. It is estimated that $12 million was allocated by the Agriculture Ministry for farm programs which were subject to misuse through two foundations.

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Pandora II. On Sept 10, there were press reports that the Fiscal Unit Against the Impunity of Corruption (UFECIC) is investigating another case of misuse of government funds, the so-called Pandora II case. It is alleged that among the investigated parties are a former minister and deputy ministers. NGOs and foundations were used to sign contracts with government then diverted funds from social projects to individuals for private gain. UFECIC is in possession of contracts that were signed with nonprofit organizations that allegedly diverted funds. Investigations are underway.

Development Funds Audit by TSC. In August, local papers reported statements by TSC where it warned that the special audits of resources managed by members of Congress, which were ordered in a 2018 budget reform, was at risk because of the refusal of SEFIN to transfer the resources (L 45 million) required for the research. In 2017, the National Congress approved a reform to the Organic Budget Law that gave the TSC up to three years to audit the management of funds managed by parliamentarians for social works of the last three legislative periods. MACCIH considered the budget reform a "pact of impunity" because it interfered with MACCIH’s ongoing work, but now it seems that the audits will not take place.

Bribes in traffic of licenses in the Directorate General of Fisheries and Aquaculture. On July 23, EL HERALDO reported that it had access to testimony made by anti-narcotics and intelligence agents, as well as from other people linked to fishing industry, which reveal that drug trafficking and organized crime organizations have been paying bribes in the Ministry of Agriculture and Livestock (SAG) of up to $ 25,000 for licenses for industrial fishing.

E. APPOINTMENTS

Attorney General. The fourth quarter started with positive news for anti-corruption as Oscar Chinchilla was re-appointed as the Attorney General. Mr. Chinchilla has a proven track record for independence and high integrity, has worked well with MACCIH and is widely backed by civil society.

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3. PROGRAM HIGHLIGHTS

A. KEY ACTIVITIES

Component 1: Transparency and Effectiveness of Public Spending Improved

The basis for strengthening the legal basis for transparency and control over malfeasance was advanced with the completion of the draft review of the legal framework that identifies the gaps that have to be addressed which is matched with actions plans agreed with SEFIN. A new SEFIN portal under production by FT will facilitate fiscal oversight by civil society and improved information management by the same civil servants. Control of the wage bill by improvements in civil service cost budgeting is being addressed by the development of the salary policy initiated in the fourth quarter although the work will continue into year 2.

The serious attention paid to reform of the procurement law and regulations through a wide range of consultation over the year has now paid in amendments drafted in the fourth quarter that ONCAE will put forward to address openings that have allowed less than economic procurement for years.

ONADICI, with Minister Doblado in the lead, took ownership of government-wide training on internal control with the a training of trainers program (SLT) for 22 staff of the Internal Control Committees and ONADICI who completed their initial training in September and will complete the preparation of material in Quarter 1 of Year 2 before taking the course to budget units across government over Year 2 and 3.

Component 2: Institutionalize Public Private Dialogue on Transparency, Fiscal Policy, and Anticorruption issues

FT contributed to a major gain in transparency, which since 2005 considers citizen particaption as a key element. Partnering with the Directorate of Transparency of SEFIN an approach was developed to bring civil society organizations and the private sector groups into discussion on the formulation of the 2019 budget to effect a level 2 consultation , that is a two-way communication where government commits to consider, and act on, the feedback from citizens on subject set for the consultation. SEFIN conducted, with FT support, formal consulation on how to improve the transparency of the budgete process and over the quarter receive significant and actionalble feedback. The participants came with a broad range of civil society and produced recommendations which was later prioritized and agreed with SEFIN for the development of actions plans to be presented at the follow-up workshop.

Component 3: STEPS TAKEN TO PROFESSIONALIZE THE CIVIL SERVICE

The re-structuring of the Civil Sevice Directorate (DGSC) is a pre-requisite to improve oversight of personnel performance and control of the wage bill. In the fourth quarter, FT finalized the technical evaluation of the Civil Service General Directorate (DGSC) which sets out not only the changes that the entity should implement to strengthen its role as a regulator but also the required budget which SEFIN has supported. The way is no clear for DGSC, with FT support to review and update of the Civil Service Law Regulation and develop a government-wide salary policy and scales.

Governments cannot operate effectively without an agreed set of values and FT in collaboration with TSC, developed over the quarter a Public Integrity and Ethics Program

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and related Action Plan to be implemented by the Directorate of Probity and Ethics (DPE) over the next 2 years of activities under FT. This Program and its Plan will serve as a foundation to strengthen and promote the work that the DPE has been carrying out in terms of integrity and public ethics within the public sector as a primary objective, and in the private sector as a coadjutant to improve the culture of integrity and ethics in Honduras.

4. ACHIEVEMENTS AND MAJOR ACTIVITIES

Achievements and major activities during the reporting period are presented below for cross-cutting activities, then for each project component.

A. CROSS CUTTING SUPPORT

Political Economy Analysis (PEA)

Over the quarter FT worked out a final version of the PEA report with the sub-contractor, Adapt LLC, and discussed the report with USAID that would have restricted circulation. FT considered producing a less sensitive version for wider circulation but in discussions with Adapt LLC it was agreed that such as document would be of limited value since the key findings are by their nature sensitive or reveal information shared in confidence. A final draft was submitted July 19, which was approved with comments by USAID on July 26, 2018. A clean version was submitted August 6, 2018 by FT. (Year 1 AWP Activities K.1 – K.5)

Strengthening Institutional Capacities (SLT)

The FT Capacity Building Manager was mobilized in June and established, with the Component Leads, a work strategy, timeline and tools to assess capacity needs. Work began on capacity building in the quarter under the 3 components as follows.

Component 1. It was agreed that the Capacity Building Manager would work with specialists of National Office of Integral Development of Internal Control (ONADICI) and related institutions of the executive branch from June 2018 to March 2019 to develop an SLT program on internal control. The Training Advisory Board was established and participants of Train of Trainer beneficiaries (+/- 20 people) identified and an evaluation of training needs in terms of internal control made in the third quarter.

On September 17, FT, along with SCGG and ONADICI, inaugurated the Sustainable Learning Transformation (SLT) Program – Trainer of Trainers (ToT), in the Central American Technological University (UNITEC). The aim of course is for participants to develop skills that will allow them to have a multiplying effect in public institutions for strengthening internal controls. The event was opened by SCGG’s Minister Martha Doblado. The 22 participants, aside from those from ONADICI, are all members of the Committee of Internal Control (COCOINs) and come from the following institutions: National Commission of Banks and Insurance (CNBS); National Commodity Supply (BANASUPRO); Permanent Commission of Contingencies (COPECO); National Council of Housing Promoters (CONVIVIENDA); Ministry of Labor and Social Security (STSS); Secretariat of Human Rights; Secretary of Foreign Relations (SRE); SCGG; Migration's National Institute; Honduras Post Office (HONDUCOR); Honduran Institute of Social Security (IHSS); National Institute of Retirements and Pensions of the Employees and Officials of the Executive Branch (INJUPEMP). On the second day of the Program,

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participants defined objectives and developed a synthesis and a summary for the course and training module. Participants will have one month to prepare the 11 courses and modules that will form the COSO curriculum which will be subject to quality control in November after which the 22 trainees will gather to receive feedback. The set of 11 courses will be basis for rolling out COSO2 training throughout the public sector. (Year 1 AWP 9.2)

Component 2. The evaluation of training needs of CSOs at the workshops scheduled for mid-July was not carried out because efforts were focused on the budget consultation events and within this plan the workshops for CSOs, outside of the women groups, were postponed to first quarter in Year 2 as explained under Result 12. (Year 1 AWP 11.2)

Component 3. Plans to evaluate the ethics training needs through surveys / interviews with the Directorate of Probity and Ethics of the TSC and the members of the ethics committees (+/- 200 people) to establish a training program for the Y2 were carried out in the fourth quarter and a draft report issued. The main objective of the training needs analysis was to identify areas of improvement in probity and ethics and to define the specific training needs in these areas. The training needs assessment methodology applied was based on the Human Performance Technology (TDH) approach that analyzes the performance gaps of an individual (worker), department (work) and organizational perspective (workplace) and provides interventions aimed at identifying performance gaps. This assessment led to recommendations on interventions to improve organizational performance, as well as individual performance. This approach develops sustainable capacity rather than focusing only on the capacity of individuals who may not be able to improve their performance due to an inadequate work environment. (Year 1 AWP 15.2)

Gender

Gender Strategy. A gender and inclusion strategy was completed and a final report submitted to USAID in the third quarter to which USAID provided detailed feedback on July 13. As such, in the fourth quarter the short-term advisor who prepared the draft was mobilized to work with the FT gender group to consider the feedback and introduce changes as appropriate. A new draft was submitted on August 28 and was approved Sept 4, 2018. In this framework, and based on the recommendations of the Gender Analysis for deepening the laws and their applicability and the concepts of ADS 205, the Strategy responds to and is limited to the laws, policies, regulations and institutional practices of the Gender Matrix of USAID and will carry out the activities of the GEIS Strategy. The activities of the Strategy in this domain concentrate on the elaboration, construction and implementation of mechanisms and technical instruments with an intersectional approach that facilitate the execution and compliance with existing norms and regulations. (Year 1 AWP J.1 – J.4)

Grants

During the fourth quarter, the grants unit developed a more detailed pipeline and continued the due diligence process and pre-award surveys. Four grant proposals were prioritized from the initial 8 initiatives presented in the third quarter report as follows:

2 The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a joint initiative of the five private

sector organizations American Accounting Association, American Institute of Certified Public Accountants, Financial Executives International, The Institute of Internal Auditors, The Association of Accountants and Financial Professionals in Business) and is dedicated to providing thought leadership through the development of frameworks and guidance on

enterprise risk management, internal control and fraud deterrence.

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• Technical strengthening of ONADICI through an In-kind Donation - Technological

Equipment for ONADICI including 25 computers, 2 data shows, chairs and

similar items to improve their response and training capabilities. US$ 40,000

• Technological Laboratory Equipment and Audiovisual Production Room for IAIP

donation of a fully equipped computer laboratory and the Audio-visual production

room to generate media diffusion messages to strengthen transparency

messages to citizens. US$ 88,000

• Diploma and certification of 200 public officials in the processes and regulations

of the Contracting Law. Diploma to train 200 public officials in procurement

processes and procedures for the Government of Honduras (GoH). US$ 100,000

• Fiscal Education Campaign of the Budget Process. Educational campaign aimed

to explain to citizens the different stages of the budget process to improve

participation. US$ 100,000

On processing, during July and August 2018, Fiscal Transparency and USAIDs

representatives agreed on the step by step process for in-kind awards and unsolicited

proposals. This process is both compliant with the ADS and the FT’s Grants Manual.

Similarly, the Fluxx system is up and running to manage the grant award documentation.

A second physical record is stored in the Grants Unit folders. (Year 1 AWP H.1 – H3).

Communications

A communications strategy was drafted and agreed to be included under the current Branding Implementation and Marking Plan of the Activity, approved in April, 2018. This file includes the activities of the strategy on the elaboration, construction, implementation and uniformity of mechanisms and reporting system according to USAID’s standards and norms. Approval from USAID is still pending.

