Issue - meetings

• The Internal Audit Strategy for Pensions;
• External Control Assurance;
• Pension Fund Governance and Investments.

9.1       The Committee considered a report on p the draft Internal Audit Strategy for Pensions.

9.2       The Committee RESOLVED to note the report.

• The Internal Audit Strategy for Pensions;
• External Control Assurance;
• Pension Fund Governance and Investments.

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8.1.        The Board considered a report containing the draft ESPF Internal Audit Strategy, and Internal Audit reports on Pension Fund Governance and Investments and Pension Fund External Control Assurance.

8.2.        LW asked how the East Sussex Internal Audit is not duplicating the work of other internal audit teams in the other 10 ACCESS local authorities in auditing externally managed investments held under the ACCESS pooling agreement.

8.3.        Danny Simpson (DS) said that he will liaise with other internal audit officers to ensure that they are not duplicating work. OO added that an audit plan is being developed for ACCESS that will avoid duplication by enabling individual internal audit teams to use the assurance report of whichever internal auditor conducts the externally managed investment audit of ACCESS. He confirmed that these reports would comply with the Institute of Chartered Accountants’ AAF 01/06 Assurance Reports so could be used by East Sussex County Council’s Internal Audit team in lieu of its own assurance reports.

8.4.        SO asked whether it was unusual to have two internal audit reports without any actions arising.

8.5.        DS confirmed that it was unusual but external assurance – the subject of one of the reports – is usually straightforward to obtain substantial assurance for. The other four areas where internal audit seeks to provide assurance on (set out in 2.5 of the strategy) tend to be more complex. OO added that the substantial assurance of governance and investments was the result of several years of hard work in improving the governance arrangements of the ESPF.

8.6.        The Chair asked whether Internal Audit proactively liaises with the external auditor, Grant Thornton, when seeking to provide assurance.

8.7.        DS said that Internal Audit does not, but the external auditor may contact the team. IG added that the reliance of external auditors on seeking assurance from Internal Audit has diminished over the years and they generally seek their own assurance, however, Grant Thornton – which is newly appointed – has contacted the Internal Audit team this year.

8.8.        The Board RESOLVED to:

1)            note the report; and

2)            recommend the following changes to the draft Internal Audit Strategy:

·         change 2.3b) to read “provide strong governance and decision making”;

·         remove from 2.3c) reference to “improve value”; and

·         amend 2.5 to read “Pensions administration – people, processes and systems”, given the need to have assurance that there are competent people in place to manage the process and systems.

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