Agenda item

Report of Grant Thornton, the Council’s appointed auditor of the Pension Fund.

The Chief Financial Officer introduced the report on the audit of financial statements and the letter of representation. It was reported that this was the first year there had been a formal separate audit of the Pension Funds accounts.

Grant Thornton reported that the audit had been straightforward, and that very few adjustments had been required. The main issue raised was the Audit Commission’s recommendation that the Pension Fund be held in a separate bank account to the Council’s general funds, which had also been raised in the previous year. Grant Thornton had looked carefully into the position at Haringey and had concluded that there were no issues with the Fund being appropriately remunerated but it was still recommended that separate accounts be adopted. Other issues raised had been the late receipt of some contributions from scheduled and admitted bodies and the timing of benefits payments but that this had improved from last year. It was noted that no new issues had been raised, and the position in respect of all the issues raised demonstrated an improvement on the previous year. Grant Thornton commended the work of the Chief Financial Officer and his team.

The Committee asked whether it was likely that a deadline would be set for the introduction of separate bank accounts, and why the recommendation from the previous year had not been implemented. It was reported that it was unlikely that a deadline would be imposed, but that the Audit Commission would continue to recommend this. The Chief Financial Officer reported that the administrative burden and cost of establishing and managing two separate accounts had been assessed against the risk posed by having a single account; as the arrangements at Haringey had been found to be managed effectively and the SAP system permitted the funds to be treated separately within the same account, it had been concluded that the drawbacks of introducing separate accounts had outweighed the potential risk at the time. The Chief Financial Officer reported that the issue of introducing separate accounts, and the potential cost to the Council, would be reviewed again in 6 months. In response to a question from the Committee regarding the reason for the recommendation, it was reported that this was to reduce the level of risk, but it was also reported that, the risk would be managed by having adequate controls in place. It was reported that the decision to implement separate bank accounts would be made by the Chief Financial Officer, and it was recommended that a report setting out the benefits and drawbacks be presented to Members before a final decision was made.

In response to a request from the Committee, the Chief Financial Officer would provide Committee members with details of scheduled and admitted bodies who had submitted contributions late. It was noted that the timeliness of all contributions had improved in the past year, and it was confirmed that in the quarter ending 30^th June 2009, all contributions had been received within the statutory time limits.

In response to a question from the Chair, Grant Thornton reported that there was no indication that the basis for the audit fees would be reviewed by the Audit Commission.

RESOLVED

i)                    That the content of the report and updates provided by Grant Thornton be noted.

ii)                  That the changes to be made to the Pension Fund Accounts 2008/09 be agreed.