FT’s Social Media had an organic growth of followers in Facebook and Twitter. In July 1st, FT’s Facebook page had 43 followers, and on September 30th, 120 people followed the page, while FT’s Twitter page had 8 followers on July 1st, and on September 30th, reached 70.

Ongoing weekly media monitoring reports were prepared to determine how visible the efforts through FT are. During July, USAID and FT were mentioned by the Ministry of Finance (SEFIN) and media outlets by supporting the workshops made towards transparency in the budget, and then, also in July, on the support of the fiscal dialogue, in the midst of transportation strikes.

Blurbs were also drafted for FT events and workshops and biweekly updates have been sent to USAID on activities, results, and next steps to accomplish results for components

Private Sector

FT coordinated with ONADICI on a session on July 2, 2018 from the president of Latin American Foundation of Internal Auditors (FLAI) Jorge Badillo with 29 representatives of the private sector on the international certifications of internal auditors. (Year 1 AWP 9.2, 9.3).

Over the quarter FT also conducted a series of consultations with SEFIN on increased credibility and functioning of public-private oversight mechanisms such as Consultation Council for Alliance for Prosperity (CCAP) which complemented feedback from CSOs and private sector originations received at the budget consultation workshops and

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consultations with the USAID-funded Civil Society Media Activity. (Year 1 AWP 11.2, 11.3)

Following the input from the budget consultations SEFIN agreed to 3 priorities to develop actions plans, one of which is the analysis of tax exonerations granted to the private sector. The terms of reference for support in this area have been agreed with the technical staff of SEFIN and are is awaiting approval of the Minister. (Year 1 AWP 12.4)

Under the program developed by FT in the quarter with DPE of TSC on government-wide ethics in relation to the strategic objective of promoting ethics from the public sector to the entire Honduran society, FT included a task to create alliances with the private sector for the formulation of a system of ethics for the businesses

B. COMPONENT 1: IMPROVE TRANSPARENCY AND EFFECTIVENESS OF PUBLIC SPENDING

Result 1, 2, 3 Transparency: Status Green3

The draft review of the legal framework is complete (Result 1), civil service cost budgeting improvements is being addressed by the development of the salary policy although this work will continue into year 2 (Result 2). A consultant was mobilized in the first quarter of year 2, to develop an inventory, compile and analyze the existing legislation on salaries, analyze the current remuneration scheme (including collective bargaining agreements) in pilot institutions, and carry out a salary analysis in the Honduran market then will define the salary scale for the centralized, decentralized and decentralized public sector.

The improvements in reporting of budget stages, in particular of execution of the budget, are addressed with work on SEFIN portal and improving the institutional capacity of IAIP through the introduction of results based budgeting under the strategic plan developed in year 1(Result 3).

Result 1: Strengthened implementation and enforcement of prioritized laws to improve the transparency of public spending

PFM Legal Review. Over the year, FT analyzed the gaps of the current PFM laws, and identified those that need to be revised to promote greater transparency and expenditure efficiency. In the fourth quarter the Spanish version of the report was completed and submitted to USAID. The English translation is underway. Although many legal provisions can affect directly or indirectly transparency and budget management, FT analyzed just those provisions related to ethics, as a cross-cutting factor, budget management, public procurement, transparency and control of public resources, which together regulate the functions of the bodies identified as FT’s counterpart. Specifically, these include: SEFIN, SCGG, TSC, and the Institute of Access to Public Information (IAIP).The criteria used to identify gaps in transparency included the IMF transparency standards. The laws covered by the study include: Laws and Codes related to Probity and Ethics, Law of Transparency and Access to Public Information (LTAIP), Organic Budget Law (LOP), State Contracting Law (LCE) and the Organic Law of the Superior Court of Accounts (LOTSC). Based on the recommendations presented in the study to

3 In agreement with USAID the report rates advance on component with a traffic light system (green -on track, yellow – risk of delay, red risk of no completing in the year)

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address the gaps, the study serves FT and SEFIN as a reference for the design and implementation of processes to overcome the gaps as follows.

The Transparency Law (LTAIP). This law grants the government officials and the public

access without restriction to documents on all public acts but specific exceptions but

these provisions conflict with the Secrets Law ( Ley de Secretos Oficiales y de

Clasificacion de la Informacion) which must be clarified by IAIP to reduce this barrier to

transparency. Also, the Transparency Law specifies a number of requirements as to

what must be published (contracts, salary information, plans, etc.) but this does not

information on their mission activities, such as the provision of services, related costs,

the qualification of their quality and the achievement of goals with indicators that

facilitate social control which are key to accountability. A provision to such an effect

should be incorporate. Lastly, the law does not specify any transparent process for the

selection of the commissioners.

Ley Organica de Presupuesto. The Organic4 Budget Law (LOP) does not specify any

methodology for strategic and budgetary planning which results in a serious gap

between planning and budget and a lack of results in all stages of the budget cycle and

continuous budget modifications that undermines transparency and credibility of the

budget process. Provisions should be incorporated to tie budgets to planning and

results. As far as compliance with fiscal laws is concerned, the approval of laws, by

initiative of the Legislative and Executive Branches, without a Fiscal Impact Analysis

(AIF) and a clear identification of the source of financing, is a violation of the provisions

of the Organic Law of Budget (LOP), General Provisions and Fiscal Responsibility Law,

putting their compliance at risk. This gap in compliance must be contained.

Public Trusts (fideicomisos). are not governed by the guidelines established in the LOP

which operate outside the single treasury account hence the funds do not operate under

the law which reduces the transparency of the budget and put in risk compliance with

the goals of the Fiscal Responsibility Law. The LOP should be extended to apply to the

public trusts.

Procurement Law. The Procurement Law, Ley de Contrataciones del Estado, includes

private bidding and private competition, as legitimate methods but since are highly

vulnerable to corruption they should be removed. Similarly, the use of a declaration of

the state of emergency to avoid regular Procurement Law provisions is abused because

do not require a time limit; the use of emergency provisions must be limited by the

specification of end date for its application.

The Organic Law of the Court of Accounts (LOTSC). The law on the Court of Accounts

has no major shortcoming but the TSC does not fulfill the related international auditing

standards in its annual report to Congress which should be the area of reform and

support over the mid-term. (Year 1 AWP 1.2, 1.3, 1.5, 1.6)

PFM Action Plan. FT carried out three idea-workshops: with ENEH in April, SEFIN in May, and TSC in June, to develop proposals related to reducing gaps in adherence with

4 An organic law is a law, or system of laws, that form the foundation of a government, corporation or any other

organization's body of rules. A constitution is a particular form of organic law for a sovereign state

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the Organic Budget Law (LOP) and Organic Law of the Supreme Audit Organization (LOTSC) respectively, in coordination with SEFIN, SCGG, Electric Power Distribution Trust Technical Committee and TSC. The aim of the idea-workshops was to define the problem of adherence and identify possible solutions taking as input the knowledge and experience of the main actors involved. In preparation for each of the three workshops, FT developed a baseline of gaps in adherence to the LOP and the LOTSC based on: (1) problems identified in the report “Review of the Legal Framework for the Management of Public Finances”, which outlined adherence gaps to the LOP and the LOTSC; the Fiscal Transparency Code of 2007; and (2) interviews with professionals from SEFIN, the SCGG, the TSC and members of the Technical Committee.

The results were summarized in a report completed in September of the four areas of fiscal transparency where the following main problems stood out: (i) planning tools that do not facilitate orderly budgeting; (ii) low levels of disclosure of financial information by the energy distribution trust; and (iii) low levels of disclosure of financial information related to programming and budget execution related to gender. The report also gives the initiatives selected by the groups aimed at improving the level of adherence to sections of the LOP (in general or focused on trusts and public companies) and the LOTSC. Finally, the report outlines the selected initiatives to be the subject of reforms. On this basis, the report outlines the tentative action plans on the initiatives chosen, by consensus of the representatives at the meetings, as most pressing by the participants that include: (i) improving budget programming by aligning different planning and budget tracking tools; (ii) improving the disclosure of the execution of the trust agreement via the trustor (the public client that contracts the service); (iii) improve the audit of accounts by public employees via updated sworn statements. These tentative action plans feed into Year 2 and 3 AWPs and represent fulfillment of Activity 1.7 on steps to address gaps since these action plans of (i) and (ii) have already agreed with SEFIN. Similarly, gaps in Procurement and Civil Service Laws regarding salary, are being addressed already but amendments drafted for the former and the consultancy initiated by the end of the year on a review of the laws and regulations on salary for the latter.(Year 1 AWP 1.1, 1.7)

SEFIN Portal. The Expenditure Framework of Component 1 includes a set of tasks to address the limited dissemination of budget and financial information in ways that enable the public and civil society to participate meaningfully in monitoring government performance. Work on the portal addresses gaps in compliance with the PFM law or its compliance, Activity 1.7, in that is provides the updated platform to comply with the provision of the Organic Budget Law in reporting on budget execution hence reduces the risks of budget overruns and failures to meet limits set by the Fiscal Responsibility Law. FT’s approach is to build the capacity of the targeted institutions to effectively implement existing laws and regulations throughout the budget cycle which entails devising mechanisms that enable the targeted institutions to mobilize public support and confront vested interests and ingrained habits of opacity, excessive discretion, and corruption. In this regard, and in-line with its commitments, under the Open Government initiative and the Open Data initiative, SEFIN is taking steps to improve coverage and performance of its portal. In response to SEFIN’s plan, FT mobilized over the fourth quarter 3 advisors to (1) design a new portal of the conceptual model set by SEFIN; (2) develop the functionality of for the portal; and (3), to ensure adequate maintenance of the site over this critical period of conversion.

The portal design is on-track with SEFIN’s expectations as the advisor completed the work plan, the high-level functional requirements, the requisite level of effort and the key use cases, and met with the developer to define the methodology. The development of

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the site just got under way in September; it is expected that a preliminary version will be delivered during the next quarter. For the site to perform adequately, support for the administration and maintenance of the portals must be mobilized for which recruitment is underway. FT’s support also includes testing and quality control prior to the implementation of the updates related to these portals. (Year 2 AWP Activity 1.7)

SAG Results Based Budgeting (RBB). SCGG and SEFIN have begun the process of implementing a series of methodologies for the development of Results-based Budgets (RBB) in six pilot institutions (Ministry of General Government Coordination, Ministry of Natural Resources and Environment, Ministry of Agriculture, Ministry of Labor, Social Security Institute, Ministry of Security). The adoption of RBB will bring enhanced transparency and expenditure efficiency but in addition to this, it will help GOH comply with the provisions of the Organic Budget Law regarding the incorporation of results throughout the budget cycle.

The implementation of results – based budgets (RBBs), are directly related to Results 1 and 3 of Component 1. Specially on Result 1, strengthening the application and execution of prioritized laws to improve the transparency of public spending, it is linked to the Open Budget Initiative score: Budget Transparency, in that RBBs lead to greater clarity in the allocation of public resources because they provide a link between the use of funds and the objectives or goals that are met with their execution. For Result 3, selected GOH systems will generate credible and timely information for decision making, including information and procedures for citizens to access services. RBBs are linked to the PEFA indicator on service delivery which measures whether public resources are clearly identified in relation to the products and services that the population receives.

