EU4PFM kicks off Study Visit to Prague on Public Internal Financial Control

Today, EU4PFM, within its Component 1: Budget Process Modernisation, started a Study Visit to the Czech Republic.

Over three days, Czech experts will share their insights and experiences in the domain of Public Internal Financial Control (PIFC) with Ukrainian counterparts from the Central Harmonisation Unit of the Ministry of Finance of Ukraine.

The Study Visit aims to share experiences with the Czech counterparts on reform efforts in the areas of Financial Management, Control and Internal Audit. Gaining knowledge of practices in these areas in EU-member states like the Czech Republic, helps Ukraine shape its reforms.

Deputy Minister of Finance of the Czech Republic Jiri Valenta, in his welcoming address, expressed the Czech side’s eagerness to collaborate and share their expertise.

During the first day of the Study Visit, the Central Harmonisation Unit of the Ministry of Finance of the Czech Republic presented its current organisational structure and key tasks. In addition, the legislative framework related to Financial Management and Control as well as Internal Audit was outlined. Areas like practical risk management implementation as well as the specifics of the Czech internal control systems within public entities were presented and discussed. These specifics contained aspects like managerial responsibility and accountability towards efficient, effective, and economic use of public funds as well as key controls in crucial financial processes (4-eye principle, segregation of duties). Also, capacity-building instruments for internal audit like training and certification through different means were presented.

In its turn, the Ukrainian Central Harmonisation Unit presented its current organisational structure and key reform efforts in PIFC. Also, the key challenges based on assessment reports of the current state of play were presented. This led to a nice bridge towards the afternoon session in which challenges as well as pathways for solutions to these challenges were discussed. 

The Czech counterparts showed that a range of reform efforts are still in the pipeline, starting with proposals to update the law on financial control (the so-called Financial Control Act). This update aims to modernise, simplify and streamline the overall system of Public Financial Internal Control. Stronger internal control arrangements, better alignment with the principles of sound financial management, better connectivity of risk-based approaches to both internal control and audit and ensuring the existence of documented audit trails related to the management of public funds are a few of the key items presented. 

The discussion on challenges from both CHUs led to an interesting exchange of thoughts in which current shared challenges but also differences became apparent. The next two days will be focusing on deepening this discussion with, amongst others, discussion with representatives of public sector entities tasked with implementing the principles discussed on day one. 

EU4PFM remains steadfast in its support of the Ministry of Finance of Ukraine, standing ready to provide assistance to accelerate Ukraine’s journey towards EU accession.