Strathclyde Pension Fund has reported a "significant potential fraud that had occurred over a lengthy timeframe" to Police Scotland, after discovering that around £300,000 had been paid to a deceased pensioner.

The potential fraud was flagged following a returned mail exercise, according to the scheme's annual report, with immediate action taken to stop all future pension payments, and an internal audit was also informed to investigate.

The investigation confirmed that a pension had continued to be paid to a deceased pensioner to the value of around £300,000, as the Strathclyde Pension Fund Office was not notified of the pensioner’s death, which predated current data matching controls.

Police Scotland are currently reviewing the evidence to “determine the way forward”, while the internal audit and the pension scheme are working in the meantime to ensure that there are no other similar cases, and to determine what further controls, if any, should be in place.

A further, more detailed report is expected to be brought to a future committee once these lines of enquiry are complete.

Despite this issue, the accounts confirmed that "based on the audit work undertaken, the assurances provided by the executive director of finance and the director of Strathclyde Pension Fund, and excluding the issues noted above, it is the head of audit and inspection’s opinion that reasonable assurance can be placed upon the adequacy and effectiveness of the governance and control environment which operated during 2020/21".

Furthermore, commenting on the scheme's governance controls more broadly, the annual report stated: "The work undertaken by internal audit has shown that the arrangements in place are generally operating as planned.

"We consider the governance and internal control environment operating during 2020/21 to provide reasonable and objective assurance that any significant risks impacting on the fund’s ability to achieve its objectives will be identified and actions taken to avoid or mitigate the impact.

"Where areas for improvement have been identified and action plans agreed, we will ensure that they are treated as priority and progress towards implementation is reviewed by the Strathclyde Pension Fund leadership team, board and committee.

"We will continue to review and enhance, as necessary, our governance arrangement."

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