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Clauses 7.1 – 7.2

Ensure authorised executive officers are in place and assess financial viability risk

Clause 7.1

The RTO ensures that its executive officers or high managerial agent:

  • are vested with sufficient authority to ensure the RTO complies with the RTO Standards at all times, and
  • meet each of the relevant criteria specified in the Fit and Proper Person Requirements in Schedule 3.

Clause 7.2

The RTO satisfies the Financial Viability Risk Assessment Requirements.

What this Standard means for your RTO

To operate effectively, managers must have authority to ensure that their RTO complies with the Standards at all times. If your RTO is part of a larger organisation, it is particularly important that the people actually managing the RTO are able to make decisions that ensure compliance.

All executive officers (who the NVR Act defines  as anyone who manages the RTO, or owns more than 15 per cent of it) and the ‘high managerial agent’ of your RTO must satisfy the Fit and Proper Person Requirements 2011 outlined in Schedule 3 (see Appendix 2) at all times. You must make a ‘fit and proper person’ declaration, in accordance with ASQA’s requirements, when:

  • you apply for initial registration or to renew registration as an RTO, or
  • you employ a new manager.

You also need to advise ASQA if anything happens that means one or more people may no longer meet the requirements.

Your RTO is required to present an acceptable level of financial risk at all times. Each RTO’s financial viability risk is assessed by ASQA to evaluate the likelihood of business continuity, and the RTO’s capacity to achieve quality outcomes, as outlined in the Financial Viability Risk Assessment Requirements 2011. Every initial registration application process includes this assessment, and ASQA may also require an RTO to submit to a financial viability risk assessment at any other time.

A guide to compliance

Evidence to demonstrate compliance varies depending on the structure of the organisation:

  • For a sole trader, it is obvious that the relevant authority is in place and no evidence would be required.
  • For a larger RTO with multiple managers, providing organisational charts, position descriptions, duty statements and delegation documents are some ways to demonstrate that managers have sufficient authority.

There is no requirement for policies or procedures to demonstrate compliance.

Evidence would usually be provided with applications for initial or renewal of registration or notifications of new managers rather than during an audit or other regulatory activity. ASQA’s registration and notification processes guide RTOs about any evidence required at that point. These processes can be access on ASQA’s website at www.asqa.gov.au/news-and-publications/publications/forms.html

ASQA may request evidence if your RTO is considered to present an unacceptable level of risk.

When applying to become an RTO, you must provide relevant evidence with your application.

The application process provides guidance to applicants about the specific evidence required to demonstrate that all executive officers and high managerial agents meet the Fit and Proper Person Requirements and that the RTO meets the Financial Viability Risk Assessment Requirements.