The Generic Scorecard for the Chartered Accountancy Sector, part 8 – Enterprise and Supplier Development Scorecard

Enterprise and Supplier Development Scorecard

The objective is to measure the extent to which the CA Sector buys goods and services from suppliers with strong B-BBEE recognition levels.

This scorecard aims to strengthen local procurement from Black-owned QSEs and EMSs, thereby increasing procurement from local suppliers and supporting employment creation.

This is the section of the scorecard to which meaningful contributions by the CA Sector are most limited in scope. While recognising the need for the CA Sector to contribute to the development of Black enterprises that provide goods and services to the sector, the nature and unique structure of the profession is such that a large portion of the procurement spend is not discretionary. This is particularly true for member firms of global networks. Therefore, based on sound economic principles, sectoral characteristics and empirical research in line with the principles set out in paragraph 11.4, the 25 Preferential Procurement Weighting points were reduced to 15 Weighting points. The goal of this redistribution is to contribute to the achievement of the vision of the CA profession Sector Code.

As indicated above, this is one section where the contributions of the CA Sector are limited, particularly as it is in the service industry.

The vision of the CA Sector is to grow the number of Black People in the CA profession to reflect the country’s population demographics. One of the key ways in which to achieve this objective is to grow the pipeline through capacity building of the Historically Disadvantaged Universities, so as to ensure that the quality of all the degrees obtained at these institutions is on a par with those of the accredited universities. This is seen by the profession as ‘Supplier Development’, as these universities provide the employers with future Employees.

Accordingly, for the CA Sector, it would be appropriate to split Supplier Development into another category, namely development and capacity building at Historically Disadvantaged Universities.

These are, at present, the following 6 universities:

1. University of Fort Hare
2. University of Limpopo
3. University of Venda
4. University of the Western Cape
5. University of Zululand
6. Walter Sisulu University

All contributions made to these institutions can be monetary or non-monetary in value. The initiatives envisaged include the marking of papers, appointment of tutors, subvention of lecturer salaries and procurement of equipment to enhance the provision of education, which will be recognised as Supplier Development.

In order to appropriately account for these monies, Measured Entities will be encouraged to direct their contribution through Thuthuka, indicating for what purpose the amount is paid, as well as to which institution the funding should be allocated. As SAICA currently has programmes at all the Historically Disadvantaged Universities, it will account to the CA Charter annually on monies received and spent.

Bursaries are not included, as these are covered by the Skills Development element.

In addition, SAICA has set up an enterprise, SAICA Enterprise Development, to assist Measured Entities in this sector with Supplier and Enterprise Development.

The Indicators and Weightings are as follows:

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Key measurement principles

For the CA Sector Enterprise and Supplier Development Scorecard card the following key measurement principles apply:

1.1 The Weighting points in the Enterprise and Supplier Development Scorecard represent the maximum number of points possible for each of the criteria.
1.2 Procurement of goods and services and any other activities that fall under Preferential Procurement will not qualify for scoring under Supplier Development and Enterprise Development, and vice versa.
1.3 Beneficiaries of Supplier Development and Enterprise Development are EMEs or QSEs which are at least 51% Black Owned or at least 30% Black female-owned. Furthermore, beneficiaries could include Black Owned Professional Services Firms as defined in this Charter, as a sector-specific programme.
1.4 In line with the Amended Codes of Good Practice, the Empowering Supplier Provision is now awarded automatically until further notice.

2. Sub-minimum and discounting principle

2.1 A Measured Entity must achieve a minimum of 40% for each of the targets set for Development and Enterprise Development as follows:

2.1.1   Preferential Procurement: 40% of 15 points
2.1.2   Supplier Development: 40% of 10 points
2.1.3   Enterprise Development: 40% of 5 points.

2.2 Non-compliance with the sub-minimum will result in the overall achieved B-BBEE status level being discounted in accordance with paragraph 11.3.

Preferential Procurement: Key principles

3.1 If a Measured Entity procures goods and services from a supplier that is:

3.1.1   A recipient of Supplier Development Contributions from a Measured Entity that has a minimum three-year contract with the Measured Entity, the recognisable B-BBEE Procurement Spend that can be attributed to that supplier is multiplied by a factor of 1,2;
3.1.2   A Black owned QSE or EME which is not a Supplier Development Beneficiary but has a minimum three-year contract with the Measured Entity, the recognisable B-BBEE Procurement Spend that can be attributed to that supplier is multiplied by a factor of 1,2; and

3.1.3 A first-time supplier to the Measured Entity, the recognisable B-BBEE Procurement Spend that can be attributed to that supplier is multiplied by a factor of 1,2.

The next article will further discuss the Enterprise and Supplier Development Scorecard from a Procurement Spend and Measurement aspect.