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    21Jan, 2022
    “Clarity” Regarding SANAS Letter
    Any verification undertaken from the 15th of August 2020, should be done so in such a manner that it does not exceed a period of 12 months from the most recent Financial Year – End. This was the subject of the SANAS clarification letter dated the 6th of April 2021 (which referenced a supporting SANAS email clarification dated the 14th of August 2020 and attempted to “clarify” said email). Unfortunately, this letter did not shed light on how companies should address the following real issue that several companies have and may still face: what happens if a company is in the middle of a verification and their current financial year, ends? Does the measured entity continue to finalize their verification or must the entity stop the verification immediately? You may say, that company should have planned the verification to start (and end) sooner! However, as consultants, we know that in certain instances, getting a company verified (and completing the verification quickly) is not always as easy as that, for instance:
    • In this “new normal” we find ourselves in, companies may have employees working from home and not always easily accessible.
    • Integral people to the verification may get sick and therefore be unable to provide information.
    • Loadshedding, internet connectivity and other factors also contribute to delays.
    It is therefore necessary for SANAS to provide a comprehensive statement so that there is no uncertainty for measured entities, verification agencies or consultants. Failing that, consultants should also be given access to ask SANAS questions or perhaps there should be one body that regulates all consulting firms and who can then provide more guidance in terms of the clarification(s)? When it comes to understanding the B-BBEE legislation and implementing the interpretation thereof, EconoBEE is dedicated to coming up with innovative transformation strategies for our clients that make business sense. Please feel free to reach out to us on 011 483 1190 or info@econobee.co.za if you would like to hear more.
    23Apr, 2021
    SANAS Clarity on measured period
    The governing body of verification agencies, the South African National Accreditation System (SANAS),  have sent a letter of clarification to all verification agencies in relation to the issue of the measured period. The letter is as follows: “I refer to the correspondence issued by Mr Yuneal Padayachy on 14 August 2020 in respect of the above-mentioned matter.(clarity on measured period)  We reiterate that the latest financial year end records must be verified for B-BBEE Verification purposes. The Verification Manual makes provision for the use of financial statements which are not audited and details the additional testing or requirements to be taken into consideration in reducing the risk to an acceptable level. These processes had been agreed to with the dtic and are not new requirements. If the intention of the legislature had been to allow for audited financial statements only, then it would not have allowed for the alternative testing or requirements on unaudited Financial Statements.  As a consequence of that communication, all verifications not done in line with that guidance, effective 15 August 2020, should be corrected. SANAS assessors will sample to determine if the guidelines had been followed by all Rating Agencies” The impact of this communication is as follows:
    1. Measured entities will not be allowed to use a measured period different to their financial period.
    2. Management accounts need to be aligned to the financial period, therefore an unaligned rating period will not be used.
    3. A measured entity is now required to use its most current financial information for a BBBEE audit. For example in 2021, a measured entity with a year end of February will need to use the financial information from March 2020 to February 2021. The measured entity being audited in 2021 will not be allowed to use the financial information of March 2019 to February 2020.

    Talk to us about how this communication may impact you going forward.