Public Internal Financial Control under Ukraine’s new PFM Reform Strategy: Expert opinion

Public Internal Financial Control (PIFC) remains one of the key instruments for improving the management of public finances, preventing inefficient use of budget funds, and bringing Ukraine closer to EU requirements in the area of financial control.

The new Public Finance Management Reform Strategy for 2026–2030 identifies the further development of PIFC as an important element of good governance, stressing that the proper functioning of internal control and internal audit in line with EU requirements and good practices is one of Ukraine’s commitments within the EU accession process. At the same time, the Strategy clearly points to the need to address uneven progress in the development of internal control and internal audit across public institutions and to ensure fuller practical implementation of the already established regulatory and methodological framework.

A separate emphasis in the strategic vision is placed on managers’ accountability, stronger managerial responsibility, and the achievement of public policy objectives. In this context, PIFC is seen not merely as a set of control procedures, but as a management system that helps managers identify risks in a timely manner, respond to deviations, take informed decisions, and ensure the achievement of results and policy objectives. It is about developing a coherent set of instruments that strengthen accountability, transparency, and results orientation in the work of public institutions.

In the PIFC area, the Strategy sets out several interrelated directions. It includes the further strengthening of internal control, the integration of risk management into management processes, the improvement of practices for responding to deviations, the introduction of internal control declarations as an additional accountability instrument, the enhancement of the quality, effectiveness and capacity of internal audit, the updating of national internal audit standards in line with the new Global Internal Audit Standards (GIAS), as well as the further development of the institutional framework for financial control. Another important element is the establishment of audit committees and the continued expansion of the practical toolkit of internal audit so that it increasingly serves not only to verify compliance, but also to improve the efficiency and effectiveness of institutions’ operations. Taken together, these steps are intended to promote a more accountable management culture and better use of public resources.

EU4PFM will continue to support this reform area through practical, implementation-oriented expert assistance. In particular, the Programme will support the development of internal control and internal audit in line with European approaches, as well as training activities, pilot initiatives, and the dissemination of practical experience. Particular attention will be given to managerial accountability, the development of a risk-based approach, the practical application of new methodological solutions, and strengthening the capacity of internal audit as a tool for improving the quality of governance and the effectiveness of the use of public resources. This fully reflects the logic of the Strategy: to move from the formal existence of rules to their real application in the day-to-day practice of public institutions.

by Manfred van Kesteren, EU4PFM International Expert on Public Internal Financial Control