“Implementing change requires thoughtful consideration and respect, recognising the environmental differences and historical contexts of each country.” – Manfred van Kesteren
EU4PFM continues its interview series “Voices of Expertise,” introducing international experts who encourage changes and share insights in transforming Ukraine’s public finance management landscape. Meet the second interviewee, Manfred van Kesteren, EU4PFM International Expert on Public Internal Financial Control.
Personality and Motivation
— Please introduce yourself and your professional background, including your experience in public internal financial control?
Sure, I’m originally from Eindhoven in the south of the Netherlands. I’m married to a Ukrainian woman, and we currently live in Prague with our children. Prior to moving to Prague due to the full-scale invasion, my family and I lived in Kyiv, where I worked on behalf of the Dutch Ministry of Finance in Technical Assistance projects. Also, I still worked in the Hague for the Central Government Audit Service (the internal audit function in the public sector in the Netherlands).
My career began in 1999 when I joined the public sector as a trainee. I relocated to the Hague, and started working at the Dutch Ministry of Finance, where I remained for nearly 25 years. Starting in 2005, I transitioned to working in international environments within the Ministry, engaging in various activities such as the Centre of Excellence in Finance (CEF), EU Twinning projects, and Technical Assistance projects in the framework of the IMF and the World Bank. My work involved providing technical support in areas like internal control, internal audit, and risk management. In 2009, I began working in Ukraine and through this work, I have witnessed significant developments in the field of public internal financial control (PIFC).
And in March 2023, I decided to become an independent consultant, to more or less detach myself functionally from the Dutch Ministry of Finance.
— Have you been working all this time since 2009 with the Ukrainian Ministry of Finance?
Yes, primarily with the Ministry of Finance. When we started in 2009, our main counterpart was the Central Harmonisation Unit. Back then, it was part of the State Audit Service, but it’s now within the Ministry of Finance. This move reflects one of the key developments over the years, with PIFC coordination becoming integrated into the Ministry of Finance. So, we’ve been working closely with them throughout this process.
— Could you share some insights from this experience?
During these years, I’ve witnessed many positive developments, though it’s been a journey, sometimes taking two steps forward and one step back. The 2014 Revolution of Dignity was a turning point, leading to increased support from the EU and donors and a stronger push towards alignment with European standards. There has been substantial change in the broader realm of public internal financial control, and the current situation is incomparable to what it was years ago. Nevertheless, many challenges still remain ahead.
— It appears that both your personal and professional aspects were developing gradually and organically. Regarding your involvement in the EU4PFM Programme, how did it come about, and what motivated you to join the EU4PFM Team as an International Expert?
Basically, it was also a gradual process. After the war began, we moved to Prague. This became a turning point for me, where I considered my next steps. Returning to the Netherlands and resuming project work was an option, but I already had a strong, long-term connection to working in Ukraine and desired to continue that work. I initially got in touch with the Project through activities related to the Country Study Report on future modalities for internal audit. I was asked to provide input from the Dutch perspective. This became the starting point
As an independent expert since March 2023, I saw the EU4PFM Programme as a logical bridge to maintain my professional connection with Ukraine. It was the perfect moment for me to jump on board with the Programme.
Starting as a PIFC expert, I gradually expanded to activity coordination for all elements of budget process modernization within component one. More importantly, I see the need and potential for support in Ukraine. Contributing even a little to bring Ukraine closer to the EU would be very valuable for me. This connection with Ukraine goes beyond professional; it’s personal too.
— By the way, did you have a chance to learn Ukrainian?
(smiling) I am not so good with Ukrainian language. I do understand in general, but speaking is another level. Especially when it comes to using technical terms at a professional level, it’s more effective to switch to English. I have a basic understanding, let’s put it that way.
— From a practical standpoint, can you describe how you contribute to the PFM agenda in Ukraine?
Primarily, as an expert, focusing mainly on the PIFC area. This expertise stems from my experience at the Dutch Ministry of Finance and from involvement in reform efforts in similar domains in other countries. Secondly, it involves the coordination of activities within a broader scope under component one.
I was tasked with extending beyond the PIFC area to also coordinate activities in Public Sector Accounting (PSA) and Budgeting. While I don’t consider myself an expert in PSA, as we have international and national experts on board for that, my role is more about coordination and keeping track of progress within these activities. In contrast, with PIFC, I wear both hats, providing expertise and overseeing coordination.
— Describe your ongoing experience collaborating with Ukrainian partners. What is your impression of such joint work? How has this collaboration impacted your work or objectives?
Working with Ukrainian partner institutions within component one has been very pleasant for me. Specifically, in PIFC, I have known the key partners for a relatively long time, and we have built a relationship based on a certain level of trust. With the Central Harmonisation Unit (CHU), a key partner in PIFC, I can openly discuss our progress, what is necessary, and we are not afraid to address any discrepancies. This level of openness, built over years since 2009, helps us effectively navigate PIFC developments.
In other areas such as PSA and Budgeting, I try to actively build partnerships and align needs with what EU4PFM potentially offers. It’s an ongoing process with various dimensions. I believe that maintaining good relations with openness, trust, transparency, and a constructive working environment is essential when collaborating with partner institutions for an extended period. I am currently working on cultivating these aspects in other areas as well.
— Are there any particular goals or aspirations you have for this ongoing partnership?
My aim is to continue building valuable working relationships with other partners within component one, following the same principles mentioned earlier: openness, trust, transparency, and a constructive working environment.
