This CIDB guideline has been developed to assist Accountants with the preparation and submission of the documents required by the CIDB when it comes to applications of CIDB grades 2 to 9.

Please read through and obtain a good understanding of the stringent key requirements to be met in order to successfully submit a CIDB application that would end up being approved by the CIDB for your clients.

The CIDB track record refers to a bunch of evidenciary documents submitted to the CIDB in order to ascertain that the company, applying for the level of a CIDB grading does indeed qualify for the level being applied for.

Such documents will include amongst others, the financial statements, track record,bank statements as well as the application form, which are submitted at any of the regional offices of the CIDB.

Please go through each of the documents required as part of the track record and pay attention to the additional notes included within the closed brackets.

• Completed Cidb grade 2 – 9 application form – (As an accountant, you are expected to accurately assist construction company clients by completing the CIDB application form for grades 2 to 9 in a professional manner. Its also very important that when completing this form, on section b, where you are required to capture the contact details, you fill in your contact details, as this will enable or assist you in verifying your details when contacting the CIDB to follow up on the progress of your clients documentation needs. You are also expected to submit the documents at a CIDB office near you as construction company clients are not expected to be going to queue at the CIDB if they have paid you for their CIDB services.
• CK/CM Company Registration Documents – (As an accountant,you are expected to download the latest COR 14.3 or CK document from the CIPC than to rely on the company registration documents supplied by the client, the reason for this, is that the client might have effected new changes on the company ever since inception, for example, new directors could have been added but then the client gives you the old Ck document. Therefore it is advisable to download your own CK document so that you can submit this to the CIDB as part of the track record that the CIDB demands. Remember the CIDB only takes into consideration the latest CIPC documents and as such, all certified ID copies of the latest company directors must also be submitted as part of the track record.
• ID Copies – (Preferably colour photocopied ID’s, if using the smart card ID, both sides should be photocopied in colour on a one A4 page and should be certified within the past 3 months. The ID numbers as well as the face should be clearly visible. The CIDB shall not accept photocopies taken by smart camera phones. Photocopies of ID’s & any other documents that form part of the track record, should be done by the traditional photocopier.
• Tax Clearance Certificate Pin – (Please note that the tax clearance should not expire within at least the next 21 working days from date of submission of the track record).
• Construction Contract – (The construction contract must have a major labour skills clause in it with the ability to allocate the monetary value to the labour component . Supply only contracts will disqualify the client for  application. As an accountant, its very important to take sometime to go through the client’s construction contract & determine if it meets the CIDB criteria for a valid contract. In other words, make sure the signatures exist, the pages are initialed, the dates are valid excetra. You can download a list of construction contract templates by clicking here which you can use to assist your clients with).
• Purchase Orders – (Purchase orders are required mainly in long term maintenance contracts, whereby, one contract is issued to the client, and thereafter, a series of purchase orders is issued to the client. You can download a list of purchase orders for your construction clients and you can ammend or customise them, if they don’t have these. Click here to download a list of purchase order templates).
• Completion Certificate –  (A completion certificate is a huge corner stone in the CIDB application process. The accountant must study the clients completion certificate and ensure that it meets at least the bare minimum of CIDB standards. For example, the completion certificate must be on the letter head of the employer company and not on the client’s company letter head. The completion date cannot for example be before the construction commencement date on the construction contract excetra. The completion certificate must be properly signed and dated by the employer company and it must state that the project was completed satisfactorily or at least to that effect. You can view and download construction completion certificates acceptable to the CIDB by clicking here).
