B-BBEE CONSULTATION

ENSLINS PUBLIC AUDIT & CONSULTING IS A B-BBEE LEVEL 1  CONTRIBUTOR

Click Here To Download our B-BBEE Certificate

Click Here To Download our QSE Scorecard

B-BBEE SERVICES

We provide the following B-BBEE services:

  • B-BBEE Consultation Services
  • Preparation of complete file for verification
  • Drafting of affidavits where applicable

B-BBEE have been a part of South Africa for quite some time now.

The new Codes of Good Practice came into effect on 1 May 2015.

The new codes are much stricter than the old codes and therefore businesses need to align their structures accordingly so that they are not downgraded by not adhering to the subminimum requirements of the three priority elements i.e. Ownership, Skills Development as well as Enterprise and Supplier Development.

This may seem very complicated to you but we are there to help you through the process.

In a nutshell – There are three categories of entities that can be measured:

  •  Exempted Micro Enterprises (EME)
  • Qualifying Small Enterprises (QSE)
  • Generic: Consists of two types:
    • Generic
    • Adjusted Generic

Now let’s look at these different types of entities:

1. EXEMPTED MICRO ENTERPRISES (EME)

TURNOVER LESS THAN R10 MILLION

An EME does not require a certificate anymore. Only an affidavit is required. Black ownership needs to be included in the affidavit.

  • 100% black ownership = Level 1
  • More than 50% black ownership = Level 2
  • Less than 50% black ownership = Level 4

2. QUALIFYING SMALL ENTERPRISES (QSE)

TURNOVER R10 MILLION TO R50 MILLION

QSE WITH AT LEAST 50% BLACK OWNERSHIP ONLY REQUIRES AN AFFIDAVIT AND NO CERTIFICATE

  • 100% Black ownership = Level 1
  • More than 50% black ownership = Level 2

QSE WITH LESS THAN 50% BLACK OWNERSHIP

These QSE’s must use the QSE Scorecard to be rated on all 5 elements. The table below compares the old QSE Scorecard on the left with the new QSE Scorecard on the right.

2007 Codes of Good Practice Amended Codes of Good Practice October 2014
Elements Points Bonus Elements Points Bonus
Ownership 25 3 Ownership 25 0
Management Control 25 2 Management Control 15 0
Employment Equity 25 3
Skills Development 25 0 Skills Development 25 0
Preferential Procurement 25 0 Enterprise and Supplier Development 30 0
Enterprise Development 25 0
Socio-Economic Development 25 0 Socio-Economic Development 5 0
Total (after selecting any 4 of the above elements) 100 8 Total 100 0

3. GENERIC

3.1 GENERIC – NORMAL

TURNOVER ABOVE R50 MILLION

The Generic entities use the following scorecard and must be rated on all 5 the elements. The table below shows the old Generic scorecard on the left compared to the new Generic Scorecard on the right.

2007 Codes of Good Practice Amended Codes of Good Practice October 2014
Elements Points Elements Points
Ownership Ownership 25
Management Control 15 Management Control 15
Employment Equity 15
Skills Development 20 Skills Development 20
Preferential Procurement 20 Enterprise and Supplier Development 40
Enterprise Development 15
Socio-Economic Development 15 Socio-Economic Development 5
Total 100 Total 100

3.2 ADJUSTED GENERIC SCORECARD

The adjusted scorecard is applicable to organisations where the Ownership element cannot be assessed for example Public Entities, Higher Education Institutions, Non-Profit Organisations, etc.  The table below compares the old Adjusted Scorecard on the left with the Amended Adjusted Scorecard on the right:

2007 Codes of Good Practice Amended Codes of Good Practice October 2014
Elements Points Elements Points
Management Control 15 Management Control 20
Employment Equity 15
Skills Development 20 Skills Development 25
Preferential Procurement 20 Enterprise and Supplier Development 50
Enterprise Development 15
Socio-Economic Development 15 Socio-Economic Development 5
Total 100 Total 100

RECOGNITION LEVELS – OLD ON THE LEFT VS NEW ON THE RIGHT

BBBEE Status 2007 Qualification Amended Qualification 2013 BBBEE Recognition Level
Level 1 ≥100 points ≥100 points 135%
Level 2 ≥85 points <100 ≥95 points <100 125%
Level 3 ≥75 points <85 ≥90 points <95 110%
Level 4 ≥65 points <75 ≥80 points <90 100%
Level 5 ≥55 points <65 ≥75 points <80 80%
Level 6 ≥45 points <55 ≥70 points <75 60%
Level 7 ≥40 points <45 ≥55 points <70 50%
Level 8 ≥30 points <40 ≥40 points <55 10%
Non-compliant <30 <40 0%

SECTOR CHARTERS

There are also Sector Charters for certain industries which have unique industry related targets and scorecards. Charters must be brought in line with the new Codes before 31 August 2015. If Charters are not changed by that date the DTI may scrap the Charter and then the entities that fall in that category must then adhere to the Generic scorecard. At the moment the following Charters exist:

  • Agri
  • Financial
  • Information and Communication
  • Property
  • CA
  • Integrated Transport
  • Forest
  • Construction
  • Tourism

IS BEE RELEVANT FOR MY SMALL BUSINESS?

The answer is YES!

B-BBEE is driven by procurement and with the new Codes more businesses will be forced to get their B-BBEE rating in order for them to retain clients.

If you render services to government or if your clients are getting their B-BBEE status rated every year then it’s time for you to do the same. Get rated now and be B-BBEE compliant.

Enslins can assist you in getting your file ready for B-BBEE verification.

Contact Enslins today before BEE gets the better of you.