Agenda item

For Committee Members to consider the Clwyd Pension Fund’s draft Annual Report and Accounts for 2022/23 and approve this for consultation, and to make Members aware of the response to the 2022/23 Audit Enquiries Letter and the 2022/23 Audit Plan.

a)    The Committee considered the Fund’s draft Annual Report for 2022/23 including the draft Statement of Accounts.

b)    The Committee noted and commented on the Audit Wales plan.

c)    The Committee noted the Audit Enquiries letter and response

            The background to the audit plan was introduced by Michelle Phoenix, the Financial Audit Manager with Audit Wales who are responsible for the external audit of the Fund. She explained that the detailed audit plan for the 2022-23 audit contains key messages for the attention of the Committee, and highlighted that there would be a new approach to the audit this year due to the implementation of the International Standard of Auditing 315 (ISA 315). ISA 315 puts a greater emphasis on the planning of the audit and involves a very granular approach looking in great detail at the Fund’s accounts and internal controls, and identifying risks specific to the audit. This means a more focussed audit with more work being undertaken before the audit of the financial statements can commence. This change has contributed to an increased fee: 10.2% of the increase was due to ISA 315, as well as additional costs due to inflation.

She noted that two members of the audit team are deferred members of the Fund, however safeguarding measures were put in place to ensure this did not impact the independence of the audit.

            Mrs Fielder took the Committee through the draft Annual Report and Accounts, which LGPS regulations require to be published before December 1 each year. She confirmed that Flintshire County Council’s Section 151 Officer has reviewed the accounts and his comments were incorporated. She thanked Mercer for their support in preparing the report and noted that this document was to be considered in draft, and further work would be done around presentation and accessibility before bringing the final audited version for approval to Committee on November 29.

Mrs Fielder noted that in the preparation of its draft Annual Report, the Fund aims to comply with CIPFA guidance. She highlighted on page 152 of the pack the actual cost compared to budget which showed a £4.9 million overspend on the £23.7 million budget, which was mainly driven by a £5.5 million overspend on investment management expenses. Mrs Fielder explained the investment management expenses and noted last year that the Fund had underbudgeted for investment fees, particularly performance fees on the private market portfolio.

She talked the Committee through the accounts and financial report including cashflows compared to the budget and explained the reasons behind some of the variances. She then continued through the remaining sections of the Annual report including the key strategies and policies that would be included in section 5 of the final report.

Mr Hibbert commented that he finds the annual report to be a good way of judging progress made by the Fund across many areas. He thanked everyone involved for the work done and progress made over the year.

Cllr Swash noted the Good Economy Factsheet referenced within the report. He commented with reference to the 10% invested in Wales, around half of which was invested in Clwyd, that he would like to review this data in more detail. He thanked officers for providing this report.

RESOLVED:

a)    The Committee considered the Fund’s draft Annual Report for 2022/23 including the draft Statement of Accounts.

b)    The Committee noted and commented on the Audit Wales plan.

c)    The Committee noted the Audit Enquiries letter and response