Agenda item

The auditor from Forvis Mazars presented the Teesside Pension Fund Audit Completion Report for the year ended 31 March 2024, which summarised their audit conclusions.

The Committee was advised that the 2023/24 accounts would be signed off on 28 February 2025, the statutory backstop date, with a disclaimer of opinion.  Work on the audit continued to take place, however, it was hoped that an area of exception for reporting had been identified.  This related to level 3 investments and the associated change in the market value of investments.  The Committee would be updated accordingly on this matter. 

Members heard that there was a high number of disclosure misstatements, and it was emphasised that this had been due to the timing of the different sets of accounts received by the auditors.  Reference was made to the timescales, changes and crossover involved in completing the previous two years’ accounts, which had been particularly complex and highly unusual.

The Teesside Pension Fund was both a complex and specialised field.  It was hoped that sufficient progress would be made to proceed towards an unqualified opinion over the next couple of years.

The auditors expressed their thanks to the Council’s officers for working with them, and to Members of the Audit Committee for their challenge, questions and patience during this time.

A Member commented on the efforts made by the auditors in commencing from a position of two previous years of unaudited accounts, and successfully recognising the area within Teesside Pension Fund where concerns were held.

A Member referred to other organisations whose employees were Teesside Pension Fund Members, such as Cleveland Fire Authority and Cleveland Police.  Concerns were expressed that a valuation for this year, for contribution purposes, needed to be provided.  The potential impact that this could have, and the importance of achieving a quick resolution, was highlighted by the Member.  Officers advised the Committee that, at the present time, unfortunately nothing more than the assurances provided so far could be given; this was an ongoing problem, but was receiving attention.

The Chair referred to Internal Audit and requested that a meeting be arranged for the Vice Chair, Internal Audit and herself to discuss the audit programme, in particular the timeliness and outcomes of Internal Audit reviews.  The Director of Finance and Transformation would look into this.  Reference was made to Internal Audit provisions and associated recommendations from the LGA.  A contract for Internal Audit was currently in place for 2020-2030; the terms of this contract would be shared with the Committee, for information.

A discussion ensued regarding declarations of interest, during which the following points were made:

·        It was the responsibility of individual Councillors to declare any interests.

·        Internal Audit would soon be commencing an audit in respect of declarations of interest.

·        A Member referred to the Teesside Pension Fund Committee and suggested that training in relation to declarations of interest could be undertaken.  The Head of Finance and Investment/ Director of Finance and Transformation would raise this with the Chair/ Vice Chair of the Committee.

·        A Member commented that the TVCA had offered a full day of training in respect of declarations of interest, which demonstrated the complexities of this area.

A Member referred to the availability of resources in providing assistance to the auditors and queried whether this had been sufficient.  In response, officers made reference to reviews carried out by CIPFA and MHCLG, which had identified that additional resources were required within the finance directorate.  It was indicated that, following approval of the Council’s budget, money had been made available for a revised structure to be implemented and recruitment activity would commence in the near future.  It was indicated, however, that the skillset associated with this work was specific and, owing to the lack of qualified people within the market place and training taking a long time to complete, potentially difficult to obtain.  This was a nationwide issue and not applicable only to Middlesbrough.  Members heard that an advert for the Head of Pensions position was now live.

The Chair thanked the auditors and officers for their attendance and contributions to the meeting.

AGREED that:

1.     The request for a meeting between the Chair, Vice Chair and Internal Audit would be raised with appropriate personnel by the Director of Finance and Transformation.

2.     The Head of Finance and Investment would circulate a copy of the terms of the Internal Audit contract for Members’ information.

3.     The Head of Finance and Investment / Director of Finance and Transformation would discuss the suggestion regarding Teesside Pension Fund Committee/ Members’ declarations of interest training with the Chair/ Vice Chair of that Committee. 

4.     The information, as presented, was noted.