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Association for BEE Verification Agencies

Association for BEE Verification Agencies. Public Workshop 17 February 2006. Facilitator: Lenhle Daka. Agenda. Constitution & Structure Vuyo Jack. Broad-Based Black Empowerment Act.

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Association for BEE Verification Agencies

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  1. Association for BEE Verification Agencies Public Workshop 17 February 2006 Facilitator: Lenhle Daka

  2. Agenda

  3. Constitution & Structure Vuyo Jack

  4. Broad-Based Black Empowerment Act • Promote achievement of constitutional right to equality, increase broad-based & effective participation of black people in the economy and promote a higher growth rate, increased employment & more equitable income distribution • Establish national policy on B-BBEE to promote economic unity of the nation, protect common market & promote equal access to government services

  5. Codes of Good Practice • Code 000 • Framework for the Measurement of Broad Based Black Economic Empowerment • Statement 020 • The Approval, Accreditation and Regulation of BEE Verification Agencies

  6. Industry Body • Founding Members resolved to establish an Association of private sector BEE verification agencies • Serve as formal representative entity for fulfilment of requirements of the Codes • “Association of BEE Verification Agencies” commonly referred to as “ABVA” • ABVA will be the Industry Body for BEE Verification agencies

  7. Objectives of ABVA • To promote the objectives of the Act and the Codes • To promote high levels of professionalism and competence • To regulate the proper conduct and practice of members • To represent the BEE verification sector in its dealings with the Department, SANAS, the public and other relevant stakeholders • To promote general public knowledge of the BEE verification requirements and processes. • To facilitate participation by SANAS, the dti, NEDLACBUSA, and other relevant role-players, in ABVA’s activities.

  8. Membership • Membership Criteria • Private sector based agency or similar legal entity • Compliance with criteria for accreditation • Commitment to achieving objectives of the Act and the Codes • Currently engaged in providing BEE verification services • Reasonable proof independence & impartiality • No record of blacklisting in terms of the Act and the Codes • Types of Members • Full Members are Verification Agencies that have SANAS accreditation • Associate Members are agencies awaiting accreditation • Must demostrate commitment and proven progress towards compliance • Must achieve SANAS accreditation within 6 months • All participating agencies will be associate members until achieving SANAS accreditation • Associate Membership in ABVA does not guarantee SANAS accreditation

  9. Membership • Termination of Membership • Insolvency, dissolution or closure of the member’s legal entity • On written notice of termination to the Secretary • A resolution of the Board • Misconduct • Proven non-performance of duties required by the Act or the Codes • Failure to comply with the criteria for membership of ABVA • Blacklisting by SANAS or the Dti • For any other reason recognised by law. • The Member or Associate Member concerned must have a reasonable opportunity to hear the case against it and state its own case • The liability of the Members and Associate Members limited to the amount of unpaid subscriptions or any amounts specifically provided for in this Constitution

  10. Conflicts of Interest • Members must act at all times as independent service providers when performing their duties as verification agencies. • Members must therefore not create any conflict of interest between their activities as verification agencies and any consultancy services they may directly or indirectly also provide.

  11. Structure ABVA Statutory Board Advisory Board Represented by dti, BUSA Executive Committee Technical Committee Disciplinary Committee SANAS STC SANAS, dti, Government, ABVA, BEE Consultants, Labour, Business

  12. Structure • Chairperson of the Board • elected at an AGM to hold office for one year • Board of Directors • minimum 7 members • elected at an AGM to hold office for one year; • Executive Committee • minimum of 5 members • Board will appoint from amongst its members • Secretary • appointed & employed by the Board • part- or full time basis • for remuneration and other benefits determined by the Board, to manage the administration and finances of ABVA • Founding Members entitled to nominate I person for appointment as a Director on the inaugural ABVA Board of Directors

  13. Management • Members at AGM vote for election of Board members & Chairperson (simple majority) • General governance - the Board • General management - Exco • Board member, absent without good reason from 2 consecutive scheduled meetings deemed to have resigned from the Board • Only paid-up Members of ABVA in good standing may be elected or appointed as members of the Board • Secretary report to Exco • Interim structure in place until first AGM

  14. Advisory Board • Established to facilitate participation by the dti, BUSA, and other relevant role-players, in ABVA’s activities • Attend and participate in meetings of the ABVA Board of Directors • Not be entitled to the voting rights provided for in this Constitution • ABVA have invited the dti and BUSA to become members of the Advisory Board • members entitled to nominate one representative and one altermate to represent its interests • ABVA may, in consultation with the current members of the Advisory Board, invite additional parties to become members of the Advisory Board

