Changes to financial viability requirements for new applicants
Any organisation applying for registration with ASQA must demonstrate it has developed the foundations of a sustainable business.
ASQA assesses each organisation’s financial viability risk when considering applications for registration.
This ensures that—at the time its initial registration application is submitted—the organisation has been independently assessed as a financially viable business entity. ASQA will use this assessment as one of a range of regulatory checks when making a risk-based consideration about whether the organisation’s application is approved.
ASQA has authority to assess an organisation’s financial viability under legislation, specifically:
- the National Vocational Education and Training Regulator Act 2011 for applicants seeking to become a registered training organisation, and
- the Education Services for Overseas Students Act 2000 for applicants seeking to be listed on CRICOS to offer courses to overseas students.
What is changing?
The requirement for all ASQA registered training organisations and CRICOS providers to demonstrate compliance with financial viability provisions is unchanged. However, as of 1 October 2013, ASQA is changing the way in which it ensures the financial viability of new applicants for initial registration.
From 1 October 2013, ASQA will require each new applicant to demonstrate financial viability by completing and submitting the new Financial viability risk assessment pack prior to or at the same time as submitting their initial application if they are:
- seeking registration as a registered training organisation (RTO), or
- registration under the ESOS Act to deliver courses to overseas students (CRICOS provider).
Previously, financial viability was assessed, by an independent assessor contracted by ASQA, as part of the application assessment process and consequently extended processing timeframes. It is expected the introduction of the new requirement will reduce processing times for initial applications for the majority of providers.
The new process is detailed in the Financial viability risk assessment pack.
What are the new requirements?
The assessment of financial viability is now undertaken by the applicant and their nominated accountant before the applicant submits an application for initial registration.
This assists applicants to gain a realistic understanding of the financial requirements of becoming an RTO, and an independent assessment of the sustainability of their proposed business, before undertaking the extensive initial registration process.
A ‘nominated accountant’ is the accountant engaged by an organisation applying for registration.
The nominated accountant must be:
- a member of one or more of the following professional bodies: CPA Australia, The Institute of Chartered Accountants in Australia or The Institute of Public Accountants, or
- registered with the Australian Securities and Investment Commission as an auditor.
Under the new requirements, an applicant must:
- answer a series of questions about their organisation’s financial viability, including questions about forecasted financial projections, business ratios, and accounting systems
- provide forecasted financial information for the next 12 and 24 months,
- provide a declaration certifying the information provided in the pack is valid, and
- provide a declaration from their nominated accountant, certifying the financial viability of the new business entity.
For more information, see the introduction to the Financial viability risk assessment pack.
When do these changes come into effect?
These requirements come into effect from 1 October 2013.
What do these changes mean for providers who have applied to ASQA for initial registration?
If you have already submitted an application, or if you submit an application before 1 October 2013, these changes do not affect the initial registration financial viability assessment process for you.
What do these changes mean for providers who intend to apply to ASQA for initial registration?
From 1 October 2013, the financial viability risk assessment pack must be completed by all applicants seeking initial registration with ASQA as either:
- a registered training organisation (RTO)
- a CRICOS provider
The introduction to the pack explains the process of completing and submitting the pack.
When do I submit the financial viability risk assessment pack?
You must submit the financial viability risk assessment pack, including the required certificates, either:
- before submitting an application for initial registration—but no sooner than 30 days prior to submitting the application, or
- at the same time as submitting your application for initial registration (as long as the figures provided in the pack were not completed longer than 30 days prior to submission).
How do I submit the financial viability risk assessment pack?
- Scan and submit the pack to firstname.lastname@example.org
- You must submit your 'Application for initial registration' (RTO or CRICOS) within 30 days of the dates of signing the certificates in the pack.
- If you submit an application for initial registration (RTO or CRICOS) without having previously completed and submitted the pack, the application will be deemed incomplete. You will be notified of the incompleteness and provided with ten working days to rectify it. Failure to rectify the incompleteness within the prescribed timeframe will result in ASQA rejecting your application. Your application fee will also be forfeited.
What do the changes mean for providers currently registered with ASQA?
The changes only apply to organisations applying for initial registration.
- Download the FVD-0001—Financial viability risk assessment pack for more information.
- Contact the ASQA Info line on 1300 701 801 between Monday and Friday, 9.00 am to 7.00 pm, AEST, or email email@example.com.