WHAT IS A B-BBEE AUDIT/ VERIFICATION?

So, you are now being forced to get a BEE certificate by your suppliers!

Why – because they earn procurement points from buying from companies that have a valid BEE Certificate.


Where to now – what do you do?

The first step is to establish what Sector Code you fall under https://www.compliancehub.co.za/sector-codes) and what your annual audited financial periods turn over is to establish if your company is an EME (exempt micro Enterprise) , QSE (Qualifying small enterprise) OR Generic entity.


Once you know this - in the case of an EME or QSE depending on your ownership %,

(EME/QSE THRESHOLDS, https://www.compliancehub.co.za/general-documents-to-download) You may be able to simply complete an affidavit and use that as your B-BBEE Certificate (https://www.compliancehub.co.za/affidavit-templates)


If you do not qualify for an Affidavit, then its time for a verification and certification.

B-BBEE verification is audited by a verification agency that is accredited with the South African National Accreditation System (SANAS).


What is a B-BBEE Audit or verification?

An audit is the validation of the proof of the claim that your company is making pertaining to the level of transformation in your company.


QSE

Qualifying Small Enterprise, -the annual turnover of your financial year is between 10-50 Mil. A partial on-site audit is done, this is where 4 of the 5 chosen elements are verified and an on-site verification is conducted.


GENERIC

In case of a Generic company,- when the annual turnover is 50 Mil and above in your financial year, a full on site audit is necessary, this means that all five elements are verified as per the Generic Scorecard, an on- site verification and interviews are conducted.



Depending on the points earnings of each element you will be allocated a rating level.

File Preparation

The consultant or Verification analyst will ask for documents pertaining to your company to prove the level of transformation in your company – this proof is evaluated against targets and on achievement of the targets you will earn points and when added together translate into the rating level your company will be awarded. Level1 being the worst and down to non-compliant of less than 40 points.


Typical file Preparation documents for verification

The consultant or Verification analyst will ask for documents pertaining to your company to prove the level of transformation in your company – this proof is evaluated against targets and on achievement of the targets you will earn points and when added together translate into the rating level your company will be awarded. Level1 being the worst and down to non-compliant of less than 40 points.


What type of documentation are you expected to submit?

This is an example of some of the info that you will be required to submit for your verification.

The quality of the evidence on the above is essential as it will be audited and verified, queries may lead to additional information from the verification Agency.

The Verification company will now call for samples of documents i.e. Salary slips to confirm equal pay for equal race for equal gender and to confirm salary scales in management positions. Copies of board minutes, confirming attendees, copies of procurement invoices and proof of payment for procurement points, copies of SED and Enterprise development payments, copies of training registers, seta agreements and learnership confirmations etc.

Onsite or Virtual audit

By now all your information has been submitted and considered the verification company will now either do a Virtual (Skype, Teams or Zoom) verification or confirm a date for a physical onsite. The purpose of this is to confirm the documentation received, gain clarity (if needed) and interview selected management, Owners, or learners.

What is the timeline of a verification?

As can be seen above the timeline is dependent on the submission of your information, the longer you take the longer the verification takes. Please also note that every submission must be referenced on your file and the BEE calculator needs to be updated by the verification agent of your consultant.

The days of a “file flip” verification is long over.

So, where are we? It is a seesaw, the more complex the legislation, the more need for specialist consultancy. Organizations will continue obtaining the advice of consultants whilst the B-BBEE Codes retain their daunting complexity. B-BBEE, in its incomprehensible current format, has become a complex purchase! Experts are brought in to get the best possible score for the least cost and disruption, much like your SARS process. Few people question the need for transformation in South Africa. What is true is that without a BEE Rating or BEE Certificate your company will be held back.

If I need an urgent BEE Certificate what can I do?

All verification Companies offer a “fast track” option for an additional verification fee. What this means is that you can jump the Verification companies que and be verified at the first available slot, BUT all the above information still must be referenced and be presented on date of audit.

Should you require help please feel free to contact Compliance Hub Consulting. We focus on your compliance while you focus on your business.




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