  15. Procedure: Meetings • Annual General Meeting held as soon as possible after close of ABVA’s financial year. • 1st AGM to be held after initial accreditation • Business of the annual meeting of ABVA will include: a) receiving annual report of ABVA’s affairs and audited financial balance sheet & accounts of ABVA b) election of auditors c) approval membership fees d) transaction any other matters the Board deems expedient • Board maintain minutes • Records kept of: a) appointments members of Exco & officers of ABVA b) names elected Board members c) resolutions & proceedings of meetings of Board & Exco

  16. Procedure • FINANCIAL • The financial year of ABVA will be from 1March to 28 February. • Proper books of account kept by the Financial Committee appointed by the Board • Accounts examined at least once every year • AMENDMENTS • Constitution amended by resolution passed by not less than two-thirds of members of ABVA present at general or special meeting • DISSOLUTION • resolution passed by not less than two-thirds of the members of ABVA present at a special meeting

  17. Criteria and Standards SANAS Document Ebrahiem Mohamed

  18. Apply to Minister with motivational evidence of compliance to 10 criteria Optional: 11. Verification services to QSE’s at reduced cost/no cost as enterprise development Yes Grant Agency accreditation certificate Refuse accreditation if found that criteria not met No Ineligible to apply to Minister for accreditation Criteria and Process for Accreditation of Verification Agencies 1. Superior Contributor (65% or more) 9. Has unrestricted operational capacity to perform core function of verification 2. Member of Industry Body 10. Statistical data on BEE progress provided to the dti 3. Qualified Personnel 4. Compliance with verification Standards • 5. Robust internal controls to: • Operate independently • Manage conflicts of interest • Ensure client confidentiality All 10 criteria met? 6. Staff member(s) conducting verifications have not performed any other service for that client for 24 months 7. Have professional indemnity (in case of fraudulent acts by verified entities engaging in fronting) 8. Verification agreement for clients which meets Verification Standards

  19. Criteria and Process for Accreditation of Verification Agencies 1. Superior Contributor (65% or more)

  20. Criteria • Superior Contributor • PAGE 7 Point 7-7.1.2 • A conflict exist between the SANAS document (statement 050) and codes • for QSE. Most verification agencies fall within the QSE criteria/scorecard. • Statement 050 requires all verification agencies to comply with • all 7 element. Does it mean that verification agencies that fall within • the QSE scorecard can choose not to report on ownership?

  21. Criteria and Process for Accreditation of Verification Agencies 1. Superior Contributor (65% or more) 2. Member of Industry Body

  22. Criteria 2. Member of Industry Body Covered by Vuyo Jack Refer to Code 000 Statement 020

  23. Criteria and Process for Accreditation of Verification Agencies 1. Superior Contributor (65% or more) 2. Member of Industry Body 3. Qualified Personnel

  24. Auditor Qualifications Ithuteng Ndomane

  25. Auditor QualificationsTerminology • Auditor Qualifications are BEE Verification Analyst Qualifications • Analyst -person carrying out the verification • Outsourcing -verification of the measured entity by a third party on behalf of the verification agency

  26. Auditor QualificationsUnderlying Principles • Verification agency should have documented policies and procedures on human resources management • Selection of competent personnel • Provision of ongoing training • Performance measurement and monitoring • Maintenance of up-to date records

  27. Auditor QualificationsJunior Verification Analyst • Qualification • Completed a BEE Verification Learnership programme (to be created), OR • A tertiary qualification (National Diploma/Bachelors Degree) • Work Experience • Minimal work experience • Performs the verification under close supervision of the senior verification analyst

  28. Auditor QualificationsSenior Verification Analyst • Qualification • A tertiary qualification (Bachelors degree) • Work experience • 5 years commercial work experience, OR • 2 years external audit experience, OR • 3 years internal audit experience, OR • 2 years BEE verification experience. • Guides, supervises and reviews work performed by junior verification analyst

  29. Auditor QualificationsExternal/Expert Verification Analyst • Qualification • A tertiary qualification (Bachelors degree) • Work experience • 5 years commercial work experience, OR • 2 years external audit experience, OR • 3 years internal audit experience, OR • 2 years BEE verification experience. • Decisions on the outcome of the verification remains with the verification agency

  30. Auditor QualificationsVerification Specialist • Qualifications • Tertiary qualification (Bachelors degree) • Work Experience • 10 years commercial work experience, OR • 3 years external audit experience, OR • 5 years internal audit experience, OR • 3 years BEE verification experience. • Performs an independent review of the evaluation and endorses the result of the verification • Each Verification Agency must have at least one verification specialist. • This function can not be outsourced