• Bank Statements to determine financial capability – (When it comes to bank statements, there are two categories of bank statements that need to be submitted. The first set of bank statements, is a list of bank statements that back up the revenue that has been reported on the annual or interim financial statements. The CIDB generally will take into consideration the total amount of cash that came into the entities bank account or accounts over the reporting period and determine if the revenue reported within the entities financial statements is not overstated by more than 10 percent. Unfortunately, if the revenue reported within the financial statements exceeds the total income of the cash flows calculated on the bank statements, only the cash flows calculated on the bank statements will be taken into consideration in determining the financial capability of the client. Furthermore, all bank statements submitted to the CIDB must be stamped with the latest bank stamp. Both manual and electronic stamps are accepted by the CIDB.
• Bank Statements to prove contract payments – (The second set of bank statements to be submitted, is a set whereby you have to tick off the payments on the bank statements for the project payments received. These bank statements must be in sequence from the first payment ticked off to the last payment received. In otherwords, if the first payment was let’s say in May and the last payment was in October, then the bank statements must include all the transaction months in between that period, even if in a certain month in between,no payments were received. The ticking off must be done by a black pen in the form of a tick. Do not highlight payments by using highlighters. The payments must add up to the value or exceed the contract amount, otherwise, a variation order must be submitted that reconciles the values of payments ticked off to both the original construction contract value as well as the variation order.
• Bill of quantities – (The CIDB will request for a bill of quantities in the event that different CIDB classes of works have been applied for under the one construction contract. For example, a company can be given a construction contract to build a house, but in that contract, they will also have to electrify the house. The CIDB will need a bill of quantities to determine,of the total contract value,how much has gone to the CIDB class of General Building and how much of the contract value has been allocated to the CIDB class of electrical construction. Therefore, the bill of quantities must have precise descriptions and Rand values for each construction line item.
• Shareholder’s Certificate – (The latest shareholder certificate orcertificates are only required for PTY companies only, the share certificate must be certified by a commissioner of oaths within the latest 3 months. Share certificates not commissioned by a commisioner of oaths within the latest 3 months will be rejected by the CIDB. You can download the Share Certificate Example currently being accepted by the CIDB by clicking here. You can customise the share certificate to your client’s needs.
• Vat 201′s. (You will only submit VAT 201 statements as an alternative to bank statements, should the volume of bank statements be considered to be too high and impractical for submisssion to the CIDB. Generally, the CIDB will look at the clients historical declaration of income on his VAT201 statements and try to work out the annual revenue that was earned by that company and then compare it back to the revenue reported within the financial statements, in order to determine the financial capability of the enterprise. Once again,if the VAT201 statements were understated, for example, they reflect zero, then there is no point in submitting such VAT201 statements as your client will be disqualified immediately).
• Financial Statements. (The financial statements must meet all the requirements of IFRS or SA GAAP in addition to the other specific requirements. The CIDB will only accept financial statements that have been signed off by an accountant registered and in good standing with any of the following controlling bodies, Saiba, Saipa, Saica, Irba,Acca, Cima & Cgma. Only independently reviewed or audited annual or interim financial statements will be accepted by the CIDB. When signing off the independent review or audit report, the accountant must sign off in full with their names as they appear in their ID copies together with full practice numbers and the accountant’s letter head must state the name of their accounting firm together with their contact details as well as address. Please click here to see an example page of a CIDB generally acceptable Example Audit Review Page.

