During the IHEA Dual-Sector Network conference, Sukh Sandhu addressed issues and changes in the VET sector.

A recent conference of IHEA Dual Sector Network recognized ASQA’s effort to change its focus from person-centred to system-oriented auditing.

ASQA was also commended for focusing on continuous improvement and self-assurance rather than solely on compliance. Their website includes many more fact sheets and information related to education and training opportunities, which is really helpful for the entire industry.

In addition, it was mentioned that it will be interesting to see how ASQA works as an assurance body for training packages and supports industry clusters.

There were, however, a number of challenges discussed as well, including:

A clear set of guidelines on what’s expected of RTOs – ASQA needs to ensure that it provides clear guidelines regarding what’s expected of each RTO for each clause and the standard. Hence, we should attempt to remove ambiguities to the best of our ability and focus on quality assurance and students throughout the process.

Greater transparency around each and every clause and requirements:

Regulations and requirements must be transparent around each and every clause. There were a number of examples given, including publishing information related to credit transfers, but the second paragraph mentioning best practices that RTOs can follow is very confusing for the industry as in our experience, auditors have audited training organisations on “best practices” rather than compliance requirements. So, what requirements should the training organisations follow? Best practices or compliance requirements or both? To ensure compliance with the regulatory requirements, the regulatory body should clarify this.

Greater flexibility in delivering training and assessment

After COVID-19, we live in a world that requires a lot of flexibility in training and assessment, as well as the regulatory body’s ability to promote and regulate it.

Improving data collection and monitoring

Instead of focusing on tools that are outdated or do not meet client and employer satisfaction requirements, we should focus on tools that are current, reliable and useful.

Development of the new standards

Several of our previous editions has discussed the Department of Education and Training’s work on developing new standards for registered training organisations, which will be published next year. Before they become legislation, these standards should be released to the public so that industry stakeholders can provide feedback, as well as the regulatory body and the Department of Education and Training can receive feedback on their validity and usefulness.

The other topics included:

  • The delivery of high-quality training and assessment services
  • The regulatory body providing clear benchmarking
  • Auditors going through regular professional development training and moderation activities
  • Subjectivity that comes into play when auditing and monitoring compliance of training organisations
  • ASQA supports and validate their outcomes
  • The issues with finding minor administrative issues or issues those have no effect on student’s training and education as non-compliance
  • Assisting the sector and stakeholders in a collaborative manner

At the conference, representatives of ASQA took notes on the main points and promised to revisit them at one of the next IHEA conferences.

ASQA’s as a national training package assurance body

As part of the transition to the new arrangements, the Australian Skills Quality Authority (ASQA) will soon replace the assurance function of the Australian Industry and Skills Committee (AISC).

To ensure that students, employers, governments, and the community are confident in the integrity of national qualifications issued by the VET sector, the function will establish a robust approval process.

As a training product assurance body, ASQA has two key functions:

  • In order to recommend products for endorsement, training products must be assessed for compliance.
  • Supporting Industry Clusters in building capacity and improving the system of training product development by providing education and guidance.

For more information, please visit https://www.asqa.gov.au/training-package-assurance/about-training-package-assurance

A database of cheating websites has been updated through intelligence sharing.

TEQSA shared updated on information on suspected academic cheating service websites with Australia’s higher education sector 24 June 2022.

A database of 2,333 suspected commercial academic cheating service websites has been updated to include intelligence gathered by TEQSA staff. This globally accessible database includes 579 sites specifically targeting students at Australian higher education institutions. The goal is to help reduce the amount of academic cheating that takes place in the country.

Sharing this database will enable providers to block access to these websites from their institutional networks, and forms part of TEQSA’s ongoing partnership with the higher education sector to strengthen cultures of academic integrity and reduce the risk posed by illegal academic cheating services.

In addition to this intelligence sharing, TEQSA’s Higher Education Integrity Unit is finalising investigations into a number of the most-visited sites and expects to take enforcement action in the coming weeks.

The Australian Skills Quality Authority (ASQA) must work with the Tertiary Education Quality and Standards Agency (TEQSA) to update its list of websites that offer academic cheating services.

The database must include information on websites that offer essay writing services, assignment help services, and other academic cheating services.
ASQA must use this information to monitor these websites and take action where appropriate.

For more information, please read Intelligence sharing: updated cheating website database | Tertiary Education Quality and Standards Agency

An ASQA initiative called Pathways and Perspectives has been launched

The excellent initiatives that ASQA is taking to deliver information to the VET and RTO sectors are worthy of appreciation. They have recently begun a project called Pathways and Perspective, which is an effective technique of informing and communicating with the VET industry.

The community is provided with facts, insights, and noteworthy stories on the vocational education and training (VET) industry via the Pathways and Perspectives publication.

This document is designed in a visual format and provides an overview of the vocational education and training (VET) sector, including the opportunities VET sector creates as well as the key role it plays in the Australian economy.

For more information, please visit here.

What to do when legislation changes.

When a new law or regulation is enacted that affects the operation of training organisations in Australia, it is important to take steps to ensure compliance. Depending on the nature of the change, this may involve modifying existing policies and procedures, developing new ones, or both.

There are a number of ways to stay up-to-date on legislative changes:

1. Pay attention to announcements from relevant government agencies. For example, if a change is made to the National Vocational Education and Training Regulator Act 2011, the Australian Skills Quality Authority (ASQA) will likely issue a notice about it on its website.

2. Stay subscribed to email updates from bodies such as ASQA or other sector peak bodies. This way, you’ll be notified as soon as any changes are made to legislation that affects your training organisation.

3. Check sector-specific news sources regularly. For example, a number of websites include a section on regulatory updates, including CAQA.

4. Attend relevant events and conferences where updates are often provided.

5. Join relevant industry associations

6. It is always a good idea to consult with a legal professional if you have any questions or concerns about how a change in legislation may impact your business. They will be able to advise you on the best course of action moving forward.

7. Check the Australian Government’s Legislation Register regularly. This is the site where all changes to Commonwealth legislation are announced.

8. Stay informed about industry news and developments. Changes to legislation often come about as a result of wider changes in the sector or industry. By keeping up with news and developments, you’ll be in a better position to anticipate legislative changes that might affect your training organisation.

9. alk to other training organisations and sector bodies. Keeping in touch with others in your industry will help you stay abreast of legislative changes that might affect your training organisation.

10. Keep an eye on government consultations. The Australian Government often consults with industry and the public on proposed changes to legislation. By taking part in these consultations, you can have a say in the development of legislation that affects your training organisation.

It’s important to keep up-to-date on changes to legislation, as it can have a direct impact on your business. For example, new legislation may require you to change your training methods or materials. Ignoring legislative changes can put your business at risk of non-compliance.

If you’re not sure how a particular legislative change will affect your business, get in touch with a professional organisation or RTO consultants for advice. They’ll be able to provide you with guidance on how to stay compliant.

Once you are aware of a change, take the following steps:

  1. Review the new legislation and make sure you understand how it will impact your training organisation. Check the date the change comes into effect – make sure you are prepared in advance!
  2. Speak to your legal advisor or RTO compliance consultants to get guidance on how to comply with the new requirements.
  3. Assess and understand how the change will impact your organisation’s operations. This may require consulting with stakeholders such as staff, management, clients, or industry bodies. Decide if the change is something you need to comply with – some changes may not be relevant to your organisation.
  4. If you do need to comply with the change, develop a plan of action for how your organisation will do so. Determine what needs to be done to ensure compliance with the new law or regulation. This may involve modifying existing policies and procedures, developing new ones, or both. Organisations should then update their training materials and notify staff of the changes.
  5. Implement the necessary changes in a timely manner. Depending on the nature of the change, this may require training staff on the new procedures, updating client-facing materials such as changes on the marketing materials, training and assessment resources and materials, compliance and regulatory registers or making changes to internal systems, processes, procedures and operational guidelines.
  6. Communicate the changes to all relevant staff members and make sure they understand what is required of them under the new regime.
  7. Monitor compliance and make adjustments as needed. Once the changes have been put in place, it is important to monitor compliance and make any necessary adjustments. This may involve conducting audits, reviewing feedback from staff or clients, or modifying procedures as needed.
  8. Make any necessary tweaks or adjustments to ensure continued compliance.
  9. Keep up to date with any further changes that may come into effect, and repeat the process as necessary. Share your knowledge of the changes with others in your organisation, so that everyone is aware of the requirements.
  10. Seek professional help or advice if you are unsure about anything – it is better to be safe than sorry!