To be effective, RBB must arise from and support the government development plans. The National Plan 2010-2022 is the long-term strategic framework of reference for the new administration. The analysis of the National Plan 2010-2022 (PN) and the Country Vision 2010-2038 (VP), carried out when the Multiannual Indicative Program 2014-2020 was written, concluded that this is sufficient and specific enough to provide the basis for strategic planning of cooperation. It must be complemented however by sector policies and plans; some of which have already been adopted or are under construction.

SCGG has promoted the implementation of the results-based management model in response, in part, to the weak link between planning and the budget. As such, resource allocation is disconnected from the strategic goals of the nation affecting the quality of public spending. To this end, the Medium-Term Expenditure Framework (MGMP) is being developed jointly by the Budget Dept. of SEFIN and the Planning Dept. in SCGG that should allow a more strategic allocation of public resources by sectors and institutions considering the priorities defined in the different planning instruments of the National Planning System. In this regard, SCGG has developed a new methodology for the development of strategic institutional planning that was applied in six pilot entities, and a manual for the definition of budgetary structures consistent with this planning. Additionally, the methodology for sectoral planning was developed and work will be done on the methodology for the Government Plan instrument. The integration and consistency of these new tools is essential in order to deepen the implementation of the Results-Based Management model.

FT is supporting the Fisheries Dept. (DEGEPEZCA), the Irrigation Dept. of SAG, as well as IAIP - see Result 3, with the alignment of the strategic plan and the operational tasks of the pilot institutions. This work should contribute to consolidate in the medium term an

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integral "process management" based on the systematic application of the ISO 9000 standards for the assurance of the quality and sustained success of the entities. In the fourth quarter FT supported SAG in this regard as follows:

Fisheries Dept. (DEGEPEZCA) and Dept. of Irrigation Strategic Plan. FT completed the analysis and the draft report providing technical assistance to the Secretariat of Agriculture and Livestock (SAG) in the adoption of a "process approach" to ensure an adequate link between its strategy and operations with a focus on DIGEPEZCA and the Dept. of Irrigation. The work implied carrying-out an abbreviated planning process to identify the problems in management, legal framework and the current approach in establishing the strategic planning of the SAG and the conditions of DEGEPEZCA.

The work identified the key processes and products that will be the basis for RBB. Critically, this same process of updating the Plan Estratégico Institucional (PEI) 2017-2021 was followed for the Directorate General of Irrigation and Drainage (DGRD). Once this process is complete for all departments, a new budget structure of the SAG based on the results (outputs) of this planning will be requested from the Ministry of Finance. The results were presented in a FT report in September and approved by government. Translation of the report is underway. (Year 2 AWP Activity 1.7)

Process Workshop. FT also mobilized a process specialist to analyze the administrative, operational, and strategic production processes of the DIGEPESCA, in accordance with the Directorate’s strategic planning objectives. To this end, a workshop was supported on August 29, 2018 where 13 DIGEPESCA staff and management learned the basics of RBB and how to identify the elements of a process in government, which all supports the developing an organization’s strategic plan. (Year 2 AWP Activity 1.7)

Result 2: Improved planning and budgeting for civil service positions in targeted ministries.

In the quarter, FT documented analyzed and proposed improvements in the critical processes of human resources management of DARA. The review covered the planning and budgeting processes for recruitment, selection and hiring of personnel, as well as the process of separation, which were presented to the Human Resources Management of DARA for review and approval. Similarly, FT documented and proposed improvement in the payroll processes. The review also covered the payroll processes (incidents, personnel movements and calculation of the payroll) from the registration of the attendance to recording in SIARH and SIREP as appropriate.

FT analyzed the activities and identified improvements that allow not only reducing the number of steps and improving the sequence of activities but also the improvements in internal controls to improve reliability of the information contained in the SIARH and SIREP. The final report is underway and will contain the main findings and recommendations, as well as in the redesign of procedures. The report will be discussed during the next quarter with the technical staff of DARA, DGSC and SEFIN and presented to the authorities of these three institutions and will contribute to the guidelines for the standardization of payroll processes in the SIREP.

Result 3: Select GOH systems generate credible and timely information for decision-makings, including information and procedures for citizens to access services

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Inventory of Reporting Entities. FT developed with IAIP a compliance list of 60 of the 206 entities required under articles 4 and 13 of the Transparency Law to report. This information served as the basis for planning support and interventions on access to public information. (Year 1 AWP 3.1)

IAIP In-kind Grant. Over the quarter, FT initiated the process for an in-kind grant to equip a learning laboratory and audio-visual production room to strengthen IAIP by creating a dynamic space for the training of public information officers, other government institutions’ staff, institutional staff, and investigative journalists. The audiovisual production room will allow the creation of multimedia and audiovisual resources in a sustainable manner from the IAIP where innovation is promoted in terms of compliance with the right to Access Public Information.

IAIP Strategic Plan. Given FT’s on-going engagement with IAIP and its success with supporting Institutional Strategy Planning in DEGEPESCA, where the training was complete and final reports will be presented in December, the Commissioners requested training on the preparation of their strategy plan with a view to support the adoption of RBB. To achieve this objective, FT technical staff organized four workshops to develop, in a participatory manner with commissioners and officials, the Institutional Strategic Plan (PEI), which wound-up on September 26. Beginning in October, training will begin for the IAIP staff on budget for results and the process review, which includes the identification of risks and controls. It is expected that for the 2019 budget IAIP will implement results budget for internal use in decision-making, and that for the 2020 budget, it will be fully applied. (Year 1 AWP 3.1, 3.3)

At the beginning of the fourth quarter FT approached the topic of support for SINTRA and related work on monitoring service delivery by preparing an analysis of the obstacles to the implementation of SINTRA, in the form of a Concept Note for FT activity, which concluded that Honduras has the lowest positioning of the Electronic Government Development in Central American. Online services in the public sector in Honduras are more focused on indirect civil services, rather than direct services to the public such as education, social welfare and work. A United Nations survey showed that Honduras has not made significant progress in implementing the Digital Government in recent years which is reflected in a fall in the development index from 2012 to 2016. (Year 1, AWP 3.2)

On this basis FT decide to focus on support for IAIP over advancing with SINTRA. (Year 1, AWP 3.3 – 3.6)

Result 4, 5, 6, 7 Procurement: Status Yellow

The review of the legal framework is on schedule but training on Honducompras II was delayed because the full implementation plan has not been agreed between MCC and ONCAE.

Result 4: Procurement staff trained and certified in new web-based procurement system in coordination with MCC

ONCAE Training. Over the quarter FT prepared a grant to provide funding for a certification program for 200 new public officials in the procurement processes and procedures of the Government of Honduras (GoH). This grant will complement work supported by the Millennium Challenge Corporation, "Programa Umbral de la Cuenta del Milenio", carried out from January to June 2017 with the participation of four universities, in which 200 public officials participated. This grant will target at least 200 public officials

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to receive training on the regulations for government procurements while the awardee will develop its own capacities to plan and execute the certification program in public contracting by designing syllabi and curricula in coordination with ONACAE. Activity 4.2 could not be accomplished because the courses are yet to take place. (Year 1 AWP 4.1, 4.2)

Result 5: In coordination with the World Bank, broadcast module designed and implemented to provide citizens with access to information on public procurement

Open Data and HonduComprasII. FT held a teleconference with the World Bank on September 4, 2018 concerning findings of the Open Contracting Diagnostic. It was explained that open contracting refers to the publishing and use of open, accessible and timely information on government contracting to engage citizens and businesses in identifying and fixing problems.

The WB diagnostic found many problems with current procurement data and that different systems that publish data are not linked to each other, hindering information on hiring, payments, and budget. Another concern is that access to information is complicated by the large number of contracts that are outside Honducompras. Finally, FT was informed that there is no further support from USAID on the Open Contracting Diagnostic so the activity is winding down.

In a meeting requested by ONCAE on September 27, the Director of ONCAE reported the implementation of HonduCompras II is moving ahead but behind schedule. FT is awaiting the full implementation plan to determine its inputs in Year 2. (Year 1 AWP 5.1, 5.2)

Public Procurement Consultations. Activity 5.3 calls for consultation with civil society which was done over the course of the fourth quarter as FT supported consultations with civil society on transparency of the budget cycle, including procurement, on July 16 and 17 for budget experts and women’s groups and separately with civil society on legal framework including transparency provisions on August 2 in San Pedro. Input from these consultations fed the proposed amendments to the procurement law which, in part, include improvements to access to information by citizens. Amendments to the procurement law and related regulations on its implementation are drafted and will be refined and presented to civil society in Year 2 which should contribute to a more rebust framework for civil society oversight.(Year 1 AWP 5.3)

Result 6: Regulations on the Law on State Contracts reformed so procurement processes are open to public participation.

Procurement Legal Framework. FT is supporting ONCAE in a comprehensive reform the State Procurement Law. For this purpose, during the months of April, May, June and August, it supported ONCAE in four workshops to gather representatives of public sector control bodies such as the TSC, the Public Prosecutor's Office, the Attorney General's Office, and the Public Prosecutor's Office, the Institute of Access to Public Information, the business sector. The aim was to identify the problems and solutions and to strengthen the transparency, efficiency and competitiveness of government purchases.

FT mobilized two Honduran lawyers, specialized in public procurement, to review the results of the consultations with the sectors and other consultations carried out by ONCAE, determine the adjustments required in the law and present to ONCAE a first draft of the new public procurement law. The draft was produced which highlighted the most relevant points as well as statistical data that demonstrate the need for review,

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such as the value of purchases made with emergency decrees that are used for several years and the value of purchases made by the trusts. (Year 1 AWP 6.1)

On the support regarding Independent Monitoring Organization (IMOs) in implementing monitoring, making more relevant information public, given the delay in the roll-out of Hondurcompras II there was only limited basis for exercise this monitoring. Nevertheless, FT through the activities described above on the law has contributed to building a stronger foundation to require more information be accessible to the public and to IMOs for monitoring. Also, the public – private consultative group to be hosted by SEFIN as agreed in the Open Government Plan will be consulted on the formation of this group. (Year 1 AWP 6.2)

Result 7: System to measure and control payment arrears in place to ensure invoice dates are entered correctly and vendors are paid on time

Payments. Following consultation with the Director of the Treasury in SEFIN and USAID, it was agreed that, since prior years’ arrears were largely analyzed and addressed, FT would focus on providing technical assistance to monitor prompt payment of current invoices related to improving the efficiency of cash forecasting, quota setting and payment prioritization in Treasury. In this regard, FT developed in the quarter an approach to monitor compliance with payment guidelines.

