To note the report from Damien Pantling, Head of Pension Fund

Damien Pantling delivered the Annual Report and Accounts and began with a commendation to the team for their hard work in preparing the draft annual report for the Pension Fund, ending on 31 March 2023. It was explained that the purpose of the report was outlined as seeking approval for the draft, which remained unaudited due to ongoing prior audit periods. It was emphasised that the Pension Fund accounts were integral to the RBWM accounts and could not be signed off until the latter were audited. Although external auditors provided a positive verbal update during the Pension Fund pre-meet, formal audit opinions were pending. Pension Fund Committee approval was sought to publish the annual report, marking its first public release, although it was noted the chart of accounts had been previously published alongside RBWM draft accounts in May/June.

Councillor Da Costa acknowledged the effort that had gone into the report and suggested using PNG format for signatures instead of JPEGs. Reflecting on the audit, Councillor Da Costa sought clarification that while most of the testing had been conducted and formal sign-off was pending, the auditors did not raise any issues with the Pension Fund accounts and their feedback suggested no significant concerns?

Damien Pantling explained that auditors had completed most of the testing and verbally confirmed no issues found, but formal assurance awaited partner review. However, due to unaudited prior-year balances and outstanding audits, full assurance was pending.

Councillor Da Costa asked what the process was once the previous outstanding accounts were signed off? Damien Pantling explained that once the auditors sign off on the accounts for the years 2021to 2023, the final audited accounts will be approved by the Audit and Governance Committee of the administering authority. Any material amendments will be brought back to the committee for reapproval. It was also noted that the process for finalising the annual report will follow a similar pattern, with any significant changes requiring Pension Fund Committee approval.

Councillor Da Costa requested that the word ‘draft’ be added to the motion which officers accepted.

Councillor Tisi wanted to clarify the wording in 2.6 of the report that referred to a correction related to scheme assets amounting to £24 million, representing approximately 0.9% of the total assets. He sought clarification if this error was due to an update or adjustment in the reported values of the assets rather than an error in the internal accounting processes. Damien Pantling explained that they reported the information provided to them by their Fund custodian, and it was later discovered that there was a double counting error amounting to approximately £24 million. The error was identified by fund officers approximately two months after the initial reporting and they followed all due processes by reporting the information as received from their third-party custodian. Upon officers discovering the error and raising with the Custodian, they (the custodian) promptly corrected it.

Councillor Tisi asked about potential legislation changes impacting financial reporting requirements, and would they still do the outstanding previous years accounts if it was no longer required? Damien Pantling said he viewed audits as valuable for continuous improvement of controls and processes.

Councillor Newton asked if any significant learnings have emerged from this incident? Damien Pantling said that they had changed their custodian due to performance issues identified during the process and, they had strengthened internal processes for cross-checking asset values, ensuring a more robust control environment. 

AGREED: That the Pension Fund Committee notes the report;

i)     Notes and reviews the amendment to the (prior year) 2021/22 annual draft reports; and

ii)    Approves the 2022/23 draft annual report and statement of accounts for publication.