By taking these steps, you can ensure that your organisation is compliant with the latest legislation and able to continue operating smoothly.

Making sure your organisation is compliant with new legislation can be a challenge, but it’s essential for maintaining your accreditation. By taking the time to review the legislation and make the necessary changes, you can help ensure your organisation continues to provide quality training.

Set boundaries, establish guidelines, and work within them.

Organisations providing training services have a responsibility to ensure that their activities are carried out in a manner that is compliant with the expectations of the relevant regulatory bodies. This includes setting boundaries and establishing guidelines for staff and clients.

As a training organisation, it’s important to set boundaries and establish guidelines. This will help you stay within the parameters of your organisation, and ensure that you’re providing the best possible training service to your clients and staying compliant with the regulatory requirements according to the expectations of the regulatory bodies such as ASQA.

Some boundary setting may be required in order to:

  • Maintain a comprehensive policies and procedures framework
  • Maintain high-quality training services
  • Ensure legal and ethical compliance with organisational policies and external regulation
  • Facilitate positive working relationships between trainers, trainees and clients.
  • Organisational boundaries may include:
    • Physical space: Where is training allowed to take place? Are there any dangerous areas off-limits?
    • Time: What are the start and finish times for training sessions? Is there an allotted time for breaks?
    • Materials: What materials or equipment can be used during training? Are there any dangerous materials that should be avoided?
    • Behaviour: What behaviour is expected of trainers and trainees during training sessions? Are there any rules about speaking or interacting with others?

It’s important to communicate these boundaries to all involved in the training process so that everyone is clear on what is expected of them. By setting and enforcing these boundaries, you can help to ensure a safe, positive and productive learning environment for all.

There are a few things to keep in mind when setting boundaries and establishing guidelines:

The type of organisation you are running: What are the specific requirements of the regulatory body that you need to comply with? Are there any industry-specific standards that you need to adhere to?

Your clients: What are their expectations and needs? How can you best meet those needs within the confines of your organisation’s boundaries and guidelines?

Your staff: What do they need to know in order to carry out their roles effectively? What are their capabilities and limitations?

Your resources: What do you have available to you in terms of time, money and manpower? How can you make the most of what you have available?

Define the scope of your services. What kind of training do you offer? What are your areas of expertise? Make sure that you’re clear about what you can and cannot offer so that you can set the appropriate expectations with your clients.

Make sure your boundaries are realistic. If you set too many restrictions, you’ll likely find yourself unable to provide the training that your clients need. Likewise, if you set too few boundaries, you may find yourself overstepping your bounds and causing problems for your organisation.

Be clear about what your boundaries are. Your clients should know exactly what they can and cannot do during their training sessions. This will help them stay within the bounds of your organisation, and avoid any potential misunderstandings.

Enforce your boundaries. If you find that your clients are constantly pushing the limits of your boundaries, it’s important to take action. This may mean terminating their contract or providing them with a warning.

Communicate with your clients. Throughout the training process, it’s important to keep your clients updated on your boundaries and guidelines. This will help them stay informed, and avoid any potential surprises. Make sure that all your RTO stakeholders understand what your policies are and how they will be enforced. This will help them know what to expect from your service and avoid any surprises.

Be clear about your pricing. Make sure that your clients know how much your services cost so that there are no surprises down the road.

Follow up with your clients after they’ve attended a training session. Make sure that they’re satisfied with the service that they received and address any concerns that they may have.

By following these strategies, you can ensure that you’re setting appropriate boundaries and establishing clear guidelines for your training organisation. This will help you provide the best possible service to your clients, and avoid any potential problems.

If you have any questions about setting boundaries in your training organisation, please get in touch with us today. We’d be happy to help!

How trainers and assessors keep a training organisation compliant.

Organisations face many compliance risks, and a key part of managing these risks is ensuring that learners receive quality training according to the policies and procedures of the training organisation and set standards, guidelines and regulations set by the regulatory body and Australian Government. This is where trainers play a vital role in maintaining compliance within a training organisation.

As experts in adult learning theory and instructional design, trainers are uniquely positioned to develop, deliver and evaluate engaging and effective training programs that help learners understand the relevant concepts and topics.

The role of trainers in maintaining compliance is essential to ensuring that learners receive the best possible training experience. By maintaining a good relationship with learners and being familiar with the training organisation’s requirements, you can help to ensure that learners are able to comply with the training organisation’s rules and regulations. Additionally, by being familiar with the training organisation’s complaint procedures, you can help to ensure that any complaints that learners have are dealt with in a fair and transparent manner.

Use of compliant training and assessment materials

Make sure that the training materials you use are compliant with the latest requirements and standards. This includes ensuring that any third-party materials you use to meet these criteria too.

Training meets regulatory requirements and standards

Deliver training that meets the required standards. This means following the correct procedures and using approved methods and materials.

All assessments have been assessed fairly and accurately

As a trainer, it is your responsibility to ensure that all assessments are conducted fairly and correctly. This means that you must be able to identify any potential areas of non-compliance and take steps to address them. This includes adhering to the principles of assessment and rules of evidence.

Evaluate training on an ongoing basis

Evaluate training regularly to check that it is still meeting compliance requirements and standards. This may involve conducting audits, surveys or other reviews.

Participate in the learner and assessment validation sessions

Take action to address any areas of non-compliance.

This could involve changing the way training is delivered, updating materials or taking disciplinary action against employees who do not meet the required standards.

There are a number of ways that you can do this:

Keep up to date with changes in legislation and policy. This includes changes to government regulations, industry codes of practice and your organisation’s own policies. You can do this by subscribing to newsletters or alerts from relevant organisations, such as the Australian Skills Quality Authority (ASQA).

Make sure you understand the requirements of the legislation and policy. This includes understanding what the requirements are and how they apply to your specific situation.
Comply with the requirements of the legislation and policy. This includes ensuring that all training activities are carried out in accordance with the relevant legislation, codes of practice and organisational policies.

Monitor compliance with the legislation and policy. This includes regularly checking to ensure that training activities are being carried out in line with the relevant legislation, codes of practice and organisational policies.

Ensure that all assessors in your organisation are properly trained and qualified. This will ensure that they are familiar with the latest changes to the relevant regulations and standards and that they are able to conduct assessments accurately and fairly.

Take action to address any non-compliance with the legislation and policy. This includes taking steps to ensure that training activities are carried out in line with the relevant legislation, codes of practice and organisational policies.

By following these strategies, you can help to ensure that your organisation’s training activities are compliant with the relevant legislation, codes of practice and organisational policies.

The disadvantages of ASQA not following ISO auditing management systems

The Australian Skills Quality Authority (ASQA) is the national regulator for the vocational education and training (VET) sector. ASQA is responsible for ensuring that all VET providers in Australia meet the Standards for Registered Training Organisations (RTOs).

However, ASQA does not follow an international ISO audit and administration model, which could lead to problems with the quality of training provided by RTOs.

There are several disadvantages associated with ASQA not following an international ISO audit and administration model.

Some of the disadvantages of ASQA not following an international ISO audit and administration model include:

There is no guarantee that ASQA will identify all non-compliant RTOs. the entire auditing system is person-centred rather than system-centred. The same document can be made non-compliant by the same auditor just in a period of two months at another training organisation.

