Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Industry Charters

Chartered Accountancy Charter

Section C From Theory to Practice: The Scorecard

12. The Generic Scorecard for the CA Sector

12.2 Application of the CA Sector Scorecard

12.2.4 Skills Development Scorecard

Purchase

Through the indicators listed below the objective is to measure the extent of initiatives desired by the CA sector (employers) to develop the competencies of black Employees within the organisation.

This section of the scorecard requires that Measured Entities prove that programmes have been implemented which target the development for SETA-defined core, critical and scarce skills. The Skills Development spend recognition is not restricted to SETA-acquired training only. The Learning Programmes Matrix lists Learning Programmes that result in tangible outcomes such as degrees, diplomas, certificates, etc.

The Skills Development scorecard comprises three indicators: the first two measure monetary spend on black Employees, whilst the third measures the number of black Employees who are enrolled in learnerships and / or structured work-based Learning Programmes as set out in the Learning Programmes Matrix.

In order to contribute to the achievement of the vision of the CA Sector Code and based on sound economic principles, sectoral characteristics and empirical research in line with the principles set out in paragraph 11.3, five additional Weighting points were allocated to the Skills Development scorecard.

All five Weighting points have been allocated to one specific indicator, namely bursary expenditure. The CA sector aim of improving the pipeline numbers with the ultimate objective of increasing the output and number of qualified CAs will only become possible if more funds are allocated to providing black learners with bursaries. This was the motivation for the increase in focus on Skills Development Expenditure.

Secondly, the Generic Scorecard compliance Targets for learnerships, which is set at 5%, is far too low for the CA sector. This statement is based on data obtained from a number of CA sector organisations which indicated that the present learnership figure is already 13%. Accordingly the compliance Target has been set at 18%. This will be re-evaluated by the Charter Council once credible information has been collected on the status of all organisations making up the CA sector, as indicated in paragraph 8.1, item 8.

It should be noted that as far as learnership positions are concerned, this is the one area where the CA sector can make a significant contribution (for the reasons stated above). In fact, trainees who are developed and groomed for leading positions in the country and the economy make up the majority of the CA sector Employees.

The indicators and Weightings are as follows:

Skills Development Indicators

Weighting points

Compliance Target for 2016

Code

CA sector

Code

CA sector

Skills Development Expenditure on any programme specified in the Learning Programmes Matrix-

•	for black Employees as a percentage of Leviable Amount using the adjusted recognition for gender

•	for black Employees with disabilities as a percentage of leviable Amount using the adjusted recognition for gender

0.3%

Bursary expenditure

Specific bursary expenditure on potential black Employees, which includes amounts spent on the Thuthuka Bursary Fund as a percentage of NPAT or turnover

4% of NPAT or 0.5% of turnover

4% of NPAT or 0,5% of turnover

Learnerships/Learning Programmes

Number of black Employees participating in learnerships or category B, C and D programmes as a percentage of total Employees using the adjusted recognition for gender

18%

•	Measured Entities will receive points for this part of the scorecard only if-

o	they are in compliance with the Skills Development Act and Skills Development levies Act;

o	they have registered with the appropriate SETA;

o	they have developed a Workplace Skills Plan; and

o	they have implemented programmes targeted at developing Priority Skills generally and specifically for black Employees.

Skills Development Expenditure

•	This will include legitimate expenses incurred in any programme offered by a Measured Entity to the Employees substantiated by an invoice or appropriate internal accounting record.

•	Any such expenditure that is an Adult Basic Education and Training (ABET) programme is recognisable at a multiple of 1,25 to the actual value of such expenditure.

•	legitimate training expenses include

o	cost of training material

o	cost of trainers

o	cost of training facilities (including catering)

o	course fees

o	accommodation and travel

o	administration costs such as the organisation of training including, where appropriate, the cost to the Measured Entity of employing a Skills Development facilitator or a training manager.

•	The opportunity cost of an Employee's time may NOT be included as a legitimate training expense EXCEPT where the Employee participates in learning Programmes.

•	Overhead costs should be allocated according to the amount of time administrative staff spends on different areas of skills training.

