External Auditors Statements

Auditor Statements

It is important that the Government, LGPS members, employers and stakeholders have confidence in the overall financial management of the scheme.
Under the LGPS regulations each of the LGPS administering authorities are required to publish an annual report. Each LGPS fund is subject to an annual statutory external audit of its financial statements that must be prepared in accordance with the LGPS regulations and CIPFA guidance that is updated annually.
The shadow Scheme Advisory Board is keen that all LGPS funds publish their statutory annual report and audited financial statements by 30th September and at the latest by 1st December each year. The latter was largely achieved in 2014 other than by a small number of funds whose reports were not published until early 2015.

The LGPS pension fund financial audits are the responsibility of three statutory auditing bodies – the Audit Commission and National Audit office for 83 LGPS funds based in England, and Welsh Audit Office for 8 LGPS funds based in Wales. They are required to give assurance (or otherwise) that the financial statements show a true and fair view of the fund income and expenditure and of the amount and disposition of the fund assets and liabilities.
Until its abolition the Audit Commission has appointed the external audits of local authority bodies. This has included the audit of 81 LGPS funds. Currently six firms of external auditors (see below) undertake these audits. From 1st April 2015 the responsibility for appointing Local Authority auditors will pass to Public Sector Audit Appointments (a limited company being set up by the Local Government Association).

England	Name of sub-contracted audit firm				Number of LGPS funds audited
National Audit Office	Not applicable				2
Audit Commission	Grant Thornton	█	35.8%		29
	KPMG	█	28.4%		23
	Ernst & Young	█	12.3%		10
	PWC	█	12.3%		10
	Deloitte	█	8.6%		7
	Mazars	█	2.5%		2
Wales
Welsh Audit Office	Not applicable				8
	Total				91

England - the Audit Commission

Each LGPS funds' financial accounts are audited separately from each Local Authority financial accounts. They are then consolidated into Local Authority financial accounts and ultimately into the financial accounts of DCLG and HMT.
The Audit Commission’s most recent annual report was published in December 2014 and it covered the work of its auditors on local government accounts (including LGPS funds) for the financial year 2013/14.

Local Government Reporting 2014 - (England)

The Audit Commission 2014 annual report concludes that financial reporting in English local authorities remains strong that there has been a progressive improvement in the earlier publication of consolidated financial statements. No principal local government bodies received a qualified opinion on their financial accounts due to pension issues. The South Yorkshire Pension Fund Authority was commended for the early publication of its accounts on 24th July 2014.

In its 2014 Report, the Audit Commission National Fraud Initiative estimated for the LGPS it detected and prevented pension fraud, overpayment and error amounting to £1.4m. 

England - National Audit Office

The National Audit office is responsible for the financial audit of the Environment Agency financial accounts and the financial accounts of its two LGPS pension funds (Closed and Active funds). Both are consolidated into the financial accounts of DEFRA and ultimately HMT. The annual reports and audited financial statements of the Closed and Active Funds were published and laid in Parliament on 25th June 2014. Both sets of accounts were unqualified.

Wales - Welsh Audit Office

The Wales Audit Office is responsible for the audit of all local government bodies (including pension fund authorities) in Wales. They are then consolidated into Local Authority financial accounts and ultimately into the financial accounts of DCLG and HMT.
The Office’s most recently published annual report on the work completed on local government accounts for the financial year 2013/14 is below:

Local Government Reporting 2014 - (Wales)

Overall the Welsh Audit Office report concludes that the financial reporting of Welsh local authorities needs to continue to improve. However no accounts were qualified because of pension issues. Paragraph 38-43 of the report refers to the need to improve the reconciliation between pension fund member data held by a number of Welsh LGPS funds and Welsh LGPS employers.