New rules for BEE Verification – EconoBEE Newsletter – 27 September 2011

EconoBEE - BEE Points = Business
Minister Gazettes Changes to Verification Requirements and Makes Grave Mistake

The minister has approved IRBA as a B-BBEE Regulatory body. This means that auditors can now be accredited by their own body, IRBA (Independent Regulatory Body for Auditors) to verify BEE certificates.

They will be known as “Approved Registered Auditors. Previously only SANAS was able to accredit agencies. This should result in more organisations being able to verify, hopefully a higher quality of work, and most importantly consistency of verification.

The notice comes into effect on 1st October 2011.

Salient points:

  1. As we had suggested in our submission in February, EMEs are specifically excluded, allowing an accountant or auditor or financial officer to continue to sign EME statements.
  2. All agencies must follow the Verification Manual and the gazette specifies that this includes sector codes – an issue we have been complaining about for months.
  3. Certificates must show the weightings in points of each element verified. (Some agencies only use levels, e.g ownership level 7. The gazette requires them to show points earned.).
  4. Verification Agencies seeking accreditation with SANAS or Approved Registered Auditors seeking approval must have completed the B-BBEE Verification Services and Certification or Management Development Program respectively, launched recently by the dti and dept of higher education. This implies that no more agencies may be accredited or auditors approved until they have completed the programs, which could entail a delay of another year!
  5. Prospective verification agencies may no longer use a pre-assessment letter issued to them by SANAS. They previously could use their pre-assessment letter to perform verification. From 1st October 2011 those agencies will only be allowed to issued valid certificates once they have their full accreditation.

Comment:

We welcomed the introduction of other regulatory bodies when the minister issued his draft gazette. At the time his proposal was to begin accrediting those bodies from 1st April 2011, so this is 6 months late. We continue to support the proposals, but wonder why the minister did not take the time to clear up other issues surrounding B-BBEE certificates and interpretations.

We did recommend that the minister ensure more consistent verification, and the requirement that all prospective agencies must complete a B-BBEE training course is a step in the right direction.

Grave Mistake

Due to the minister’s requirement that no more agencies can be accredited or auditors regulated until they have completed the relevant B-BBEE short course, there will be a delay in further agencies coming on-line. Applications opened for the course on 1st September. According to Unisa, the first course starts this Friday (30th September 2011), but lasts a year. The first batch of Unisa graduates will complete their studies by October 2012.

 

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EconoBEE Newsletter
27 September 2011

In this issue

  • Minister Gazettes Changes to Verification Requirements and Makes Grave Mistake

In other news

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Executive summary of B-BBEE

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