ERD / SAICA MEETING 08/12/2022

REPORT TO MEMBERS

Dear Members

The ERD is pleased to confirm that we had a successful meeting with the CEO of SAICA, Mr Freeman
Nomvalo on 8th December 2022, which meeting was attended by representatives of our Committee
and our legal advisor.

Broadly stated, we were disappointed that we could not meet the CEO before the Board meeting in
November, but we are glad to advise that we experienced a positive engagement. We covered
(amongst others) the following material issues during the meeting:

1. We advised that we are a broadly representative group with at least 1,500 members and, as
representative, we had received many complaints from our members about frivolous
prosecutions of members for trivial (administrative) errors, many of them committed several
years ago. We reiterated that the anger of CA’s at this unsatisfactory and belated
enforcement was adequately conveyed during the online meeting of 28 October 2022.

2. We previously addressed a letter to the Board dealing with many contentions relating to these
prosecutions. We asked for our letter to be presented to the Board. It was not. We were
informed that the Board had not yet seen our letter as it would form part of the referral to a
subcommittee of the Board (see below) - to which we noted our disappointment as same was
meant to convey our views in the absence of an opportunity to meet with the CEO or Board
before the Board Meeting in November. We were assured that prior to making a definitive
decision, the Board would be placed in possession of our letter.

3. Arising from these prosecutions, the CEO was at pains to record that they viewed the
dissatisfaction of members with the recent process as a serious issue needing solution. He
advised that it was for this reason that the Board had formed and mandated the
subcommittee of the Board, which will give expert input and member perspective to the Board
by the end of January 2023. It is envisaged that the Board will meet within 7 days of the
subcommittee’s report, to resolve the issue.

4. We interrogated the composition of the Board subcommittee, but we were assured that the
subcommittee was a “member” committee as these issues were member issues. We did
suggest that a broadly representative composition of the committee was required, as was
access to the subcommittee for rank and file members. The answer was that the committee
was a subcommittee of the Board and the opportunity for member engagement would come
after their work was done.

5. We were further informed that the committee was representative of members and would
regulate its own processes. We urged that an “opportunity to be heard” was important. We
stated that we may write to and request access to the subcommittee, as we were fearful of
the Board receiving “filtered” information from the subcommittee, with a bias which could
limit the discretion of the Board.
 6. On accountability, we were unable to deduce anything from the CEO as to who was
responsible for the decision to implement the prosecutions. We recorded our view that
responsibility lies with the Board, and the CEO advised that the regulations were the remit of
the Board but the practical application thereof was the responsibility of others. No individual
was named, and no matter how hard we pressed, no concession came that the Board had
made an error. We did insist that accountability was important, but the focus of the CEO was
on “forward-looking problem solving”. We believe that we will have to pursue the
accountability issue further.

7. Further on accountability, we asked for the “rules of the game” to be the same for SAICA
functionaries as it was for the members. This was raised in the context of the many complaints
we have from our members that SAICA ignores their communications for protracted periods
but sanctions our failure to answer theirs promptly. The CEO reported that he had met with
staff just before seeing us, that he was working on a “member centric” ethos, with ownership
of issues from end to end, so that a matter raised with SAICA would be “owned” by the
recipient and resolved promptly. We look forward to seeing this come to fruition.

8. The CEO was at pains to explain that SAICA was a member body, and that it was answerable
to, and to service members. He mentioned that he was trying very hard to instil a “member
centric” approach. We will look forward to members’ comments on the success or otherwise
of this assertion by the CEO.

9. We made the suggestion that an “administrative lapse” be sanctioned by an administrative

penalty, and that where such a lapse not be accompanied by dishonesty, in other words if it
is administrative in nature, then the failure would not be recorded against the CA concerned
as a transgression. The CEO did state that such a suggestion could be considered. We also
confirmed with the CEO that all disciplinary processes for the administrative issues remain on
hold. We advanced our view that even those who may have pleaded guilty prior to the recent
events would benefit from a reversal of the previous position, should that eventuate – which
we believe should be an appropriate outcome.

In summary, we were pleased to have had an engagement, and we are hopeful that our views have
been (or will be) fully conveyed to the Board. Jari made it clear that if the Board was to make a bad
decision on the matters we raised, we would be left with no option but to contest it. In that event,
member activism and attendance at General Meetings may need to be considered and taken more
seriously by every member – it is our organisation after all.

It seems that the end of January will have to be awaited, we look forward to a positive outcome and
will report further to Members the minute any outcome becomes known.

Sincerely

Jari Cerny, Chairman

East Rand Member District of Chartered Accountants