Agenda item

Councillor Tim Butcher, Deputy Cabinet Member for Accessible Housing and Resources and Julie Edwards, Pensions and Investments Manager presented the audited Statement of Accounts for the Buckinghamshire Pension Fund for the year ended 31 March 2023. These were appended to the reports pack. The Pension Fund Accounts and Net Assets Statement showed that in the year to 31 March 2023 the value of the Buckinghamshire Pension Fund decreased by £171m to £3.741bn. The audit work was completed remotely by Grant Thornton during August to October 2023. Grant Thornton anticipated issuing an unmodified audit report opinion.

The draft Audit Findings Report for the Pension fund was also appended to the reports pack. During discussion, points raised included:

·       The Pension Fund Statement of Accounts and Audit Findings report had been considered by the Pension Fund Committee at its meeting on 15 November 2023. The previous statement of accounts for 2020/21 and 2021/22 had already been presented both to this Committee and the Pension Fund Committee, although were unable to be formally signed off until the corresponding year’s main statement of accounts were signed off. There were not any significant issues identified which impacted the pension fund’s reported position and the audit findings were reported to be positive, with good financial statements and working papers. Thanks were given to the Pensions and Investments Manager and the finance team. 

·       Attention was drawn to respective issues found with level 3 and level 2 investments. These were detailed at points 1.6 and 1.7 of the covering report appended to the reports pack and related to amounts overstated in the accounts, these related to differing dates of valuation having been used, albeit it was only a matter of days between the different dates used. It was proposed that the amounts did not require changing and the external auditor supported this approach.

·       There remained a piece of work outstanding on an experience item which was being worked through with the audit manager and page 83 of the reports pack outlined some IT comments around essential controls which would be followed up as part of the next audit. The Chairman suggested that the areas highlighted could be considered by the Risk Management Group when it considered the IT risk register at its January meeting, this would assist in identifying the risks posed to the Council as a whole.

ACTION: Ms M Gibb to liaise with the IT Service Director to request the areas identified be presented to the Risk Management Group at its January meeting.

·       A Member noted that on page 83 of the reports pack, two developers were individually named rather than their roles and questioned what the control structure and management override was in respect of this issue.

ACTION: Ms J Edwards to liaise with IT and provide a response to Councillor S Rouse, copying in all Committee Members.

·       Members noted that SAP was RAG rated red, it was explained that SAP was a complicated system and upgrades had been completed to ensure the latest version was being used. There was said to be nothing untoward within the SAP landscape and the challenges were not unique to the Council.

·       The rise in management expenses from the previous year was queried and the Committee heard that value for money work had been commissioned and the Pension Fund Annual Report detailed an analysis of fees saved by pooling as part of the Brunel fund. In terms of the increase, this was generally linked to areas such as the underlying value of assets and the structure of the fund; a significant portion was invested in private investments which was more expensive to manage; the LGA had introduced a cost transparency programme; and the management fees information which managers had been provided had been improving over recent years. The Committee was assured that the Pension Fund Committee kept a watchful eye on the Brunel Pool and administrative expenses.

·       It was confirmed that around 90% of assets had already transitioned to Brunel, for which there were one off transition costs.  The remaining balance was largely investments held within private markets which were difficult and expensive to transfer. As such the view had been taken that unless savings could be demonstrated there was no benefit in selling investments, some of which were illiquid.

·       It was explained that representatives from Brunel did regularly attend meetings of the Pension Fund Committee where they were questioned on performance fund and costs charged to funds. A Member queried the increase in illiquid funds and a breakdown of the increase would be provided.

ACTION: Ms J Edwards to provide an analysis of the management fees comparing liquid and illiquid funds within the pension fund to Councillor R Carington.

RESOLVED:

1.      That the Buckinghamshire Pension Fund 2022/23 audited Statement of Accounts, including the External Audit findings report be reviewed and noted.

2.      That management’s proposed treatment of areas identified by the auditor be endorsed subject to the points of concern raised by the Committee, as noted above.

3.      That the Buckinghamshire Pension Fund Statement of Accounts 2022/23 be approved and the final sign off for the Statement of Accounts be delegated to the Chairman of the Audit and Governance Committee and the S151 Officer subject to:

·       No material changes in the accounts

·       Final sign off by the external auditors of Buckinghamshire Council accounts 2022/23

·       The Pension Fund Committee endorsing management’s proposed treatment of areas identified by the auditor.