|SANAS Accreditation Mandatory for Exempt Micro Enterprises
SANAS and the DTI have issued a joint statement announcing that BEE Verification agencies would now be accredited to issue EME certificates from 1 March 2012. The reason for this sudden change is that the recently revised PPPFA regulations make it a requirement of government departments when awarding tenders to ensure that if a BEE certificate was issued by an accredited agency it must have a SANAS logo on the certificate.
Accredited agencies have never been accredited to issue EME certificates which has now caused considerable confusion in the market place and will drive the cost of credible verification up substantially.
Section 10.(1) of the Preferential Procurement regulations states:
10. (1) Tenderers with annual total revenue of R5 million or less qualify as Exempted Micro Enterprises (EMEs) in terms of the Broad-Based Black Economic Empowerment Act, and must submit a certificate issued by a registered auditor, accounting officer (as contemplated in section 60(4) of the Close Corporation Act, 1984 (Act No. 69 of 1984)) or an accredited verification agency.
This error was discussed in more detail in a past newsletter - read more about the error.
However when the Treasury issued their practice notes in December last year they reiterated that their requirements were to only accept agencies certificates if they were accredited by SANAS. This despite the fact that SANAS has never accredited BEE verification agencies to issue EME Certificates.
Manage your BEE process better EconoBEE's complete managed service is designed to help you earn more BEE points, be less admin intensive and ultimately less costly. Contact 011 483 1190 or visit www.econobee.co.za for more info.
Section 4.7 of the practice notes discusses requirements for BEE certificates issued by SANAS accredited agencies which includes EME certificates:
4.7.1 Verification agencies accredited by SANAS
18.104.22.168 These certificates are identifiable by a SANAS logo and a unique BVA number.
22.214.171.124 Confirmation of the validity of a B-BBEE Status Level Verification Certificate can be done by tracing the name of the issuing Verification Agency to the list of all SANAS accredited agencies. The list is accessible on http://www.sanas.co.za/directory/bbee_default.php. The relevant BVA may be contacted to confirm whether such a certificate was issued.
126.96.36.199 As a minimum requirement, all valid B-BBEE Status Level Verification Certificates should have the following information detailed on the face of the
- The name and physical location of the measured entity;
- The registration number and, where applicable, the VAT number of the measured entity;
- The date of issue and date of expiry;
- The certificate number for identification and reference;
- The scorecard that was used (for example EME, QSE or Generic);
- The name and / or logo of the Verification Agency;
- The SANAS logo;
- The certificate must be signed by the authorized person from the verification Agency; and
- The B-BBEE Status Level of Contribution obtained by the measured entity.
The implications for business and verification agencies;
- Cost of EME Verification will soar. One requirement of an accredited agency is to conduct a site visit. The site visit will be essential to ensure the company does not have a second similar trade name, appears to be a small business based on business premises size and even that they are not merely a continuation of an existing business.
- The analyst should conduct an interview with financial staff and shareholders.
- Where audited accounts are not available the analysts will need to conduct sampling to ensure the management accounts are correct. Amongst others the analyst will need to ensure the invoices are sequential and the financials balance.
- Fronting instances where EME certificates were incorrectly issued will lower as agencies will conduct a more thorough verification.
- Agencies will not be able to issue a certificate quickly any longer as the verification manager or signatory will need to review every EME status issued. If comments are raised during the on-site then the analyst will need to document them suitably.
- IRBA accredited agencies or accounting officers will have a significant competitive edge since they remain exempt from the more stringent SANAS requirements.
Overall ensuring BEE verification agencies conduct better verifications will go a long way to preventing fronting, fraud and misuse.
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The Tourism sector code had a major flaw which prevented some tourism companies from earning maximum points on the scorecard. Now after much consultation TOMSA (Tourism Marketing Levy South Africa) have opened their collection service to additional tourism operators. In the past this was reserved for Accommodation, Car Rental and Tour Operators which excluded most other forms of tourism based companies including travel agents.
Just a quick update, we now collect the TOMSA levy in most other sectors of the Tourism Industry and not just the Accommodation, Car Rental and Tour Operator segments.
We kindly request that you encourage all your clients within the Travel and Tourism to join TOMSA in order to earn the 3% B-BBEE score as a TOMSA collector.
Tourism Marketing South Africa - Manager
Tourism Business Council of South Africa
If you are a tourism based business and need help earning maximum BEE points please contact 011 483 1190 for consulting assistance.
EconoBEE remains committed to helping our clients work through Broad-Based Black Economic Empowerment one small step at a time. Contact us to help you calculate a preliminary BEE scorecard and assist you with strategies to improve your BEE scorecard - 011 483 1190 or
No time to manage your BEE scorecard. Our consultants can phone your suppliers for a BEE certificate - Managed Service.
While there is demand for a B-BBEE Scorecard someone will be taking advantage, shouldn’t that someone be you...
8 March 2012
In this issue
- SANAS Accreditation Mandatory for Exempt Micro Enterprises
- TOMSA levy open to all
EconoBEE is an expert BEE consultancy. EconoBEE helps businesses Become BEE Compliant, prepare for verification, earn maximum BEE Points and ensure that they achieve the BEE Level they need to get more business.
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