Employers' Guide
Section 16 - Audit Certification
Contents
1. Action to be taken by employers 2. Action taken by TP 3. Information for auditors 4. Tests to be undertaken by auditors 5. Common errors1. Action to be taken by employers
At the end of each scheme financial year, 31 March, you will be issued with a form asking for a summary of contributions due to the TPS, contributions actually paid over during the course of the year and any adjustments made to the contributions. The form also asks for total contributable salaries paid for the year.
LAs will receive form TR17 and all other employers will receive form TR17A if an audited EOYC has not been submitted. Notes for guidance for completion of these forms are on the reverse side of the form.
These summaries must be checked by auditors or responsible officers who are required to sign the certificate on the form when their checks are completed. Instructions for the certification of form 17 (LAs) are passed direct to auditors appointed by the Audit Commission. Instructions for auditors of non LA s are outlined below.
When you have completed the appropriate section of the forms, it should be forwarded to your auditor in sufficient time to complete the checks and return the form to TP by no later than 30 November. If you are a Local Authority you must send the form TR17 to your auditor no later than the 30 June. After forming their opinion, the auditors should send the signed form no later than 30 November, directly to TP.
You should take a copy for your records. This auditor certificate is separate from the annual return of service, salary and additional contributions information which is submitted for individual teachers
Back to the top2. Action taken by TP
On receipt of the form TR17A, TP will check sections 1 to 3. Discrepancies will be investigated by TP and will ask you for an explanation. Refunds of overpayments will be made by TP after the audited copy of form TR17A is received. If an underpayment is discovered, this should be paid to TP with an in payment slip B9, by the due date of the return of the completed audit certificate. If the payment has not been received by the due date, you will be asked to provide a monthly schedule of contributions due and paid. Interest will then be calculated as stipulated under regulation G7 of the Teachers' Pensions Regulations.
Back to the top3. Information for auditors
The TR17A includes a reference to the pension contributions paid to TP. The auditor is entitled to form an opinion without qualification where he has carried out the tests listed below in Section 4 and is satisfied:
- that teacher and employer contributions have been correctly calculated in respect of all those required to contribute under the scheme based on the pensionable salaries paid and the current contributions rate; and
- that they have been remitted.
When the auditor considers that he is unable to form an opinion without qualification, he should:
- where the amendments required are simple and agreed with the employer, make them in red on the form TR17A and include "subject to the amendments in red". No report is required; or
- where there are uncertainties or disagreement with the employer, set out the reasons for concern and any matters in dispute in the form of a formal letter to TP.
If uncertainties or disagreements remain although amendments have been made, please qualify this in a letter attached to TR17A.
Back to the top4. Tests to be undertaken by auditors
Please ensure that all relevant parts of the form TR17A are completed then .check all the arithmetic on the form TR17A.
- Ascertain the method of compilation of the form TR17A and the internal controls which apply.
- Consider to what extent they may be relied upon to produce accurately compiled returns and whether there are areas covered by the form TR17A which may have a high risk of error.
- Investigate changes in the method of compilation of the form TR17A.
- Compare the form TR17A and working papers with those of the previous period.
- Obtain and corroborate explanations for significant variations. If the previous form TR17A resulted in adjustment to that return after any necessary TP decision, ensure that the corrected approach has been followed in the current return.
Agree the compilation of Form TR17A and reconcile it with the employers payroll, accounts and related records.
Please check that:
- the total of teachers' salaries at section 1 of form TR17A agrees with the employers' payroll records;
- the total additional contributions at section 2.a.i. of form TR17A agree with the employers' payroll records;
- the total TR22 election amounts at Section 2.e.i of form TR17A agree with the employers' payroll records;
- the amounts at Section 2cii and iii are the arrears plus interest paid in respect of backdated EFE elections and agree with the employers' payroll records;
- the total basic teachers' contributions at section 2.a.ii. of form TR17A agree with the employers' payroll records;
- the total employers' contributions at section 2.a.iii. of form TR17A have been calculated in the relevant ratio to the teachers' basic contributions;
- the contributions due at section 2.a.iv. of form TR17A for teachers' and employers' contributions have been correctly calculated;
- the contributions paid in respect of this return are correctly analysed between the types of contribution made and that all figures agree with amounts paid as recorded by the employer and advised in the end of year report issued in April each year; and
- that all figures on form TR17A have been calculated correctly.
Ensure that contributions in respect of all persons eligible to be members of the TPS by virtue of Schedule 2 to the Regulations, including those who have elected to contribute to the scheme but excluding those who have opted not to do so, are brought to account on the return.
Auditors should sample check pay records from which the return is compiled. The extent of this testing will depend on the information provided by the employer about controls. In particular please substantiate any variation from the normal 6.4% contribution. The circumstances in which contributions are not payable are where:
- a teacher has opted out of the Teachers Pension Scheme;
- a teacher is aged 75 or over;
- a teacher has been in continuing part-time employment from before 1 January 2007 and has not made a valid election to treat the service as pensionable;
- a teacher has retired before 1 January 2007 (other than on ill-health grounds) and has been in continuing employment before 1 January 2007 and did not make an EFE election
Circumstances which apply where contributions are paid at a non standard rate are where:
- a teacher has elected to buy-in additional years;
- a teacher has elected to buy additional pension;
- a teacher is paying contributions to re-instate earlier years of service for which contributions were previously withdrawn;
- a teacher has elected to pay contributions for additional family benefits;
- a teacher has elected to pay contributions on a former higher salary, TR22 elections.
5. Common errors
- The employer has not treated as the service as pensionable despite TPS membership being automatic for all teachers including re-employed teachers unless they opt out.
- The employer has not treated part time service as pensionable where a member has changed contract or taken up additional employment.
- Non implementation of a new part-time election or where a teacher changes employer and the election is not picked up by the new employer.
- The deduction of contributions in error by a new employer when a teacher has not notified them that they have opted out.
- Non implementation of election to pay any additional contributions.
- Non deduction of contributions on full time re-employment in the case of teachers who are in receipt of ill-health benefits.
- Non deduction of contributions in respect of pensionable allowances.
- Deductions of contributions in respect of an allowance that is not pensionable.
- Incorrect rate of deduction for additional contributions.
- Collection of additional contributions past the cessation date.
- Payment of AVC contributions to Teachers' Pensions instead of the appropriate insurance company.
For a selection of teachers whose records show an additional contributions election, please check that the correct deductions are being made on the payroll; auditors should refer to the list for employers provided by TP which indicates which teachers who according to TP records have elected to pay additional contributions.
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