The Key Audit Partner from Grant Thornton, the Council’s external auditors, referred to the Audit Findings document noting that they had not identified any matters that required modification. An unmodified audit report was anticipated.
Reference was made to the potential impact of the McCloud judgement and how this had delayed the finalising and issuing of the accounts and reports to members. The Committee was reminded of the background to the case and the Court of Appeal’s ruling that age discrimination in relation to the pension schemes had been identified. The legal ruling would impact on Council pension funds and pension schemes where transitional arrangements for changing benefits were being implemented.
As a result of the ruling and the GAD review which had been commissioned by the LGPS Scheme Advisory Board, work had been undertaken with the Council to ascertain potential implications. This had resulted in a further actuarial assessment being commissioned. The assessment had identified a non-material increase in the pension liability for the Council. The financial statements had not been amended at this time.
It was noted that the McCloud case would impact on all local authorities. The Committee was informed that a pension liability of £1.4m and above was classed as ‘material’. The Council’s pension liability was £1.2m so was therefore classed as non-material. The implications would not be immediate but future provision would be required and factored into future budgets.
Reference was then made to the minor cash flow changes mentioned under audit adjustments but these were not seen as significant. Further reference was made to the McCloud judgement and Government Minimum Pension (GMP) and how the external auditors had satisfied themselves that there appeared to be no material misstatement. The Auditors acknowledged the uncertainties relating to the estimation of the impact on the Council’s liability at this time.
Members were informed that the Value for Money conclusion would be submitted to the September meeting of the Committee. The reason for the delay in issuing the conclusion was to enable further consideration of the Council’s governance assessment following the recent announcement of the departure of the Chief Executive and the departure of the section 151 officer. It was emphasised that this was standard practice when senior management left and did not indicate a problem. The work would be undertaken as quickly as possible so that the value for money conclusion and completion certification of the audit could be issued.
In response to a Member’s query on whether the mention of Warwickshire Pension Fund was correct, the Committee was informed that this would be corrected. Members were also informed that the real cost implications of the increase in pension liability would be subject to the outcomes from the Tribunal Review and would not be reflected immediately but in future years.
A Member wished to have her concerns noted that in light of the error regarding the Pension provider in the papers there could potentially be other errors that had not been identified. Confirmation was sought on whether the figures were correct and related to this Council. The Auditors reassured the Committee that prior to the statutory deadline of Wednesday 31 July, 2019, any typing errors would be corrected and an opinion would be given on the accounts.
In response to a Member’s query regarding questions he had submitted to the auditors, the Committee was informed that no issues had been identified that required highlighting with the Committee. The auditor suggested that a discussion with the Member who raised the questions be undertaken outside the meeting.
Reference was made to the final fee not being noted at Appendix D and it was confirmed this would be included in the final papers.
It was proposed, seconded and AGREED:
That the Governance and Audit Committee approved the External Auditors, Grant Thornton, Audit Findings.