Agenda item

To receive a report presenting the findings of the 2020-21 internal audits covering the Fund’s internal financial controls, MiFID II & Data Protection Act 2018/GDPR compliance.

Andy Cunningham, Head of Pension Administration and Relations, and Richard Bullen, Fund Governance and Performance Manager, presented a report on the findings of the final Internal Audit Report for 2020-21 prepared by the South West Audit Partnership (SWAP), in respect of the Wiltshire Pension Fund.

The audit covered the Fund’s processes concerning its key financial controls, the Data Protection Act 2018/GDPR and MiFID II, and gave an opinion of “reasonable assurance”. Five areas of review were also highlighted: three were low priority and two were medium priority. Officers noted that under the GDPR item, SWAP conducted a survey on Fund officers for breach reporting and data protection which resulted in positive comments and a good level of understanding of the processes, roles and responsibilities. Members were informed that officers had requested that SWAP contact other Funds with regard to MiFID II and whether their approaches were similar to that of the WPF. It was confirmed that nine other Funds had been approached and the general feedback was varied but the underlying theme was that the WPF’s good practice approach for MiFID II was very high and officers expressed satisfaction at the recognition for the high-quality management of the area.

Jennifer Devine, Head of Pension Fund Investments, spoke of the i-Connect contribution issues discussed within the report. It was confirmed that the issues weren’t a risk in terms of the implementation of i-Connect, it was more the posting of the contributions data to the general ledger that caused issues within the accounting team. However, it was clarified that the problem had been identified and actions were being implemented to resolve those issues such as ensuring that employers were submitting simplified returns, and the development of spreadsheets that automatically uploaded the data onto the ledger system which would subsequently minimise the risk of errors. It was also noted that the accounting and investment team were developing a monitoring report that would be sent to the administration team to help the two teams work in tandem with more clarity.

Andy Cunningham followed on from this and highlighted one of the benefits of i-Connect; the ability to view data on a monthly basis instead of waiting for the end of year figures, thus allowing Fund officers to identify and solve any data issues at a faster rate. Officers noted that the short to medium term had produced complications and delays due to officers striving to simplify the process, but that the end result would put the Fund in a far better position for checking data with minimal errors. It was highlighted that this had been raised within the report, but that it was already being actioned by officers prior to the audit. Further improvements were cited as potential action points but that this was reliant on the software providers improving their reporting capabilities.

The recommendations were noted as having been accepted by officers, and actions were taking place, with a report to such being taken to the next meeting of the WPFC in December 2020 if completed. The Chairman noted that he had felt there was a risk of delaying employers onto i-Connect as a result but that he felt reassured that this was not the case and that officers were actioning the recommendations.

One member of the Board raised that the covering paper stated that the report contained the management responses but that he could not find reference of such, therefore they felt that it was not clear whether each individual recommendation had been accepted or disputed by management. Said member also expressed disappointment that there were outstanding recommendations still attached from the 2018-19 audit. Officers clarified that management responses were under the title “Agreed Action” but acknowledged that it could have been emphasised more clearly. Officers additionally clarified that the recommendations that had been carried over had been agreed upon by officers but that the recommendations themselves were rather complex and difficult, therefore they were taking officers a long time to resolve. It was noted that the specific issue concerning the reconciliation of administration and payroll databases had been referred to within the Fund update in Agenda Item 8. Officers were hopeful that an updated report would be brought forth to the December 2020 meeting of the WPFC.

Officers noted that the turnaround between the finalised audit report and this meeting of the Board had been tight which meant that they could not fulfil all subsequent suggestions such as including a process log on the implementation of recommendations but confirmed that this would be raised with SWAP to be included within future audit reports. Officers also confirmed that an update on any outstanding recommendations would be brought forth to the next meeting of the Board in February 2021 to reassure members that action was being taken.

Resolved

The Board noted the findings of the SWAP audit report and the management responses stated within the report.