Declarations of interest:
None
Witnesses:
Jason Bailey, Pensions
Lead Manager
Neil Mason, Senior
Advisor (Pension Fund), Pensions and Treasury
Siva Sanmugarajah, Lead Auditor, Internal
Audit
Key
points raised during the discussion:
- Officers outlined the
annexes provided, and explained the context of the internal audit
report. It was highlighted that there was a distinction between the
sovereignty of the Fund and that of Orbis as a service provider, and that the progress
report was intended to reflect the Board’s areas of concern.
Officers also asked that the Board note that the administration
strategy and risk register, both of which were in development,
would clarify roles and responsibilities in respect to Orbis and the Fund.
- The Board was
informed that Internal Audit would be reviewing Orbis’ response to the recommendations,
before a formal follow up audit was conducted in quarter four
2017/18. It was also noted that the Surrey Pension Fund Committee
would consider the Board’s review on 15 September 2017, and
the Surrey County Council Audit and Governance Committee would
receive a progress report on 27 September 2017. Board members
expressed some concern as to the duplication of process, and it was
clarified that the Pension Fund Committee had asked the Board to
review and lead with monitoring progress and responses from
Orbis on behalf of the
Fund.
- The Board expressed
concern that it had frequently highlighted performance issues over
the past 18 months, and had received assurances that there would be
improvements. The internal audit report was highlighted as evidence
that there were continued challenges in delivering sustained
improvement.
- The Board noted that
it had previously requested that any new business Orbis sought should be assessed on the basis of
risk to current service delivery. The Chairman highlighted that he
was to be informed if any new business was being tendered for, and
advised of what impact this was likely to have.
- The Board questioned
whether officers were confident that staff increases were
sufficient to address identified backlogs. It was confirmed that
there was an increase of 4-5 Full-Time Equivalents (FTE) in the
team, and that this would be a short term measure to deliver the
improvement work. Officers highlighted that the internal audit
activity had been conducted through late 2016-17. It was also noted
that the impact on benchmarking data would be seen in the 2017/18
figures.
- The Board queried
what additional management capacity had been created to respond to
the report’s recommendations. Officers highlighted that an
operations manager had been assigned from another area of
Orbis to review performance. It was
also the case that additional executive support was being recruited
to enable project oversight during a six month period.
- The Board commented
that it did not have a sense of the project plan, current backlogs,
proposed changes or timescales for improvement. It was reflected
that this made it difficult to assess the extent to which the
service had responded to the internal audit recommendations.
Officers agreed to circulate an improvement plan, and noted that
backlog volumes and expected clearance dates would be added to the
key performance indicator reports for 2017/18. Officers commented
that they would expect to see a reduction in backlogs over the
course of the financial year.
- The Board was
informed that the proposals to develop a pension administration
risk register would support improved oversight. Officers were
invited to identify specific areas of concern, and it was
highlighted that there were continued concerns about performance
within the Pension Services team. Officers noted that comparisons
with the performance of the team based in Lewes had identified
issues, and that individuals were being seconded to support the
documentation and revision of work processes.
- The Board expressed
that it wanted a clearer sense of the target dates for key outputs
related to responding to the audit recommendations. It was also
requested that areas of concern were highlighted through the
response to the audit recommendations.
Actions/ further information to be provided:
The improvement project plan,
with planned changes, outputs and timescales be provided to the
Board.
Resolved
That the Board note the report,
and will continue to monitor progress until the follow up audit in
quarter four 2017/18.