EconoBEE Newsletter – The Role of Consultants
The role of Consultants compared to Ratings Agencies.
There is a lot of confusion as to the different roles that ratings agencies (BEE Auditors or Verification Agencies) play compared to consultants in the BEE industry.
A rating agency, whether they have applied to SANAS to eventually become accredited or not, has the role of verifying/auditing your BEE score. The best description is they are the auditors of the industry. Their job is to ensure that the points you claim are correctly claimed and that you have sufficient evidence to prove the points you are “claiming”.
The consultant, on the other hand is there to assist you to find those points – to educate you and help evaluate your business to find the most effective way to earn points. The consultant will assist you in collecting evidence and documenting your BEE activities so that the auditors are satisfied with the score you have claimed.
SANAS have a strict code of practice which governs the BEE Verification industry. It states that a ratings agency (the auditor) may not act as a consultant for the same company. This keeps the auditing of your BEE documentation independent and objective. If your ratings agency helps you to find extra points, i.e. consults to you, then your certificate will be invalid.
When do you need a ratings agency?
A ratings agency is not mandatory and you are within your rights to produce a self-rating. We consider the auditing of your BEE Scorecard to be the last step in your BEE journey. However, for purposes of credibility it is sometimes useful to have an independent verification agency give you an audit of your BEE scorecard.
You should have identified all the points you think you have earned, gathered all the documentation necessary, and only then hand it to the verification agency when they arrive for the audit. We have seen many cases where the client complained that they did not earn the points they thought they deserved. This was not the fault of the ratings agency. They can only audit what you give them. If you have no information to hand to the verification agency, or are not sure if you have claimed and documented every BEE activity, you will end up with a score lower than what you could have achieved.
When do you need a consultant?
If you are not sure of all the codes and the complications of some of the indicators, then a consultant can assist you in identifying where you can earn more points and show you how to set up policies, strategies and methodologies to ensure that you collect all the evidence you need to ensure an accurate, and high score. There are subtle nuances to the codes which can make a big difference to your eventual score: Are you categorising all the training spend? If not, you stand the chance of losing up to 6 points on your Scorecard. Are you continually monitoring your score on a day-to-day basis? If not you may be overspending on socio economic development and under spending on enterprise development.
Can a consultant produce a scorecard for you?
Throughout the consulting process you always need a scorecard. This is used to see how many points you have/where you are losing points and how you can get additional points. Always remember producing a scorecard does not happen over night, it is a process that takes time. Once the consulting process is finalised and the desired score is achieved then the score should be signed by the company fiduciaries (much like final audited accounts) or sent for an audit.
A consultant can’t give you a verified scorecard, that can only be issued by a ratings agency. If you don’t need a verified scorecard then your current scorecard is acceptable.
Do you have to appoint either a consultant or ratings agency?
No, it is possible to gain all the information you need by studying the codes, visiting our website or other websites and make a detailed study. Many people in companies have gained that knowledge. It is also possible to do your own self-rating. In both cases it is your prerogative. According to the dti codes of good practice you do not need anything more than a self-rating as long as it meets the requirements set out in the codes, and you can learn all you need without appointing a consultant.
In reality both consultants and verification agencies serve a valuable purpose – just make sure you know their roles!
Practically a business should contact a professional who has experience in implementing BBBEE and has sufficient knowledge to make BEE compliance as easy and quick as possible. Our 10 step process has been designed to practically produce a quick scorecard for your business and to allow for the constant changes in your company.
Practical Seminar – Produce a BBBEE Scorecard
Every day thousands of businesses are asked for a Broad Based Black Economic Empowerment Scorecard and only a few respond. Many don’t respond simply because they don’t know how to respond. They can’t answer any of the BBBEE questions.
Our practical seminars will take your business through everything it needs to produce the BEE scorecard.
Some of the topics we cover:
The scorecard in your company
How you should go about obtaining other companies’ scorecards
Tips – to earn points and measure compliance
What to look for to calculate the scorecard accurately
How to determine the percentage spend on training – and all other elements
Keeping the correct documents and how to maintain them
Creative ideas to earn more points and to document each activity
We are hosting our popular full day B-BBEE seminar on 25 June in Johannesburg. Book now to reserve your place.
“An in-depth understanding of BEE helps you manage your BEE process.”
Tracking BEE Documents Leads to an Improved Score
BBBEE is made up of seven elements, some elements are more labour intensive than others which causes companies to sacrifice some points to save time.
Not any more – EconoBEE’s easy to use BEE management tools will help you keep track of all the BEE points you have earned. This results in a scorecard being generated at any time, based on real underlying documentation which gives you the most accurate scorecard imaginable.