Understanding how BBBEE makes allowance to fund the services generally provided by Professional Bodies.

By Dr Ivor Blumenthal
CEO: ArkKonsult

It seems that Professional Bodies are unaware that their status is recognised and entrenched in BBBEE Legislation.

The GREAT NEWS is that that the Legislation DOES MAKE FUNDING available for Professional Body Services when it comes to provisions to fund a range of services provided by those Professional Bodies including:

  1. The funding of the provision for Work Experience required by Professional Bodies to complement qualifications which have been completed, prior to the awarding of Professional Designations
  2. The funding required for the processing of an application for Professional Designation and Recognition by a Professional Body
  3. The funding for Continuous Professional Development which is always a requirement for Re-Registration for a Professional Designation from a Professional Body
  4. The funding for the Re-Registration with a Professional Body periodically

It is important that each Professional Body understands that there are clauses in the current legislative framework around broad-based black economic empowerment which encourages professional bodies to charge for its services i.e. where they provide the Assessment and Professional Designation services to a Professional Practitioner who work in a particular industry covered by that Professional Bodies activities. Allowance is also made for what happens after Designation is granted to a Professional Practitioner by a Professional Body, namely where a company funds CPD – Continuous Professional or Lifelong Development for an employee who is a Designated Professional Practitioner.

These considerations permitting Professional Bodies to charge and companies to recover those expenses as recognition for Scorecard Points, are accommodated as follows by Code Series 300, of the BBBEE Legislative Framework, of May 2019:

Categories C of The Learning Matrix allows for expenditure on

“The attainment of recognised or structured experiential learning in the workplace which is required after the achievement of a qualification, formally assessed by a Professional Body reflecting professional knowledge and experience formally recognised through registration or licensing”.

From an Expenditure perspective therefore, the following clauses directly relate to the funding of a Professional Bodies Designation activities for 18.1. and 18.2. Employee’s and importantly also for those 18.1. and 18.2. Employee’s who may be Disabled:

Clause which reads that 3.5% of Payroll should be spent on: “Learning Programmes specified in the Learning Programme Matrix (Category C) for black people as a percentage of Leviable Amount.”

Where this is successfully done, a total of 6 Scorecard points can be earned.

Clause which reads that 0.3% of Payroll should be spent on: “Learning Programmes specified in the Learning Programme Matrix (Category C) for black employee’s WITH DISABILITIES as a percentage of Leviable Amount.”

Where this is successfully done, a total of 4 Scorecard Points can be earned.

IN ADDITION to counting expenditure on Learnerships entered into for the purposes of covering Professional Body Assessment Activities and Training and Work-Related requirements, Code series 300 gazetted in May 2019, allows companies which spend money on processing its employees who qualify, through the Professional Bodies application and Designation processes, and thereafter where the company pays for those Employee’s to participate in required CPD for Re-Registration processes with a Professional Body,  to recover some of those expenses including Professional Body Registration, CPD and Re-Registration Fee’s, to a maximum of 25% of skills development expenditure paid by the company.

Clause 5.3 of code series 300, restricts this recovery for these expenses to 25% of Skills Development Expenditure i.e. 6.3% of Payroll every year and reads as follows:

“Skills development expenditure arising from informal and workplace learning programs or from category F and G learning programs under the learning programs matrix cannot represent more than 25% of the total value of skills development expenditure.”

So in-summation therefore, Professional Bodies need to understand the VALUE PROPOSITION to be put to companies employing individuals who constitute the community of Professional Practitioners which Professional Bodies are ultimately responsible for.

In simple terms that Value Proposition is that any company dependant on their Measured Entity Status when looking to be retained or to become a New Supplier to another Measured Entity in-turn, should strategically plan to ensure that as many Employee’s as possible who are capable of being recognised as Professional Practitioners, obtain a Designation from a Professional Body and participate in ongoing Continuous Professional Development because spending money on those benefits will serve the company very well, in-terms of its ultimate BBBEE Scorecard Points, thus ensuring the company of the best Measured Entity Status attainable.

The proviso is that that plan when implemented must take account of the maximum amount which the company has available from its Skills Development Spend to spend on these activities, namely a maximum of 25% of all Skills Development Spend, as well as 3.8% of Payroll for Professional Body Assessments and Work-Based Experience.