Agenda item

To present the minutes of the extraordinary meeting of the Audit Committee held on 7^th November, 2014.

The minutes of the previous extraordinary meeting of the Audit Committee held on 7th November, 2014, were presented and confirmed as correct.

Arising thereon –

•           The Capital & Treasury Management Accountant reported back to the Committee as requested with information in relation to average borrowing rates across authorities in Wales which he had organised in tabular form and rank order based on data sourced from the Public Works Loan Board (PWLB) website. The Officer explained that although benchmarking against other authorities can be useful, it is also important to emphasise that the timing of historic borrowing is dependent on when the capital programme has required borrowing to fund the schemes therein. For this reason, some authorities may have needed external borrowing to fund the programme at a time when interest rates were low whilst other authorities will have had to take up borrowing to fund their programmes at a time when rates were high. Also this approach can cloud the picture in as much that an authority’s performance is based on interest rates from outstanding loans which can date back decades and which cannot be rescheduled due to the premiums that will be incurred in doing so, which would outweigh the savings.

The Officer said that the Average Fixed Rate for outstanding PWLB loans across local authorities in Wales is 5.58% meaning that the Isle of Anglesey County Council (IOACC) at 5.72% is slightly higher than the Welsh average. By ranking the authorities by the fixed interest rate for PWLB loans, the IOACC has the 14th lowest fixed interest rate out of the 22 local authorities in Wales. By ranking the authorities by the fixed interest rate for PWLB loans on a regional basis, the IOACC has the 3rd lowest fixed interest rate out of the six local authorities in North Wales.

The Committee noted the information.

•           The Internal Audit Manager confirmed that he had contacted the Gwynedd Pension Fund to ascertain whether an official from the Fund would be able to attend this meeting of the Audit Committee to update Members on any performance issues. Whilst that had not been possible, alternative options had been offered viz. Members of the Committee could ask for feedback from the Isle of Anglesey’s Elected Member representative (the Portfolio Member for Finance) on the Pension Fund Committee, or otherwise they could forward any questions directly to the Fund Management.

The Interim Head of Resources & Section 151 Officer said that it is customary every year for the pension funding and holding authority to convene a meeting with the Section 151 Officers of the Fund’ s constituent partners to address any issues pertaining to performance, investment and /or shortfalls etc. Whilst he had not been informed of when that meeting would be held he assumed that if the previous one had been held in March, 2014 then the next will be in March of next year. He confirmed that he would be happy to report back to the Committee on the first available date following the meeting, and for the Committee subsequently to follow up any issues that might arise with Gwynedd should that be the case.

The Committee took the view that it was important for it to be kept informed on the Pension Fund since performance issues were highlighted at the previous presentation in September 2013 and because the deficit on the Pension Fund does impact on the Authority’s Balance Sheet. It was proposed and accepted that the Portfolio Member for Finance be asked to brief the Audit Committee at its next meeting with regard to the Pension Fund and any matter that may have arisen at meetings of the Pension Fund Committee.

Mrs Sharon Warnes informed the Committee that she had attended a meeting of Gwynedd Council’s Audit Committee in September to observe Lay Member participation, and that the Pension Fund had been discussed at that meeting as part of the submission of the accounts, and an improvement in the Fund’s performance was reported. The establishment of a  committee comprised of representatives of each of the constituent partners within the Pension Fund to scrutinise the Fund had also been mooted as part of the discussions. She suggested it might be worthwhile inquiring whether that forum had indeed been set up, and its implications.

The Committee noted the update by the Internal Audit Manager and the additional information provided by Mrs Sharon Warnes.

ACTIONS ARISING:

•           Internal Audit Manager to request the Portfolio Member for Finance to brief the Committee at its next meeting on the Pension Fund and any related matters.

•           Interim Head of Resources and Section 151 Officer to report back on any salient issues from the Pension Fund’s constituent bodies’ Section 151 Officers meeting when held.