The Australian Skills Quality Authority (ASQA) recently released its Annual Report for the 2017-18 period. Once again, the figures contained within indicate that ASQA is getting tougher in its approach to compliance, particularly for new entrants to the sector.

In the 2017-18 financial year, nearly 30% of applications for initial registration submitted to ASQA were rejected. This rejection rate is up significantly from the previous financial year, when around one in five applications were rejected.

Something we found interesting, however, was that the increase in rejected applications is not a result of the new process for initial registrations, because ASQA only introduced this on 1 July 2018. As part of this new process, ASQA introduced a new Financial Viability Risk Assessment (FVRA) tool, designed to get a better picture of the prospective RTO’s financial position. So, even before applicants started using the new tools, ASQA was demanding even greater levels of business planning from operators.

In its 2017-18 Annual Report, ASQA highlighted that a lack of financial resources was one of the two main reasons for rejecting initial registrations:

ASQA expects any applicant seeking initial registration as either an RTO or a CRICOS provider to:

  • be fully financially prepared to operate a sustainable training business
  • have all the appropriate resources, processes and systems in place to commence delivery at the time of submitting the application
  • ensure all people that will be involved in the operation of the training provider are suitable.

Clearly, having appropriate financial plans in place for the business and being able to demonstrate this to the regulator was already a problem for new entrants.

Fast forward to 24 October, when ASQA issued a notice to advise that it was experiencing delays in relation to the processing of initial registrations. While the regulator has committed extra resources to process the backlog, they were also keen to point out that many of the applications had similar issues, including where: “financial viability is not demonstrated or assessment is incomplete”.

This suggests to us that many training businesses are having difficulty completing ASQA’s new FVRA tool and demonstrating they have ticked all the boxes when it comes to forecasting and business planning. We have also spoken with a number of consultants who have advised that this is an area of concern for their clients, as the new FVRA tool cannot be submitted unless all sections are completed correctly.

As ASQA’s 2017-18 Annual Report figures indicate, the majority of initial registration applications take longer than 6 months to process. This is a long time to wait only to find that the application has been rejected due to issues that could be addressed upfront.

If you are in the process of working through your registration, you should consider getting expert help reviewing your FVRA tool to ensure it can be submitted. As specialists in the RTO sector, we have extensive experience with the financial viability assessment process and regularly discuss common issues with ASQA.

To talk to one of our experts, click here.