Agenda item

This report presents the Haringey Pension Fund Annual Report and unaudited accounts for 2022/23 to the Pensions Committee and Board (PCB) for approval, subject to the successful completion of the external audit exercise.

Mr Tim Mpofu, Head of Finance (Pensions & Treasury), introduced the item.

The Head of Pensions noted that the Haringey Pension Fund’s annual report had been prepared by the pensions accounting team in accordance with the CIPFA guidance. It was further noted that the Pension Fund was required to publish its audited annual report by 1 December each year. The Council’s external auditor, BDO, was responsible for completing the audit of the annual report on time and provide assurance on the preparation of the annual report. It was explained that this assurance would be in the form of an audit opinion which would be issued alongside the audit opinion of the Council’s

Statement of Account.

- A query was raised regarding the governance process which provided

assurance to the Committee and Board that the annual report has been

prepared in accordance with guidance and the appropriate accounting

standards. In response, the Head of Pensions confirmed that as part of

the process, the external auditor would present their audit plan in

advance of each audit exercise to the Committee and Board and would

regularly provide subsequent updates on the progress made.

- A query was raised relating to the internal process for ensuring that the

annual report has been prepared in accordance with the appropriate

accounting standards. The Head of Pensions informed the Committee

and Board that report went through various checks consistent with the

finance team structure. Typically, the report was drafted by a senior

accountant and checked by senior fund officers which included the Head

of Pensions and the Assistant Director of Finance. The chief accountant’s

team would then conduct a further check before the Pension Fund Accounts were published.

- Further concerns were raised regarding the delay in the completion of

the external audit exercise since the financial year 20/21. Members of

the Committee and Board considered this current situation untenable

and requested that an official complaint be raised with the appropriate

authorities. It was further suggested that the officers should explore

alternative plans for ensuring assurance over the Fund’s financial

operations. It was further noted that this was a national issue and not

unique to Haringey. As such, the government was consulting on a

framework to address the backlog in local government audits. The

Committee and Board would be updated on this once it became clear

what the next steps were.

The Committee and Board commented that:

 As the audit profession was regulated, local authorities or the GLA should be making an official complaint that the industry was not upholding its duties. A ‘plan B’ was required as auditing and the

asset management industry were large operations. It should be

possible to commission an exam, test or review of whatever

particular element the Committee thought was most vulnerable to

give in order to provide comfort that accurate financial statements

were being reported whilst the industry was undergoing reform. In

response, the meeting heard that the issue had been escalated by

the Society of the London Treasurers. The Council’s external

auditors were BDO who were experiencing a backlog created

during the coronavirus crisis. BDO were also having difficulty

recruiting auditors and some of their resources had been focused

on NHS audits over the summer. There was an early indication that

the external auditors may be able to commence work in October

for the 2021 audit. There was a backlog up until that year and the

view was that the 2021/22 audit could not be commenced until

2024 at the earliest.

 The problem was mostly prominent in England with LGPS funds. There was less of a problem in Scotland and Wales because the Scottish and Welsh Government have said if the auditors could sign off the pension accounts, they did not also have to sign off the

Council accounts before they could be can submitted. In England, both had to be signed off. The Scheme Advisory Board wrote to the Minister for the LGPS who had said that he was working with the officials to have a separate sign off.

 Due to the backlog in external audits, it was important that an alternative framework be established. In response, the meeting heard that a solution would be discussed with the Director of Finance.

 In response to a query regarding the impact of significant discrepancies being identified by the auditors as part of their auditing testing work, the Head of Pensions commented that the longer the issue persisted, the higher the risk of discrepancies being identified. However, it was noted that the Fund had received reasonable assurance on its internal controls and had processed in place to minimise the impact of this risk.

 Some members of the Committee and Board queried their attendance details that had been included as part of the annual report. The Head of Pensions requested for any identified inaccuracies to be raised with the pensions team after the meeting

and amendments would be made were appropriate.

 A query was raised regarding the increase in administrative costs outlined on page 21 of the agenda papers. In response, the Head of Pensions confirmed that the increased was primarily attributable to administration software costs following a new contract being agreed with the software provider. It was noted that the previous contract had been in place for several years and the costs going forward were expected to be comparable year on year.

 In addition to this, it was noted that the team had made use of interim resources of the past year following the retirement of several members of staff. The Committee and Board were informed that the team restructuring exercise had now been completed with most of the pensions team vacancies filled.

 A query was raised regarding page 28 of the agenda papers where the percentage completed within the service level agreements were quite low. In response, the Committee and Board were informed that the team had experienced a backlog in some tasks due to the resource issues experienced during the financial year. However, the resource issues had largely been addressed and a plan had been put in place to address the backlog. It was further noted that senior fund officers were monitoring performance

against the SLAs on a regular basis and the information would be provided to the PCB on a quarterly basis in the future.

 A query was raised regarding how the report was made available and how members were made aware of it. In response, the meeting heard that the report was designed to be published on the website. It would be possible to send notification to members for them to be informed on how the scheme was performing.

 A query was raised regarding page 27 of the agenda papers regarding disputes. In response, the meeting heard that there had not been any Internal Dispute Resolution Procedures (IDRPs) in the last year and the report would be changed so that this was clearly stated.

RESOLVED:

1. That the Pensions Committee and Board note the draft Haringey Pension Fund Annual Accounts and unaudited accounts for the 2022/23 appended as Appendix 1 to the report.

2. That the draft version of the Pension Fund’s Annual Report to be uploaded on to the Haringey Pension Fund’s website by 1 December

2023 be approved.