Estimates: Education and Employment Legislation Committee (Australian Skills and Quality Authority)
Senator RHIANNON: I want to clarify those figures. I am interested in since 25 February; you would obviously remember the date when the minister announced ASQA would undertake an audit of 23 RTOs. Have any audits into other RTOs been launched since then?
Mr Robinson : Yes. In terms of our audits, I will get that information for you.
Senator RHIANNON: Can you tell us which RTOs too, please?
Mr Robinson : We have undertaken a total of almost 4,700 audits in the last four years. In 2013-14, we undertook just over 1,500 audits. This year, to date-this is the first three-quarters of this financial year-we have done 1,041 completed audits. There are, of course, a lot scheduled that are also underway at the moment as well.
Senator RHIANNON: Have breaches been found in any of those audits? Can you give us a breakdown on what you have found, please?
Mr Robinson : They have. When we audit RTOs, overall about three-quarters of RTOs have at least noncompliance with one standard or part of a standard. But part of our process requires that they get a 20-day period to address those issues that are found. After that period, nearly 85 per cent of all RTOs are fully compliant with all the standards. There is about 15 or 16 per cent that still have noncompliances after that process, and we take a range of regulatory actions around those issues, depending on what the nature of those noncompliances are. That includes termination of their registration.
Senator RHIANNON: So that is the process that is going through. So are there any more details you can provide about the nature of those problems?
Mr Robinson : Well, overall, we have refused the reregistration of some six per cent of all RTOs.
Senator RHIANNON: How many is six per cent, please?
Mr Robinson : It is about 141, I think.
Senator Birmingham: Over the life of ASQA?
Mr Robinson : Over the life of ASQA. We have taken regulatory action outside of registration renewals as well. So we have moved to take away the registration of a total of about 260 RTOs either by cancelling it or refusing to reregister them when they come up for reregistration. So that is at the significant end of our regulatory decisions, where we believe the RTOs are not in a position to be continuing. In other cases, we give a regulatory sanction of one kind or another. In some cases, it is taking some of the courses off their scope. So they can continue as an RTO, but they cannot continue offering particular courses. In other cases, it may be a direction to redress a particular issue in a certain amount of time.
Senator RHIANNON: Can I clarify the figures? You said six per cent have been refused. I think I heard the minister say that that is over the life of ASQA. Is that correct?
Mr Robinson : They are the numbers.
Senator RHIANNON: I know I will run out of time soon. I was trying to ascertain whether any audits into other RTOs been launched since 25 February?
Mr Robinson : Yes. There would be hundreds. I do not have the exact number since that date, but we could provide that.
Senator RHIANNON: Thank you. And then details about what they have found and where it is up to, please.
Mr Robinson : Yes.
Senator RHIANNON: I understand the purpose of the reform to ASQA's functioning is to allow it to focus on high risk providers.
Mr Robinson : Yes.
Senator RHIANNON: Can you explain on what basis ASQA determines whether an RTO is a high risk?
Mr Robinson : We look at their regulatory history-whether they have had compliance problems in the past. We look at a number of factors to do with some of the areas that they might be training in. If they are high-risk areas, they might be things that might have occupational health and safety risks, for example. It could be the asbestos area or something like that. So we look at a range of things to determine. We look at some of the patterns of their operations. We look at complaints. We get complaints from people about RTOs. We also canvass the media. If issues have been raised in the media about those RTOs, we feed that into our work on assessing risk.
Senator RHIANNON: It sounds fairly subjective in the way you have described it. That is what I wanted to check. Do you have a set of criteria that you check off against, or is it just making an assessment?
Mr Robinson : No. We have particular items that we look at. We give them different weightings. We come up with a range of risks that we think an RTO is in. Around 10 per cent of the RTOs that we deal with we would assess as being in the high-risk range.
Senator RHIANNON: Can you table your process for determining that, please?
Mr Robinson : We could provide you with information about that, yes.
Senator RHIANNON: ASQA has authority around approving RTOs to set up in the first instance.
Mr Robinson : Correct.
Senator RHIANNON: I wonder what the logic is behind approving a high-risk provider and then monitoring them. Why do you do that? It seems a contradiction.
Mr Robinson : We do not assign a risk rating until after they have been operating for at least a year. We audit all RTOs that are setting up. For all organisations that want to set up a new RTO, we make an assessment of their preparedness to commence operations. We look at teacher and trainer qualifications. We look at their training and assessment materials and the approach that they intend to take. So you are making an assessment of their initial capability. If we approve them to operate, we do a further audit of them after they have been operating for 12 months to ascertain whether they are in fact operating in a compliant way. In some cases, we refuse their registration at that point. They have set up and they have started their operation, but they are not operating in an appropriate way.
Senator RHIANNON: I want to jump sideways a bit. Can you table the report you did on Vocation that led to the $20 million penalty?
Mr Robinson : We have not done a report on Vocation.
Senator KIM CARR: That is an issue with Victoria.
Senator RHIANNON: I want to understand why we are not getting it.
