Agenda item

Internal Audit Reports


Middlesbrough Council’s Internal Auditors, Veritau, carried out two planned audits of the Pension Fund’s activities during the 2020/21 financial year, one covering investments and one covering administration. The reports and recommendations in respect of those audits were attached at appendices A and B to the submitted report.


The Investments Audit looked at the transition of assets from the Pension Fund to Border to

Coast Pensions Partnership to determine whether this was carried out in a planned, controlled, manner and whether plans were adequately monitored and appropriately reviewed.  Although the audit did identify some issues relating to how up-to-date some policies were, and whether risk reviews were being appropriately documented, the overall conclusion was that a sound system of governance, risk management and control existed and that this provided substantial assurance.


One priority 3 agreed action was identified and it was agreed that every time the Teesside Pension Fund risk register was presented to the Committee, Pentana will be updated to reflect the fact that a review of the risk register had taken place.   Pentana was the software the Council and the Pension Fund used for risk management.


The scope and objectives of the Pension Fund Administration audit were: to provide assurance to management that procedures and controls within the system would ensure that:


·         Pensions Administration was operated in accordance with relevant legislation and agreed processes, and that support and guidance was provided to employers to ensure the quality of returns.

·           Correct and timely payments were received from employers, which were regularly reconciled to Business World and to the Teesside Pension Fund bank account.

  • For those members who retired early, where there was a strain on the fund, payments from employers were monitored to ensure the deficit was paid in full within agreed timescales.
  • Processes were in place for monitoring and recording the receipt of income from member transfers in from previous employment.


The overall conclusion of the audit was that a sound system of governance, risk management and control existed, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited.   Veritau’s overall opinion of the controls within the system at the time of the audit was that they provided Substantial Assurance. 


Three priority 3 agreed actions were identified as follows:


  • Several strategy and policy documents relating to the administration of the Pension

            Fund had passed their scheduled review date without being reviewed.  Revised

            documents would be prepared and presented to the December 2021 Pension Fund


  • The Pension Fund should consider introducing a charging policy to cover circumstances where employers consistently fail to provide required information in respect of pension administration.
  • A formal process should be put in place to ensure late payment of invoices in respect of employer pension scheme costs was monitored and escalated as appropriate.


Target dates to complete the actions identified were set out in the appendices and progress would be monitored and reported back to subsequent Committee meetings.


ORDERED that the report was received and noted.

Supporting documents: