EU4PFM completes Phase I of the Internal Control Pilot at the Ministry of Justice
EU4PFM has completed Phase I of the Internal Control Pilot at the Ministry of Justice of Ukraine. The pilot was implemented as part of Ukraine’s Public Internal Financial Control (PIFC) reform and in close cooperation with the Ministry of Finance.
The pilot tested how internal control can work in practice as a management tool. The focus was on risk‑aware decision‑making, strategic planning, and effective budget execution.
The objective was to move beyond formal compliance. The pilot aimed to embed internal control into day‑to‑day managerial processes, and to develop practical solutions that can be replicated in other public institutions.
Pilot set-up
An inception session defined the scope and ambition of the pilot. A budget programme was selected. The Free Legal Aid System, including the Coordination Centre for Free Legal Aid Provision, was chosen as the pilot institution. Expectations were aligned around using the pilot not only for assessment, but for hands‑on improvement and organisational learning.
Assessment of the current situation
A structured Internal Control Questionnaire (ICQ) assessment was carried out. Its results were analysed by EU4PFM experts, and provided a common, evidence‑based understanding of the current internal control setup.
The assessment covered:
- the control environment
- risk management practices
- links between planning and budgeting
- roles and responsibilities across management levels
- cooperation between control functions
The insights from this assessment were incorporated into a comprehensive document and formed the analytical basis for structuring further pilot activities and targeted improvements in 2026 during the Phase II. The findings helped identify priority areas where existing practices can be strengthened rather than replaced.
Capacity building and practical tools
Within Phase I a dedicated training session on the COSO Internal Control Framework was also delivered to create a shared conceptual baseline among managers and key specialists. This was followed by working meetings focused on how COSO principles and tools can be practically applied within risk management and strategic planning processes. COSO‑aligned instruments, such as risk registers, risk categorisation, and control mapping, were developed and tested in selected areas.
Preparatory coaching and facilitated discussions laid the groundwork for the next phase. This phase will start in January with a strategic session and a senior-management-led risk identification exercise within the Free Legal Aid System. The exercise will involve the Coordination Centre, the Ministry of Justice, and the Ministry of Finance (CHU).
Initial steps were also taken to improve cooperation between second- and third-line functions. This work focused on clarifying roles and information flows.
Next steps in 2026
Phase II will focus on consolidation and institutionalisation. Planned actions include:
- translating diagnostic insights into prioritised improvement actions
- embedding risk considerations more systematically into planning and budget execution
- strengthening documentation, audit trails, and follow‑up mechanisms
- deepening coordination between internal control, compliance, and internal audit functions
- integrating internal control insights into performance indicators and reporting cycles
- testing scalable approaches suitable for replication across other ministries and public institutions
The pilot confirms a key lesson: internal control is most effective when it evolves gradually — through leadership engagement, practical tools, and learning‑by‑doing, rather than through formal rules alone.
Looking ahead, the pilot explicitly positions internal control as an integral part of strategic planning and budgeting processes, rather than a standalone compliance exercise.
The next phase will focus on embedding risk management into core working processes of the system, ensuring that identified risks inform strategic priorities, resource allocation, and managerial decision-making on a continuous basis. This linkage between internal control, strategy, budgeting, and risk‑informed operations is expected to form the backbone of sustainable implementation over the coming implementation periods.