Senator Birmingham: Let Mr Robinson finish. As we well know, Vocation owned a series of RTOs and owns some that remain. Different audit work is undertaken for those different RTOs.
Mr Robinson : We worked in conjunction with the Victorian government in terms of auditing the two particular RTOs that they were concerned about. Their regulatory authority audited one and we audited the other. The Victorian government took action to retrieve funds from both those RTOs that it had paid. Both those RTOs no longer are registered. So we cooperated with the Victorian authorities over that. We did audit work. We found problems and actions were taken, which included the-
Senator RHIANNON: Can you table that work that you did about those two RTOs?
Mr Robinson : Well, one of them we did not do. The Victorian government did. It was the one RTO in Vocation that was regulated by the Victorian government. We can provide you with further information about the work we did.
Senator RHIANNON: Thank you. You can take that on notice. What is the total number of complaints made to ASQA over the past four years? I am interested in that being broken down by provider.
Mr Robinson : I will not have the information by provider here.
Senator RHIANNON: Can you take that on notice?
Mr Robinson : Yes. In terms of the number, I can tell you the number. There has been a total of 4,503 complaints in the period we have been operating. In the last financial year, there was just under 1,400 complaints, and this year we have had 1,100 up to the end of March for the first three quarters. Around 40 per cent of those complaints come in from students. They do come in from other people-employers. A lot of them come from other RTOs who are complaining about their competitors. They come from various other sources as well-industry bodies or the like that might be dealing with them.
Senator RHIANNON: Can you also supply that data with those complaints grouped by provider?
Mr Robinson : Yes. Some of the complaints get closed, of course, without substantiating them whilst others are substantiated. We normally do not issue complaints information down to the provider level because not all of them are actually substantiated and the like. What we do with those complaints, though, is use that as a major trigger for regulatory follow-up to make sure that they have addressed the issues that were raised or, indeed, if they were not valid complaints, that we identify that as well.
Senator RHIANNON: Could you also supply how many complaints ASQA has received about Evocca?
Mr Robinson : Yes. We could.
Senator RHIANNON: I thought I asked a question about how many complaints ASQA has received about Evocca.
Mr Robinson : I said no, we can provide that on notice.
Senator RHIANNON: I could have sat here for the afternoon. There has been a $68 million injection for ASQA. Can you outline what proportion of that funding is being spent each year over the forward estimates, please? I am interested in some details about what you are planning to use that for-new staff or IT. What is it going on?
Mr Robinson : Most of that money-$55 million of it-was to enable ASQA to not go to full cost recovery fee collections so that we could be more targeted in our regulation in terms of shifting our focus on to the poor performing providers more quickly and not going through administrative processes with providers that were lower risk that we were not as concerned about. We would have had to put our fees up further to go towards 100 per cent cost recovery. But we are operating now at about 50 per cent cost recovery. So the government has put in a funding injection to fund the other half of ASQA's operation. The other money was for funding things like better education programs for RTOs so that they would understand their obligations better. We ran some major workshops in the latter part of last year in the lead-up to the new standards starting on 1 April this year for existing RTOs. We had 31 workshops around the country with around 4,500 people from RTOs attending those workshops. So it is RTOs having a better understanding of their obligations under the standards. That was $4.9 million over the forward estimates and $3.4 million in this financial year. The $55 million is spread over the forward estimates.
Senator RHIANNON: So how do we get up to the $68 million over four years?
Mr Robinson : It is $4.9 million for running things like those better education programs and better information for RTOs.
Senator RHIANNON: That is each year?
Mr Robinson : No. Over the four years. This is the $68.8 million. So $4.9 million is for that. An amount of $55.1 million is to enable us not to go to full cost recovery. So that was an injection of funding by the government instead of us collecting that money through fees. It lowers the costs of regulation to RTOs. And $5.1 million was for the agency's capital budget. It is particularly for developing our IT system to make it more user friendly for RTOs so they can conduct all their payments and applications processes online-they can see where their application is up to and things like that online.
Senator RHIANNON: Right. So that got us to the $68 million?
Mr Robinson : That is $68.8 million, yes.
Senator RHIANNON: Thank you. What proportion of new RTO applications has ASQA refused each year? I am interested in it on a yearly basis, not just the total.
Mr Robinson : Yes. I can tell you that. In 2011-12, it was 31.4 per cent. In 2012-13, it was 14.9 per cent. In 2013-14, it was 12.2 per cent. For the first three months of this year, it was eight per cent. The average over the four years is 15.3 per cent of all applications for new registrations. That number has been going down. It has partly been because people have understood that ASQA does run a rigorous process of assessing those applications and not approving all of them. In fact, it does not approve a significant number of them. The numbers of applications from people that are not seriously ready to operate have declined.
Senator RHIANNON: You said it has gone down. It has gone down for those three financial years. But if it is eight per cent for the first three months, it would suggest that it is going to go up in this financial year, would it not?
Mr Robinson : No. Eight per cent of the numbers that we have completed were refused in that period. The number may change slightly by adding the last quarter. It is the first three quarters of the financial year. But it was of the applications we completed in that time as well.
