Agenda item

An update by the Investment and Accounting Team Lead concerning the operational accounting arrangements, to include budget monitoring.

Chris Moore, Investment and Accounting Team Lead, presented an update concerning the operational accounting arrangements, which also included budget monitoring. The update included that the final sign off for the full Wiltshire Council Accounts for 2019/20, 2020/21 and 2021/22 continued to be delayed. Additionally, work had been conducted on the accounts and annual report for 2022/23, however work had recently paused, with the auditors being chased for a progress update.

It was outlined that the new Evolve system went live in November 2023, however this had since changed from green to amber on the quarterly financial performance dashboard as the reconciliation and implementation of the system had not been smooth and had caused significant problems to the accounting team. Issues had included that the team had been unable to post journals and daily processes, however this was now possible.

Detail was provided regarding cashflow, banking and capital calls that the single approval limit for payments had been an issue due to the Council accounts not being signed off therefore meaning the limit could not be increased. The Treasury team in the Council had however provided an update that progress had been made and changes are expected to be applied to the limit.

Reference was made to the budget forecast, with it noted that there was a forecast overspend of £44k against the original budget. This overspend includes an additional £49k of costs approved by Committee for the new office space. An additional cost of £50,000 is also forecast should the Committee approve the recommendation for investment in the Climate Opportunities Portfolio. It was noted that previously there had been uncertainty with the budget regarding the pay award, however this had now come to fruition in line with what was budgeted for, therefore meaning the cost risk was removed.

Detail was provided that since writing the report, one of the employers in the Fund was experiencing insolvency, with officers set to work with the company to work out what will happen in due course.

The Committee discussed the update, which included reference to the Dorset & Wiltshire Fire and Rescue Service Financial Audit Committee who had had concerns about information not being provided for auditing purposes. It was stated that this could potentially be related to the external auditors as the Fund had provided all that it could to the auditors.

Clarity was provided regarding mismatched records between Altair and SAP payroll and that though the difference had come down in February and March, this had increased in April due to the way the pension increase was applied to members.

It was questioned regarding the performance dashboard, whether payroll should be rated as a red rather than amber due to the experience of implementation. It was clarified this was treated as two separate issues with it rated red in the risk register but amber for progress made to align the two systems.

A question was posed regarding employer contributions as to why there were big variants and sudden peaks in June 2023 compared to other entries. It was clarified that the table provided summarised contributions from 187 employers with total payments circa £8million a month from employees with a spike in April due to a prepayment of contributions from Wiltshire Council of £35million. Furthermore, it would not take much for the table to be impacted, for example a late payment from a large employer, which could potentially distort the figures.

A discussion took place regarding whether the Fund charged interest on late payments, to which it was stated that the Fund could do but has not and rather takes an engagement approach. It was outlined that there was a focus on educating employers on their responsibilities and that the Fund might charge interest in the future.

A point was raised regarding running costs per member and whether the Fund was different to other organisations. It was clarified that a previous paper had included cost per member analysis and that this benchmarking had identified the Fund as being within the average expected number for the size of the Fund. Furthermore, though there was an increased running cost per member, this would still not be in the highest level with all funds experiencing the same increase.

It was questioned whether persistent late payers are flagged for action, to which it was noted that there is a list of those who are regularly late and that there is a control route for this, with an employer data and contributions working group reviewing the list each month. Furthermore, the list was also used to understand covenant risk. Officers also outlined that the escalation policies had been reviewed to now have a six-stage approach in comparison to the previous one of four stages. Additionally, it was acknowledged that there is also a breach log which is reported to the Pension Board on an annual basis.

At the conclusion of debate, it was,

Resolved:

The Committee agreed to:

·       Use this report to monitor progress against resolving the issues which have been identified.

·       Approved the additional £50k of investment due diligence and advice in relation to the Climate Opportunities Portfolio.