BEE Verification Open to Auditors – EconoBEE Newsletter – 18 January 2011

EconoBEE - BEE Points = Business

Change is inevitable – One story from years back seems to be most memorable. A client of ours once said “I will never sell my business to anyone”. We remarked, “what will you do when you retire?”. His answer, “sell my business!”.

This is particularly interesting because BEE doesn’t require businesses to do transactions they don’t want to do. BEE encourages businesses to do transactions that make business sense and BEE sense.

In many instances change is based on a series of unstoppable events all leading up to one big event. BEE is a change – One day a customer will ask you for a scorecard or maybe you will find someone who will benefit greatly from your assistance and you will want to help them.

Prepare a strategy for 2011. Measure, update and focus on BEE throughout the year. Create your strategy now and ensure the score your customers require is the scorecard you achieve. Our managed service will help you achieve your long term goals. Contact us.

The DTI Moves to Open BEE Verification to Auditors

The DTI has now gazetted for comment their plan to open BEE Verification to the auditing profession. This has come after much conflict in the industry with BEE Verification agencies offering little consistency.

This is a very positive move for verification. In particular it creates a second regulator capable of accrediting auditors – IRBA (The Independent Regulatory Board for Auditors) to do BEE Verification. This will create competition and with that provide more consistency. The proposals will allow other industries to become accreditation regulators.

From a business perspective this will certainly make verification easier and quicker by virtue of the approach that can now be taken. We would anticipate seeing more businesses approach verification like they approach their financial audit.

  1. Prepare a self assessed scorecard – internal
  2. Audit the scorecard – external

Salient features;
IRBA will need to prepare similar documentation to SANAS (1st Verification Agency Regulator) to ensure that their members wanting to offer a verification service meet certain minimum conditions. Only auditors who qualify will be accredited to issue a BEE Certificate.

  • All auditors must meet the accreditation standards set out by the regulator
  • Provide proof of competency through practical experience and training
  • Comply with all DTI gazettes

We do not expect every registered auditor to become accredited. The accreditation of auditors is not a “blanket exercise”. We have been calling for the auditing profession to step in since 2006 because we believed it would encourage more transformation by making the process quicker and easier for business.

Comments can be submitted for 60 days from 31 Dec 2010 to After the commentary phase the documents may be amended and then gazetted. The documents suggest a target implementation date of 1st April 2011.

If you are an auditor registered with IRBA and see BEE Verification as a new business opportunity contact EconoBEE’s Accreditation and Regulation division – we can help you with knowledge, creating infrastructure and accreditation.

Time to change BEE certificates

BEE certificates are expected to be a true reflection of a company’s current BEE status but due to misunderstanding and incorrect application of the codes this opens a door to controversy and misrepresentation.

This is why BEE specialist, Keith Levenstein, CEO of EconoBEE, calls for an adjustment to the current BEE certificate validity format.

His concerns lie in the item called “date of issue”. Found on all BEE certificates, this represents the date on which the verification agency issued the certificate. All certificates are valid for a period of one year from date of issue.

Uncertainty arises for some as the codes talk of a “measurement period”. As suggested this represents the period under measurement, which is usually aligned to the financial year on which the verification is based.

Typically, this period is used in order to provide a company’s turnover figures. It is also used for procurement and skills development expenditure; enterprise development and social-economic development spend as well as to determine the measured entity’s net profit after tax.

Levenstein explains that verification can take place many months, or even years after the end of the financial year. Most verifications make use of audited financial statements, and producing audited financials can take anywhere between 3 months to over a year.

In fact, verification can take many months from the initial appointment of the agency, to gathering the information, verification, queries and appeals until the final certificate is issued.

“It sounds wrong that a certificate that is based on financials for the year ended 2009 can be issued today, and it remains valid for the rest of 2011. On the other hand a certificate issued in March 2010 based on the same financial period would be valid from March 2010 until February 2011,” states Levenstein.

Read more…

Financial Services Charter draft welcomed

Compiled by the Government Communication and Information System

Pretoria – The new draft of the Financial Services Charter (FSC), gazetted by Department of Trade and Industry Minister Rob Davies, has been welcomed by Keith Levenstein, CEO of EconoBEE.

The draft of the charter will be up for public comment until the minister issues it as a sector code – which can be as little as three to four months but will most likely be a lot longer.

Once it has been declared a sector code, the charter will apply to all institutions operating within the financial services industry. This includes banks, insurance companies, brokers and bond originators.

Until then, affected companies will continue to use the Codes of Good Practice.

The new draft of the Financial Services Charter, gazetted in terms of 9(5) of the B-BBEE Act, is being gazetted in two phases. Phase 1 has only now been gazetted and companies operating in the financial services field can look forward to a detailed scorecard published in phase 2.

Levenstein said he welcomed the issuing of the new draft of the charter, because he believed it removes confusion around the status of the sector codes.

Read more…

    Exempt Micro Enterprises (EMEs), turnover below R5 million per annum – exempt from BEE more info…

    How to be “verification Ready” and earn more points?
    Not sure how to get a BEE Scorecard, click here to see a demonstration of how best to produce your own BEE scorecard.

    While there is demand for a B-BBEE Scorecard someone will be taking advantage, shouldn’t that someone be you…

    Want us to manage your BEE Process – simple 10 steps to BEE Compliance.

    Use our pre-prepared “Verification Ready” documents and templates in your business – contact us for more.

    Turnover below R5 million – find out how to get your BEE Exemption.

    Is BEE procurement a pain? Sort it out quick and easy – click here.

    EconoBEE Newsletter
    18 January 2011

    In this issue

    • The DTI Moves to Open BEE Verification to Auditors
    • Time to change BEE certificates
    • Financial Services Charter draft welcomed

    In other news

    About EconoBEE

    EconoBEE is an expert BEE consultancy. EconoBEE helps businesses Become BEE Compliant, prepare for verification, earn maximum BEE Points and ensure that they achieve the BEE Level they need to get more business.

    Our services include BEE Management Systems, Training, EME Pack, Completely Managed Services; consulting and advisory and Procurement Solutions.

    As leaders in the industry we are driven to help maintain and develop knowledge in the BEE industry.

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    Executive summary of B-BBEE

    Turnover below R5 million per annum – automatic BEE status

    Turnover above R5 million per annum – you need a BEE Scorecard. Our workshops, scorecard tools, procurement manager or a complete managed services will be best for you.

    Complete Managed BEE Service


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