Manfred van Kesteren: “The implementation of changes requires thorough consideration and respect, recognition of differences and the historical context of each country”

EU4PFM continues its series of interviews “Experts Talk,” introducing international professionals who contribute to change and share their views on the transformation of the public finance management landscape in Ukraine. In the second issue, we spoke with Manfred van Kesteren, EU4PFM international expert on public internal financial control.

Personality and Motivation

— Please tell us about yourself and your professional journey, particularly about your experience in the field of public internal financial control?

Of course. I was born in Eindhoven, in the south of the Netherlands, and now I live in Prague with my wife, who is Ukrainian, and our children. Before moving to Prague due to Russian aggression, my family and I lived in Kyiv, where I worked on behalf of the Dutch Ministry of Finance on technical assistance projects. In addition, I continued my work at the Central Government Audit Service (the internal audit unit in the public sector in the Netherlands) in The Hague.

Overall, my career began in 1999, when I started working in the public sector as a trainee. After moving to The Hague, I continued my career at the Dutch Ministry of Finance, where I worked for almost 25 years. Since 2005, I have been actively involved in various international projects of the Ministry, including the Center of Excellence in Finance (CEF), EU Twinning projects, and technical assistance projects within the IMF and World Bank. My work involved providing advice and technical support in internal control, audit, and risk management. In 2009, I began working in Ukraine, where I witnessed important changes in the field of public internal financial control (PIFC).

In March 2023, I started working as an independent consultant to more clearly separate my activities from the Dutch Ministry of Finance.

— Have you been cooperating with the Ukrainian Ministry of Finance throughout this period since 2009?

Yes, mainly with the Ministry of Finance. At the beginning of my work in 2009, our main partner was the Central Harmonization Unit, which at that time was part of the State Audit Office and now belongs to the Ministry of Finance. This step reflects one of the key developments of recent years, as coordination of public internal financial control was then integrated into the Ministry. Since then, we have been working closely with them throughout this time.

— Could you share some insights from this experience?

Over the years, I have witnessed many positive changes, although the path was not always smooth. The Revolution of Dignity in 2014 was a turning point that led to increased support from the European Union and donors, as well as more active alignment with European standards. Significant changes have taken place in the wider field of public internal financial control, and compared to many years ago, progress is evident. At the same time, many challenges remain ahead.

— It seems that your personal and professional development happened gradually and organically. Regarding your involvement in the EU4PFM Programme, how did this come about and what motivated you to join EU4PFM as an international expert?

In essence, it was also a gradual process. After the start of the invasion, we moved to Prague. That was a turning point for me, when I was considering my next steps. Returning to the Netherlands and resuming project work was one option, but I already had a strong and long-standing connection with activities in Ukraine and wanted to continue this work. Initially, I became involved in the Project while working on a study on possible forms of further development of internal audit in Ukraine. I was asked to provide an analysis of the Dutch experience. That was the starting point.

As an independent expert since March 2023, I saw the EU4PFM Programme as a logical step to support my professional connection with Ukraine. It was the perfect time for me to join the Project.

Starting as an international expert on PIFC, I gradually moved on to coordinating all elements of budget process modernization within the first component. Moreover, I see the need to support Ukraine. For me, it would be very valuable to make even a small contribution to bringing Ukraine closer to the EU. This connection with Ukraine goes beyond professional; it is also personal.

— By the way, have you had the chance to learn the Ukrainian language?

(smiles) At the moment, I cannot say that I am fluent in Ukrainian. I understand the basics, but conversational language is a different level of complexity. Especially when it comes to using specialized terminology at a professional level, it is more effective to switch to English. Nevertheless, I have a basic understanding of Ukrainian.

— From a practical point of view, how do you contribute to implementing reforms in the field of public finance management in Ukraine?

First of all, I use my experience from the Dutch Ministry of Finance and the knowledge I have gained from reforming similar areas in other countries as an expert specializing in PIFC.

Secondly, I coordinate activities within the first component of the Project, going beyond the scope of PIFC. This includes coordinating activities in public sector accounting and budgeting. Although I do not consider myself an accounting expert, since we have both international and national experts for that, my role is mainly to ensure coordination and track progress in this area. In contrast, in PIFC, I perform both functions: providing expertise and coordination.

— Describe your current experience of working with Ukrainian partners. What are your impressions of working together? How has this cooperation influenced your work and goals?

Cooperation with Ukrainian partners within the first component of the Project gives me great satisfaction. Especially in PIFC, where I have many years of experience working with key partners. During this time, we have built trust-based relationships. With the Department for Harmonization of Public Internal Financial Control, our key partner, I can openly discuss progress and current tasks, and easily resolve any differences. This level of openness, which has developed over many years (since 2009), helps us effectively advance PIFC.

In other areas, such as accounting and budgeting, I am actively working on building partnerships and aligning needs with EU4PFM proposals. This is an ongoing process with many aspects. I believe that maintaining good relationships, openness, trust, transparency, and a constructive working atmosphere are critical for successful long-term cooperation with partner institutions. Currently, I am focused on developing these aspects of cooperation in other areas.

— Do you have any specific goals or aspirations for this partnership?

My goal is to continue building strong working relationships with other partners within the first component, adhering to the principles I have already mentioned: openness, trust, transparency, and creating a constructive working environment.