ASQA’s audit and administration procedures may not be as rigorous as those of other international regulators.

ASQA may not have the resources to effectively monitor all RTOs in Australia.

The lack of an international ISO audit and administration model could lead to problems with the recognition of Australian qualifications overseas. It is also difficult to compare the quality of services provided by different countries when they each have their own unique set of standards. This can make it difficult for businesses to know if they are getting the best possible service when they choose to work with an ASQA-registered organisation.

ASQA’s focus on compliance may result in it missing important quality issues that could impact on the delivery of training.

ASQA’s complaints handling procedures may not be as effective as those of other international regulators.

ASQA’s enforcement powers are limited compared to those of other international regulators.

ASQA’s structure and governance arrangements are complex and could be improved.

ASQA use consultants to audit RTOs who can work with the same organisation, after just a few months, questioning its impartiality and framework.

There is a lack of transparency around ASQA’s decision-making processes.

The lack of standardisation can also lead to inconsistencies in the way that ASQA-registered organisations are run, which can impact negatively on the quality of services provided

Finally, it can be more expensive to comply with multiple sets of standards than just one, which may impact on the affordability of ASQA registration for some organisations.

While ASQA is the national regulator for the VET sector, it does not follow an international ISO audit and administration model. This could lead to problems with the quality of training provided by RTOs in Australia.

ASQA’s model for self-assurance and reality

ASQA has published a new model for self-assurance that providers can use to improve their practices.

The new model should have set out the requirements for an effective self-assurance system and provided guidance on how providers can develop and implement such a system. However, what we can find online after extensive consultation and engagement that ASQA states it did in April and May 2022. It has very little information related to the self-assurance system. Yes, they have recently put a disclaimer work in progress but, after so much consultation the sector receives a diagram.

This diagram has effective training and assessment delivery and quality outcomes and achievements in its centre, surrounded by continuous improvement and four foundational elements such as leadership/governance; staff capability and development; student engagement and support; and industry and/or community engagement.

How is this diagram going to assist training organisations with a self-assurance framework?

A training organisation’s model for self-assurance should include the following components:

The organisation’s purpose, values and goals
The legal and regulatory environment in which the organisation operates
The organisation’s stakeholders and their expectations
The risks facing the organisation and its activities
The controls in place to mitigate those risks
The process for monitoring and reporting on risk and control effectiveness
The organisation’s culture and how it supports or detracts from effective risk management

  1. Governance and management arrangements that promote a culture of continuous improvement and learning, and that are aligned with the organisation’s strategic objectives;
  2. A robust quality management system that is regularly reviewed and updated in line with changes in the organisation’s operating environment;
  3. Clear accountability arrangements for all staff members, including clear lines of responsibility and reporting;
  4. Regular monitoring and evaluation of the effectiveness of training programmes and delivery methods;
  5. Continuous professional development opportunities for all staff members;
  6. A mechanism for dealing with complaints and feedback in a timely and effective manner;
  7. A commitment to maintaining high standards of customer service;
  8. Regular review and update of policies and procedures.

Organisations should have clear and specific training objectives that are aligned with their business goals. Instructional methods should be based on adult learning principles and be tailored to the needs of the learners. Resources should be sufficient to support the delivery of the training. The learning environment should be positive and conducive to learning. Finally, evaluation should be ongoing to ensure that the training is meeting its objectives. By incorporating these components into their self-assurance model, organisations can be confident that they are providing quality training that will meet the needs of their learners.

Organisations that have a well-developed model for self-assurance are more likely to be able to identify areas in which they can improve their performance and make the necessary changes to their operations. This, in turn, leads to improved outcomes for both the organisation and its clients.

When developing a model for self-assurance, organisations should consult with their stakeholders to ensure that it meets their needs and expectations. Stakeholders include clients, employees, regulators, and other interested parties.

Organisations should also seek feedback from their stakeholders on a regular basis to ensure that the model for self-assurance is fit for purpose and remains relevant. Feedback can be obtained through surveys, focus groups, or one-to-one meetings.

URL: https://www.asqa.gov.au/how-we-regulate/self-assurance/have-your-say-draft-self-assurance-model

We hope that ASQA’s new self-assurance model provides ultimately offers the training organisation with the requirements for an effective self-assurance system, as well as guidance on how to develop and implement such a system. The benefits of having an effective self-assurance system in place include improved quality of training and assessment delivered by the Provider, increased confidence in the Provider’s ability to meet ASQA’s Standards, and reduced risk of non-compliance with ASQA’s Standards.

Unrealistic timeframes of the regulatory body

The Australian Skills Quality Authority (ASQA) is the national regulatory body for the vocational education and training (VET) sector. ASQA’s primary role is to protect students and ensure that they receive high-quality training from registered training organisations (RTOs).

ASQA has a range of service standards that it strives to meet, including:

  • Providing clear and timely communication
  • Making fair and transparent decisions
  • Acting with integrity, professionalism and respect
  • Being open and accountable
  • Providing efficient and effective services.

However, recent reports have suggested that ASQA’s decision-making processes are often slow and bureaucratic, resulting in unrealistic timeframes for RTOs. This can create significant problems for RTOs, particularly small businesses, who may not have the resources to wait for a decision.
Addition to scope

ASQA’s unrealistic timeframes for adding new courses to its scope of registration are a major problem for providers.

The process for adding a new course to ASQA’s scope of registration is needlessly complicated and takes far too long. It can often take up to 6 months for ASQA to process an application, during which time the provider is unable to offer the course.

This is a major problem for providers, as it limits their ability to respond to market demand and offer new courses in a timely manner. It also puts them at a competitive disadvantage compared to other providers who are not subject to the same delays.

ASQA needs to streamline its process for adding new courses to its scope of registration, and reduce the timeframe to a matter of weeks, not months. This would allow providers to be more responsive to market demand and offer new courses in a timely manner.

It would also level the playing field with other providers who are not subject to the same delays.

ASQA’s slow decision-making process is a major problem for the VET sector. It is essential that ASQA improves its processes so that RTOs can continue to provide high-quality training to students.

A draft model for self-assurance for training organisations

ASQA has developed a draft model for self-assurance for training organisations. The purpose of this model is to provide a framework within which training organisations can develop and operate their own quality assurance systems.

The model sets out the key elements of an effective quality assurance system and includes guidance on how these elements can be implemented.

The model is designed to be flexible and allow training organisations to tailor their quality assurance systems to meet their individual needs and circumstances. ASQA will continue to consult with the sector on the development of this model, and welcomes feedback from training organisations and other stakeholders.

Principles for the model

  • flexible to be appropriate for all providers regardless of size, type, operating context and self-assurance maturity
  • aligned with RTO standards and supporting other requirements including State/Territory where possible
  • focused on continuous improvement rather than merely compliance
  • simple and easy to understand for providers
  • encouraging and supporting providers to fully integrate self-assurance into their business (‘organic’ to operations)
  • reinforced and validated by other regulatory activities including ASQA’s performance assessments and risk analysis
  • valuable to providers and linked to a reduction in regulatory burden
  • backed by effective support, guidance and education by ASQA

A model should avoid:

  • being overly prescriptive
  • encouraging providers to just ‘tick the box’ / achieve the minimum requirements
  • causing self-assurance to become an additional business process for providers
  • duplicating existing requirements of providers

During Phase 3, ASQA will:

  • develop and refine the level of detail for the overall model and each element, including an overall explanation about its purpose
  • explore guidance and information requirements by model element/sub-element
  • identify providers’ expectations about and capacity to provide evidence of self-assurance by model element
  • identify expectations about ASQA’s and others’ role in the provision of education
  • identify additional tools or resources required, based on further model development.

