Issue - meetings

38.1     The Committee considered by Grant Thornton (Independent Auditor) to those charged with governance, and to report on anticipated unqualified audit opinion on the 2020/21 Pension Fund Accounts.

38.2     It is recommended that no further actions are taken in regard to the issue whereby the discrepancy between the Fund Custodian’s estimated value of illiquid funds as at the end of quarter 3 and the outturn value at quarter 4 reported by the fund manager is causing an immaterial breach. This method of reporting external valuations of the Fund’s asset classes in the accounts is standard practice elsewhere and is part of Chartered Institute of Public Finance and Accountancy (CIPFA) best practice. It is also a common occurrence, and whilst large this time may in future be a lower value if the value of illiquid assets increases by less than 1% of the value of the Fund over the Quarter, i.e., approximately £41m – although as more assets are moved into this class, the chance of a material breach increases.  Grant Thornton advised a note could be added to the accounts to explain that the latest available value will always be a Quarter behind the final report, and it is recommended this is the extent of the action that should be taken.

38.3     The Committee RESOLVED to:

36.          1) Note the draft Independent Auditor’s (Grant Thornton) report to those charged with governance on Pension Fund Accounts 2020/21 (Appendix 1);

37.          2) Approve the Pension Fund Accounts for inclusion in the authorities Accounts (Appendix 2).

Report by the Chief Finance Officer

12.1     The Committee considered a report by the Chief Finance Officer, and received a presentation by the external auditors, Grant Thornton, of their draft Audit Findings Report, before it is considered by the Pension Board and Pension Committee.

12.2     The Committee discussed the update to the level of materiality, and the internal triangulation of valuations between the Fund, the fund managers and the Fund’s Custodian, in response to the Grant Thornton recommendation at Appendix A of their report. 

12.3     The Committee RESOLVED to (1) note the report and its appendices; and

(2) confirm that there were no concerns arising from the Independent Auditor’s report or the management response to it that need to be brought to the attention of the Pension Board or Pension Committee.