Senator RHIANNON: Can you provide the numbers as well as the percentages, please? Can you take that on notice?
Mr Robinson : The number of applications that were approved for initial registration was 68 in 2011-12; 185 in 2012-13; 286 in 2013-14; and 144 in the first three quarters to date. They were the approved applications for initial registration, making a total of 683 over the period. But we have had a drop of nearly 400 RTOs since we commenced operation, which is around eight per cent of the number of RTOs. So that is the net of these numbers that come in plus the other numbers that have gone out, because we have taken regulatory action against them or they have withdrawn their-
Senator RHIANNON: And they have withdrawn?
Mr Robinson : Their RTO registration. We can do either. Some people withdraw their registration when it comes time for renewal and the like because they decide at that point they do not want to continue. So the effect of our regulation has been for the first time really that the numbers have been going down instead of going up each year. There have been some amalgamations. Some RTOs that have been operating at the margins have decided to withdraw. Others we have taken regulatory action against.
Senator RHIANNON: I want to dig into this a bit more. What proportion of the reregistrations have been refused each year since you have been doing this?
Mr Robinson : In 2011-12, it was 12.1 per cent. In 2012-13, it was 9.5 per cent. In 2013-14, it was 3.5 per cent. In the first three quarters of this year, it was 2.9 per cent. It is 5.8 per cent overall. So that is six per cent almost of existing RTOs have had their application for renewal of registration refused by ASQA. In addition, we have cancelled or suspended the registration of a further 218 RTOs.
Senator Birmingham: In relation to the reregistration, you will note the steady downward trend in the rejection of applications to renew. It is pleasing that obviously the level of compliance at the point of reregistration is improving through time.
Mr Robinson : Yes. I think the stronger regulatory framework that we have introduced has meant that some RTOs take reregistration time as a trigger to cease their operations voluntarily. So our regulation has had direct effects and indirect effects. As I say, overall, even though we have registered 600-odd new ones, there has actually been an overall net reduction of nearly 400 RTOs since we started. That is the first time the number of RTOs has been going down.
Senator RHIANNON: You have the two lots of data. It shows it is going down. You have presented that it is because of a stronger regulatory framework. But some argue that it is because you are now focussing on high risk providers and you have changed your focus. What is your response?
Mr Robinson : No. All things being equal, focussing on higher risk providers would tend to make the numbers go up. There could be providers with more regulatory problems because they are high risk. Really, what has been happening is that it is true; the number for whom we have been rejecting renewals of registration has been going down. But we have been increasing our regulation of people mid cycle. So we get complaints in. We are following up on them faster. People express concerns about a particular RTO to us so we go and have a look at them. We do not wait until it is reregistration time. So by the time we get to do the reregistration ones, there are fewer problem RTOs in that category because we have taken other action at different times on poor performers who are high risk.
Senator Birmingham: As you recall, Senator Rhiannon, it was one of the reasons we changed the legislation to align the reregistration period for organisations regulated by ASQA with those regulated by TEQSA to an equal seven-year footing. Fewer resources went into those reregistration audits from ASQA and more resources could be deployed towards risk based assessments and auditing.
Senator RHIANNON: So is it correct that, in the period the number is going down, your resources have been reduced and fewer RTOs have been investigated?
Mr Robinson : Our resources have been going up.
Senator RHIANNON: Okay. So we will cross off the resources. What about the number of RTOs?
Senator KIM CARR: It must be an important question.
Senator RHIANNON: I am saying that that is not a factor. That is all I am doing.
Senator Birmingham: Mr Robinson has already said that the number of RTOs is going down.
Senator RHIANNON: I am just trying to understand. I am acknowledging that the resources are there.
CHAIR: The resources are acknowledged.
Senator RHIANNON: Figures are being interpreted, and often there can be a stretch of logic. I am trying to see if there is a stretch of logic.
Mr Robinson : No. ASQA had an injection of resources under the previous government in addition to what it started with. It has had a further $68.8 million injection over the forward estimates from the current government.
Senator RHIANNON: I will go to the other question. The numbers are going down. In this period, have fewer RTOs been investigated?
Mr Robinson : No. I will just go back to that one. I will explain it to you. In terms of completed audits, in 2011-12, we completed 773. In 2012-13, we completed 1,364. In 2013-14, we completed 1,550 audits. In the first three quarters of this year, we completed 1,041 audits, with a total of 4,693 audits. So in each full year, the number of audits we have done has been going up.
Senator KIM CARR: What is the total number again, I am sorry?
Mr Robinson : The total number is 4,693 audits. Is that the number, Senator, you wanted?
Senator KIM CARR: Yes.
Senator RHIANNON: Thank you for clarifying. This is my last question. Did the minister instruct ASQA to undertake those audits? I am back on to the 23. Did ASQA make that decision under existing processes and then the minister announced it?
Mr Robinson : The situation was that ASQA determined that, because of the VET FEE-HELP complaints and as part of our new approach of looking at risk and saying, 'Let's go in and have a look at areas where concerns are being raised,' we would focus on that. The minister made an announcement about that after that was decided.
Senator RHIANNON: Thank you.
