BEE Partner, South Africa Economy Watch

Having established how much the business needs to spend, the next step is to consider what to spend the money on so it will count as contributions to transformation. This section provides guidance on what the company may and may not include as skills development spend. The term “skills development spend” is defined, meaning that unless the spend meets the definition, it will not be included in the measurement.

This means the measured entity may not include anything that does not meet the definition of “skills development spend” in this measurement. The definition is broad but specifically excludes the skills development levy paid to the industry SETA. The business has to pay an SDLA levy over and above this. The targeted BEE skills development spend is 2% of the leviable amount.

The skills development spend includes any legitimate expense incurred for a learning programme that can be substantiated by an invoice or appropriate internal accounting record. Although not a requirement of the Codes, learning programmes that do not issue written certification of attendance and completion should be encouraged to provide written confirmation of the employee’s enrolment and achievement.

Legitimate training expenses that can form part of the skills development spend include:

• costs of training materials
• costs of trainers

• costs of training facilities, including catering

• course fees
• accommodation and travel costs

• administration costs relating to training, including the costs of a skills development facilitator or a training manager

The salaries and wages of employees participating as learners where the learning programme falls into category B, C or D of the learning programme matrix or qualifies as a learnership. The Codes do not define the term “learnership”. Previous drafts of the Codes refer to the definition as provided by the Skills Development Act, which is a SETA-accredited learnership.

As described previously, examples of learnerships include apprenticeships, professional articles or internships. Section 3.7 says the cost of the salaries of Black learnerships may be included in calculating the skills development spend.

While the rationale for including this spend is understandable, the unintended consequence is a crowding out of the intended objective of this element. Many businesses based on professions or trades will reach the target without having to contribute anything further to skills development, thus undermining the element.

• scholarships and bursaries, unless the measured entity can recover the expenses from the employee or the grant is conditional. The bursary or scholarship may still be recognised if the condition imposed is the:
• successful completion of the course within the allocated time period
• continued employment with the measured entity for a duration less than or equivalent to the period of the bursary.

Scholarships and bursaries are only recognisable in skills development where they are granted in favour of an employee, meaning that the candidate is either studying part-time or has taken extended leave to complete a specified course. School leavers who have not yet worked for the measured entity but have been granted a bursary to complete tertiary education will be recognised under Statement 807 / 700 Socio-economic development.

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