A busy week but mainly routine items for noting. Firstly was a Pensions Fund Investment Sub-Committee, followed by the Audit & Accounts Committee.

Cambridgeshire County Council Pension Fund Quarterly Performance Report for the period ending 31st March 2023

An interesting update shows the fund’s value rising to £4.217bn while the liabilities were only £2.8bn – A funding level of 152%! This is an estimate of the current value of the future liabilities, which has fallen significantly due to increases in interest rates.

The fund is currently moving the investment mix into more secure items, with a lower level of investment in equities, reflecting the strong valuation of the fund.

Our investment advisors failed to update us on the poor performance of a number of the investment managers and I am concerned about this.

Stewardship and Engagement Update 31 – 64

This new report looks at how our investment managers interact with the companies we invest in. This attempts to demonstrate our engagement with the companies we invest in, but it is still a work in progress and we need to look more at this.

Exclusion of Press and Public

Some items we discuss has to be done in confidential session. This is mainly because of confidential information and advice that we receive from advisors. These items included updates on :

Analytics for Climate Transition – how we report our achievement of carbon emissions reduction

Climate Aware Passive Equity Investing – fulfilling our commitment to carbon emissions reduction

Strategic Asset Allocation Update – detailed discussion of changes to our portfolio

Infrastructure Options – options for how our funds are invested

Report on the authority’s process, application and use of powers within the Regulation of Investigatory Powers Act (RIPA)

The RIPA policy is reviewed on a periodic basis and this will continue in the future. There were no instances of use of the powers to be reported, but it is still essential to have an up-to-date policy in place.

Draft Annual Governance Statement 2022-23 – the annual governance statement sets out a lot of detail about the operation of the Council. It is a set of required statements and follows the same pattern as other Councils. The Internal Auditor reported that:

“On the basis of the audit work undertaken by Cambridgeshire’s Internal Audit team during the 2022/23 financial year, it is the Head of Internal Audit’s opinion that overall Internal Audit can provide moderate assurance over the system of internal control in place at Cambridgeshire County Council for the financial year ended 31st March 2023.”

Internal Audit Annual Report 2022-23 – the council has an internal audit team that reviews the operation of the Council. A statement by the auditor, that they “Had only just sufficient resources to enable it to provide adequate coverage of the authority’s control environment.” Is concerning, however, the Head of Paid Service gave assurance that sufficient resource would be made available to ensure the service is able to operate properly.

Whistleblowing is an area I have been very concerned about. When people raise concerns about their employer, too often they discover that it impacts their career. It is good to see that the Council takes this seriously and now has a good system in place. The results of whistleblowing referrals in the year were as follows:

Outcome of Case	No. Cases
No action required (Initial review of the referral finds no investigation is required e.g. the issue has already been dealt with or is not serious enough to warrant a full investigation)	5 (21%)
Referred to relevant process (Where initial review identifies that this should be dealt with through another corporate process rather than whistleblowing e.g. as a formal complaint or grievance, or safeguarding referral, and this is referred into the relevant process.)	7 (29%)
No powers to investigate. (Where concerns raised are not within the Council’s powers to investigate, for example if they relate to an academy school or District Council services. Where possible the referral is passed on to the relevant organisation.)	1 (4%)
Informal Audit advice & recommendations. (Where a full investigation is not required but informal advice or guidance is issued to the relevant service on improving the control environment.)	3 (12%)
Investigation indicates no serious concerns. (An investigation has been initiated but subsequently finds the allegation is not substantiated or only minor issues are found)	2 (8%)
Full audit investigation and recommendations.	2 (8%)
Police Referral / Taken to court	3 (12%)
Recovery action (Recovery action is taken to recoup losses including setting up a payment plan, recouping overspends etc.)	1 (4%)
Resolved within service. (The issue is resolved within the relevant service without requiring a full investigation or onward referrals).	0 (0%)
2022/23 Totals	24

Financial Reporting and Related Matters Update – A local elector can object to the Council’s accounts, and objections have been received by the current auditor for the years 2018 – 2021Value For Money opinions. The auditor has now determined that there is no action to be taken in respect of these objections. The cost of the investigation has to be borne by the Council. These are expected to be about £80k. There are also outstanding objections dated 2017 and 2018 with the previous auditors, and these are expected to be resolved shortly.

There are still some items to be resolved for the 2021/22 accounts and the Council will not meet the shortened deadline for the sign-off of the 2022/23 accounts.

The Council are also changing some technical accounting policies and the Committee had to approve these.

Procurement and Commercial Annual Report – concerns were raised in previous years over adherence to the procurement policy and this report sets out the improvements made and the adherence to the policy. It also notes some significant changes happening the local authority procurement through the Procurement Act 2023.

Council’s use of Consultancy and Agency staff – the use of consultancy and agency staff is a good way of covering short-term resource and expert resource requirements. The council has introduced an e-form for capturing all this expenditure and ensuring compliance with the Council policies and ensuring best use of resources.

Audit and Accounts Committee Draft Training Plan – Local government audit and finance is continuing to evolve. The valuation of balance

sheets or format of the accounts has never been more complicated, the regulation of audit

is changing and the public scrutiny on the role of audit committees has never been as high

profile. As such the Audit and Accounts Committee members have a significant number

changes it needs to consider and plan for. Whilst we acknowledge the high competency of

the County Council’s members, we continually strive to ensure all of its members have

access to training to maintain those skills.

Exclusion of Press and Public

Cyber security position statement – cyber threats are becoming more serious as more and more different types of attacks are used to try and breach security. It is essential that the Council takes steps to protect itself and it is also appropriate that these actions are not discussed in public.

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