SAICA drives transformation in Accountancy

Many current captains of industry almost invariably launched their business careers by qualifying as Chartered Accountants CA(SA). Open up any company annual report and many often than not the CEO and much of the board will have SAICA’s coveted CA (SA) designation behind their names. The classic route to the top of the corporate ladder is to qualify; gain hands-on experience with auditing firms or accountancy practices, and then enter the executive management ranks of JSE listed companies. While black chartered accountants remain so much scarcer than their white counterparts, the upper echelons of big business will continue being dominated by white faces.

Over the past decade the number of black chartered accountants graduating has grown steadily from 1 325 chartered accountants (CAs) in 2002 to 6 136 in 2012 - but then 27 011 white graduates also qualified in 2012. It is clear that much more needs to be done to swell the ranks of black chartered accountants and related professions. Leading the way is the South African Institute of Chartered Accountants (SAICA).

Thuthuka - an expanding pipeline of black accountants

As the new millennium dawned in the year 2000, SAICA decided to tackle the urgent lack of black, coloured and Indian candidates being trained as CAs (SA). After two years planning and consultation, SAICA on 1 January 2002 launched the Thuthuka Education Upliftment Fund (TEUF) to access and manage the funding needed for accountancy skills development programmes. "Thuthuka" is a Zulu verb, meaning "to develop".

From its humble, single project beginning, the TEUF now finances 16 financial literacy, science and mathematics programmes around South Africa. The TEUF teams and representatives search across the country for talented candidates from previously disadvantaged backgrounds and presently reaches some 180 000 learners per year.

In 2005 SAICA added a second pillar to its industry transformation drive by founding the Thuthuka Bursary Fund (TBF), which annually funds up to 300 previously disadvantaged students at universities. Most of these students are identified through Thuthuka Fund initiatives and are from previously disadvantaged families lacking the resources to send their daughters and sons to university. In total, the fund presently has about 900 fully sponsored black and coloured students in its transformation pipeline. These budding accountants are at various stages of the seven years needed to achieve SAICA's prestigious CA(SA) qualification.

In 2011 SAICA welcomed the first 13 Thuthuka graduates into its ranks as fully qualified chartered accountants. These are the first of a widening stream of Thuthuka trained black accountants being launched into the South African economy. The true measure of the impact of the Thuthuka initiatives can be found within the membership statistics. Two factors should be kept in mind when evaluating the change in the membership statistics. Firstly, the Thuthuka programmes started in 2002. Secondly, it takes a minimum of seven years to qualify as a CA (SA).

(as a percentage of total)

Demographics

2002

2010

2011

African

Coloured

African

Coloured

African

Coloured

CTA students (enrolments)

13%

5%

34%

7%

37%

7%

Trainees

14%

2%

28%

6%

28%

6.5%

Membership

1.5%

1.1%

5.8%

2.5%

6.6%

2.6%

Membership (number)

322

222

1845

789

2184

873

SAICA's focus on transformation is paying dividends. From the following graphs it can be clearly seen that the race and gender distribution is improving in particular in the younger age groups.

TBF 2011 University Results:

The TBF pipeline 2011

University

Undergraduate

UCT

124

UJ

138

WITS

52

NMMU

128

SU

79

UP

159

UFS

101

UKZN

44

TOTAL

825

Building accountancy capacity at universities

SAICA has leveraged the Thuthuka programmes to build scarce skills development capacity at South Africa's universities. Its partnership with these institutions has introduced specialised BCom Accounting courses onto which Thuthuka and regular students are enrolled. Nine universities are fully participating in the programme, with four more being brought on board. The initial nine are the universities of KwaZulu-Natal, Johannesburg, Stellenbosch, Pretoria, Cape Town, Free State University and the Nelson Mandela Metropolitan.

Being determined to roll Thuthuka out to other universities with higher ratios of previously disadvantaged students, SAICA raised and secured R160 million to extend accountancy training to the Fort Hare and Limpopo universities. These universities have "twinned" with larger universities to maintain their accountancy training capacity.

In 2012 SAICA received funding guarantees of R180 million to launch new capacity-building projects with the Walter Sisulu University and the University of Zululand. These institutions will partner with the University of Cape Town for academic support.

Transformation challenges - funding and academic standards

When a suitable young candidate steps ups to become a chartered accountant, it will take at least seven years at a cost of R400 000 or more. SAICA and the industry face challenges along all links in this supply chain of professionals. Before even entering hallowed university halls, accountancy applicants must be solidly grounded in core subjects such as mathematics and science. This is a big task in an era of largely dysfunctional national basic education that in 2011 could only matriculate 5 515 black and 536 coloured learners with a mathematics pass of above 60%. Other professions such as the medical, actuarial and engineering compete aggressively for fresh blood from this tragically small output.

SAICA sources its annual intake by engaging with learners throughout their basic education years by supporting a range of initiatives such as Maths and Accounting Olympiads, SAICA camps, exhibitions and school feeder programmes.

Having found our candidates, SAICA needs to source funding them for seven long years before they begin contributing to the industry. Finding sufficient funding is an ongoing struggle and the institute is grateful for the support we get from private sponsors and public sector bodies such as the SETAs, National Skills Fund and Department of Higher Education and Training. The Thuthuka pipeline could accommodate at least an additional 100 Thuthuka students per annum, given the extra funds.

Additional and sustainable funding is urgently needed on an ongoing basis. With this SAICA can ramp up the CA(SA) pipeline and accelerate its other channels of learning, such as the QE repeat programme in Johannesburg and Cape Town for unsuccessful Part 1 black and coloured candidates, as well as the CA Connect programme for distance education students doing post-graduate studies.

Thuthuka - making transformation history happen

SAICA black chartered accountants are now pouring through the Thuthuka pipeline in a widening stream and all that can slow it now is for funding to dry up. After ten years the Thuthuka model is well proven to stimulate professional development at all points from basic education to graduation, university capacity building to post-graduate qualifications. The engineering and other disciplines are now eager to adapt the Thuthuka model for their own industries. Although a history of discrimination and lost opportunities is water under the bridge, SAICA's flowing Thuthuka pipeline of transformation is opening the way for our future captains of industry.

By Chantyl Mulder
Senior Executive: Transformation and Growth

Category: Guest Articles