Agenda item

The Finance and Systems Manager (Pensions) presented the report. He asked Members to note that the closing of the accounts for 2016/17 had been brought forward by one month to 31 May from 30 June as a dry run for 2017/18, when the earlier closing date becomes mandatory. The draft accounts would be presented to the June meeting of the Committee, the audit would be completed by the end of July and the final accounts would be presented to the Corporate Audit Committee on 12 September and to this Committee at the September meeting. The Committee was invited to note the audit plan prepared by Grant Thornton, which explained their approach to the audit. He introduced Julie Masci and Megan Gibson from Grant Thornton.

Ms Masci and Ms Gibson commented on the audit plan.

A Member noted that benefits based on final salaries were being replaced by benefits based on average salary and asked whether the audit would examine whether employers were making the correct contributions. Ms Masci said that specific testing on contribution payments was carried out a sample of employers. The onus was on employers to pay correct contributions, but the auditor had a responsibility to report to the Fund if there was evidence that employers were calculating contributions incorrectly. The auditor also carried out high-level checks on employer systems to make sure that they were appropriate.

A Member referred to the section in the audit plan dealing with the role of Internal Audit (agenda page 33) and said that he could not recall having seen any report from them. The Head of Business, Finance and Pensions responded that the last report on the Fund by Internal Audit had reviewed its performance against the Pensions Regulator’s requirements. The Fund was found to be fully compliant. This report had been presented to the Pension Board, which had raised some issues in relation to the Fund’s employers. He had spoken to the Head of Audit and it had been agreed that in view of the number of employers now in the Fund and the increased churn of membership there should be a more regular review of the transactional aspects of the Fund, not on a risk-based approach, but focussing on the testing of valuations and calculations. Reports from these reviews would be brought to the Committee.

The Head of Business, Finance and Pensions noted that in contrast to previous years this year’s final accounts would be presented to the Corporate Audit Committee before being presented to this Committee. Lessons would be learnt from this year’s dry run as to whether controls needed to be adjusted to take account of the earlier date. He thought that this year’s audit report might be longer than in previous years, but this would help to identify improvements for when the earlier closing date became mandatory. Ms Masci said that experience from other authorities who had already brought their accounts forward had shown that there was an increased need for management to make judgements about entries in the accounts because final information was not available before closure. It was possible that more errors would be noted by the auditors because more information would be available at the time of audit that was available at closure. An increase in identified errors would not necessarily indicate a decline in accounting performance by the Council.

A Member suggested that if officers felt that the accounting processes for the Fund needed further improvement, they might consider convening a sub-group of Members to advise on this.

RESOLVED to note the Audit Plan for the accounts for the year ended 31 March 2017.