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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 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 not achieved in 2020 with a significant number of funds whose reports were still not published until after the deadline, albeit draft versions were available before the deadline in these cases.  

The LGPS pension fund financial audits are the responsibility of three statutory auditing bodies – the Public Sector Audit Appointments Limited (PSAA) (the Audit Commission up to 31st March 2014) and National Audit office for 80 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.

From 1st April 2015 the responsibility for appointing Local Authority auditors passed to PSAA (a limited company being set up by the Local Government Association) and currently five firms of external auditors (see below) undertake these audits.

England

Name of
sub-contracted
audit firm

     

Number of
LGPS funds
audited

National Audit Office Not applicable       2
PSSA BDO LLP 7.7% Auditor pie chart 6
  Deloitte LLP 9.0% 7
  Ernst & Young 28.2% 22
  Grant Thornton UK LLP 39.7% 31
  Mazars 15.4% 12
         

Wales

         
Welsh Audit Office Not applicable       8
  Total       88

England - Public Sector Audit Appointments Limited (PSAA)

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.

More information on the Public Sector Audit Appointments Limited (PSAA) - (England) and annual audit letters for each authority may be found on its website.

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. Responsibility for the NFI moved to Cabinet Office in 2015.

The number of cases relating to local government pension fraud was reported at 1,852 in 2020. This figure was 876 in 2016, and was 298 in 2018. A full report is provided on its website.

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. 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 reports on the work completed on local government accounts for the financial year 2019/20 is below:

Local Government Annual Reports - (Wales)

Overall the Welsh Audit Office report concludes that local government bodies have made made further progress in improving the quality and timeliness of their annual financial statements but more remains to be done to meet the challenge of earlier reporting deadlines.