Agenda item

The Chair said that as agreed in previous discussion the Board should seek to review the Fund’s Annual Report and Accounts earlier in future years.

The Head of Audit West presented the report.

The Head of Finance, Business and Pensions commented on the External Audit Governance and Annual Report.

The Head of Audit West and the Audit Manager commented on the Internal Audit Report.

There was a discussion between Members and officers.

The Chair reiterated that the focus of the Board was on compliance with regulations and requirements. How would the Board get assurance that accounts had been prepared in accordance with regulations and CIPFA guidance. The Head of Business, Finance and Pensions responded that there were statutory requirements for reporting and rules about the reporting of assets and liabilities; breaches would be picked up by the external auditors.

The Strategic Director of Resources pointed out that there was now a separate external audit report for the Avon Pension Fund, and that following a recommendation from the external auditor the Committee had decided that the Fund would separate its bank account and other financial arrangements from the Council’s. This was a good instance of the Fund improving its governance following advice, and established a good starting point for the work of the Board.

A member asked about the Governance Compliant statement in respect of the Committee composition. The Head of Business, Finance and Pensions referred to the changes in the composition of the Committee over the past ten years, including the appointment of Independent Members, who came from other areas and were entirely independent of the Fund. He thought the Committee now had a very broad representation of the Fund’s members in the public sector. In the past few years, however, public sector functions had increasingly been outsourced to the private sector, as for example in the case of academies. Looking forward, there would an increasing number of members in organisations performing outsourced functions and some form of democratic means of representing them would have to be developed. The Chair indicated the Pension Board would review the funds governance arrangements in due course.

A Member asked how the Investment Panel monitored transaction costs. The Head of Business, Finance and Pensions that responded that changes to CIPFA rules had revealed that many internal fees had not been disclosed in previous accounting statements. He said that there was difficulty in measuring transaction costs in pooled funds because the costs were shared; investment managers would have to do more analysis to ensure that they were fully measured, so it was not clear that there would be cost savings from the pooling of funds.

The Chair asked for the Board to be advised on the separation of the BANES and Avon fund accounting, and for clarification that the fund’s next accounts would be prepared and audited against the CIPFA LGPS accounting disclosure checklist.

Responding to comments from Members, the Strategic Director of Resources said that it was not clear at present whether the audit programme of the Fund properly reflected the statutory role of the Board. This would only become clear over time.

RESOLVED to note the report and issues raised with regard to the future work plan of the Board.