— How do you adapt to a new environment and interact with local teams in different cultural and professional contexts?

Partly it is attitude, partly experience. Over the years working in Ukraine and other countries, I have realized that taking local context into account is a decisive factor for success. Simply copying a model or mindset, for example from the Netherlands, will not be effective in Ukraine. Each country has its own specifics, so it is important to make adjustments considering these differences. Neglecting this can lead to resistance and ineffective results.

Therefore, I believe it is important to adapt to the cultural environment of the country where you work, while remembering the ultimate goal and the possibilities of adapting European standards and practices to the specific context.

— How does this work in practice?

It is indeed a delicate balance. I see it as a respectful approach to the new cultural environment, as to a valuable cultural artifact.

On the one hand, it is important to recognize differences in the environment given the historical context and to understand the reasons for the current state of affairs. For me, this is a priority. Understanding the perspective of local people is crucial. Therefore, it is important to be flexible and adapt to local customs.

On the other hand, it is necessary to remember the need for changes that align with the practices you seek to implement. For example, implementing the principle of managerial accountability within internal control largely depends on clear delegation of responsibilities, tasks, and budget. This concept has long been established in Europe, but countries like Ukraine, with a historical focus on centralization, have different approaches. I recognize this trend and work with it, understanding that changes need to be introduced thoughtfully and respectfully. Essentially, I see this as practicing “cultural anthropology,” which is an integral part of the work.

— There are many things in Ukraine that need to be changed, including certain attitudes and approaches. Where, in your opinion, should Ukrainian partners start when considering the necessary changes in Ukraine?

The starting point should be a clear formulation, for themselves and for further communication with partners, of the benefits they will gain from these intended changes. Always ensure clarity about the advantages they will receive from implementing a particular change.

Professional Expertise

— Give a brief overview of the current state of public internal financial control in Ukraine. What key challenges does the country face in this area?

The Ministry of Finance of Ukraine has a professional team — the Department for Harmonization of Public Internal Financial Control, which coordinates the PIFC reform. This team has made significant progress, and it is very pleasant to cooperate with them. However, challenges regarding the application of achieved progress remain.

The main issues involve strengthening the impact of internal audit on public institutions, which could increase its potential both quantitatively and qualitatively, ensuring greater compliance with international standards and practices. In addition, more efficient use of existing internal audit resources is critical.

It is important to emphasize that internal audit and internal control should not focus only on compliance issues, such as adherence to laws and regulations. They should also take into account aspects of effectiveness: are there effective checks and balances that ensure the proper and efficient use of public resources?

Another key task is raising managers’ awareness of internal audit and internal control. Some managers still perceive internal audit as a mere control or inspection function. The ultimate goal is for internal audit to be seen as a management tool that enables managers to achieve their goals more effectively, ensuring not only compliance, but also productivity, overall governance, risk management, and specific areas such as IT-related risks.

Both EU4PFM and the Department are aware of these issues. While the road ahead may be challenging, we are confident that it will be overcome.

— How do you assess the success and effectiveness of reforms in your area? Are there specific indicators or benchmarks you use to evaluate progress?

Certainly, we are guided by our work plan, which outlines expected results and activities for their measurement. It is important to emphasize that success lies not only in completing tasks but also in achieving outcomes. Thus, what matters is not only the expected result, but also the impact of implementation. We evaluate whether our activities are leading to tangible changes in practice.

In addition, various tools are used for assessment, such as the SIGMA assessment, the PEFA report, and the European Commission’s Enlargement Package report.

And last but not least, maintaining close contact with our partners in the Ministry of Finance is essential to staying informed about progress and results.

— How do you ensure that the changes implemented in your component are sustained and continue to deliver benefits after the Programme ends?

We ensure sustainability of changes by fostering ownership of the Programme results within the partner institution. For example, while it is beneficial to develop and deliver training programmes, it is even better if the partner institution gains the capacity to deliver this training independently in the future.

In addition, we emphasize the importance of aligning our initiatives with the legislative framework to ensure sustainability.

And, of course, it is extremely important to maintain connection with other donors. This allows us to share our progress and collect information about their efforts, promoting cooperation and maximizing the impact of our joint efforts.

Work-Life Balance

— How do you manage to maintain a healthy balance between work and personal life?

I make time for rest and simple relaxation. I run daily to clear my mind. I also enjoy various activities such as pleasant dinners with my wife, reading, or watching movies. These moments of recharging are essential for everyone and allow me to refocus and approach work with new energy. Despite a busy schedule (combining work at EU4PFM, the Dutch Ministry of Finance, and Sigma), this approach is effective and really works for me.

Guiding Principles

— Given your rich experience, what advice would you give to people who strive to make a positive change in the field of finance management?

Start with building on the existing foundation, as there is always something to work on. However, be careful not to fall into the trap of trying to impose concepts that worked in one country onto another. What works in country A will not necessarily be effective in country B.

— What personal philosophy or guiding principles do you apply in your work?

Honesty, openness, and transparency are the foundations of my work. In addition, I believe that sometimes it is important to look at things lightly. Often bringing a touch of humor or a smile to the negotiation table proves more effective than being overly critical or too formal.