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Standard Seven

The RTO has effective governance and administration arrangements in place.

Context

Business viability is critical to the ongoing sustainability of an RTO and the investment it makes in its services. If RTOs are not viable, then this negatively impacts on the quality of its training and assessment outcomes and on learners.

Operational and financial business standards therefore provide important protective measures for the learner and RTOs, as well as acting as a disincentive for underprepared organisations to enter the market.

The factors determining the viability of an RTO are dependent upon the business objectives and operating characteristics of the RTO. For example, the factors determining the business viability of an enterprise RTO embedded within a major Australian business may be different to those impacting upon a private provider or a publically-owned TAFE Institute.

How Standard Seven benefits:

Learners

  • Learners know their provider is stable and well-governed, so are confident it will continue to operate and be properly resourced to deliver training.
  • Learners know that their exposure to financial loss is limited in the case of a provider closing or not being able to provide the training.

Industry/employers

  • Employers of learners are confident that providers can adequately resource the training and assessment of their staff and that providers will continue to operate through the life of training contracts.

Governments

  • Governments are confident of investing in training provided by RTOs knowing they are viable and properly governed.

Standard Seven is explained in more detail in this section of the guide, including the RTO’s responsibility to: