Barking and Dagenham's Pension Committee has been alerted to concerns raised by external auditors regarding loans made between the Pension Fund and the council. The issues, identified by BDO, relate to the years 2019/20 to 2022/23 and also involve what the audit report refers to as prepayments .

The concerns were discussed at the Pensions Committee meeting on Wednesday, 17 December 2025, where members reviewed a Fund Governance Report.

BDO's concerns included issues related to loans between the Pension Fund and the council, and the prepayment of contributions by the council in the period 2019/20 to 2021/22 which were not reflected in the actuary's Rates and Contributions Certificate. However, the council obtained a King's Counsel opinion in December 2024 supporting the legality of the transactions. BDO concluded that they would not make an application to the court for a declaration that the prepayment of employer contributions or the loan received by the pension fund are contrary to law.

The loans issue, which has been previously discussed, involved loans between the Pension Fund and the council. According to the Fund Governance Report, this practice has since been terminated, and the council has implemented a revised Treasury Management Strategy to prevent any further borrowing by the pension fund from the Council. The Fund Governance Report states that conventionality of practices has been restored, backed by the revised Treasury Management Strategy designed to give proper re-assurance to sound administration.

BDO also raised concerns about prepayment of contributions by the council in the period 2019/20 to 2021/22, which were not reflected in the actuary's Rates and Contributions Certificate. The Fund Governance Report stated that there appears to have been a misuse of the term prepayments by council officers, and that these transactions are historic and have no impact on the 2023/24 and 2024/25 accounts.

As a result of these issues, BDO will issue a disclaimer of opinion on the financial statements for all four years (2019/20, 2020/21, 2021/22, and 2022/23) for the council's accounts incorporating the Pension Fund accounts. This is driven by the compressed timetable imposed by the Accounts and Audit (Amendment) Regulations 2024 backstop date, which limited the ability to complete all necessary audit procedures. According to the Fund Governance Report, the disclaimer reflects circumstances rather than failure in the current arrangements.