The Standards for VET Regulators 2015, made under section 189 of the National Vocational Education and Training Act 2011 (the Act), requires ASQA to implement a risk-based approach to regulation in order to:

• Reduce regulatory burden for high-performing providers with a history of strong compliance, and
• Increase regulatory action for those providers considered higher risk.

The Commonwealth Regulator Performance Framework (2014) requires ASQA to minimise impacts on the regulated community while effectively and flexibly managing risk, protecting the interests of the community and supporting the Australian economy. Proportionate, risk-based regulation is a requirement of this framework.

The primary risk for ASQA to manage is a Registered Training Organisation certifying that a person has competencies that do not reflect his/her skills, knowledge and attitudes. The potential damage flows not just to the individual, but to employers, and the wider community.

Source: https://www.asqa.gov.au/sites/g/files/net3521/f/ASQA_Regulatory_Risk_Framework.pdf?v=1508135481

• Non compliance with the relevant legislation, standards and guidelines resulting in poor student outcomes and complaints
• Governance, financial viability and senior management responsibilities
• Provider profile – eg. compliance history (dealing with audits, dealing with complaints, data provision requirements, payments to ASQA, submission of annual declarations etc.)

The outcome of this risk assessment is a rating for the provider of ‘somewhat concerning’, ‘concerning’, ‘serious’ or ‘very serious’. This will determine the level of ASQA’s response to the risk – a RTO with a poor compliance history is likely to receive a stronger regulatory response than a provider with a strong compliance history where the same regulatory obligation has been breached and the factors relevant to the case are similar.

The Basics of Risk Management

Risk is something that may have an negative impact on the achievement of RTO’s goals or objectives. Risk Management is an essential part of good business and management practices. ASQA’s Regulatory Risk Framework has been based on AS/NZS ISO 31000:2009 Risk Management Standard. The standard lays out the process for identifying, analysing, evaluating and treating risks and the ongoing monitoring to ensure changes are made and regularly assessed.

Risks to RTOs could come from any of the following management processes or systems:

• The financial system – income. expenses, cash, assets, liabilities etc.
• The compliance process – legal and regulatory
• Physical assets – student facilities, computers, equipment etc.
• Learning Management system
• Student management system
• Learning and assessment resources
• Governance and leadership
• Reputation

The above is just a sample of the type of management processes and systems that manager use to make everyday decisions which has a direct impact on risk.

RTO Risk Management

Risk management should be part of your vision & strategic plans. This will ensure your continual assessment of the risk that your RTO endures. Your risk management process could include the following process:

Why you need us for your risk management

When assessing applications for registration and monitoring the compliance of registered training organisations (RTOs), ASQA uses a risk assessment approach based on the Risk Assessment Framework as set out in the section 190 of the National Vocational Education and Training Regulator Act 2011.

This framework sets out a risk assessment process for ASQA in making decisions about:

• Assessing and responding to the risk of non-compliance by applicants against the VET Quality Framework,
• Assessing and responding to the risk of non-compliance by RTOs against the VET Quality Framework, and
• Monitoring the compliance of RTOs against the VET Quality Framework.

What we will provide/do for you

We will:

• Advise you on the risk assessment process
• Advise you on Risk indicators – Performance risk indicators contribute to the risk rating for an RTO
• Advise you Financial risk indicators – indicators Of financial viability
• Governance risk indicators
• Advice you on Governance risk indicators – Quality of business planning, Transparency of ownership and management structure and Skills and experience of senior officers and directors
  Advice you on Supplementary risk indicators such as
• The scope of the registration application
• The delivery of training that leads to a licensed or regulated outcome
• The RTO delivering training to overseas students studying in Australia
• The RTO having multiple sites
• The delivery of training offshore
• Partnering or subcontracting arrangements
• The RTO accepting fees in advance from students
• The RTO delivering training to students under the age of 18
• The mode of delivery
• Compliance with and value of government training contracts.