[This article was updated on 29 July 2014 to clarify how these arrangements will apply.]
In an effort to further reduce regulatory burden and costs, from 1 July 2014 the Australian Skills Quality Authority (ASQA) will remove the requirement for an automatic financial viability risk assessment (FVRA) as part of the renewal of registration process for training providers (in all but extreme high-risk cases).
Unless they meet one of the listed exclusion categories, applicants for initial registration—as either a registered training organisation (RTO) or Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) provider―are still required to complete and submit the ‘Financial Viability Risk Assessment Pack’ in-line with the FVRA changes announced by ASQA in October 2013.
What is the background to this change?
ASQA’s focus during its first three years has been on:
- processing applications from RTOs
- developing its risk-based regulatory approach, and
- establishing a higher bar for new entrants to the sector.
Using the intelligence it has gathered during this time, ASQA is able to take steps to move from a transactionalregulatory approach (which focuses on assessing providers at the point of application) to risk-focused performance monitoring (which focuses on identifying poor providers to better target regulatory resources).
As part of this continued evolution to risk-focused regulation, ASQA is moving away from undertaking FVRAs at the point of application for established providers. Rather, any time ASQA receives information identifying risks related to a provider’s financial circumstances, ASQA may require that provider to undergo a financial viability risk assessment. This information may come from sources such as:
- the Australian Securities and Investments Commission or Australian Taxation Office or other government agencies
- audit recommendations.
Why are applicants for initial registration still required to undergo a financial viability risk assessment?
ASQA seeks to maintain high standards for entry to the sector, to prevent poor quality or financially unsustainable businesses delivering negative outcomes for students.
ASQA requires financial viability risk assessments to ensure that all new providers entering the market:
- have sufficient financial resources to deliver quality training that meets the national standards, and
- are sufficiently financially viable to provide training to students in accordance with the commitments they have made in their ‘Application for initial registration’.