You can provide feedback in a number of ways:

  • have your say on the Phase 3 model (survey open until 8 June 2022)
  • email the project team at StrategicReviews@asqa.gov.au

How ASQA assess the RTO registration renewal

ASQA is responsible for the assessment and registration of RTOs. ASQA must be satisfied that an RTO is meeting the requirements of the Standards for Registered Training Organisations (RTOs 2015) for its registration to be renewed. ASQA takes a risk-management approach when they evaluate registration renewal applications. They use a structured process to assess applications and ensure they meet all the requirements for continued registration before approving. As part of its regulatory role, ASQA assesses RTO registration renewals to ensure that they continue to meet the RTO Standards. This includes a review of an RTO’s:

compliance history – An RTO’s compliance history is one factor that ASQA considers when assessing an application for renewal of registration. ASQA also considers the RTO’s current compliance status and any changes to the RTO’s operations since its last registration renewal. ASQA will consider any non-compliance issues that have been raised against the RTO, as well as the steps the RTO has taken to address these issues.

current operations and resources – your RTO’s policies and procedures, training and assessment materials, practices and resources, a schedule of training delivery for each course, trainers and assessors credentials, industry engagement and consultation, training and assessment strategies, RPL kits, LLN kits, student support and welfare, validation, transitioning from superseded to current training product, the results of recent audits, governance and administration processes and practices and marketing material are few of the things those can be considered for compliance purposes. ASQA also assesses the RTO’s financial viability and its capability to deliver high-quality training. The assessment process takes into account the RTO’s resources, including its staff, teaching and assessment practices, and facilities.

plans for future development – Future development plans refer to how a training organisation is preparing for its next steps, including but not limited to expanding into new markets or learner cohorts such as offshore markets, applying for CRICOS or funding contracts, and so forth.

To ensure you meet the requirements for renewal, you should review the following, but not limited to:

  • The Standards for Registered Training Organisations (RTOs) 2015
  • The National VET Regulator’s guidance material
  • Your RTO’s scope of registration
  • Any changes that have occurred since your RTO registered
  • Compliant training and assessment resources
  • Industry engagement and consultation
  • Validation plan, processes and evidence
  • Marketing and advertising materials
  • Training and assessment strategies and practices (The quality of the training and assessment delivered by the RTO)
  • Student support and welfare
  • Quality management system (QMS) and risk management processes
  • Student and staff records
  • Policies and procedures manual
  • Transitioning practices and documentation
  • The competence of trainers and assessors employed by the RTO
  • The resources and facilities available to the RTO
  • The student engagement and satisfaction levels with the RTO’s courses and services
  • Any complaints or breaches of ASQA’s standards by the RTO

ASQA conducts regular audits of registered training organisations (RTOs) to ensure they are meeting the Standards for Registered Training Organisations (SRTOs). These audits can be either announced or unannounced, and can cover any or all of the aspects mentioned above.

If an RTO does not meet all the requirements, ASQA may take enforcement action. However, ASQA recognise that some RTOs may have made mistakes in the past but have since taken steps to improve their operations. In these cases, they may consider granting a conditional approval to allow the RTO time to continue meeting all the requirements. ASQA’s risk-management approach ensures that all registered RTOs are continuing to meet the high standards they expect. If ASQA is not satisfied that an RTO meets the requirements of the Standards, the RTO’s registration may not be renewed.

It is therefore important for RTOs to maintain high levels of compliance at all times, and to rectify any issues that are identified during an audit. This helps ensure that students receive quality training and assessment that meets the required standards.

For more information, please refer to asqa.gov.au/rto/renew-rto-registration

The use of third parties in delivering and assessing training in Australia under ASQA

Since its establishment in 2011, the Australian Skills Quality Authority (ASQA) has been responsible for regulating the quality of vocational education and training (VET) in Australia. ASQA is an independent statutory authority, governed by a board appointed by the Minister for Education and Training.

One of ASQA’s key functions is to accredit training providers and courses. This means that ASQA has the responsibility for ensuring that all training providers offering nationally recognised qualifications are assessed against a set of quality standards. To do this, ASQA uses a range of mechanisms, including on-site audits and reviews of provider practices and documentation.

When assessing whether a particular provider meets the required standards, ASQA may also take into account the use of third parties. A third party can be an organisation or individual that is not associated with the training provider but provides services to it, such as student support, assessment or delivery of training.

There are a number of benefits to using third parties in training provision. First, it can help to improve the quality and consistency of training provision. This is because the third party will be independently assessed against a set of quality standards, and must meet these standards in order to provide services to the training provider.

Second, using a third party can help to reduce costs for the training provider. This is because the third party may have already met the required standards, and therefore does not need to be assessed by ASQA.

Third, using a third party can help to improve the flexibility of training provision. This is because the third party may be able to provide services to a range of training providers, across different locations and sectors.

Finally, using a third party can help to improve the accountability of the training provider. This is because the third party will be held responsible for meeting the required standards, and any failings will be attributed to it rather than the training provider.

While there are many benefits to using third parties in training provision, there are also some potential risks. First, using a third party can lead to a loss of control over the quality of training provision. This is because the third party may not meet the required standards, or may not be aligned with the values and objectives of the training provider.

Second, using a third party can lead to a loss of access to important resources. This is because the third party may not share the same resources as the training provider, such as staff, facilities or equipment.

Third, using a third party can lead to a loss of knowledge and expertise. This is because the third party may not have the same level of experience or expertise as the training provider.

Finally, using a third party can lead to a loss of independence. This is because the third party may be reliant on the training provider for business, and may be less likely to criticise it or provide negative feedback.

An RTO may use a third party to deliver a VET course only if it has an agreement with the third party (refer to Sections 116 and 117 of the NVR Act). The agreement must:

  • the names of the RTO and the third party
  • the start and end date of the agreement
  • clauses detailing both parties’ obligations, roles and responsibilities of the RTO and the third party for example, under the agreement, making clear that:
    • any training and/or assessment is provided in the name of the RTO, not the third party
    • the third party cannot advertise any VET courses in its own name
    • students are enrolled as students of the RTO, not the third party
    • qualifications and/or statements of attainment are issued in the name of the RTO, not the third party
  • clauses detailing the obligations of the third party (that is, setting out which party will provide training and assessment materials, resources and facilities)
  • the mechanisms through which the RTO will systematically monitor the third party (for example, if the third party is providing the training and assessment materials, resources and facilities), set out:
    • how these will be reviewed prior to use across all delivery sites
    • how the RTO will ensure that trainers and/or assessors provided by the third party meet the requirements of the Standards for RTOs
  • record-keeping procedures for enrolment information and completed assessments
  • details of which party will validate completed student assessments
  • any obligations (of the RTO or third party) relating to government subsidies or other financial support
  • clauses requiring the third party to cooperate with ASQA and provide accurate responses to requests about delivery of services.

An RTO may use a third party to assess a VET course only if it has an agreement with the third party. The agreement must include arrangements for quality assurance, including regular monitoring by the RTO. The third party must also comply with ASQA’s requirements.

ASQA regularly monitors RTOs and their use of third parties to ensure that they are meeting the required standards. If an RTO is not meeting these standards, ASQA can take action, including suspending or cancelling the RTO’s registration.

For more information, please refer to Third party arrangements | Australian Skills Quality Authority (ASQA)

Marketing practices and regulatory requirements under ASQA

ASQA is the regulatory body for quality assurance in Australian vocational education and training (VET). ASQA is responsible for ensuring that all VET providers meet national quality standards. This includes marketing practices and regulatory requirements.

Marketing is an important part of any business, and VET providers are no exception. ASQA requires that all marketing materials be accurate and truthful, and not misleading or deceptive. Providers must also ensure that their marketing activities comply with all relevant laws and regulations.

For example, advertising must not contain false or misleading information about a course, the provider, or the student experience. Promotional activities such as competitions or scholarships must be conducted fairly and in accordance with the law. And pricing information must be accurate and up-to-date.

