Public Internal Financial Control: A Vital Reform for Transparent Public Sector Governance
Today, the EU4PFM Project and the Ministry of Finance hosted the second ‘Public Internal Financial Control: Perspective for Future 2.0’ conference, focusing on practical steps toward effective internal control management.
Over 180 senior public sector leaders from various government agencies, including the Cabinet of Ministers, Verkhovna Rada, and key ministries, attended the conference in both online and in-person formats.
Key speakers included Denys Uliutin, the First Deputy Minister of Finance, Henrik Huitfeldt, Head of Operations Section II: Public Finance, Business Support, and Social Policies of the Delegation of the European Union to Ukraine, Manfred van Kesteren, EU4PFM International Expert on PIFC, Igor Bugrak, Head of the State Internal Financial Control Harmonisation Department of the Ministry of Finance, along with representatives from the SIGMA/OECD and Audit Progress Committee of the European Commission.
Denys Uliutin kicked off the conference with a welcoming address, highlighting the importance of reforming financial control in the context of EU accession: “Ukraine’s accession to the EU is a key priority for Ukraine today. Our future in the EU depends on how quickly and efficiently we reform various sectors in line with the best international standards. In particular, the Ministry of Finance is doing its best to bring Ukraine’s financial control sector closer to European standards, including through the reform of the State Financial Control Service. This is a tool for heads of state agencies that enables them to effectively manage their institutions. A culture of transparent reporting by managers will help to provide the highest quality services to society, using available resources as efficiently as possible. This is also very important in view of the significant amounts of external funding received from international partners for the restoration and modernisation of Ukraine,” said Mr. Uliutin.
In turn, Henrik Huitfeldt emphasised that Public Internal Financial Control (PIFC) is a fundamental aspect of Ukraine’s accession process. “Last week, the Ukrainian delegation in Brussels participated in a screening meeting, marking their first round of negotiations on Chapter 32, which addresses external and internal audit and control, as well as specific arrangements related to EU funds and efforts to combat fraud and corruption. Ukraine and the European Commission addressed in a comprehensive discussion the gaps and milestones required to meet EU standards. Support from the EU through the EU4PFM Project to enhance PIFC is ongoing,” Mr. Huitfeldt added.
The conference explored a range of topics, including the EU perspective on financial management and control, the results of a financial management and control assessment by the SIGMA, and innovative approaches to enhancing PIFC development through Audit Committees.
Manfred van Kesteren outlined the EU’s vision for further developing PIFC in Ukraine, and emphasised key areas for continued progress. “Reflecting on the past, we can acknowledge that Ukraine has made significant strides thanks to the efforts of the State Internal Financial Control Harmonisation Department within the Ministry of Finance. This includes establishing a solid legislative framework for both internal audit and internal control, implementing effective training and development programmes, providing methodological support from the Ministry of Finance, creating Audit Committees, and digitalising PIFC processes – we are now intensively working on the development of a PIFC portal. However, there is still work ahead, and with the support of the EU and the EU4PFM Programme in particular, we can advance this important agenda, as PIFC is fundamental to Ukraine’s path toward EU membership,” Mr. van Kesteren noted.
During the presentation, the expert emphasised the crucial role of senior management in the development of PIFC and shared his vision:
- Lead by Example: Senior management must champion the principles of transparency, accountability, and sound financial management, setting a standard for the rest of the organisation.
- Ensure Effective Internal Controls: It is your responsibility to establish and maintain robust internal control systems that align with PIFC requirements and EU best practices.
- Promote a Culture of Accountability: Senior leaders must ensure that performance accountability is embedded in day-to-day operations, driving efficiency and effective use of public resources.
- Strengthen Collaboration: You play a crucial role in fostering cooperation between internal auditors, external oversight bodies, and other institutions to ensure comprehensive financial oversight and combat corruption effectively.
The successful first PIFC Conference, held in February, brought together over 130 internal audit leaders, demonstrating the commitment to PIFC reform.
EU4PFM continues to provide unwavering support to the Ministry of Finance in meeting EU accession requirements and bringing Ukraine closer to European integration.