To implement the approach FT designed a tool for use by the internal auditors to facilitate review which provides coverage of all the steps required in the full and proper processing of payments of goods and services under the budget. The tool, which is an automated Excel worksheet, was prepared in consultation with the ONCAE Analysis and Statistics Unit. This worksheet includes the evaluation points made by the Analysis and Statistics Unit to the Public Institutions, as well as a form called "Guide for Monitoring and Monitoring of Internal Controls for the Contracting of Works, Goods and Services of the State" issued and approved by ONADICI on August 28, 2018 designed specifically for internal control. Over the first quarter of Year 2 the tool will be used by internal audit departments in two pilots to review compliance with the SEFIN circular on recording of reception date which serves to determine the date of payment. (Year 1 AWP 7.1 – 7.3).

Result 8, 9, 10 Internal Control and Audit: Status Yellow

FT and ONADICI advanced on the related activities in the Year 1 Annual Work Plan except work on the Internal Audit Framework, which has been held up because ONADICI and TSC have not agreed on the updated framework which TSC indicates must aligned with a new TSC Organic Law which is Congress, although its standing is not known.

Internal Control and Audit

Result 8 – Strengthened institutional capacity and independence of the TSC

Code of Ethics. TSC is part of the International Organization of Higher Audit Institutions (INTOSAI) and therefore committed to its standards, the International Standards on Auditing for Higher Auditing Institutions (ISSAI). ISSAI 30 stipulates that the audit bodies must have an approved and implemented Code of Ethics to comply with international standards. FT mobilized a short-term consultant in the quarter for the preparation, dissemination and implementation of the Code of Ethics of the TSC.

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FT conducted an analysis of the constitutional, legal and other hierarchical regulations related to the TSC and of the related Code of Ethical Conduct of the Public Servant of Honduras, and its regulations. FT prepared a review of the draft Code of Ethics of the TSC prepared by a consultancy in 2016. On this basis, a work plan was agreed to and the first outputs produced, specifically a proposal for an outline (index) of the Code of Ethics of the TSC along with strategies for its preparation and presentation to the Directorate of Probity and Ethics, for its review and provisional approval. Approval was given by the Ethics Department and will be discussed in the Magistrates council in October. (Year 1 AWP 8.1, 8.2) This document will be disseminated with the support of FT in Year 2 as such Activity 8.3, training on the new code of ethics, is reschedule for Year 2.

Public Works Audit. Training on computer – assisted audit techniques (Activity 8.4.1) could not be provided as TSC did not see the need at this time so it was switched for training on works audit. Over the quarter FT sought out the priorities in TSC for maximum impact on constraining malfeasance and improving expenditure efficiency. Through numerous discussions with management and technical staff at TSC it was determined that public works is an area where TSC needs technical inputs and where impact could be significant if modern audit techniques were applied. On that basis FT developed the Terms of Reference to increase the capacity of the TSC to perform audits of public works, specifically to provide a manual in this specialized field, incorporating the new trends in government auditing and national and international regulations. The consultant was selected and will mobilize in October. (Year 1 AWP 8.4.1)

Develop the internal control framework for government. The amended Article 222 of the Constitution of the Republic of Honduras defines the Superior Court of Accounts as the governing entity of the control system for public resources. In the fulfillment of its function, the TSC must perform financial control, management and results, based on efficiency and effectiveness, economy, equity, truthfulness and legality. TSC is also responsible for the establishment of a system of transparency in the management of public servants, the determination of illicit enrichment and the control of assets and liabilities. TSC and ONADICI have indicated the need to update the regulations that the TSC has issued on internal control to align with COSO 2017, which was agreed as one of the four activities for FT with TSC in Year 1.

In August, FT made a proposal to the technical committee, that TSC appointed on this subject, that the new Internal Control Framework be doctrinal or principle-based, as opposed to a set of detailed guidelines like the current one, and that through the National System of Control of Public Resources (SINACORP), the detailed regulations could be periodically updated without modifications to Framework. One of the first detailed regulations that would be approved by the Liaison Committee implemented by SINACORP, would be the Guidelines for the Implementation of Internal Control issued by ONACIDI, making it mandatory for the whole public sector, and not only for the Executive Function. FT prepared the TORs for the related work TSC then provided comments on the TORs on which basis FT is conducting a search for the short-term consultant to prepare the new principle-based framework. (Year 2 AWP 8.5)

Activities 8.6 and 8.7 were not agreed with TSC for Year 1, although work on the framework for internal audit (8.6) is planned for year 2.

Training of ONCAE staff and internal audit units across the public sector continued in the fourth quarter where 193 auditors attended 3 events (internal control on procurement, on personnel management and on the legal framework for procurement). (Year 2 AWP 8.8)

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Result 9 – Strengthened Internal Controls in Selected Line Ministries

Examine selected internal controls in pilots. FT responded to requests from counterparts to assess internal controls over different business processes as follows.

DARA – Human Resources Management and Payroll. FT documented, analyzed, and proposed improvements in the critical processes of human resources management and payroll of DARA. The review covered the planning and budgeting processes for recruitment, selection and hiring of personnel; as well as the process of separation, which were presented to the Human Resources Management of DARA for review and approval.

DEGEPESCA Internal Control over Licensing. Given the assistance of FT to SAG on strategic planning, the Minister brought up the concern of reported corruption cases. The case of the DEGEPESCA is an acute concern where it was reported in the press that organized crime may be involved in buying permits to operate off-shore and in-shore fishing boats. Given the level of USG commitment to SAG and the high level of request, it was agreed to use DIGEPESCA as a pilot for developing HR and procurement processes. Under this approach FT, over the fourth quarter, applied risk analysis and process design to the granting of licenses and permits for marine fishing and permits for the aquaculture activities. The draft report was presented to management in September with 9 findings and 22 recommendations on August 22, 2018.

BANASUPRO Various - Over the quarter, FT worked to advance the strengthening of internal controls over human resources and acquisitions in BANASUPRO by assessing the effectiveness of the controls established in the related processes. Specifically, FT evaluated the internal control in the processes of: 1) human talent management (to determine compliance with its Internal Work Regulation), 2) purchasing, storage, distribution and sale of basic products. The draft report was sent to BANASUPRO on August 16 and the final discussed with management in a meeting on September 24. (Year 1 AWP 9.1)

Identify the problems with legal frameworks and determine training needs analysis / Train 30% of Internal Audit Units in selected themes, based on training needs. To contribute to enhanced capacity of internal audits, FT coordinated with ONADICI for a course from the president of Latin American Foundation of Internal Auditors (FLAI) Jorge Badillo to be given on determining the level of maturity of a system on internal control which was delivered on July 2, 2018 for more than 150 representatives from the internal control committees and internal auditors units. This training allows internal auditors to gauge their assessment and recommendations on control to what is viable in the context where processes are matched with the risks and lead to higher adoption of internal audit inputs. Separately 35 representatives of private sector organizations attended a session on how to obtain international certifications of internal auditors. The international certification of internal auditors is a public good since it raises the standard of understanding and performance of internal audit both in the public and private sectors. All told to date, FT provided training to 39 out of 50 active internal audit units (80%). (Year 1 AWP 9.2, 9.3)

Develop Training Needs Assessment. The questionnaires for the evaluation of training needs were submitted to the internal control workshops on June 21 (procurement processes - 51 responses) and June 22 (human resources management - 29 responses). In July, the input was complemented with interviews and observation of available facilities and based on this feed-back, the evaluation was concluded and presented in a report and a training plan for COCOINs members was agreed upon. The

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assessment led to the development of the TOT course which will in turn roll out internal control understanding throughout the public sector. On September 17th, FT, along with SCGG and ONADICI, inaugurated the Sustainable Learning Transformation (SLT) Program – Trainer of Trainers (ToT), in the Central American Technological University (UNITEC). The event was opened by SCGG’s Minister Martha Doblado. On September 19th, the 22 participants defined objectives and developed a synthesis and a summary for the course and training module. The Program is being led by FT’s Capacity Building Manager who is following-up with participants who now have one month to prepare their courses and modules that will be evaluated in November. (Year 1 AWP 9.4)

Redefine and expand the role of the Internal Control Committee. On September 25 and 28, two events were held to train members of the Internal Control Committees (COCOIN) based on material developed by the Consultant Daniella Caldana: one for the Strengthening of the COCOIN and training for the use of matrices to measure the degree of maturity of the internal institutional control respectively. Eighteen officials attended from the COCOINs of the Attorney General’s Office (PGE), SEFIN, Ministry of Education and the HONDUTEL. The basis for the training was to rewrite the regulations for the operation of COCOIN in Honduras which was aligned with international standards and practices and supported by guides. Together the new material and the dissemination contribute to redefining the role of the COCOINs. (Year 1 AWP 9.5)

Result 10: Improved inter-institutional coordination between the Public Ministry, TSC, other relevant stakeholders to advance administrative sanctions for corruption.

Inter-Institutional Coordination on Sanctions. This activity was delayed at the request of TSC while awaiting the appointment of the new Attorney General (Fiscal), and then FT was not able to meet with relevant authorities. A change in approach is necessary so rather than wait for access to the Fiscal, FT will focus on the Office of the Public Prosecutor (Procurador). FT will analyze the competencies of the TSC, the Office of the Attorney General (PGR) and the Public Prosecutor (PP), regarding the process of applying sanctions originating in reports from the TSC and the internal audit units. On this basis, FT will support the TSC in the elaboration of agreements between the TSC, the PGR, the PP and other entities to achieve the application of sanctions and the generation of information. FT will also support the TSC and the other related entities to implement the agreements reached to promote coordination and generation of statistical information and other relevant information related to the application of administrative and civil sanctions by the Public Ministry and criminal actions by the Public Ministry. (Year 1 AWP 10.1)

Although in the work plan was defined to convene a working group this was not possible because the meeting with the Attorney General was only held in October 29, 2018 where it was agreed that PGR will coordinate a working meeting with TF to establish the objectives and scope of the work to be done to strengthen the process of recovery of sanctions and other responsibilities established by the TSC and other agencies. (Year 1 AWP 10.2)

C. COMPONENT 2: INSTITUTIONALIZE PUBLIC PRIVATE DIALOGUE ON TRANSPARENCY, FISCAL POLICY, AND ANTICORRUPTION ISSUES

Results 11, 12, 13 Participation: Status Green

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Support for all key component activities is underway and products including the mapping of civil society organizations and the report on budget consultations were delivered.

Result 11: Increased credibility and functioning of public-private oversight mechanisms such as CCAP

Identify CSOs focused on Transparency, Fiscal Policy and Anticorruption Initiatives. Following the mapping of actors in public-private dialogue on fiscal affairs, FT expanded the profile of the related parties. The Government of Honduras’ legal framework that empowers the right of citizen participation in public administration, the Constitution of the Republic, as well as the Organic Law of the Superior Court of Accounts, support citizen and non-governmental participation. The Law on Transparency and Access to Public Information similarly supports the right of citizens to access public information. Based on this framework, civil society organizations such as FOSDEH, the Center for Women's Studies in Honduras (CEM-H), Center for Democracy Studies (CESPAD), Legal Technical Services (SETELEC), and Citizen Commissions of Transparency, have affected social oversight and research. Issues researched by FT included: examining the General Provisions of the Budget of the Republic, priorities and rigidity of the budget, quality and efficiency of spending on education and health, monitoring and evaluation of public spending on security and defense, gender social oversight of the budget, and oversight of municipal finances.

