To receive an update on the Pension Fund audit plan.
The Head of Pensions and Treasury introduced the report which presented the audit plan prepared by the Pension Fund’s external auditors, BDO, for the audit of the Pension Fund’s Statements of Accounts for the year ended 31 March 2021 for the Pensions Committee and Board’s consideration.
It was noted that the year end close down activities had been completed on time. The audit had commenced slightly later than usual due to the impact of Covid-19 on the auditor’s workloads. It was explained that fieldwork for the audit had started on 22 November 2021 and the auditors had identified the key areas of risk for testing. The Head of Pensions and Treasury highlighted that these areas were similar to previous years and officers were confident that assurances could be provided.
It was commented that an outline of audit fees was provided on page 19 of the agenda pack. It was anticipated that the auditors would be charging approximately £3,000 less this year as they were not required to conduct the triennial work that had been undertaken in the previous year. The Head of Pensions and Treasury explained that additional areas of testing might be required which would have an impact on fees and the audit timeline.
It was noted that the timeline for the audit was set out on page 29 of the agenda pack. It was anticipated that all testing would have been undertaken by February 2022 and that the auditors would be in a position to provide an initial audit completion report which would be presented to the Pensions Committee and Board in March 2022.
In response to a question about materiality, it was noted that the materiality figure was 1% and that this had not changed. It was explained that the auditors would seek additional assurances for anything in excess of 1% but could also ask for additional evidence for any issues, even where this was less than 1%.
Some members of the Committee noted that the auditor considered the management override of controls to be a significant risk but that management felt that this was low risk and asked why there was a variation in opinion. The Assistant Director of Finance explained that the management override of controls was always considered to be a high value risk in audit plans but highlighted that this was not a reflection of any particular concerns in Haringey.
In relation to a question about benchmarking controls against other Pension Funds, the Head of Pensions and Treasury explained that, although assurance was dictated by audit standards, an audit was based on the procedures and systems in place which would be different for each Pension Fund. It was noted that testing would be undertaken in areas that the auditor considered to be higher risk. It was added that no particular concerns had been highlighted at present but that the auditor would be able to provide more detail when they addressed the Pensions Committee and Board.
To note and agree to the audit plan that has been prepared by the Pension Fund’s external auditors, BDO, attached at Appendix 1 of the report.