Download - 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
1. Superior Contributor(65% or more)
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?
1. Superior Contributor(65% or more)
2. Member of Industry Body
Criteria and Process for Accreditation of Verification Agencies
Criteria
2. Member of Industry Body
Covered by Vuyo Jack
Refer to Code 000 Statement 020
1. Superior Contributor(65% or more)
2. Member of Industry Body
3. Qualified Personnel
Criteria and Process for Accreditation of Verification Agencies
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
1. Superior Contributor(65% or more)
2. Member of Industry Body
3. Qualified Personnel
4. Compliance with verification Standards
Criteria and Process for Accreditation of Verification Agencies
Criteria
4. Compliance with Verification Standard
Compliance with code 000 statement 050/ SANAS document in total
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
Criteria and Process for Accreditation of Verification Agencies
Criteria
5. Robust internal Controls
5.1 Operate independently5.2 Manage conflict of interest5.3. Client Confidentiality
Page 3 – Point 6 – 6.1.3
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
Criteria and Process for Accreditation of Verification Agencies
Criteria
6. Staff members conducting verifications on client has not provided any other services i.e. consulting
Page 7 – Point 7.3.5
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)
Criteria and Process for Accreditation of Verification Agencies
Criteria
7. Have professional indemnity
Page 8 – Point 7 – 7.4.1
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
Criteria and Process for Accreditation of Verification Agencies
Criteria
8. Verification Agreement
Page 6 – Point 7.2.4
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
Criteria and Process for Accreditation of Verification Agencies
Criteria
9. Unrestricted operational capacity
Page 8-10 – Point 9.1 – 9.5.4
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
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