The Technicalities of a BEE Self Assessment
Extract BBBEE Codes of Good Practice
“Any representation made by an entity about its broad-based black economic empowerment compliance must be supported by suitable evidence or documentation. An entity that does not provide evidence or documentation supporting any initiative, must not receive any recognition for that initiative.“
and “Verification of BEE compliance is encouraged and to this end, the department of trade and industry will from time to time issue clear guidelines on the verification process.“.
Extract Verification Manual
5.4.9 When verifying the accuracy and validity of the procurement calculation, the verification Agency may:
22.214.171.124 Obtain a Schedule of all B-BEE suppliers included in B-BEE Procurement spend, including total spend with the supplier, B-BEE recognition status and proof of B-BEE recognition status;
126.96.36.199 Agree a sample of suppliers to invoice to determine that the amount included in the schedule is accurate;
188.8.131.52 Agree a sufficient sample of suppliers to suitable evidence or documentation as proof of B-BEE status;
184.108.40.206 Determine whether the correct B-BEE recognition level has applied in the calculations of B-BEE spend;
220.127.116.11 Any representation made by an entity its about B-BEE compliance must be supported by suitable evidence or documentation. An entity that does not provide evidence or documentation supporting any initiative, must not receive any recognition for that initiative.
18.104.22.168 During the Transitional Period ending 31st August 2008, suppliers with only proof of narrow-based status may be accepted, but it must be subject to the transitional scorecard conversion as contained in the codes.
22.214.171.124 Select a sample of suppliers and determine that the right recognition level is applied based on the supplier’s B-BEE status;
126.96.36.199 Agree a selected sample of QSE and EMEs recognized by the entity to suitable evidence as detailed in 2.6 of statement 000 in the codes.
188.8.131.52 For EMEs only, agree a sufficient sample of suppliers to either a valid verification certificate or auditor or accounting officer’s letter;
184.108.40.206 Agree the schedule of black-owned or black-women owned suppliers to suitable evidence as detailed in2 2.6 statement 000 in the codes.
220.127.116.11 Recalculate the total B-BEE spend of the entity.
When to accept a Self Assessment
This has always been a very touchy subject for most verification agencies. The self assessment is considerably cheaper and more effective then a verification. It gives companies the opportunity to collect the same data in the same format as they normally would, except they are not charged to do the calculation.
Where ever possible the BEE codes try to be business friendly. A good example of this is the EME (Exempt Micro Enterprise) automatic allocation of a good BEE status.
When to accept a Self Assessment in our opinion is the same question as “when to accept any BEE Scorecard?”. Accuracy is key. All scorecards issued need to be accurate – they should follow the same principles as scorecards produced by verification agencies and self assessment.
If a scorecard has clear errors on it that causes a change in the score/level then it can never be accepted, similarly if the scorecard has little or no information then it can not be accepted. If the scorecard is detailed and follows the BEE Codes of Good Practice, documentation is available and is substantially correct then it should be accepted.
What happens if Self Assessment doesn’t count?
You lose! A Self assessment affects your BEE score. Procurement is an important element, it is the driving force behind BEE compliance and it is an extremely effective area to earn points. Procurement has a tiny cost to company which is why again it is so effective. Self Assessment falls part of your Preferential Procurement scorecard – every scorecard received earns you points. Every time a self assessment is rejected (without cause) you lose points.
In reality it is vitally important to prepare a scorecard first, whether it is accepted by your customers or not. You will be rewarded with a much better score which your customers will thank you dearly for.