In addition to the submission of the above track record documents mentioned above, the CIDB also employs the following summarised table of metrics when it comes to determining the CIDB grading level that each company can qualify for. Therefore you are encouraged to download and print the following table and also learn the various metrics used by the CIDB to qualify construction companies for the various CIDB grading levels.

Please cliick here to download this table.

When it comes to the submission of track record documents to the CIDB, it is best that the documents are slotted in a lever arch file with clearly market folders. The reason for this, is that, at the CIDB, the CIDB consultant will quickly tell you for example, give me the tax clearance certificate, the last thing you want is to be fumbling through 100’s of documents each time they call out for the one document. Therefore placing documents in a lever arch file with clearly labelled file dividers, will make the job of taking out these documents much more quicker, because remember, at the CIDB, you hand in one document at a time and if any of the documents are missing, you could be sent back and thus wasting so much valuable time.

After about 3 weeks of submitting, its better to start making up follow ups with the CIDB regarding your clients submissions.

When you make calls to them, you will need to verify that you are an authorised person to make that call.

To ensure this, please make sure that when completing the application form, you enter your first name,surname, phone number as well as your email address as you will be required to furnish these details to the call centre agent in order to proceed with the phone call. The CIDB contractor registration number (CRS) shall also be required.

You are also advised to register the clients company onto the CIDB’s online registration portal as follow ups with regards to contractor registration can also be made here, though it is not as close as to being helpful if you make a direct call to the CIDB but none the less, it can be used to check the status as well as if there are any credits or balances due to the CIDB.

Financial Capability refers to a construction company’s financial capabilities to carry out future construction projects.

This measure is usually based on the company’s historical financial performance based on the best annual revenue figure over the past two financial years as well as its net assets value as reported in the statement of changes in net assets within the annual financial statements.

For this reason, the CIDB will always look through the Annual or interim Financial Statements to determine the financial capability score based on a sliding scale as depicted by table C(ii) on the CIDB’s application form.

You can view the CIDB table by clicking here.

With this in mind, it is very important that clients pay good attention to the information contained within their annual financial statements to establish that they will indeed qualify for the CIDB grading that they are aspiring for when submitting these annual financial statements.

There are a number of factors to look out for when submitting these annual financial statements to the CIDB.

Factor number 1. Revenue.

The CIDB will take a look at the revenue figure to determine if you have met the revenue threshold for the CIDB grade that you are applying for.

A number of accountant’s have the tendency of just putting this revenue figure for the sake of showing that the financial capability revenue figure has been met, however, please be warned that the CIDB has a full bench of accountant’s who can spot when your are trying to manipulate the CIDB revenue figure requirements.

They will compare the accuracy and the reason-ability of your revenue figure to the other supporting documents such as the total value of the combined construction contracts completed within a financial year as well as to the total cash flow received through your bank statements.

If there are variances in excess of 10%, then your financial statements could be disregarded for the CIDB grading that you are trying to apply for.

Factor number 2, Net assets value or net worth.

The CIBD will also look at your financial statements to determine, your company’s net worth by taking into consideration, your total financial assets less total financial assets and determine the grading you qualify for based on their sliding scale table as reflected under table C(ii) on their application form.

Once again, the CIDB accountants will be on a look out for companies that try to over inflate their net asset’s value by looking at the supporting documents for items such as cash & cash equivalents as reflected on the bank statements at specific balance sheet dates.

They will also be on the look out for fictitious financial statement asset line items such as revaluation reserves & surpluses that exist without independent valuation certificates.

Signing off of the annual financial statements.

The CIDB will also investigate the designation as well as the standing of the accounting officer, who signs off the annual financial statements. Any accountant who signs off your annual financial statements must be in good standing with a properly recognized accounting body within South Africa.

Secondly, they must also have the authority to sign off your annual financial statements based on your company’s public interest score.  Different accountants have different authorities to sign off financial statements based on the construction company’s public interest score.

Factor number 3, compliance to IFRS 15 when reporting revenue from construction contracts.

Track record or work’s capability is a measure of the evidence of the single largest contract project ever carried out by your company within the past 5 years.

The cidb uses track record on a sliding scale as a measure to determine the cidb grading due to your company.

You can view an extract of the cidb’s sliding scale table D by clicking here.

At Fixonate, we consider track record as the most defining item on your CIDB upgrade.

Therefore, with this in mind, the way you build your track record file, can determine if you will get the CIDB upgrade or not.

The track record file should include all the evidence that proves that your company genuinely did indeed receive the project.

The project was successfully carried out within the parameters of the project contract.

You were paid for the project in cash and that the company that awarded you the project was happy with the work carried out.

For this reason, your project contract file should at least include the award letter or purchase order to prove that your company did indeed get the project.

Documentary proof for the bill of quantities should be provided and the bill of quantities should tie to the project award letter or the award letter.

If there are differences between the bill of quantities and the project award letter amounts, a variation order should be included within the track record file.

Within the track record file, bank statements in chronological order should be included that highlight amounts that add up to the project amounts.

A completion certificate dated preferably at the end of the project should also be included and signed off by the employer.

The completion certificate should be signed off by the project manager with contactable information such as email as well as the telephone number for confirmation purposes.

It takes about 21 working days for the CIDB to finalize an application for a CIDB upgrade and the clients certificate can be viewed or printed online by visiting the CIDB’s register of contractors page and entering the clients CRS number in one of the key fields provided.