B-BEE Verification Delays Continue

B-BEE Verification Delays Continue

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The DTI minister has gazetted changes to B-BBEE verification procedures and rules that came into effect on 1 October 2011.

The changes allow IRBA (Independent Regulatory Body for Auditors) to approve registered auditors to issue B-BBEE certificates in addition to continuing to allow SANAS to accredit verification agencies, but with changes to the rules.

The gazette stated that SANAS may only accredit entities that have “completed training on B-BBEE Verification Services and Certification offered by Higher Education Institution as prescribed by the DTI.” It also stated that IRBA may only approve auditors that “have completed the Standardised B-BBEE Management Development Program and Certification offered by Higher Education Institutions as prescribed by the DTI.”

More work than agencies

This is aimed at ensuring consistency and improved quality of verification, but will have the effect of delaying any additional accreditation or approval for possibly a year. Previously SANAS was accrediting about 3 to 6 agencies per month. Now, they cannot do so until those agencies have completed the relevant short course offered by Wits, Unisa or other higher education institution. Applications for the first course only opened on 1 September 2011. According to Unisa, the first course starts on 7 October 2011 and will last one year. This means that despite there being an additional body able to approve verification agencies, the number of agencies in the next year is not likely to increase. With the imminent implementation of the PPPFA, due to take place on 7 December 2011, the current batch of verification agencies is not likely to be able to handle the pressure of work.

Verification delays

We consider this a grave mistake by the minister. The intention was to expand the verification industry by allowing more companies to offer verification services, but is likely to freeze accreditation of new agencies for possibly one year. We do support the concept of IRBA approving additional verification entities. We also support the introduction of education requirements for verification analysts. However there should have been a transitional or phase-in period so as not to hinder the process of accreditation.

At the same time we note that prospective verification agencies may no longer use a pre-assessment letter issued by SANAS. They previously could use their pre-assessment letter to perform verification without full accreditation. From 1st October 2011 those agencies with SANAS accreditation will only be allowed to issue valid certificates.

Keith Levenstein
Keith Levenstein is the moderator of the B-BBEE forum on Business Masters. Keith has been involved in broad-based black economic empowerment since 2005. His business, EconoBEE, well known to all in the industry. Their aim in this forum is to assist you in becoming BEE compliant.