Issue - meetings

51.1     The Committee considered a report on the outcome of the Internal Audit report: Governance, Strategy and Investments 2019/20 

51.2     The Committee RESOLVED to note the report.

48.1.      The Board considered a report on the outcome of an Internal Audit review of the Pension Fund: Governance, Strategy and Investments 2019/20.

48.2.      The Chair asked whether controls were now in place to prevent the transfer of funds between the ESPF and East Sussex County Council bank accounts.

48.3.      Ian Gutsell (IG) confirmed that SK and RW now have bank mandates for the Fund’s account and so the ESCC Treasury Management team will not be able to loan money to the County Council from the ESPF account in future.

48.4.      DP asked why lending money in this manner was not seen by Internal Audit as a major risk. 

48.5.      Danny Simpson (DS) said that the ESCC Treasury Management Team’s access to the Pension Fund bank account was an historical arrangement and access to process transactions in the future was being withdrawn.  Councillor Gerard Fox (GF) said he had seen the report and was satisfied that it was a medium risk, as it had happen only twice, rather than being a pattern of behaviour, and had resulted in a modest gain to the Fund, even if it had been against regulations. He welcomed that it had been picked up by Internal Audit and that controls had been put in place. TD added he was in favour of the actions taken.

48.6.      TD asked when the Governance Manual on the management of fund managers would be approved by the ACCESS pool.

48.7.      GF explained that it was progressing but had been paused whilst the Inter Authority Agreement, which sits above it, was revised and agreed by each administering authority. There is a chance it will be ready by the time of the February Board and Committee meetings.

48.8.      TD asked for clarity on the arrangements of the Investment Working Group.

48.9.      GF clarified that the Investment Working Group was set up to oversee the implementation of decisions taken by the Pension Committee in relation to investments (which is a function delegated in the Council’s constitution to the Chief Finance Officer, rather than a Committee function).  It comprises officers, the Independent Advisor to the Fund (William Bourne), and the Chair of the Pension Committee. A decision has been taken to merge it with the ESG Working Group, due to the importance of ESG to investment decisions.

48.10.   GF clarified that the PIRC recommendation that it have published agenda and minutes was advisory. He said that for it to become a formal, decision making sub-committee with an agenda and minutes it would require a decision from the County Council as it would involve amending the constitution. The advantage of it being informal was that it allowed greater flexibility and discussion of issues. GF was open to reviewing the purpose of the Investment Working Group in the future and offered to discuss it more with TD outside the Board meeting.

48.11.   SK added that the Investment Working Group will have an agenda at future meetings. The Working Group’s actions and any recommendations are reported  ...  view the full minutes text for item 48