  31. Auditor QualificationsOutsourced Arrangements • Verification agency should draw up an outsourcing agreement • Verification agency takes full responsibility for the verification • Decisions on the outcome of the verification remains with the verification agency • Measured entity needs to be informed about the outsourcing agreement

  32. Criteria and Process for Accreditation of Verification Agencies 1. Superior Contributor (65% or more) 2. Member of Industry Body 3. Qualified Personnel 4. Compliance with verification Standards

  33. Criteria • 4. Compliance with Verification Standard • Compliance with code 000 statement 050/ SANAS document in total

  34. Criteria and Process for Accreditation of Verification Agencies 1. Superior Contributor (65% or more) 2. Member of Industry Body 3. Qualified Personnel 4. Compliance with verification Standards • 5. Robust internal controls to: • Operate independently • Manage conflicts of interest • Ensure client confidentiality

  35. Criteria 5. Robust internal Controls 5.1 Operate independently 5.2 Manage conflict of interest 5.3. Client Confidentiality Page 3 – Point 6 – 6.1.3

  36. Criteria and Process for Accreditation of Verification Agencies 1. Superior Contributor (65% or more) 2. Member of Industry Body 3. Qualified Personnel 4. Compliance with verification Standards • 5. Robust internal controls to: • Operate independently • Manage conflicts of interest • Ensure client confidentiality 6. Staff member(s) conducting verifications have not performed any other service for that client for 24 months

  37. Criteria 6. Staff members conducting verifications on client has not provided any other services i.e. consulting Page 7 – Point 7.3.5

  38. Criteria and Process for Accreditation of Verification Agencies 1. Superior Contributor (65% or more) 2. Member of Industry Body 3. Qualified Personnel 4. Compliance with verification Standards • 5. Robust internal controls to: • Operate independently • Manage conflicts of interest • Ensure client confidentiality 6. Staff member(s) conducting verifications have not performed any other service for that client for 24 months 7. Have professional indemnity (in case of fraudulent acts by verified entities engaging in fronting)

  39. Criteria 7. Have professional indemnity Page 8 – Point 7 – 7.4.1

  40. Criteria and Process for Accreditation of Verification Agencies 1. Superior Contributor (65% or more) 2. Member of Industry Body 3. Qualified Personnel 4. Compliance with verification Standards • 5. Robust internal controls to: • Operate independently • Manage conflicts of interest • Ensure client confidentiality 6. Staff member(s) conducting verifications have not performed any other service for that client for 24 months 7. Have professional indemnity (in case of fraudulent acts by verified entities engaging in fronting) 8. Verification agreement for clients which meets Verification Standards

  41. Criteria 8. Verification Agreement Page 6 – Point 7.2.4

  42. Criteria and Process for Accreditation of Verification Agencies 1. Superior Contributor (65% or more) 9. Has unrestricted operational capacity to perform core function of verification 2. Member of Industry Body 3. Qualified Personnel 4. Compliance with verification Standards • 5. Robust internal controls to: • Operate independently • Manage conflicts of interest • Ensure client confidentiality 6. Staff member(s) conducting verifications have not performed any other service for that client for 24 months 7. Have professional indemnity (in case of fraudulent acts by verified entities engaging in fronting) 8. Verification agreement for clients which meets Verification Standards

  43. Criteria 9. Unrestricted operational capacity Page 8-10 – Point 9.1 – 9.5.4

  44. Apply to Minister with motivational evidence of compliance to 10 criteria Optional: 11. Verification services to QSE’s at reduced cost/no cost as enterprise development Yes Grant Agency accreditation certificate Refuse accreditation if found that criteria not met No Ineligible to apply to Minister for accreditation Criteria and Process for Accreditation of Verification Agencies 1. Superior Contributor (65% or more) 9. Has unrestricted operational capacity to perform core function of verification 2. Member of Industry Body 10. Statistical data on BEE progress provided to the dti 3. Qualified Personnel 4. Compliance with verification Standards • 5. Robust internal controls to: • Operate independently • Manage conflicts of interest • Ensure client confidentiality All 10 criteria met? 6. Staff member(s) conducting verifications have not performed any other service for that client for 24 months 7. Have professional indemnity (in case of fraudulent acts by verified entities engaging in fronting) 8. Verification agreement for clients which meets Verification Standards

  45. Process Going Forward Theo Lombard

  46. Process Going Forward

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