The Committee received a report of the Deputy Chief Executive & Director of Corporate Services and County Treasurer (S151) relating to the Audit Plan for the Staffordshire Pension Fund.
Committee members heard that there had been technical delays in the Local Government Audit System which had subsequently impacted on the 2021/22 Fund audit being undertaken by Ernst and Young (EY). It was hoped that EY would soon issue a separate Fund specific Audit Findings Report (ISA260) that would be brought to the December Pensions Committee meeting.
Whilst the Fund accounts were audited separately, they formed part of the County Council’s audited accounts and therefore would not be formally signed off until the main Council accounts were signed off. However, it was noted that whilst the County Council’s 2020/21 accounts were also awaiting sign off, due to national issues with infrastructure valuations, the audit of the Pension Fund’s 2020/21 accounts had been finalised for some time and that there had been significant progress with the 2021/22 audit.
The document at Appendix 2 of the report, the Audit Plan, detailed how EY intended to carry out their responsibilities as auditors and was an assessment of the key issues which they believed would affect the audit. The document focussed on the process for undertaking the audit and key audit risks - most notably the valuation of harder to value level 3 assets (such as Private Equity, Infrastructure and Property) and materiality.
In response to a question relating to the impact that had been felt by other local authority tiers due to the delays in the completion of the audit process and the need to ensure concerns had been raised with appropriate bodies, it was explained that the Scheme Advisory Board had recently set up a Compliance and Reporting Committee, which had subsequently asked for volunteers to sit on several working groups. One of the working groups would focus on Audit, and another would focus on Accounts and Annual Reports for Pension Funds. The Assistant Director for Treasury & Pensions informed the Committee that they had put forward Officer volunteers for both groups, so that the recent issues and challenges that had affected the Staffordshire Pension Fund would be raised. The Committee also heard that the results of a tender exercise for the appointment of companies responsible for the Audit of Local Government, Police and Fire authorities was soon to be announced and may bring with it more stability and certainty for future Audit processes. Whist this was accepted it was highlighted that the level and standard of service received was unacceptable and had caused a detrimental impact on other authority tiers
In response to a question querying the cause of the delays within the Audit process, it was confirmed that it was primarily due to a lack of suitably qualified and experienced staff in an industry that was struggling to resource the additional audit requirements in order to provide the requisite levels of assurance, introduced more recently.