— In different cultural and professional contexts, how do you approach adapting to new environments and collaborating effectively with local teams?
This is partly attitude and partly experience. Over the years of working in Ukraine and other countries, I’ve learned that considering the local context is crucial for achieving results. Simply imposing models or thinking styles from, say, the Netherlands directly onto Ukraine won’t work. Each country has its own peculiarities and specificities, so adjustments must always be made while being mindful of these differences. Neglecting this can lead to resistance and poor results. Therefore, it’s important to go with the cultural flow of the country you’re working in, while also keeping sight of what needs to be achieved and how certain European standards or practices can best be adapted to fit the country’s context.
— How does it work in practice?
It’s definitely a very delicate balance. I often think of it like approaching a new cultural environment with respect, like a valuable cultural artefact. On one hand, it’s important to acknowledge the differences in the environment, considering the historical background and asking why things are the way they are – that’s always a priority for me. Understanding their perspective is crucial. So, you need to be flexible and adapt to local customs to some extent.
On the other hand, you must also keep in mind that certain changes are necessary and should be aligned with practices that you aim to implement.
For example, implementing the principle of managerial accountability within internal control depends heavily on clear delegation of responsibilities, tasks, and budgets. This concept has been established for a long time in Europe, but countries like Ukraine, with a historical emphasis on centralization, naturally have different approaches. I acknowledge this tendency and work with it, recognizing that change should be introduced thoughtfully and respectfully. In essence, I see it as practising “cultural anthropology,” which is an integral part of the job.
— There is a range of things that should be changed in Ukraine, including certain mindsets and approaches. What, in your opinion, should Ukrainian partners start with when considering the changes needed in Ukraine?
The starting point is to clearly articulate for yourself and for further communication with the partners the benefits for them resulting from these intended changes. Always ensure clarity on the advantages they will gain from implementing a certain change.
Professional Expertise
— From your perspective, could you provide a brief overview of the current state of Public Internal Financial Control in Ukraine? What are some of the key challenges the country faces in this area?
There is a professional team within the Ministry of Finance of Ukraine, the Central Harmonisation Unit (CHU), that coordinates the PIFC reform. CHU has made significant progress, and it’s been a pleasure collaborating with them. However, challenges persist in leveraging the progress achieved.
For me, this means enhancing Internal Audit’s impact on public entities. This could involve increasing its capacity in both quantity and quality, ensuring greater alignment with international standards and practices. Additionally, utilising existing Internal Audit resources more efficiently is critical.
It’s important to emphasise that Internal Audit and Internal Control shouldn’t solely focus on compliance issues like adhering to laws and regulations. They should also address performance aspects: are there effective checks and balances ensuring the efficient and effective use of public resources?
Another key challenge lies in raising managerial 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 managerial tool, one that empowers managers to achieve their objectives more effectively by addressing not just compliance, but also performance, governance, risk management, and specific areas like IT-related risks.
Both EU4PFM and the CHU are aware of these challenges. Although the road ahead may be challenging, we are confident in overcoming them.
— In your area, how do you measure the success and impact of reforms? Are there specific indicators or benchmarks you use to evaluate progress?
Certainly, we rely on our Work plan, which outlines deliverables and activities for measurement purposes. It’s crucial to emphasise that success isn’t merely about completing tasks but also about achieving impact. Hence, it’s not solely about output; the outcome holds greater significance. We assess whether our activities result in tangible changes in practice.
Additionally, various assessment instruments provide input and information on the impact. These include SIGMA assessment reports, PEFA reports, and the European Commission’s Enlargement report.
Last but not least, maintaining close contact with our partners in the Ministry of Finance is essential for staying informed about progress and impact.
— How do you work to ensure that the changes implemented in your component will endure and continue to yield benefits beyond the Programme’s duration?
We ensure longevity of the changes by fostering ownership of the Programme’s outcomes within the partner institution. For instance, while it’s beneficial to develop and conduct training programs, it’s even more advantageous if the partner entity gains the capacity to conduct these trainings independently in the future.
Moreover, we emphasise the importance of aligning our initiatives with the legislative framework to ensure sustainability.
Additionally, maintaining communication with other donors is crucial. This allows us to share our progress and gather insights about their efforts, fostering collaboration and maximising the impact of our collective endeavours.
Work-Life Balance
— How do you maintain a healthy balance between your work commitments and personal life?
For me, maintaining a healthy balance requires carving out time to clear my head and simply unwind. I tend to achieve this by daily running. Also, I enjoy various activities like nice dinners with my wife, reading, or watching movies. These moments of recharging are crucial for everyone, allowing us to refocus and approach work with renewed energy. Despite a busy schedule (balancing EU4PFM, the Dutch Ministry of Finance, and Sigma work), I’ve found this approach to be effective and workable.
Guiding Principles
— Based on your extensive experience, what advice would you offer individuals aspiring to make a difference in the PFM field?
Start by building upon existing foundations; there’s always something in place to work from. However, be cautious not to fall into the trap of trying to impose concepts that have succeeded in one country onto another. What works in country A may not necessarily be effective in country B.
— What personal philosophy or guiding principles do you apply to your work?
Honesty, openness, and transparency. And, also, sometimes looking at things a bit lightly, dare to see the relativity in things. Bringing a touch of humour or a smile to the table often proves more effective than a grumpy or overly formal attitude in most environments.
