To receive an update on the 2020/21 Statement of Accounts.
Minutes:
Graham Cadle, Assistant Director Finance and Helen Thompson, Ernst & Young, updated the Committee on the 2020/21 Statement of Accounts.
During the discussion of this item, the following points were made:
· The audit had substantially finished and a draft report of the 2020/21 accounts had been produced earlier in the year. At that points issues relating to infrastructure assets and pensions had been outstanding.
· The issue relating to pensions had an impact on all the Berkshire local authorities. It had been hoped that it would have been signed off by September, which had not happened. The infrastructure assets issue was a national issue and also remained outstanding.
· The latest anticipated timescale for the resolution of the pensions issue was now November.
· Helen Thompson indicated that Officers had been told that the 2021 accounts for the Pension Fund would be considered at the Royal Borough of Windsor and Maidenhead Council Audit Committee the previous week. However, it appeared that only the 2019/20 accounts had been considered. An update had been sought from Deloitte but had not yet been received.
· Helen Thompson referred to the estimate that Councillor Gee had requested at the previous meeting, and clarified that to get to even an estimate would require a significant amount of officer time, which was felt not to be a good use of resources when the decision relating to how infrastructure assets would be made, was still outstanding.
· Councillor Kaiser questioned if it was likely that the Pension Fund would ask for additional money from the Council. The Assistant Director Finance commented that this was unlikely. Helen Thompson added that the issue was not with the Pension Fund itself. The delays had been caused with RBWM’s accounts. There had been a number of objections relating to the 2019/20 accounts which had required resolution, which had significantly held up the auditors. The caveat on the letter that Ernst & Young required to sign off Wokingham’s accounts was, that until Deloitte had completed the audit on the 2021/22 RBWM accounts, they did not have sufficient assurance that there were not any potential issues that might impact the Pension Fund.
· Councillor Harper questioned how likely it was that the November target date would be reached. The Assistant Director Finance commented that this was the best estimate to date. Officers and Ernst & Young were doing all they could to progress the issue. Councillor Harper questioned whether the Chief Executive could write to RBWM Council to encourage a quicker resolution. Susan Parsonage, Chief Executive, indicated that she would work with Graham Ebers, Section 151 Officer, on this.
· Councillor Gee commented that the Council was in a period between year end and when the accounts were signed, and there were post balance sheet events to consider. With the recent extreme reactions to the financial markets, particularly the gilt market, Councillor Gee stated that the Bank of England was seeking to reassure the market so that defined benefit pension schemes did not become insolvent. She questioned the likelihood of the Pension Fund matter being even further delayed due to issues with the gilt market. Helen Thompson commented that this impact would need to be considered at all Councils in their going concern disclosures so this would be kept under review. Councillor Gee went on to ask if there was likely to be a problem in signing off the Pension Scheme accounts due to the current state of the market. Helen Thompson responded that it was too early to tell if it would cause a further delay.
· In response to a question from Mike Drake, Helen Thompson clarified that the auditors were required to audit the accounts of the Pension Fund Scheme. There was an actuarial fund that the pension fund auditors relied on and on which Ernst & Young relied on as part of its procedures for the Council. All the processes that Ernst & Young and the pension fund auditors had been required to undertake, had been largely completed. However, the pension fund auditor was still currently unable to provide the letter of assurance which was required to sign off Wokingham’s 2020-21 accounts.
· Councillor Maher questioned how many organisations were impacted by the pension fund issue, and was informed that it was those Berkshire local authorities who were part of the Berkshire Pension Fund scheme, and Berkshire Fire and Rescue Service.
· Councillor Kaiser asked what would happen if RBWM received qualified accounts. He went on to state that Wokingham Council was a large contributor to the pension fund and yet did not have a voting representative on the Trustee’s Board. Helen Thompson indicated that if RBWM received qualified accounts, unless the issue directly related to the Pension Fund, Wokingham would not be impacted. The Assistant Director Finance agreed to look into the issue regarding the Council’s representative on the Trustee Board.
RESOLVED: That the update on the 2020/21 Statement of Accounts be noted.