Superannuation funds need stronger risk management and better monitoring of their internal controls, according to a survey by the Institute of Chartered Accountants in Australia (ICAA) and Deloitte Touche Tohmatsu.

Despite the fact that trustees must report annually to APRA and prove they have adequate internal controls, about half of the funds surveyed said they have no formal processes for evaluating and monitoring their internal controls.

“This raises a fundamental question,” Deloitte’s partner Richard Rassi said. “On what basis are trustees attesting to APRA on the operation of internal controls?”

Mr Rassi said that as the Government introduces law to require all funds to implement a risk management plan, “risk assessment and management will produce new challenges for many trustees”.

While recent failures of high-profile funds have raised issues about superannuation safety, the survey highlighted the need for such issues to be put in perspective. “Overall there was a good standard of fund governance among our major superannuation funds, although there is always room for improvements,” he said.