Association for BEE Verification Agencies

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Association for BEE Verification Agencies

• Public Workshop
• 17 February 2006

Facilitator Lenhle Daka
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Agenda
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• Constitution Structure
• Vuyo Jack

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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

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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

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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

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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
  ABVAs activities.

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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

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Membership

• Termination of Membership
• Insolvency, dissolution or closure of the
  members 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

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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.

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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
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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

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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

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Advisory Board

• Established to facilitate participation by the
  dti, BUSA, and other relevant role-players, in
  ABVAs 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

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Procedure Meetings

• Annual General Meeting held as soon as possible
  after close of ABVAs financial year.
• 1st AGM to be held after initial accreditation
• Business of the annual meeting of ABVA will
  include
• a) receiving annual report of ABVAs 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

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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

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• Criteria and Standards
• SANAS Document
• Ebrahiem Mohamed

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

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Criteria and Process for Accreditation of
Verification Agencies
1. Superior Contributor (65 or more)
2. Member of Industry Body
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Criteria
2. Member of Industry Body Covered by Vuyo
Jack Refer to Code 000 Statement 020
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Criteria and Process for Accreditation of
Verification Agencies
1. Superior Contributor (65 or more)
2. Member of Industry Body
3. Qualified Personnel
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• Auditor Qualifications
• Ithuteng Ndomane

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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

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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

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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

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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

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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

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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

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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

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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
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Criteria

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

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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

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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
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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
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Criteria
6. Staff members conducting verifications on
client has not provided any other services i.e.
consulting Page 7 Point 7.3.5
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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)
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Criteria
7. Have professional indemnity Page 8 Point 7
7.4.1
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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
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Criteria
8. Verification Agreement Page 6 Point
7.2.4
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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
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Criteria
9. Unrestricted operational capacity Page 8-10
Point 9.1 9.5.4
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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
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• Process Going Forward
• Theo Lombard

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Process Going Forward