association for bee verification agencies public workshop 17 february 2006 facilitator: lenhle daka

Association for BEE Verification Agencies

Public Workshop

17 February 2006

Facilitator: Lenhle Daka

Agenda

Time Theme Presenter09:00 – 09:10 Welcome Lenhle Daka

09:10 – 09:20

09:20 – 09:30

ABVA & the DTI

ABVA and SANAS

Takalani Tambani

Mandla Sithole

09:30 – 10:00 Member’s Constitution & Structure Vuyo Jack

10:00 – 10:30 T E A B R E A K

10:30 – 12:30 Discuss SANAS document on the Accreditation of BEE Verification Agencies

– Auditor Qualifications

Ebrahiem Mohammed

Ithuteng Ndomane

12:30 – 13:00 Process Going Forward Theo Lombard

13:00 – 14:00 LUNCH

Constitution & Structure

Vuyo Jack

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

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

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

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.

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

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

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.

Structure

ABVA

Statutory BoardAdvisory Board

Represented by dti, BUSA

Executive Committee

Technical Committee Disciplinary Committee

SANAS STCSANAS, dti, Government, ABVA, BEE Consultants, Labour, Business

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

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

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

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 auditorsc) approval membership feesd) transaction any other matters the Board deems expedient

Board maintain minutes Records kept of:

a) appointments members of Exco & officers of ABVAb) names elected Board membersc) resolutions & proceedings of meetings of Board & Exco

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

Criteria and Standards

SANAS Document

Ebrahiem Mohamed

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

9. Has unrestricted operational capacity to perform core function of verification

10. Statistical data on BEE progress provided to the dti

11. Verification services to QSE’s at reduced cost/no cost as enterprise development

Optional:

All 10 criteria met?Grant Agency accreditation

certificate

Refuse accreditation if found that criteria not

met

Ineligible to apply to Minister for accreditation

No

Apply to Minister with motivational evidence of compliance to 10 criteria

Yes

Criteria and Process for Accreditation of Verification Agencies

Criteria

1. 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?

Criteria


Covered by Vuyo Jack

Refer to Code 000 Statement 020

Auditor Qualifications

Ithuteng Ndomane

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

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

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

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

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

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

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

Criteria

4. Compliance with Verification Standard

Compliance with code 000 statement 050/ SANAS document in total

Criteria

5. Robust internal Controls

5.1 Operate independently5.2 Manage conflict of interest5.3. Client Confidentiality

Page 3 – Point 6 – 6.1.3

Criteria

6. Staff members conducting verifications on client has not provided any other services i.e. consulting

Page 7 – Point 7.3.5

Criteria

7. Have professional indemnity

Page 8 – Point 7 – 7.4.1

Criteria

8. Verification Agreement

Page 6 – Point 7.2.4

Criteria

9. Unrestricted operational capacity

Page 8-10 – Point 9.1 – 9.5.4










10. Statistical data on BEE progress provided to the dti

11. Verification services to QSE’s at reduced cost/no cost as enterprise development

Optional:

All 10 criteria met?Grant Agency accreditation

certificate

Refuse accreditation if found that criteria not

met

Ineligible to apply to Minister for accreditation

No

Apply to Minister with motivational evidence of compliance to 10 criteria

Yes


Process Going Forward

Theo Lombard

Process Going Forward

Description DateFeedback from all attendees on SANAS Criteria and Standards to [email protected]

22/02/2006

Consolidation of all feedback and presentation to SANAS 28/02/2006

SANAS STC (Special Technical Committee) 15/03/2006

Associate Membership Application (Application form available on website from Monday 20/02/2006

24/02/2006

Confirmation of Membership Fees 15/03/2006

Payment of Membership Fees 31/03/2006

SANAS Accreditation TBA

Conversion to Full Membership TBA

Annual General Meeting TBA

association for bee verification agencies public workshop 17 february 2006 facilitator: lenhle daka

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