The marketing practices by an RTO may include:

  • Advertising their courses and services
  • Promoting their qualifications and skills
  • Engaging in social media marketing
  • Offering scholarships or discounts

However, RTOs must also be mindful of ASQA’s regulatory requirements when implementing these marketing practices. Some of these requirements include:

  • Not making false or misleading statements about their courses or services
  • Not exaggerating the benefits of their qualifications or skills
  • Refraining from discriminatory marketing practices
  • Abiding by the Australian Consumer Law when promoting their courses and services

ASQA can take compliance action against RTOs that do not meet these requirements. This may include issuing a warning, suspending or cancelling their registration, or imposing financial penalties.

ASQA takes compliance with marketing requirements seriously, and providers who don’t meet these standards can face sanctions, including fines or even the cancellation of their registration. So it’s important to ensure that your marketing practices are up to scratch.

How to ensure your training organisation is compliant with government regulations

If you’re running a vocational education and training organisation in Australia, you need to ensure that your organisation is compliant with government regulations. This article will outline some of the regulations that you need to be aware of, and provide tips on how to ensure compliance.

The Australian Skills Quality Authority (ASQA)

The Australian Skills Quality Authority (ASQA) is the national regulatory body for vocational education and training (VET) in Australia. They work according to set regulatory standards for quality education and training and their role is to ensure training organisations meet these standards. ASQA is the regulatory body for vocational education and training in the following states and territories:

  • Australian Capital Territory
  • New South Wales
  • Northern Territory
  • Queensland
  • South Australia
  • Tasmania

These jurisdictions are referred to as referring states and territories since they delegated their regulatory authority to the Australian Skills Quality Authority (ASQA) in 2011-12. Victoria and Western Australia are referred to as non-referring states because they have not yet delegated their regulatory authority to the federal government. ASQA is also in charge of regulating all Registered Training Organisations (RTOs) that provide courses to international students studying in Australia on student visas, regardless of where the RTO is based.

ASQA is responsible for regulating the quality of vocational education and training. ASQA audits training organisations to ensure they are complying with the VET Quality Framework and can take enforcement action if they find any non-compliance.

It governs RTOs in accordance with the Standards for Registered Training Organisations (RTOs) 2015 and approved courses in accordance with the Standards for VET Accredited Courses 2012.

For more information, please visit About us | Australian Skills Quality Authority (ASQA)

Victorian Registration and Qualifications Authority (VRQA)

In Victoria, the Victorian Registration & Qualifications Authority (VRQA) is the regulatory body for vocational education and training (VET), and it is in charge of the following:

  • Training organisations that only provide training to domestic students in victoria.
  • Accrediting courses, but only if the course is operated by the Victorian government or if the course owner is a Registered Training Organisation (RTO) that has been registered with VRQA.

VRQA regulates RTOs in accordance with The Australian Quality Training Framework (AQTF) – Essential Conditions and Standards for Continuing Registration and the VRQA Guidelines for VET Providers, and it regulates courses in accordance with The Australian Quality Training Framework AQTF 2007 Standards for Accredited Courses.

For more information, please visit VRQA

Training Accreditation Council – Western Australia

In Western Australia, the Training Accreditation Council (TAC) is the regulatory body for vocational education and training (VET), and it is in charge of the following:

  • Training organisations that only provide training to domestic students in Western Australia.
  • Accrediting courses, but only if the course is operated by the Western Australian government or if the course owner is a Registered Training Organisation (RTO) that has been registered with TAC.

TAC regulates RTOs in accordance with Standards for Registered Training Organisations (RTOs) 2015, and it regulates courses in accordance with The Australian Quality Training Framework AQTF 2007 Standards for Accredited Courses.

For more information, please visit Training Accreditation Council

Non-compliance with the regulatory standards and guidelines

If your organisation is non- compliant with the applicable standards and regulations, you could face penalties, such as fines or being shut down. Here are some important tips on how to stay compliant:

1. Make sure you’re registered with the appropriate regulatory body

The first step is to make sure your organisation is registered with the appropriate regulatory body. This means your organisation has met the minimum standards required to be registered and can offer courses that are nationally recognised.

If you’re not registered, you won’t be able to offer any nationally recognised courses and you will also face penalties if you are caught doing this.

2. Follow the General Directions, fact sheets, guides and tools

The regulatory bodies release a set of guidelines that organisations must follow in order to stay compliant. The General Directions, fact sheets, guides and tools cover everything from governance and management to teaching and assessment practices.

Make sure you’re familiar with the General Directions, fact sheets, guides and tools and are following their instructions and guidelines closely. This will help ensure your organisation meets the standards set by the regulatory bodies.

For more information, please visit Resources for providers | Australian Skills Quality Authority (ASQA)

3. Keep your records up to date

One of the most important things you can do to stay compliant is to keep your records up to date. This includes keeping track of your student’s progress, as well as your organisation’s administration, reporting, finances and governance.

The regulatory body may request to see your records at any time, so it’s important that they’re accurate and up to date. Failing to provide requested records or providing inaccurate records can lead to penalties.

4. Meet all quality assurance requirements

To make sure your organisation is delivering quality education and training, you need to meet all quality assurance requirements. This includes having systems in place to monitor and improve the quality of your courses.

You should also conduct regular reviews of your courses and make sure they’re being delivered effectively. If the regulatory body finds that your organisation isn’t meeting quality assurance requirements, you could face penalties or adverse consequences.

You must have structured audit and compliance processes in place to ensure you stay compliant with all regulatory requirements and guidelines. Having access to an independent auditor is always beneficial from a compliance perspective.

For more information, please visit Registered Training Organisation | TEQSA Standard Resources | CAQA

5. Respond to the audits

The regulatory body may audit your organisation at any time to make sure your orgnisation is compliant with all applicable guidelines and regulations. During an audit, they’ll request to see your records and talk to your staff. They may also observe your training and assessment practices and resources.

It’s important to cooperate with the regulatory body during an audit and provide them with everything they need. Failing to do so could lead to penalties.

For quality training and assessment resources, please visit CAQA Resources

6. Compliance calendars and registers

Keep compliance calendars and registers that provide you information related to:

  • When to conduct training and administration activities
  • Meeting ongoing auditing and regulatory compliance
  • Information related to meetings with different team members and departments such as enrollment, marketing, training and so on.

7. Understand the quality framework that you operate under

Familiarise yourself with the VET Quality Framework and other applicable standards and guidelines to make sure your organisation meets all the standards.

Note: Your RTO must comply with all legislation and regulations it operates under such as (but not limited to):

  • The Work Health and Safety act
  • The Discrimination Act
  • The Equal Opportunity Act 2010
  • The Racial and Religious Tolerance Act 2001
  • The Working with Children Act 2005
  • National Police Check
  • The Privacy and Data Protection Act 2014
  • The Student Identifiers Act 2014
  • The Copyright Act 1968
  • The Public Records Act 1973

For more information, please visit Complying with legislation | Australian Skills Quality Authority (ASQA)

8. Focus on personal and professional development

Focussing on personal and professional development is key to keeping your organisation compliant. Employees need to be able to constantly update their skillset, and be confident in their ability to carry out their roles. Training is a vital part of this process and should be tailored specifically to your workforce.

9. Follow what you say you are doing or going to do

Once you have a good understanding of the National Standards, you need to develop policies and procedures that ensure your organisation meets these standards. Your policies and procedures should be tailored to your specific organisation and should be reviewed and updated regularly. It is also important to keep up to date with any changes to the legislation. ASQA’s website is a great resource for information on any changes to the National Standards. By staying informed of any changes, you can ensure that your policies and procedures are always up to date and compliant.

10. Communicate the requirements to all staff members

It is critical that all staff members are aware of the requirements set by the government. This includes understanding what is required of them in terms of their behaviour and responsibilities.
If staff members are not adequately informed about the requirements, it can lead to your organisation being non-compliant. This can have serious consequences, such as heavy fines or even the loss of your licence to operate.

Communicate the requirements to all staff members on a regular basis and make sure that new staff members are given this information as soon as they start working for your organisation.
Following these strategies will help to ensure that your training organisation is compliant.