In addition, three civil society organizations (FOSDEH, FOPRIDEH, FDsF) have conducted external evaluations since 2016 - the Honduras Open Budget Survey: OBI (Open Budget Partnership). These exercises of social oversight and external evaluations have contributed to civil society organizations being influencers of public opinion and have had impact on proposals for the improvement in the budget of the republic. However, it is necessary to provide effective follow-up on the critical aspects of the budget, such as: budget execution, budget settlements, expenditure transfers, trusts, subsidies, exemptions, among others. (Year 1 AWP 11.1)

Develop Training Needs Assessment and Develop training curriculum to increase CSO capacity. Over the quarter FT conducted a series of consultations with SEFIN on increased credibility and functioning of public-private oversight mechanisms such as CCAP which complemented feedback from CSOs and private sector originations received at the budget consultation workshops and consultations with the USAID-funded Civil Society Media Activity. These discussions and feedback shed light on the capacity and needs of these organizations. It particular, it revealed that a single curriculum for training would not respond to any particular need since capacity was ample in the entities that conducted analysis and that other entities, which form the majority, the need was for information and the development of reporting tools to raise capacity in the citizens to follow fiscal affairs, rather than training. As such, FT did not conduct the capacity needs assessments or develop the curriculum as initially planned. (Year 1 AWP 11.2, 11.3)

GOH, with civil society participation, issued in August the Fourth Plan for Open Government for 2018 - 2020 where the parties agreed that a public-private commission on fiscal transparency will be formed and that SEFIN should produce user-friendly budget documents. FT’s interactions over the quarter with GOH and CSOs, as well as with the Civil Society and Media Activity, led to the formulation of an approach agreed with SEFIN for a targeted support for public-private oversight whereby interventions would be set based on the priorities on transparency decided by the commission and grants provided to carry-out the related work. This will be complemented by support for

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the development of tools to train citizens in fiscal and budgeting matters. (Year 1 AWP 11.4, 11.5)

Result 12: Increased public participation in the budget formulation process

Citizen Participation in the Budget. To improve the transparency of budget formulation, which includes citizen participation, FT supported SEFIN in the design and execution of a budget consultation on the 2019 budget. SEFIN had made an effort in March 2018 for consultations but the response was tepid and no commitment was reached for changes in the budget or process and civil society did not express any satisfaction with the process. In the quarter, FT outlined for SEFIN a new approach in-line with Level 2 of the OECD categories of citizen participation in budget formulation, whereby government commits to consider and act on the feedback from citizens but governments choose the topic. An agreement was reached on the approach and preparations were made for four workshops with sixteen (16) groups made up of professionals from SEFIN, entities monitoring gender spending in the private sector and in micro-enterprises, in addition to independent specialists. The topic chosen for consultation by SEFIN was fiscal transparency.

The first workshop, with former ministers of finance, took place on July 16 where participants began with different definitions of the concept of fiscal transparency. Participants developed an operational definition of the concept of fiscal transparency and a common baseline of transparency gaps before going on to identify alternatives to reduce the gaps based on a common understanding of the problem. Lastly, participants selected a package of alternatives that narrowed the gaps.

The second workshop, held on July 17th, followed the same methodology, and included several members from civil society and government organizations, including Solidarity Loan, Center of Study for Democracy (CESPAD), National Congress (CN), Center for Women´s Studies (CEM-H), Association Quality of Life, OXFAM, Honduran Bank for Production and Housing (BANHPROVI), The Peasant Route (LVC), and Women City Project (PPCM).

Two additional workshops, one with the social sector group of the economy and the other one with the private enterprise sector, will be conducted, with FT support, before Congress begins its review of the 2019 budget.

SEFIN and FT continued the works started by the workshops by gathering the priorities voted on by the participants and prepared a report on findings, which was presented to Minister Tábora on September 3. The Minister expressed satisfaction with the results of both workshops and identified 3 staff to coordinate the preparation of the action plans to implement the 3 initiatives, since the priorities voted on by the participants are also the priorities of SEFIN specifically: Tax Expense Group - Exonerations; Fidecomisos (Trust Funds); and Gender Budgeting. It was also agreed that the related action plans would be presented to the participants in a consultation workshop as soon as the action plans are available. The consultations that FT supported constitue public outreach and led to a list of actions agreed to by SEFIN, although the series of wshops is continuing into Year2, so these events respond to Activity 12.4.

(Year 1 AWP 12.1, 12.2, 12.3, 12.4)

Result 13: Effective collaboration between FT activity and other donor and USAID-supported efforts to advance public-private dialogue related to transparency, anticorruption.

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In the quarter, FT pushed forward with coordination of public-private dialogue with consultations with the USAID funded Civil Society and Media Activity (CSM) on July 27, August 30, and Sept 20, Asociación para una Sociedad Más Justa (ASJ) on September 13 and the Presidential Commission for Transparency on August 3.

On July 27, FT shared with the team of the CSM the progress of the workshops held between the Finance Secretariat and the group of experts and women's organizations involved in advocacy on the budget issues on July 16 and 17. The meeting discussed the background to the Fiscal Pact which IMPACTOS Activity had financed, this initiative was promoted from 2012-2016, through FOSDEH, ICEFI and Technical Services Legal, SETELEC. These 3 organizations led the participation and consultation process to present a proposal of Fiscal Pact to the government authorities. On August 30, FT met with Civil Society and Media (CSM) to explain the lines of work required to accompany civil society in the framework of the activity Enabling Environment - Rule of Law. The meeting with CSM held on Sept 20, was to discuss the profiles of the relevant actors to improve fiscal transparency and to identify coordination activities. The outcome of the meeting included an agreement for FT 1, to share profiles of CSOs that FT has identified in the fiscal and budgetary area and to identify coordination support for joint work between SCM and TF for year 2 and 2, for TF to share the preliminary reports of the workshops held between SEFIN and the CSOs or other groups.

On August 3, FT met with Mr. Alfredo Cantero, Presidential Commissioner, to discuss the issue of transparency and how the government has prioritized the implementation of the Transparency and Integrity Policy and the installation of the Inter-managerial Transparency and Anticorruption Board. The board is composed of the presidents of the state powers and the magistrates of the state control bodies. A technical commission (reporting to the board) will also be formed by members of civil society, the private sector, academia and donors.

On September 13, FT met with ASJ to discuss coordination. It was noted that ASJ in the coming months will sign a collaboration agreement with SEFIN to have access to information on forms, payments, and contracting of public trusts. FT mentioned that grants requests could be made for a study to quantify the cost benefit of the exonerations. FT pointed out that it is supporting ONCAE in the review of the regulatory framework for public procurement, consultation workshops have been held with control bodies, suppliers, purchasing managers. The results are being consolidated and in the first half of October the draft of the regulatory framework will be socialized with the civil society, the private sector, and government institutions. ASJ indicated that there are other entities that are working on the preparation of reform proposals for a new law on state contracting while FT noted that this information highlights the need to coordinate. ASJ mentioned that they are talking with the highest authorities of the Executive Power to implement in the public institutions the ISO 37001- Anticorruption and that they are looking for financing to support this effort.

On September 27, FT attended a meeting for IP working on DO3 convened by USAID to review results and opportunities for coordination like the celebration of transparency day (Year 1 AWP 13.1, 13.2, 13.3)

D. COMPONENT 3: STEPS TAKEN TO PROFESSIONALIZE THE CIVIL SERVICE

Result 14, 15 Civil Service Reform: Status Green

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Although DGSC admitted merit based recruitment cannot be introduced in full at this time, activities related to civil service reform and ethics are underway and on track to advance on targeted results.

Result 14: Improved transparency and merit-based practices in civil service recruitment, selection, evaluation, and promotion

Technical study of the DGSC. In the fourth quarter, FT finalized the technical evaluation of the Civil Service General Directorate (DGSC). The study set out not only the changes that the entity should implement to strengthen its role as a regulator but also the required budget to fund the proposed arrangements. SEFIN expressed support for the proposed budget. Based on the results of the study, FT held meetings with the General Director of the Civil Service and with SEFIN officials on the new set tasks proposed for DGSC. Initially, it has been agreed that FT would support the revision and updating of the Civil Service Law Regulation. (Year 1 AWP 14. 1, 14.6)

The government-wide salary policy and salary scales. During the quarter FT obtained a commitment from the Minister Tábora and Attorney Diaz (Director of DGSC) to continue with the development of a government-wide salary policy. On this basis, FT mobilized a short-term consultant to lead this activity. The consultant began by preparing an inventory of the agreements, laws, executive decrees, regulations and others that regulate the salary policy in the Honduran Public Sector, including labor statutes and current collective bargaining agreements. This work will help identify the main elements to facilitate the regulation of wages in the public sector that are needed to document the economic and non-economic benefits provided under the current statutes and collective contracts with specific sectors. (Year 1 AWP 14.1, 14.2, 14.3)

Results 15: Government ethics program for public servants established and institutionalized in piloted institutions

Based on a strategy agreed with TSC and DGSC, FT contributed to the development of a comprehensive government-wide ethics program run from DPE in TSC and targeting the Ethics Committees rather than entering a few ministries on their own. In this manner, the activities 15.1, 15..2, 15.3, 15.4 ( With GOH, USAID select pilot institution, Using SLT, identify performance gaps, set plan to close them, With Institutions, implement program and monitor impacts, Identify and present good practices and succesful cases of the implementation of ethic programs within the GOH, Revise program components as necessary, Assess the viability of establishing a national 'hot line' to receive citizen complaints).

In the fourth quarter, FT concentrated efforts on developing a Public Integrity and Ethics Program and related Action Plan to be implemented by the Directorate of Probity and Ethics (DPE) of the TSC, which is a milestone for Result 15. This Program will serve as a foundation to strengthen and promote the work that the DPE has been carrying out in terms of integrity and public ethics within the public sector as a primary objective, and in the private sector as a coadjutant to improve the culture of integrity and ethics in Honduras. To prepare the Program, the inputs prepared in the previous quarter were used (literature review, interviews with key actors, and analysis of problems and causes, among others), and multiple meetings and workshops were held with officials from the DPE, in order to achieve a high level of participation and ownership of the Program to be developed by them. Once the program and its plan have been approved by the TSC Magistrates Plenary, five pilot institutions will be defined to implement the actions that the FT considers appropriate, carrying out an initial evaluation to compare it with an

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evaluation that will be carried out at the end of the exercise. It is worth noting that the Program proposes the establishing of a system of complaints for violations of integrity and ethics within the public sector. (Year 1 AWP 15.1, 15.2, 15. 3, 15.4)

The review and incorporation of a “hot line”, Activities 15.5. and 15.6 will be considered in Year 2.

5. PLANNED ACTIVITIES FOR NEXT QUARTER

The following is a brief overview of the planned work for the next quarter.

