Some salient comments on the draft Verification Manual
The draft Verification Manual has been published for public comment in Notice 1055 of 2015 in the Government Gazette on 6 November 2015. Interestingly enough the public has been given 30 days to comment whereas the normally required period is 60 days. This shows clear intent to push this new legislation through as soon as possible.
The document comprises of approximately 90 pages and has significantly increased the complexity of verifications. There is a very definite focus on conducting on-site visits and interviewing all the relevant parties affecting the score on the elements being measured. There is no doubt that the verification process will be more tedious and require much more prior preparation with expert input.
The first major change is that once this draft gazette is promulgated into law, probably anytime from mid-January 2016, the verification period is fixed to your audited financial year or if financials are not yet signed off, this same financial year period based on signed off management accounts. The options of using a 12 month’s management account period, as long as it is a period adding at least 1 month to your previous verification period, will soon not be available any more. Everyone who planned to have one more verification on the Old Codes based on financial information up to 30 April 2015, may not be able to do this depending on when the Amended Verification Manual gets published as law.
Secondly, there is also clarity on the measurement of Ownership and Management Control confirming that these two elements are measured on the verification day (when the on-site visit happens) and not on what the situation was during the verification period. This means that the elements of Enterprise and Supplier Development (including Procurement), Skills Development and Socio Economic Development are measured on actions and activities within the verification year, whereas Ownership and Management Control will be measured at the verification date (after the verification year).
These changes will apply to all B-BBEE certificates issued using the Amended Codes of Good Practice based on financial statements including the financial period after 1 May 2015.
We will keep you informed on what impact and implications the Amended Verification Manual will have on your business as this process unfolds.
All material subject to our Legal Disclaimers.