The Australian Skills Quality Authority (ASQA) details of the proposed fees and charges that will apply under the full cost recovery model

In a recent announcement, the Australian Skills Quality Authority (ASQA) detailed the proposed fees and charges that will apply under the full cost-recovery model, which will take effect on July 1 2022.

Although the full cost recovery of fees and charges was originally planned for 2020-21, it was postponed as a result of the COVID pandemic.

In a draft Cost Recovery Implementation Statement (CRIS), the Australian Skills Quality Authority (ASQA) outlines how fees and charges have been computed and how they will be imposed.

Registration, renewal, and change-of-registration fees for 2022-23 will be mostly at, or below, the amounts recommended in the 2019 consultation, according to the Australian Skills Quality Authority (ASQA).

Course accreditation fees will remain at the same level as those suggested for 2019.

The decision was made not to proceed with the proposed introduction of an ARC for course accreditation in 2019.

For more information, please visit here.

ASQA’s Regulatory Risk Priorities for 2021-22

The Regulatory Risk Priorities for 2021-22, has been published by ASQA. It outlines the regulatory risk priorities for the coming year. These priorities are revised on a regular basis to ensure that they remain current with concerns facing the industry.

ASQA expressed their gratitude to all of the providers and partners who took part in their research to determine which regions of Australia’s VET and ELICOS sectors were most at risk.

When determining the most significant risks to accomplishing ASQA’s purpose, which is to assure high-quality vocational education and training (VET) and the integrity of national credentials granted by training providers, the agency adopted a risk-based methodology.

The regulatory risks include:


Providers that effectively self-assured their practices have systems and processes in place to critically examine their performance and student outcomes on an ongoing basis.

This year we are focusing on co-designing and implementing regulatory approaches that focus on self-assurance, excellence in training outcomes, and continuous improvement.

International student delivery (including offshore delivery)

Competition between international education providers for onshore international enrolments has grown during a time of international border closures.

This year we are focusing on ensuring that students continue to receive quality outcomes despite the increased pressures on VET and ELICOS providers.

Online learning

Our ongoing strategic review of online learning seeks to better understand the opportunities and risks associated with online learning across the VET and English language sectors.

This year we are focusing on ensuring that the quality of VET remains at a high standard and continue to support confidence in the integrity of qualifications.

Aged care/disability support sector

The Australian Government has provided funding for aged care providers to develop training and skills plans as well as additional training places for new and existing personal care workers, including through the JobTrainer stimulus package.

This year we are focusing on assessing and addressing poor practices and while reinforcing good practice in relation to CHC33015 Certificate III in Individual Support work placements and assessment delivery in order to safeguard quality for the aged care/disability support sector.

Trainer and assessor capability

We are continuing to provide resources and tools to support trainers and assessors in our educational Spotlight On series.

This year we are focusing on ensuring high levels of trainer and assessor capability because we recognise that it is central to delivering quality outcomes for students.

Specified training products with risk exposure

Changing economic circumstances and employer expectations, as well as changes within the VET sector, mean that the risks relating to individual training products are not static.

Through our research we have identified that the following training products warrant closer scrutiny in the year ahead:

  • CHC33015 Certificate III in Individual Support;
  • Certificate III and Certificate IV in Commercial Cookery;
  • CHC50113 Diploma of Early Childhood Education and Care; and
  • BSB50420 Diploma of Leadership and Management.

This year we are focusing regulatory effort on these training products in order to reduce the incidence of non-compliance over time.

COVID-19 response

The COVID-19 pandemic and subsequent economic uncertainty have accelerated many pre-existing economic, social and technological trends. This influences the demand for skills and training delivery, as well as the risks to the quality of Australian VET.

This year we are continuing to respond to the COVID-19 pandemic through our interactions with providers, applying a proportionate and risk-based regulatory approach.

VET in schools

We are committed to ensuring the quality of VET delivered to students in secondary schools.

This year we are focusing on implementing actions from our strategic review of VET in schools; including engaging with stakeholders on shared risk; and enhancing information and guidance for providers about their obligations. We will be supporting providers to continuously improve through our ongoing monitoring.

Monitor areas of increased funding

Our research shows that government funding injections and employment growth sectors can present a risk to the delivery of quality training, typically as a result of an increase in demand for training, and providers’ response to this increased demand.

This year we are continuing to focus on identifying and reinforcing good provider behaviours and preventing poor behaviours from emerging in relation to areas of increased funding.

We will also be contributing to wider government policies on training package reform as they are central to ensuring a fit-for-purpose system that delivers in-demand skills for a prosperous future.

Targeting risk of non-compliance with specified clauses of Standards

This year we are concentrating regulatory effort on clauses of recurrent interest or those which are reportedly problematic for providers from the Standards for Registered Training Organisations (RTOs) 2015.

These clauses include: 1.1, 1.8, 1.3, 1.2, 3.1, 1.7.

You can read more information at www.asqa.gov.au/asqas-regulatory-risk-priorities-2021-22

ASQA Annual Report 2020-21 now available

The Australian Skills and Quality Authority’s Annual Report for the 2020–21 financial year has been tabled in the Australian Parliament. A record of ASQA’s activities and performance for the preceding financial year is contained inside this report, which is available online.

The Australian Government continues to provide nationally consistent, risk-based regulation of vocational education and training (VET) in 2020–21, with the goal of contributing to an informed, high-quality VET sector that serves the needs of the country.

ASQA mentioned that they would like to maintain their regulatory focus despite working through a comprehensive agency reform program, undergoing an audit by the Australian National Audit Office (ANAO), and responding to the COVID-19 pandemic.

Key highlights and comparison to the previous year

  1. ASQA established a new regulatory operating model:
    • Implemented 8 Rapid Review recommendations and commenced work on a further 13
    • Implemented key changes to performance assessment (audit) methodology
    • Established separate teams responsible for performance assessment, and managing findings of non-compliance
    • Introduced agreements to rectify
    • Established internal review team
    • Introduced new internal quality assurance activities
    • Improved data and intelligence reports
  2. Completed 937 audits (54% of completed audits identified non-compliance) and accredited 112 courses
  3. ASQA issued 45 sanctions to suspend a provider’s registration. 5 Sanctions to amend scope of registration and 16 sanctions to cancel the registration in full.
  4. The Administrative Appeals Tribunal affirmed almost 80% of the matters that proceeded to a hearing and a decision.
  5. The Commonwealth Director of Public Proceducations (CDPP) on behalf of ASQA undertook three (3) criminal prosecutions.
  6. Managed a 52% increase in provider registration applications, 238 new provider registrations, 213 registration renewals (with a 13% rejection rate) and 6136 applications for change in scope of registration.
  7. ASQA conducted 23 targeted audits of training providers delivering and assessing the Training and Education Training Package or AVI50419. Of these, 19 have been closed and completed and 8 were found compliant at audit, 11 have been identified as non-compliant, of these, 3 were found compliant after rectification and 6 were found non-compliant at the time of assessment and were not offered rectification and 2 were found non-compliant after rectification.
  8. ASQA received 881 complaints, 610 reports related to non-compliance with the majority 54% in the category ‘training, assessment or study support’ and the main source was students with 42%.
  9. Initial applications for registrations increased to 57% from 54% (2019-2020 period) and 36% (2018-2019 period).

You can read more at www.asqa.gov.au/

Interview with David Jepsen, Founder and Principal of RTO Accountants

With over 25 years’ experience as a practicing CA, David is the Founder and Principal of RTO Accountants. David started his career at KPMG, moving onto mid tier accounting firms and commercial roles with Citigroup, Zurich, CBA and others in Sydney and London before setting up an accounting practice in 2001. Offering commercial and practical advice, David believes the foundation for business success is built upon strong, trusted and lasting client partnerships.