Results

● Result 1. Consult with counterparts on PFM Legal Review recommendations in light of Transparency and Anti-Corruption Policy. Support the preparation of an action plan to implement agreed recommendations. Support for counterparts to take steps on closing gaps. (Year 2 AWP Activity 1.1 – 1.3)

● Result 2. Collaborate with the salary budgeting for 2020 based on the new salary scale in the pilots. Support ONADICI, the SIREP and the DGSC to develop a model of procedures for the monthly reconciliation of payroll and for other controls in the management of human talent based on the results obtained in the pilot entities. (Year 2 Activity 2.2.1, 2.2.1)

● Result 2. Introduce a "gender tag" that identifies programs directed to women and/or vulnerable groups. Review all used instruments for institution's use (manuals, forms, I.T. systems, etc.) (Year 2 AWP 2.3.1)

● Result 3. Support the launch of SEFIN portal and its maintenance (Year 2 AWP 3.1.2)

● Result 3. Prepare the methodology for the Implementation of Budgets for Results (PPR) with the participation of SCGG and SEFIN based on the pilot experience in the Ministry of Agriculture and submit to the approval of both institutions, considering the generation of public information and surrender mechanisms of counts. (Year 2 AWP 3.2.1)

● Result 4. Develop a plan for the institutional strengthening of ONCAE (Year 2 AWP Activity 4.1.1)

● Result 4. Develop the processes for granting Grants to selected universities in an open competition initiated in year 1 for the certification of public buyers. (Year 2 AWP 4.3.1)

● Result 6. Support ONCAE by drafting a proposal for a new State Procurement Law or reforms to the existing one, based on the inputs of the workshops held with representatives of the State control agencies, suppliers and public buyers, and other existing inputs. (the previous activities were carried out in year 1). (Year 2 AWP Activity 6.1.1)

● Result 7. In coordination with ONADICI, develop a methodology for monitoring the payment of suppliers, from the date of submission of the payment request, to

26

the actual payment, in accordance with what is established in Circular CGR-001 2017. (Year 2 AWP Activity 7.1.1)

● Result 8. Present the TSC Code of Ethics project to the magistrates for approval, approved by TSC's Directorate of Probity and Ethics. (Year 2 AWP Activity 8.1.1)

● Result 9.1 Support TSC in updating the Internal Control Framework (contractual phase initiated in year 1. (Year 2 AWP 9.1.1)

● Result 9. Support ONADICI to implement the improvements identified for the COCOIN operation (activity started in year one with a consultancy that reviewed the role of COCOIN and presented an improvement plans. (Year 2 AWP 9.2.1)

● Result 11. Support the public-private commission to supervise the progress of the adoption of the Fiscal Transparency - Code of Good Practices of the IMF. (Year 2 AWP Activity 11.1)

● Result 11. Prepare a plan to finance CSOs to carry-out transparency initiatives. (Year 2 AWP 11.2.1)

● Result 12. Complete the round of consultation with one workshop with civil society and another with private sector. (Year 2 AWP Activities 12.1.1)

● Result 13. Convene the USAID IPs which work on participation to share the outcome of the budget formulation workshops and agree on an exchange mechanism to keep all parties abreast of activities. (Year 1 AWP Activity 13.1, 13.2)

● Result 14. Define the regulations, procedures and technical instruments to support restructuring. (Year 2 AWP Activity 14.1)

● Result 15. Select 5 pilot institutions to be strengthened through the Committees of Probity and Ethics and establish a baseline of integrity and ethics of the 5 pilot institutions. (Year 2 AWP 15.1.1, 15.1.2)

6. ADMINISTRATION AND BUDGET INFORMATION

Program Logistics and Contracting

1- In this last quarter FT’s Administration Unit was focused primarily on logistics for

the increased counterpart support, coordinating 19 training and workshop events,

with 433 participants.

2- Five local and two international short-term consultants were selected and

mobilized supporting technical activities of Component 1.

3- Preliminary market research was carried-out to identify vendors for equipment

required for the in-kind grants which are underway. This step should result in a

short list for a private bid once the grants are signed, reducing the time required

to execute the grant after agreement.

Office Administration

4- A transport company was selected on a competitive basis to provide staff

movement to and from meetings/events.

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5- The sales tax exoneration resolution was received with a correction which allows

FT to initiate the process of registering the activity in tax registration data base

(PAMEH). On-line exonerations should start in October 2018.

6- New work stations were installed in the office to provide working areas for short

term national and international experts.

7- A methodology to calculate and support counterpart contribution to FT’s activities

(referred to as cost share) was developed. Specifically, the approach to the cost

share calculation is first to identify the hours of counterpart staff time spent on FT

activities from the record of meetings and events which is part of the MEL

tracking. On this basis, FT researches the salary of staff at the level reported

through contracts and salary information posted in IAIP and assigns the hourly

rate to the time spent.

Forecast and actual expenditure by quarter is presented in the table below.

Budget Lines

Quarter 1

Actual

to

Forecast

Quarter 2

Actual to

Forecast

Quarter 3

Actual

to

Forecast

Quarter 4

Actual

to

Forecast

Forecast Actual % Forecast Actual % Forecast Actual % Forecast Actual %

Direct Costs $123,133 $100,828 82% $123,149 $162,767 132% $126,335 $155,785 123% $105,681 $171,431 162%

Grants $0 $0 $0 $0 $0 $0 $10,000 $0 0%

Indirect Costs $36,413 $29,686 82% $30,936 $37,663 122% $41,806 $29,915 72% $44,500 $30,870 69%

Labor $304,320 $261,858 86% $416,977 $442,126 106% $452,272 $394,915 87% $491,171 $437,724 89%

Subcontractors $0 $0 $0 $0 $98,134 $97,508 99% $147,201 $188,980 128%

Grand Total $463,866 $392,372 85% $571,062 $642,556 113% $718,547 $678,122 94% $798,553 $829,005 104%

Obligated and disbursed amounts are given in the table below and are tracking well to plan.

Obligated and Disbursed Amounts to September 22, 2018

In US$

Contract Value $9,490,589

Amount Obligated $6,090,589

Funds Disbursed Q1 (January 13, 2018) $392,372

Funds Disbursed Q2 (April 7, 2018) $642,556

Funds Disbursed Q3 (June 30, 2018) $678,122

Funds Disbursed Q4 (September 22, 2018) $829,005

Total disbursed against sub ceilings (September 22, 2018)

Labor $1,536,623

Other Costs $1,005,433

Total Funds Disbursed through Q4 $2,542,056

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7. PROBLEMS ENCOUNTERED AND PROPOSED REMEDIAL ACTIONS

Result 14. Merit-based Civil Service. While the work plan for Year 1 is aimed at advancing transparency and the merit-based recruitment, promotions and evaluations, it came to light during the last quarter that there is great reluctance in GOH to move ahead with merit-based selection across the board now. Nevertheless, work to restructure the DGSC is fundamental in preparing the ground for an eventual adoption of a merit-based civil service so FT went ahead with this work and shifted the plans for Year 2 to prepare the legal framework to allow for restructuring of budget units to achieve a staffing structure in line with each unit’s mandate. This will equally contribute to the eventual move to merit-based policies.

Result 12. Fiscal Pact (Pacto Fiscal) displaced budget consultations. FT had agreed with SEFIN on a set of four consultations workshops on the 2019 budget; two were carried-out but before the two remaining workshops, one with Social Sector Group of the Economy and the other one with the private company sector could take place, SEFIN and the whole of government was absorbed by the transport service providers’ strike. In the aftermath of the strike, a fiscal pact was proposed by government then opposed by civil society and private sector representatives which put budget consultations off the agenda until the strike was settled by which time SEFIN was busy with the presentation of the budget in a series of public outreach meetings. A shift in activities was necessary where FT concentrated on assisting SEFIN with the action plans to implement the priorities selected by the participants in the first two workshops while at the same time agreeing to continue with the remaining two workshops in Year 2.

Result 5. Honducompras II Scope of Implementation Not Settled . In a meeting requested by ONCAE on September 27, 2018 in the offices of FT, the Director of ONCAE reported the difficulties foreseen in the implementation of Honducompras II because there are current legal requirements which must be addressed before procurement can be automated. Similarly, certain manual processes will persist even with the implementation HonducomprasII.

Result 8. Activity 8.6. TSC is pursuing a change to their organic law to absorb the responsibility of internal audit across Government. FT prepared an analysis of the proposed amendments. The proposed arrangements are not in line with good practice and in any case, TSC is holding up the issuance of the framework for internal audit and external control because it feels that all new regulations and guidelines must align with this structure. This work is rescheduled for Year 2 when it should be clear if the amendment is to go forward. FT decided to shift to working with ONADICI for strengthening internal audit, without the TSC sanction.

Result 11. Activity 11.3 to 11.5. Feed-back from CSOs and private sector organizations which participated in the budget formulation workshops in July, indicate that their needs and interests are so diverse that these may not be addressed with a roll-out of a single curriculum. Moreover, these organizations generally have the competencies to follow fiscal affairs, expenditures in particular. FT shifted activities from training CSO organizations to assistance in defining budgetary-fiscal information needs for their use and dissemination to promote citizen participation. FT, with CSOs, will work to identify needs for improvement of budgetary and fiscal information.

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8. SUBCONTRACTOR PROGRESS

Deloitte Honduras – The firm provides expertise on civil service reform and control and audit. During the fourth quarter, the Component 3 Lead was mobilized under this arrangement as well as newly mobilized short-term specialists, including an ethics specialist, SAG process specialist, public works audit consultant, and an internal controls consultant.

The list below includes those resources that have been mobilized since the Q3 Report, working under the subcontract with Deloitte Honduras:

• Daniella Caldana (STTA) – Internal Controls Consultant

• Jose Rojas (STTA) – Public Works Audit Consultant

• Marvin Aceituno (STTA) – SAG process Specialist

• Nuria Zumbado (STTA) – Ethics Specialist

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9. MONITORING, EVALUATION AND LEARNING

During the reporting period, the M&E Specialist carried-out meetings with each Component Leader to share detailed information on the M&E process and to arrive at a consensus on the modification of indicators, means of verifications, data collection methods and other important aspects. The modification of indicators was considered necessary by FT and USAID to allow better tracking of results by bringing these into line with agreed activities for Work Plan for year 2, and those projected for year 3. Additionally, the M&E Specialist provided support and assistance for technical staff and grants component, in order to include indicator-based activities in concepts notes and RFA’s for new grants.

Agreement on the need for new indicators was given in September, 2018, and meetings with MESCLA team have been held for the elaboration of new PIRS. A new submission of MEL Plan is planned to be sent to USAID for the first week of October.

A. M&E SOFTWARE

FT worked with MESCLA’s team on the construction and adaptation of indicator tracking instruments (Excel Sheets) to be included in DevResults. Following the approval of the ME&L Plan during year 1, FT purchased an interactive software, Fulcrum. A training was held with the team on the use of the software and the importance of its reporting. Throughout the quarter, the team has been using it to report the planning and results of activities, technical meetings, events, CLA activities, grants follow-up process, communication’s updates, and indicators. This follow-up has been useful to analyze how FT’s is leading its way to comply with the theory of change. The reporting provides inputs on how the government has been motived to improve its transparency and efficiency in the management of public resources to reduce corruption.