Salaries and wages

Payment to an Employee participating as a learner in any Learning Programme only constitutes Skills Development Expenditure if the Learning Programme is a learnership or falls within category B, C or D of the Learning Programme Matrix.

Learning Programmes Matrix

Cat.	Narrative description	Delivery mode	Learning site	Learning achievement
A	Instruction -based theoretical instruction alone -formally assessed by the institution	Institutional instruction	Institutions such as universities and colleges, schools, ABET providers	Recognised theoretical knowledge resulting in the achievement of a degree, diploma or certificate issued by an accredited or registered formal institution of learning
B	Instruction-based theoretical instruction as well as some practical learning with an employer or in a simulated work environment -formally assessed through the institution	Mixed mode delivery with institutional instruction as well as supervised learning in an appropriate workplace or simulated work environment	Institutions such as universities and colleges, schools, ABET providers and workplace	Theoretical knowledge and workplace experience resulting in the achievement of a degree, diploma or certificate issued by an accredited or registered formal institution of learning
C	Recognised or registered structured experiential learning in the workplace that is required after the achievement of a qualification- formally assessed by a statutory occupational or professional body	Structured learning in the workplace with the mentoring or coaching	Workplace	Occupational or professional knowledge and experience formally recognised through registration or licensing
D	Occupationally directed instructional and work-based Learning Programme that requires a formal contract - formally assessed by an accredited body	Institutional instruction together with structured, supervised experiential learning in the workplace	Institutions and workplace	Theoretical knowledge and workplace learning, resulting in the achievement of a South African Qualifications Authority registered qualification, a certificate or other similar occupational or professional qualification issued by an accredited or registered formal institution of learning
E	Occupationally directed instructional and work-based Learning Programme that does not require a formal contract - formally assessed by an accredited body	Structured, supervised experiential learning in the workplace which may include some institutional instruction	Workplace and some institutional as well as ABET providers	Credits awarded for registered unit standards
F	Occupationally directed informal instructional programmes	Structured information sharing or direct instruction involving workshops, seminars and conferences and short courses	Institutions, conferences and meetings	Continuing professional development, attendance certificates and credits against registered unit standards (in some instances)
G	Work-based informal programmes	Informal training	Workplace	Increased understanding of job or work context or improved performance or skills

•	The Learning Programmes Matrix was introduced to ensure that skills spend initiatives have clear learning outcomes.

•	The Learning Programmes Matrix comprises the following:

o	Institutional based theoretical instruction. It must be formally assessed by the institution.

o	Institutional based theoretical instruction as well as some practical learning with an employer or in a simulated work environment. It must be formally assessed through the institution.

o	Recognised or registered structured experiential learning in the workplace that is required after the achievement of a qualification. It must be formally assessed by a statutory occupational or professional body.

o	Occupationally directed instructional and work-based Learning Programmes that require a formal contract. It must be formally assessed by an accredited body.

o	Occupationally-directed instructional and work-based Learning Programmes that do not require formal contracts. It must be formally assessed by an accredited body.

o	Occupationally-directed internal instructional programmes.

o	Work-based internal programmes.

Measurement of Skills Development indicators

The adjusted recognition for gender, as calculated in paragraph 12.2, is taken into account.

Measurement of the Skills Development indicators

Where A = score for any given indicator as referred to in the scorecard

B = adjusted recognition for gender

C = Target for the applicable indicators as referred to in the scorecard

D = Weighting for the applicable indicators as referred to in the scorecard

Bursaries and scholarships

•	The Target is the greater of NPAT or turnover calculations, using the specified percentages.

•	Expenses on scholarships and bursaries do not constitute Skills Development Expenditure if the Measured Entity can recover any portion of the expenses from the Employee or if the grant of the scholarship or bursary is conditional.

•	If however the right of recovery or the condition involves either of the following obligations, the expenses are recognised, also in the case of all Thuthuka Bursary Fund contributions:

o	The obligation of successful completion in their studies within the time period allocated; or

o	The obligation of continued employment by the Measured Entity for a period following successful completion of their studies of not more than their study period.

•	Bursary and scholarship expenditure include all legitimate related expenditure, similar to those mentioned under legitimate training expenses.