Agenda item

The Audit Findings (ISA 260) Report 2023/24 for the Wiltshire Pension Fund from Grant Thornton (external auditors).

Jackson Murray of the external auditors (Grant Thornton) presented the Audit Findings (ISA 260) Report 2023/24 for the Wiltshire Pension Fund. The report covered, but was not limited to, the following points that the audit opinion would still be disclaimed and that there was expected to be some form of modification to the audit opinion before moving down to an unqualified opinion. It was outlined that a lot of work had been done in July to close down final remaining queries with a hybrid approach taken of working remotely as well as in the office. It was noted that this year’s reports had to be done by May 2024, therefore some of the harder to value assets within the fund did not have actual results available. However, as auditors, Grant Thornton had the benefit of more time therefore actuals had been reported by fund managers.

Issues raised by previous audits were acknowledged and it was stated that once Grant Thornton were able to issue an opinion on the Council accounts, they would do this also simultaneously for the Wiltshire Pension Fund upon receipt of the final sets of accounts.

The materiality levels used for the audit were discussed with an overall £16.7m for the materiality of the financial statements listed and £4.2m specific materiality for the Fund Account. Detail was also provided within the report regarding significant risks, with no risks identified, however the IT audit report received at the last Committee raised some deficiencies on the old SAP system however it was acknowledged that this was no longer used. Specific work as also conducted on data migration with no deficiencies identified.

Detail was provided on some of the adjustments made within the audit with the different valuation levels (1,2,3) discussed as well as how one investment asset valued at £24.877m had been classified as level 3 within the fair value hierarchy, whereas other funds within the pool had classified this particular asset as level 2. It was suggested that level 3 had more disclosure than that required a level 2.

It was outlined that a triannual valuation had not been completed in past audits, therefore this was undertaken to provide assurance, with no matters arising of concern. Four recommendations were raised within the report as part of the audit, each receiving an assessment grading, with bank reconciliations graded the highest with “medium” however it was acknowledged that this was not a new issue. Proposed fee variations were also outlined within the report, which would be subject to PSAA approval.

Members asked the following questions including how the proposed local government pension fund merge would affect the Committee’s audit responsibility if it was to go ahead. Clarity was provided that the proposed reform was not regarding the merging of funds but rather the pooling of investment assets. It was outlined that as long as the Wiltshire Pension Fund was constituted as it currently was then it would require an auditor and that should changes occur this would involve discussions with the PSAA. It was also noted that regarding the pooling proposal, once further clarity was available then a report covering highlights would be brought to the Committee.

Further detail was sought regarding the level 3 classification which had been given to the investment asset in comparison to the level 2 classification awarded by other funds within the pool. Assurance was provided that Grant Thornton were satisfied that this met the level 3 criteria and had been classified based on unobservable input.

On the proposal of the Chairman, seconded by Cllr Gavin Grant it was,

Resolved:

To note the contents of the report.