Outline of MD Accountants & Auditors Inc.’s B-BBEE Verification Process

1.  Purpose and Scope

This document provides necessary information on the Verification process

2.  B-BBEE Verification

The B-BBEE verification certificate is official recognition that an organisation is in compliance with the Broad Based Black Economic Empowerment Act, No. 53 of 2003 as amended (“the Act”).

The verification is an independent and in-depth verification process aimed at establishing the B-BBEE status of companies, close corporations and other economic entities. A verified entity demonstrates its level of compliance with “the Act” and the B-BBEE Codes of Good Practice through formal verification of submitted B-BBEE related evidence.

3.  The B-BBEE Verification Process

The following steps are involved in the verification process:

    3.1  Pre-engagement Procedures:

Once the request for verification has been received from the measured entity (ME), the
following documents are sent to the ME:

  • Request for Verification Letter incorporating the B-BBEE Profile Form as part of our pre-engagement procedures.
  • Engagement Letter.

On receipt of the above mentioned forms, the application will be reviewed and accepted or
rejected by the B-BBEE Partner, Alexis Sacks.

    3.2  Engagement Procedures and Confirmation of Appointment:

Once Alexis has accepted the B-BBEE verification engagement, the ME will be contacted within 2
days to confirm the following:

  • Annual turnover as per the last financial statements to confirm QSE or Generic status and to determine which Verification Manual is applicable.
  • Which scorecard rules apply.

The ME is then sent the Receipt of Application Letter including the Letter to Suppliers and the
Verification Manual for completion.

    3.3  Assignment of Staff:

A suitable Verification staff member, where no conflict of interest exists and who has the
appropriate skills and knowledge, will then be appointed to undertake the B-BBEE verification.

    3.4  The ME will then be advised regarding the B-BBEE verification process telephonically or in
consultation to ensure that the ME is:

  • Educated in the applicable B-BBEE Codes.
  • Informed as to how the applicable rules must be interpreted and applied.
  • Informed as to what evidence is required and in what format it must be submitted.
  • Informed regarding the verification process especially in terms of the time, standards, appeals and complaints processes and how the final verification decision is made.
  • Informed as to how to complete the Preferential Procurement spread-sheet, if the Procurement element is selected by the ME.

The meeting will be arranged where the evidence will be collated and collected for evaluation.

    3.5  Collect and collate the evidence provided by the ME:

The staff member collects the evidence as per the Verification Manual and ticks the submitted
column if the evidence was accepted. If evidence is outstanding, the staff member will inform
the ME in writing of the outstanding information.

    3.6  Validate the evidence and identify areas needing verification:

The staff member will evaluate the evidence submitted in terms of the evidence standards per
element and identify areas where further verification on site is required to validate the
evidence.

The Verification Plan will identify or determine the following:

  • Additional evidence required to validate the submitted evidence.
  • People to be interviewed to validate the credentials presented.
  • Samples to be obtained from the ME to determine the validity of classes of evidence submitted e.g. supplier spend, employment equity totals and skills spend.

    3.7  Plan the final on-site verification meeting:

The additional verification required to reach a final conclusion on the B-BBEE status of the
measured entity.

The plan will identify the following:

  • Who needs to be present for purposes of interviewing to verify B-BBEE credentials.
  • What samples must be presented and who must present the samples.
  • What additional paper evidence is required to substantiate evidence already submitted.

The plan will be communicated in writing to the ME and the date for the meeting will be
confirmed via e-mail.

    3.8  Conduct the final on-site verification meeting:

Sufficient and appropriate procedures must be performed to allow the staff member to conclude
the number of B-BBEE points to be allocated based on the results of the samples taken and
evaluated.

The verification process will be terminated at this meeting and the ME will be informed that the
file will be submitted to Alexis for a final decision.

    3.9  Conclude on the Engagement:

Once Alexis is satisfied that the evidence is conclusive, the B-BBEE certificate and report will be
prepared and sent to the ME with a letter.

4.  Appeals

Should the ME wish to appeal a decision, it should immediately contact Alexis to lodge an appeal.

There is an independent appeals procedure that would automatically be invoked under these circumstances.

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