With Fulcrum, FT can provide the required information to MESCLA and to create dashboards using Microsoft tool – Power BI. This tool allows us to elaborate graphics in the form of interactive data or dashboards, which will help us to visualize and analyze the information of the indicators.

B. UPDATE ON INDICATORS5

5 FT has proposed amended indicators to USAID as of October 1, 2018 but for this report the original indicators are being

used for this reporting period

Indicator No. Specifications Baseline Year 1 Year 2 Year 3Achieved

LOP

Target 0% Level 1 Level 2 Level 3 Level 3

Actual Level 3

Indicator No. Specifications Baseline Year 1 Year 2 Year 3 Achieved LOP

Target 0 4 10 10 10

Actual 6

Target 0 20 40 80 80

Actual 196

F Indicators

18Number of government officials receiving

USG supported anti-corruption training

Component 2 - Public-Private dialogue on transparency, fiscal policy and anti-corruption initiatives institutionalized

Indicator Description Notes & Descriptions

11

Number of anti-corruption initiatives

reflecting PA-supported Public-Private

dialogues

13

Institutional Capacity in targeted

institutions strengthened through

participation in public-private dialogue

Component 1 - Improved Transparency and Effectiveness of Public Spending

PERFORMANCE INDICATORS

Indicator Description Notes & Descriptions

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10. COLLABORATIVE LEARNING AND ADAPTING (CLA)

Activity or

Process

Responsible

Office or

Person

Expected Outcomes Timing Resource

s

Next

Steps

Strategic Collaboration6

Community of Practice - GIS

Convened by: Mescla – USAID FT Representation: M&E Manager

The community of practice for Specialists in Geographic Information Systems (GIS) looks to promote a space to share contacts and present the scope of implementing partners on the subject. It was also looking to support the efforts of our country’s objectives (CDCS) and promote an open discussion about how can the GIS develop an important role in the analysis and decision making based on evidence.

4 hours

August 31, 2018

N/A Establish regular meetings with the team that will allow to track the development of new tools and innovative solutions, as well as eliminate the duplicity of efforts from IPs.

Community of Practice - Gender

Convened by: Mescla – USAID FT Representation: M&E Manager

This community of practice took place at

La Esperanza/Yamaranguila, Intibucá.

For this gender community of practice, the

purpose was to get to know the important

role of community organizations and

approach them on gender and violence-

based prevention. The community

intended also to present initiatives of good

practices implemented by USAID’s

activities and sensitize coordination

among actors.

In this particular case, two field visits were

coordinated: Agrupación Las Hormigas –

a local women organization from La

Esperanza who shared their experience

on empowerment process and

coordination with public entities. The

second field visit was made with ARCILI, a

blind people association who shared their

1 day

August 15 – August

16th, 2018

N/A Identification of possible coordination actions and knowledge exchange among USAID’s activities. Gender activities are going to be incorporated within the 20 days against gender-based violence prevention framework.

6 Communities of practice also form part of the learning activities, due to the exchange of experiences given during the events.

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Activity or

Process

Responsible

Office or

Person

Expected Outcomes Timing Resource

s

Next

Steps

experience on employment of blind

personas at Intibucá. Each participant

shared about their experience during the

field visits and some shared about the

work they have been doing on gender with

their activities.

Learning

M&E and Technical Team Meetings

FT’s M&E Manager

The meetings took place during August, 2018. The modification of indicators was already being discussed with the team. After analyzing the activities that are to be included during year 2, indicators were modified in a way that they could fit and measure year 2’s work plan. In conversations with the team, new indicators were created, means of verifications were reviewed, and targets were considered. After receiving USAID’s observations on the first version of indicators, new modifications were made and approval was given. PIRS were worked along with MESCLA, and a new version of the MELP is expected to be sent to USAID by first weeks of October.

August, 2018

N/A Implementation of new indicators for Year 2. Some targets are yet to be worked on.

Opportunities for Reflection

Pivot Log FT Technical Team & M&E

Some of the reported changes involve the following:

1. While preparing the workshops that are being held on subjects of improving transparency of programming and budget execution; FT identified the need of including SEFIN’s fiscal experts to identify new initiatives for the improvement of transparency in the budget execution and adherence to laws. The

Quarter III N/A N/A

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Activity or

Process

Responsible

Office or

Person

Expected Outcomes Timing Resource

s

Next

Steps

workshops approach differed to the common since it was participative and the initiatives selected were from inputs provided from key participants.

2. The consultancy for the update of the Internal Control Framework for the TSC was changed (time) due to a request from the TSC, to begin until January 2019 and for a period of 60 days.

3. Modification of MEL Plan.

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11. INTEGRATION AND COLLABORATION WITH OTHER USAID ACTIVITIES

July

✓ On July 16 a meeting was held with Local Governance Activity (GLH) to

coordinate with FT and complement activities on subjects of internal control.

August

✓ On August 17 a meeting was held with World Bank (STAR) to coordinate efforts with FT on implementation of open data.

✓ On August 28 a meeting was held with GLH to know about the activities they are working on and cooperation opportunities.

September

✓ On September 04 a meeting was held with WB-STAR to coordinate activities

related to open data.

✓ On September 26 a meeting was held with MESCLA’s DCOP Roger Pipe, to

review FT’s MEL Plan and its PIRS previous to submission to USAID.

12. COORDINATION WITH OTHER DONOR AGENCIES AND ACTIVITIES

✓ On September 13 a meeting was held with ASJ to follow up on the results of the

technical study from DGSC on salary policies and uniform salary scale proposed.

✓ On September 28 a meeting was held with FOSDEH to know about their

subjects of interest on fiscal activities, budget, external debts, and others. On

September 28 a meeting was held with FOSDEH’s director Mauricio Díaz

Burdett to get to know about the issues that FOSDEH is currently pursuing or is

interested to in fiscal management, budget management, external debts, and

others.

✓

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13. ANNEXES

A. TABLE OF COUNTERPARTS BY RESULT

36

B. IN-COUNTRY TRAINING

C. (F INDICATOR) 24

Number of government officials receiving USG supported anti-corruption training - A total of 171 people (78 female, 74male) received anti-corruption training with USG assistance – 55% male and 45% women:

Seminar – Workshop “Audit that Creates Value” with public and private and sector: A

total of 97 government officials (54 male, 43 female) attended the Training session with

participants from different government institutions held on March 19, 20, and 21:

✓ Secretaría de Educación (SEDUC)

✓ Secretaría de Agricultura (SAG)

✓ Banco Central de Honduras (BCH)

✓ Banadesa

✓ Secretaría de Defensa Nacional (SEDENA)

✓ Oficina de Desarrollo Integral de Control Interno (ONADICI)

✓ Ministerio Público (MP)

✓ Empresa Nacional de Energía Eléctrica (ENEE)

✓ Instituto de Previsión de la UNAH (INPREUNAH)

✓ DINAI

✓ Procuradoría General de la República (PGR)

✓ Empresa Nacional Portuaria (ENP)

✓ Comisión Nacional de Bancos y Seguros (CNBS)

✓ Instituto de Conservación y Desarrollo Forestal (ICF)

✓ Instituto Nacional de Estadísticas (INE)

✓ Empresa de Correos de Honduras (HONDUCOR)

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✓ Secretaría de Coordinación General de Gobierno (SCGG)

✓ Servicio Autónomo Nacional de Acueductos y Alcantarillados (SANAA)

✓ Instituto Nacional de Jubilaciones y Pensiones (INJUPEMP)

✓ Secretaría Mi Ambiente

✓ Secretaría de Recursos Naturales y Ambiente (SERNA)

✓ Comisión Nacional para el Desarrollo de la Educación Alternativa no Formal

(CONEANFO)

✓ Secretaría de Derechos Humanos, Justicia, Gobernación y Descentralización

(SDHJGD)

✓ Instituto de Desarrollo Comunitario, Agua y Saneamiento de Honduras (IDECOAS)

✓ Instituto de Acceso a la Información Pública (IAIP)

✓ Secretaría de Desarrollo e Inclusión Social (SEDIS)

✓ Instituto Hondureño de Ciencia, Tecnología e Información (IHCIETI)

✓ Secretaría de Salud (SESAL)

✓ Servicio Nacional de Sanidad y Calidad Agroalimentaria (SENASA)

✓ Secretaría de Coordinación, Coordinación Nacional Pro-Instalaciones Deportivas y

Mejoramiento del Deporte (CONAPID)

✓ Secretaría de Presidencia

✓ BANHPROVI

✓ Instituto Nacional de Geología y Minería (INGEOMIN)

✓ Universidad Nacional de Ciencias Forestales (UNACIFOR)

✓ Cuerpo de Bomberos.

D. MEETINGS WITH GOVERNMENT OFFICALS

During the reporting period FT leadership and advisors met with representatives of multiple government agencies to discuss work plan activities, staffing needs, and other project design and implementation issues. A list of meeting with senior Government officials during the reporting period is provided in Table 1, while meetings with technical level staff is presented in Table 2.

Table 1 Meeting with Senior Government Officials

July

✓ On July 03 a meeting was held with Yvonne Ramirez, SEFIN’s Transparency

Director; Dina Caballero from the technical team of Alliance Plan; and, Wendy

Flores from Chancellery to discuss the monitoring of the Alliance Plan.

✓ On July 26 a meeting was held with Internal Control and Transparency at

Ministry of Human Rights with Karla Sierra, Head of Cooperation.

✓ On July 30th and 31st COP Paul Sisk and Expenditure Expert Ralph Oberholzer

from Fiscal Transparency attended the fiscal pact meeting.

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August

✓ On August 03 a meeting was held with the Presidential Commissioner of

Transparency, José Alfredo Cantero, to discuss FT’s coverage and plans of the

new commissioner.

✓ On August 28 a meeting was held with IAIP’s commissioner and staff to define a

strategy course.

✓ On August 29 a meeting was held with Director of DGSC, Merary Díaz to

discuss context and support for meritocracy and the AWP for year 2.

September

✓ On September 03 a meeting was held with SEFIN to present the results of

budget consultation workshop. The meeting was attended by Rocío Tábora and

Yvonne Jimenez.

✓ On September 07 a meeting was held with Rocío Tábora, deputy ministers and

SEFIN’s management on the 2019 budget outreach by SEFIN.

✓ On September 10 a meeting was held with José Luis Osorio to deal with a

complaint by staff on description of context in the strategy report and to update

the Minister on FT’s support. Minister expressed satisfaction with the given

support and said the complaint was dealt with by SAG.

Table 2. Meeting with Other Government Officials

Month: July8 Activity

July 02 Meeting with SEFIN on the presentation of agenda and methodology to develop in the Citizen Participation and Transparency in Budget 2019 workshops. FT explained the objectives and results to be achieved with the workshops, and noted feedback they had.

July 03 Meeting with the technical team that follows up on the Alliance for Prosperity for preparation for the visit to GAO.

July 03 Meeting with DPE/TSC to gather information for the evaluation in the training area of the ethics and integrity committees of the state’s institution.

July 03 Meeting with DPE/TSC to gather data and analyze the progress of the Integrity and Ethics Program from the TSC.

July 03 Meeting with DARA to discuss comments of the review on the progress of the draft of the regimen, administrative processes and elaboration of manuals.