David is commercially minded and works collaboratively with clients to develop strategies and solutions for complex business challenges. Having worked in accounting firms as well as public and private businesses, David has a breadth of experience in accounting, taxation, business advisory, financial control/CFO roles, ensuring his clients receive top-level, expert advice.

Specialising in the VET/CRICOS/ELICOS sector since 2016, he has extensive experience working with RTO’s. Specific areas of experience include sales due diligence work, tax advice on sales and other, business group structuring, board reporting, financial viability risk assessment requirements (FVRAR) and business advice.

David loves his sport and played rugby for many years, he still follows the game at all levels from club to international closely. He now enjoys getting outdoors all year round to train and compete in kayak races.

Sukh Sandhu: How long have you been assisting RTOs with financial viability risk assessments, and what has your overall experience been like in this field?

David Jepsen: We have been working with RTO’s since 2014 and financial viabilities from 2018, which was just prior to the introduction of the version of the FVRA Tool we still work with now. The FVRA Requirements were very basic and the introduction of the new requirements in 2018, was like moving from 2 to 9 out of 10 in terms of financial reporting complexity. The sector was not accustomed to this level of financial reporting; I still see issues with that, though I think the sector is getting accustomed to this and the need for this.

The FVRAR and its Tool are complex; as qualified accountants it took us many hours and late nights to get our heads around it and learn its nuances, this is a process for us that never stops.

Sukh Sandhu: What are the five most common mistakes people make when completing the financial viability risk assessment packs, and how can they be avoided?

David Jepsen: I will start with saying we have an initial meeting with clients prior to them starting work on financials and we prepare the Tool for our clients to avoid these mistakes. The client owns and knows the RTO and its plan, though we address and guide our clients on our area of specialisation early to make the process effective and simple for the client.

1. Business Plan or other information available to ASQA contradicts the FVRA Tool.

Solution (S): Get your signing accountant to review the business plan and directors be mindful to understand if changes in the forecast affect other documents.

2. Over emphasis on the bank balance to prove viability.

Solution (S): Provide a financial guarantee and evidence of available liquid assets to fund the RTO; proving the RTO has access to funds. Funds can easily and quickly be deposited or withdrawn from an account.

3. Over optimistic forecasting; higher revenues and lower costs to make the RTO more profitable.

Solution (S): be realistic, even conservative and consider all costs and choose a mid range of student numbers and not the best scenario. Business start ups are rarely profitable and take time to grow and make a profit; accountants and auditors are aware of this.

4. Incorrect and incomplete Tools; the various sheets do not reconcile and/or are not completed correctly; leads to a Tool with a red light and automatic rejection.

Solution (S): We only see these issues when the tool is done by the director’s or another advisor and RTO Accountants are brought into review. Working with an accounting firm experienced with the Tool is the solution, alternatively spend a lot of time and hopefully get it correct.

There is a lot to consider including future, actual, historical financial and operational information that reconciles. Forecasting the balance sheet and cash flow in software and not excel. Accurate financial reporting of this complexity is difficult even for qualified accountants using specialised forecasting software.

5. Forecasting Accuracy

Solution (S): It is a forecast of the future, no matter what you do it will not be 100% correct; consider all the information currently available to you and find a comfortable balance in the level of detail, we can guide you.

Sukh Sandhu: We understand that you also assist organisations with the selling and purchase of RTOs; could you perhaps elaborate a little more for our subscribers?

David Jepsen: For sellers we can help to clarify or prove the value of your RTO via forecasting and a valuation of the RTO. We can provide a report on this that improves the sale process for you; attracting more buyers and a higher price as you are able to articulate the RTO value via this document and discussions. The report can be presented to brokers and potential buyers.

For buyers it is usually Due Diligence (DD) work on the RTO you are considering acquiring. The potential scope of Due Diligence work is very broad as its ultimate objective is to ensure the RTO financial position is as the seller’s state in their financials; the process is like a financial audit. We want to check that you are buying the RTO you think you are. The scope of work is discussed and decided with the client and can change through the process. Many buyers don’t undertake DD as it is a cost that may be large compared to the purchase price; the potential consequences and costs of not undertaking DD when you purchase a RTO can be much larger than the purchase value as the buyer inherits the past of the RTO including any compliance, legal and financial issues, and risks. Our DD findings have saved clients millions. There are many examples including:

  • A $200k RTO purchase we discovered that the RTO had not paid tax or GST for years and the new owners would be responsible for the $150k; the buyers purchase cost is doubled once penalties are included
  • In another DD the RTO was accounting for training revenue on a cash basis prior to training delivery and therefore it looked more profitable than it was. Once discovered the sale price was renegotiated from $1m to $750k; $250k savings.

DD work prior to the purchase is more effective than resolving via enforcement of the share sale contract post sale. Enforcement of the share agreement is difficult and includes directors time, court costs and an unknown outcome. Our due diligence work is focussed on the financials, and we work with other specialists on the DD. Engaging RTO specialist lawyers and consultants should be considered.

DD can also be done for sellers, though is less common. It is more likely to happen if the seller is relying on the new owner’s performance; for example, if the sale includes an ‘earn out’ whereby the sale proceeds will depend on the performance post change of ownership, you want to ensure the buyer will keep the RTO profitable.

Sukh Sandhu: What are the most significant financial risks that training organisations face in today’s environment?

David Jepsen: It depends on the RTO of course, though broadly speaking COVID still looms large for me as a risk to business and the economy for some time, I hope we have seen the worst of it. The last 18 months turned out better than many RTO’s envisaged as they cut costs, received Government support for their business and education became an economic priority and recovery plan that has led to funding of training. I know many colleges have not been so lucky, especially those exposed to international students.

General Government support of the economy, such as Jobkeeper, Jobsaver and disaster payments will be withdrawn and that may also pose risks to the economy and perhaps then student expenditure on courses.

From history we know that funding of training can be withdrawn quickly and that is a risk that directors should remain aware of and have plans in place for.

The regulator has been subdued in its compliance actions since January 2020 and I think that may change as they start to conduct monitoring reviews on inactive or suspected non-compliant RTO’s.

Management and understanding of the RTO operations and financial position, to ensure that you are making a profit and are cash flow positive in the medium to long term. There can be a race to the bottom in reducing student fees against competitors and you need to ensure the fees you are charging will cover your operations and provide the owners with a return on their investment.

Sukh Sandhu: When it comes to working with the national regulatory authority, how has your experience been?

David Jepsen: I have had meetings with the regulator on the FVRAR; that took a little time to organise though they were productive meetings.

Administrative Appeals Tribunal (AAT) attendance to defend a client’s financial viability against the regulators legal team and forensic accountants. The outcome for the client was favourable, though being questioned by a legal team is never too much fun, though it was challenging and satisfying to explain the financials in that environment.

Recently the regulator seems more communicative and proactive regarding its role and how they will undertake that role, hopefully we will see this in its actions going forward.

Sukh Sandhu: Are there any suggestions you would like to offer to people who are interested in getting into the RTO industry?

David Jepsen: It is a regulated sector as education is a matter of public interest and therefore there will be scrutiny on your affairs and how you intend to operate your business and maintain financial viability. This level of scrutiny will mean setup takes more time and costs more. Most sectors do not have this scrutiny; though writing a business plan and a financial forecast would help all start-up businesses and deter those not ready for the responsibilities of running a business.

Buyers of an RTO business need to get to know the sector and do your due diligence. Training is a happy and positive sector, the conferences are enjoyable, the people involved care about their students/clients.

As the accountant I have to say businesses have a responsibility to society, their clients, staff, suppliers, and other counterparts. For all the efforts and stress please ensure you make a decent return out of it. Understand your financials, risks and what you are making from the business, get regular reporting not just once a year.

For those who wish to connect with or follow David Jepsen, you can do so via his Linkedin, here – www.linkedin.com/in/david-jepsen

Interview with Peter Doukas – Managing Director, Denison Toyer Education Lawyers

Peter owns and operates Sydney based education law firm Denison Toyer.

