Confusion Over BEE Measurement Period vs Measurement Date

By Keith Levenstein  

There is still confusion about the date that  verification agencies need for scoring B-BBEE points. The issue is that verification agencies are using the company’s financial year for calculating only four of the seven BEE elements. These are:

1) Skills development: the actual spend during the financial period

2) Procurement

3) Enterprise Development

4) Socio-Economic Development

The other three elements, Ownership, Management and Employment Equity are verified, not at the end of the same financial year, but on the date of the site visit by the verification agency. This can cause inconsistencies.

If for example the financial period runs from 1st March 2012 to 28th February 2013, the first four elements are verified for that financial year. But the site visit and verification for the remaining three elements could only take place after the end of the financial year, as late as November 2013.

As a result, while Procurement and Enterprise Development are based on the financial data  during a specific financial year, Ownership, Management Control and Employment Equity could be verified at a later date – months after the financial year end.

Consider the case of a verification agency visiting the company after the financial year end and the company requires verification of a black employee to earn Employment Equity points.

What happens if the employee has left the company but worked for the full financial year up to 28 February 2013?

SANAS requires that to award Employment Equity points, the verification agency must interview the employee. Although this person was employed during the full financial year, he has now left. To complicate matters further, it may be difficult to contact him.

The confusion lies in the fact that while the measurement period is from 1st March 2012 to 28th February 2013, the measurement date on some of the B-BBEE elements is later in November 2013. If the employee cannot be contacted, there is a stalemate and the BEE points cannot be earned.

At this stage SANAS will not accept a letter from the employer confirming that the employee worked for the full financial year. As a result, the company is disadvantaged simply because a former employee could not be contacted.

Keith Levenstein is the CEO of EconoBEE – a B-BBEE advisory firm

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