July 04 Meeting with SAG-DIGEPESCA for the review of the problem tree, mission, vision and objective of the unity; and explain the next steps for the implementation of PPR at SAG.

July 04 Meeting with HONDUTEL to gather information about the functioning of the Probity and Ethics Committee from HONDUTEL.

July 05 Meeting at SEFIN to present agenda, methodology, objectives and results to be achieved in the workshops.

July 07 Meeting at DIGEPESCA for the review of the problem tree, mission, vision, and objectives of the unity; explain the next steps for the implementation of the PPR at SAG.

July 09 Meeting at DIGEPESCA for the definition of strategic objectives and solutions tree.

July 10 Meeting with SEFIN and SCGG on the proposal of the PPR incorporation, concept, and pilot methodology in a program from the SESAL.

July 11 Meeting with SCGG for the definition of next steps and coordination for the implementation of PPR at SAG.

July 13 Meeting with SEFIN for the review of presentations that will be made to general directors; adjustments to the workshop’s agenda, and status of confirmation of participants for first 2 days of workshop.

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Month: July8 Activity

July 14 Meeting with DPE/TSC to discuss subjects related to the draft of the Integrity and Ethics Program that Will be submitted by FT.

July 16 Meeting with SEFIN to begin the consultancy on the development of the SEFIN’s portal.

July 16 ONADICI – interviews for the analyses of needs and formation, and presentation of the SLT program to the focus group.

July 16 Meeting with GLH activity to coordinate activities and avoid duplicities, as well as achieve complementarity between organizations on internal control.

July 18 Meeting with DARA to review and discuss the Draft of the Regime of the Specific System Customs Administrative Career with DARA’s staff.

July 18 Meeting with SEFIN in the informatics and content areas (UDEM/UIT) to coordinate activities of the SEFIN’s portal.

July 18 Meeting with SEFIN on the preparation of the workshops of the social and entrepreneur sectors, definition of participants and agenda discussion.

July 20 Meeting with DPE to make a preliminary review of the draft of the Integrity and Ethics Program delivered to the DPE.

July 24 Meeting with DPE/TSC to deeply review the draft of the Integrity and Ethics Program. DPE will internally review the document to make necessary modifications and proceed to establish a final document that will serve as a base to elaborate the action plan.

July 24 Meeting with SEFIN in the preparation of workshops of the social and entrepreneur sectors, definition of participants and discussion of agenda.

Julio 25

Meeting with TSC to promote the coordination between TSC and ONADICI for the strengthening of internal control in Honduras, within the SINACORP’s framework. Also, let the authorities of the TSC know that both activities are supported by USAID (DAI and FT), and that they are coordinating their activities to complement themselves.

July 26 Meeting with the Ministry of Human Rights to get to know the type of support that they require from FT and the possibilities to be taken into consideration.

July 27 Meeting with ONADICI to plan the controls for the verification of registers and the payments that selected institutions make, to comply with the issued circular CGR 001-001-2017. Reactivate the execution of the internal control workshops in the process of procurement that are to be done at San Pedro Sula.

July 28 Meeting with SCGG to define next steps and coordination for the implementation of the PPR at SAG.

July 29 Meeting with SAG-DIGEPESCA for the discussion of the problem and solution tree, as well as identification of interventions.

July 30 Meeting with ONCAE to plan actions to follow up on the institutional development of ONCAE to face the implementation of Honducompras II. Analyze the convenience of the execution of workshops to gather information for the new norms or their reforms in the public contracts to be made at SPS.

July 30

Meeting with BANASUPRO to present the findings of the internal control evaluation on the commercialization processes and payroll management, and the actions that could be made in a short and medium term to solve it. Also, establish the level of participation of FT in the solution of findings and next steps.

July 30 Meeting with SEFIN in the technical table of fiscal pact.

July 31 Meeting with SEFIN in the technical table of fiscal pact to define the methodology for its development.

July 31

Meeting with IAIP to know the commissioner’s opinion about the possibility of incrementing the information that they must present to the institutions as the article 13 states from the LAIP, so these can additionally report on the substantial processes and of specific services. Establish a mechanism that will continue in case of an institutional interest from the IAIP to officialize the compromise of the institutions of extending information of which they are obligated to according to the article 13 of the LAIP.

July 31 Meeting with DARA to discuss progress in the elaboration of manuals and the draft of the Regime of the specific system.

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Month: August, Activity

August 01 Meeting with SEFIN to develop a proposal of methodology for the development of the fiscal pact.

August 02

Meeting with SEFIN (SIREP) to gather the process o the register of new personnel and validation of the payroll in the Register and Control of Servers System as part of the process of management and payment of payroll at DARA. With FT, it was agreed to present to UDEM’s personnel the proposal of the improvements that can be implemented in the SIREP for a better control of the census of public servers in a public level and payroll payment.

August 02 Meeting with SEFIN with technical group reduced from the Fiscal Pact to define a detailed methodology, schedule and integration of several proposals in a logic order. Preparation of the proposal for approval of the Minister.

August 03 Follow-up on the actions to elaborate the Integrity and Ethics Program from the DEP and continue with the process of formulation of the program and action plan.

August 03 Meeting with the Presidential Commissioner of Transparency to present actions that FT is assessing. A coordination of meeting was agreed between the commissioner, Yudina Castillo and Ralph Oberholzer to know the progress of the portal of open data.

August 07 Meeting with ONADICI and OTA to coordinate activities for the approval of the Procurement Manual and the Guide for Internal Audit for Procurement, and its future diffusion.

August 08 Meeting with ONCAE to follow-up on the individual national consultancy for legal support to ONCAE, for the reform activities to the current normative.

August 08

Meeting with civil service (SIARH) to gather information on the processes of: a) Actions that are being made to review, validate, elaborate a judgement and authorization of the

naming of permanent personnel, the contracts of non-permanent staff and staff’s movements. b) Register of the permanent and non-permanent staff

FT will present to DGSC the proposals of the improvements that can be implemented in order to improve the civil service in an integral way.

August 08 Meeting with SEFIN to define an initial proposal of the subjects that will be proposed for discussion in the work tables for the development of the fiscal pact.

August 09 Explanation of the work that FT will me making in the direction and the objective of implementing PPR in the institution. Workshops on strategic thinking were agreed to begin for August 13th.

August 12 Meeting with the Transparency Unit and SEFIN as a follow up on the activities of citizen participation on fiscal transparency.

August 14 The intervention of the Modernization Direction of the SCCG on DIGEPESCA was discussed for the simplification of processes and modernization of them to provide an additional support to the implementation of PPR.

August 14 Presentation of the initial proposal of the methodology for a fiscal pact.

August 17 Meeting with WB to coordinate efforts of both teams in the implementation of open data.

August 20 Meeting with DARA to review and discuss the drafts of several processes at DARA. FT will present the improvements to the Human Resources manual and possible identified risks

August 21 Meeting with TSC to elaborate an action plan of the Integrity and Ethics program from the DPE/TSC.

August 22 Meeting with the TSC to elaborate an action plan of the Integrity and Ethics program of the DPE/TSC. The action plan will be finished for the following week.

August 23 Meeting with TSC to finalize and review the action plan of the DPE. The plan will be reviewed previous to the presentation to the plenum of the TSC.

August 24 Meeting with GLH to invite them to participate in the workshops to be organized on fiscal transparency subjects. The agenda will be shared as soon as the methodology is complete.

August 28 Meeting with GLH to know about their activities and possible areas of coordination. Guadalupe López, Technical Secretary of SETCAM will be contacted to get to know more about the Regime of Municipal Career implemented.

August 29 Meeting with the DGSC to define the next steps regarding the implementation of the proposal to support the strengthening of the DGSC. FT will analyze how the program could support the GoH in regulating temporary contracts.

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Month: August, Activity

August 30 Interview with the team of FT and SCM Activity to receive recommendations on the work with CSOs.

Month: September

Activity

September 03 Meeting with DPE/TSC to deliver the draft of the Integrity and Public Ethics program and their action plan.

September 03 Meeting with SEFIN to present results report of workshops.

September 04 Meeting with WB to coordinate activities related to open data with STAR.

September 07 Meeting with the DPE/TSC to consult about the progress of the review of documents delivered to the DPE.

September 10, 2018

Meeting with SAG to know about the progress son PPR and about the situation of DIGEPESCA’s staff.

September 11 Meeting with the DGSC to discuss the draft report of the proposal of improvements that can be implemented in the DGSC and SIARH to improve the internal control.

September 13 Meeting with ASJ as a follow-up to the results of the technical study of the DGSC on salary policies and unified salary scale.

September 14 Reunión con la DPE/TSC para dar seguimiento a la revisión de los documentos entregados con anterioridad. Meeting with DPE/TSC to follow-up on the review of documents delivered previously.

September 17 Meeting with ONCAE to follow-up on the progress of the project previous to the reception of the new draft of the contract normative of the State.

September 18 Meeting with WB on open data to coordinate activities of both projects.

September 18 Meeting with DPE/TSC to talk about the changes and adjustments that the DPE proposes on the delivered documents, consensus on the ones that apply.

September 19 Meeting with ONCAE to analyze the preliminary support that FT could provide to ONCAE.

September 19 Meeting with SEFIN to work on the improvement plan of programming and execution of the gender programs in the national budget.

September 19 Meeting with SEFIN to work on the improvement plan of the programming and execution of expenditure through trust funds, as well as the legal framework.

September 20, 2018

Meeting with SEFIN to know the current status of the register system of trust funds (SERFIDE). A work plan will be created and it will be presented by SEFIN in a next meeting

September 20 Meeting with the Civil Society and Media activity with the objective of coordinating activities.

September 21 Meeting with ONCAE to talk about the plan that SESAL has to do following on the evaluation report to the operation processes of contracts.

September 21 Meeting with DPE/TSC to present the changes to the integrity and ethics program and the action plan.

September 21 Meeting with IAIP regarding the development of the narrative document on strategic planning.

September 23 Discussion of the draft report of the improvement proposals and possible identified risks that could be implemented in the following processes. FT will present to DARA a report of documental verification of the processes.

September 25 Discuss the work plan of the assistance given from FT to DPE/TSC.

September 26 Support the Transparency Direction; FT will give feedback to the ministry on the work of the development of communication campaigns.

September 26 Meeting with SEFIN to work on the improvement plan of transparency in the tax expenditure. FT will work in adjusting the proposal of the plan and will analyze the work with citizens on tax expenditure through CSOs.

September 27 II Meeting with ONCAE to know about the concerns they have about the functional requirements of Honducompras II.

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September 28 Meeting with SEFIN as a follow-up plan of fiscal improvement of the programming and execution of the expenditure through trust funds, as well as their legal framework.

September 28 Meeting with FOSDEH to know about the subjects of interest that FOSDEH’s driving in fiscal subjects, budget, external debt and others. FT will create participative contests for expert CSOs on those subjects to implement grants and achieve results through the activity.

September 28 Meeting with the DPE/TSC to deliver the draft of the Integrity and Public Ethics Program, as well as the reviewed plan by FT.

i Suplidora Nacional de Productos Básicos