Meeting documents

To be presented by Mr R Ambrose, Director of Finance & Procurement and Ms J Edwards, Pensions & Investments Manager

Mr I Murray, External Auditor, Grant Thornton presented Grant Thornton’s report and highlighted the following:

• An overview was given of the external circumstances causing the delay in the final opinion.
• The auditing process was on track to deliver an unqualified opinion. 
• The main area of work was focused around property valuations.
• There had been a degree of uncertainty around the estimated figures provided by the actuary since the impact in the draft accounts was an estimate which did not include the impact of the McCloud judgement, since there was a remote possibility that there wouldn’t be an obligation on the pension fund accounts.
• There could be a number of potential remedies following the outcome of the McCloud case. The case had been referred to an employment tribunal to determine the eventual remedy. There could be a number of outcomes and the revised estimated figures are based on one outome.
• The estimate had been redone taking into account the McCloud case.  Grant Thornton had used an in house actuary to speak to all audit providers and make sure that the approach was reasonable. 
• A member stated that it had to be said the external audit of accounts was a shambles and it’s clear that the PSAA process for audit services had created problems for many councils and external audit providers. The problem Buckinghamshire County Council had was not with our choice of auditors but with a procurement process that had badly let down everybody involved. The procurement process and remuneration levels for auditors needed to be urgently reviewed by Public Sector Audit Appointments Limited(PSAA) to allow the normal and timely process of auditing to be resumed. The chairman and all members agreed with this comment.

Mr A Rush, Interim Deputy Director of Finance and Ms J Edwards, Pensions & Investments Manager presented Buckinghamshire County Council’s report and highlighted the following:

• Any significant changes to the report compared to the draft accounts presented in May 2019 were highlighted in blue.
• Extra content has been added.  In addition to the percentage with the fund managers the value of the funds with the fund manager had been included.
• The service had increased the total liability of the pension fund in line with the McCloud case from £4752 million to £4791 million, totalling an increase of £38 million. 
• Cash deposits had been reported as £127,559.  This was an error identified by the external auditors and this would be amended to the correct figure of £121,408 before publication of the report.
• Related parties note 14 states Buckinghamshire County Council contributed £40.3 million to the pension fund, but it was anticipated that the figure would change in the final version. 

Following the reports, the following points were highlighted in response to questions raised and discussed by members of the committee:

• The derivative policy was a small element of pension funds.  The pension funds team would leave the decision to continue with the derivative policy in terms of investments down to managers’ discretion. 
• Administration costs that were incurred by Buckinghamshire County Council were recharged to the pension fund. There was an increase in performance fees on active management.  If managers outperformed the market then they would receive a performance related fee.

RESOLVED: Members of the committee NOTED the report.

RESOLVED: Members of the committee AGREED that the same process around Chairman and Section 151 Officer signing off the councilstatement of accounts would be applied to the pension fund accounts.