Working in the field of Education Law and Corporate Governance since 2007 Peter has acted for over one hundred Registered Training Organisations and Higher Education Providers in various stages of the education management cycle. He routinely acts for colleges in the Administrative Appeals Tribunal and provides extensive advice to RTO Management, Higher Education providers, Educational Conglomerates and Universities. His professional practice also includes providing legal and governance advice to listed and unlisted company boards. He has acted in some of the largest cases involving ASQA in the AAT.

Peter is also active in the multicultural space and acts as a volunteer director on various boards. He is the current chair of the Ethnic Communities’ Council of NSW. He also works providing pro-bono legal assistance to new and emerging communities, particularly in the establishment of associations and governance structures within NSW.

Peter was awarded Honour of Member of the Order of Australia for services to Multiculturalism on Australia Day 2020.

Here is a copy of Peter Doukas’s interview with Sukh Sandhu:

Thank you, Sukh for the opportunity to be part of the publication. I think it is exceptional that you have maintained the publication throughout the COVID period and it is in my view has never been a more critical time in the history of VET to properly liaise with the sector in all its shapes and sizes and the publication does this.

What are the top five genuine reasons for a regulatory body to take strict action against a training provider?

This is an interesting question. The word ‘genuine’ is something that has troubled representatives in the profession and around the sector for the last 10 years. What constitutes a genuine problem or a genuine reason for a regulatory body (any regulatory body) to take strict action against the Training Provider. The unique example of VET is one which we should bear in mind moving forward as it is the current question before us. In my view, strict action including sanctions should be the last resort. By sanction I mean the sanction of either cancellation, suspension or any other form of sanction which directly affects the ability of the organisation to trade. In my view, there are a number of items where such strict action should be taken. These include but are not limited to:

  • Criminal conduct by the Provider
  • Conduct that is not criminal but unlawful such as breaching the provisions of the NVR Act. If it is proven however to a criminal standard.
  • The use of the VET framework to further commercial interests. It has occurred routinely that I have seen individuals (either Providers and non Providers) use the mere fact of the highly regulated VET environment to further their commercial interests when pursuing them against an RTO.
  • When there are examples of mistreatment of students. This is an extension to the student centred approach that ASQA has taken in the recent past in which in my view students and their experience while studying in our VET Sector should be prioritised above all else.

When should RTO representatives seek the advice of a legal professional?

The question of when a RTO representative should engage a legal professional has plagued me for some time. I have too often been brought into cases that have been run or attempted to be run by Providers without the involvement of a lawyer. This ends up costing Providers exponentially more and in some cases the problems are too large to fix before a sanction either takes effect or can possibly be unwound. In my view is prudent for an RTO to permanently retain (this does not need to be on a financial basis) a lawyer or law firm for the sole purpose of providing legal advice. If you have a lawyer ‘on the books’ it would make the function of dealing with sanctions or any inquiries from the regulator more easy. We must remember, the VET Sector is a highly regulated environment and a VET Provider particularly a CRICOS Provider operates in the framework of multiple interlocking contracts, agreements and regulatory requirements. The idea that RTOs could go along without having legal advice outside of leasing and other contracts on an Ad-hoc basis is not realistic. For larger Providers I strongly recommend the establishment of a Board of Directors of which a retained lawyer and compliance expert sit as advisors to this Board (not necessarily Directors) but provide routine advice on compliance and on structures of the business of VET delivery.

This question is an extension to the previous question, in what ways can a legal practitioner, such as yourself, assist an RTO who is experiencing a legal problem with the regulatory body?

To answer the question about how a lawyer can address the problem facing a regulatory body or facing a registered training organisation is not as appropriate in my view as to when to involve that person. We in this Sector operate in a very unique regulatory framework. ASQA as a regulator has to face Providers which for the most part try to do the right thing but often find themselves on the wrong side of regulation or audits. I have seen on many occasions legal practitioners in some cases from very large firms find themselves completely out of their depth with regards to the implementation of the NVR Act and audit reports as part of regulatory functions. I have noticed the impact of regulatory decisions that have been taken by the regulator not being properly addressed either due to fellow practitioners not fully understanding the way the NVR Act works nor the way that AAT matters should be run. AAT litigation in the RTO space is unique and is very rarely dealt with by legal practitioners operating outside of the RTO space. There are a number of lawyers in Australia who have experience in these matters and I would encourage RTO owners to seek out lawyers who actually have acted in the AAT and ideally brought a matter to final hearing. It is not enough to simply ask a lawyer when shopping around ‘have you taken an RTO to the AAT?’. The real questions that need to be asked is whether:

  • The lawyer has taken a matter to final hearing
  • They have run a contested stay application; and
  • They have conciliated an outcome to the benefit of the RTO.

As you would have noticed, there was a time when RTOs were being cancelled left, right, and centre for trivial reasons that had no or little influence on students. Do you still witness the same pattern, or have the processes been improved?

I think the Regulator’s processes have improved dramatically in the last 18 months. In my view, the Regulator has made a genuine attempt to engage with the Sector and have as an outcome a collaborative and collegiate system of compliance and regulation. Also, it must be said that there were quite a few more RTOs at the beginning of 2018 than there are today. This can partly be due to the cancellation of many in between 2018 and 2019 and also of course a result of the impacts of COVID-19. In 2018 and for most of 2019 I remember running at least one stay hearing each week. This was a time when RTOs were being shut or sanctioned as a result of audit reports that didn’t really hit the mark. There are a number of factors I believe that have changed this. Some of which include some significant wins for RTOs and in final hearing before the AAT,other factors involve the change in perspective from ASQA to a more collaborative model of compliance. I think it can be said generally that the RTO space we are going into in 2022 is fundamentally different from the RTO space that we had in 2019. I am excited at how the Sector will look because I think that we now have a Regulator who can see the value of a competitive, compliant but confident VET Sector that isn’t always looking over its shoulder.

What are the primary reasons for the departure of so many people from the vocational education and training industry?

The departure of people from the Vocational Industry I believe will be reflected as one of the most dramatic and problematic events in Australian commercial history. I have a colleague who is looking to conduct a PhD in Vocational Education and is unable to find a supervisor. It is the case that people have left the VET Sector and found opportunities elsewhere for many reasons, but central is the lack of focus that has been placed at the sector at a policy level. RTO owners shutting or selling their RTO’s tell me that they have lost faith or lost confidence in the Sector. I have worked tirelessly to try to convince people to remain within the Sector and either keep their colleges open or at least keep themselves in the space in some way. I believe that we are about to embark on a significant period of growth in VET and we need as many experienced operators as possible. This is due in part to the combination of a skills shortage in Australia and the gradual opening of our borders to international students.

Any legal advice you’d want to share with people who are interested in entering into the RTO industry or who are currently operating in the industry would be greatly appreciated.

My view is that VET is about to take off. Unfortunately, I am looking to the government to support the Sector and support the entrance of people into the Sector. When I say government, I do not mean the Regulator but education policymakers in Canberra. We need to remember that international education is either our second or third largest export market depending on the context. Could you imagine what would occur if mining in Australia had experienced the nearly 30 per cent decline in people working in the Industry? This is VET since 2019. I believe government should look both into the push and pull factors affecting how people engage with the Sector. They have certainly addressed the push factors by the reforms of the Regulator and I think that now finally ASQA has the framework of a forward-thinking and flexible Regulator in a competitive international market which can finally be compared to Regulators in other Anglosphere jurisdictions such as Canada, New Zealand or the United Kingdom.

As to the pull factors, I believe that we really need to focus on trainers and RTO owners. These are the people who dedicate huge chunks of their life to the training of VET Students and it is these people who need our support and credit in what I hope will be a re-emergence of our VET Sector.

For those who wish to connect with or follow Peter Doukas, you can do so via his Linkedin, here – www.linkedin.com/in/peter-doukas/