Agenda item

Adrian Balmer of Ernst & Young presented the External Auditor Report on the Pension Fund Accounts. Consideration was given to the Draft Pension Fund Annual Report for 2017/18 which included details of the Pension Fund Accounts.

The Committee was informed that the London Borough of Hillingdon's Pension Fund Accounts were subject to a separate audit by the Council's external auditors. 2017/18 was the first year of the early close deadlines due to a change in legislation introduced through the Accounts and Audit Regulations 2015, which required the draft accounts completion date to move from 30 June to 31 May and the final approved audited accounts to be published by 31 July (previously 30 September).

With regard to the status of the audit, Members were advised that good progress was being made and no significant issues had been identified to date. The auditors were awaiting confirmation from the banks.

Members were informed that one area of the audit focus were 'significant risks'; it was reported that there was nothing to report in areas of significant risk. In terms of the other areas of audit focus, these were 1) Investment Manager Transition, 2) Valuation of Complex Investments (Unquoted Investments) and 3) the Earlier Deadline for production of the financial statements. The revised deadline had been noted and there was currently nothing to report regarding items 1) and 2); this was subject to final review.

Consideration was given to the Draft Audit Report. Members were advised that the pension fund financial statements for the year ended 31 March 2018 had been audited; it was found that the financial statements gave a true and fair view of the financial transactions of the pension fund and had been appropriately prepared in accordance with regulations. It was reported that it had been a clean audit with no issues identified.  No audit differences outwith the acceptable threshold had been identified to date. Data analytics had been used to enable the auditors to capture entire populations of the Fund's financial data; said data analytics helped to drive an efficient audit.

Members expressed concern regarding the reduced time window for the audit and sought reassurance that this had not affected the quality or the integrity of the report. It was confirmed that no significant difficulties had been encountered and nothing had been done differently despite the revised timescales.

Councillors requested further clarification regarding the figure of £15.3m as mentioned in the report under the heading of 'Audit Differences'. It was stated therein that any corrected misstatements greater than £15.3m identified during the course of the audit and corrected by management would be highlighted. Members were informed that there were no such misstatements to report as at the date of the report.

The Committee queried the IAS valuation figures in the table on page 102 of the report and were advised that the figures were in millions rather than thousands.

Mr Rodger Hackett informed the Committee that the Pensions Board had met and was now fully staffed; it would meet again at the end of the month.

RESOLVED:

1.    That the Committee noted the auditor's findings on the audit of the Pension Fund accounts for 2017/18;

2.    That authority was delegated to the Pensions Committee Chairman or Vice-Chairman to sign the Pension Fund accounts on completion of the audit;

3.    That the Fund Annual Report was approved for publication subject to no material changes resulting from the audit of the Pension Fund accounts.