Feature Article: Seven tips for managing RTO funding contracts effectively

Providers with funding contracts in place for subsidised courses have additional compliance obligations to be aware of so as to ensure risks are effectively mitigated. Contract compliance cannot be overlooked as the consequences can be dire for your RTO and impact adversely on you business. Here is some advice to help you understand the important aspects of managing your funding arrangements.


RTOs need to ensure when promoting subsidised training courses that marketing materials (including websites and social media posts) comply with contract terms and conditions, funding body directives and policies related to marketing and advertising. Requirements around style guides to be used when promoting courses and the use of logos and government emblems must be adhered to so as to avoid a breach occuring. Other conditions can include restrictions on offering inducements or gifts to parties in return for enrolment in funded courses.  RTOs should have a process in place that ensures all marketing is reviewed for compliance before approval and publication when associated with a contract to mitigate any risk of a breach

Student recruitment:

When undertaking student recruitment activities particularly when in partnership with other parties such as job networks or recruitment agencies you must take care to ensure that you abide by the conditions of your funding agreement and you do not appear to be recruiting prospective students who are unsuitable for your courses. When you are dealing with disadvantaged candidates particularly you should ensure your recruitment processes are ethical and transparent to avoid breaching your contract terms and conditions. RTOs need to ensure that sales staff who are selling your courses are fully aware of the rules of the game!

Eligibility and enrolment: 

RTOs should have rigorous processes in place to ensure they can determine eligibility of prospective students that meet the requirements of the funding agreement criteria prior to enrolment. This may include developing checklists and interview questions that ensure appropriate checks are conducted before enrolling students. Having thorough mechanisms in place pre-enrolment to confirm eligibility will ensure your RTO in not penalised financially down the track when your funder identifies from your data that students were not eligible to received subsidised training places in specific courses.

Course viability and delivery models: 

RTOs should ensure course costings are reflective of the subsidy being provided and the actual expenses required to deliver the specific courses. The viability of the courses you deliver will be dependent on the most efficient delivery models you use and the level of subsidy your receive from the funding body. One of the most efficient delivery models that can be used is a hybrid one combining online learning with face to face practical delivery if required. You should consider your learner cohorts, their specific needs and training product/unit of competency requirements when determining how your courses need to be delivered.

Data quality and claiming payments:

Your AVETMISS submissions need to be error free to ensure you receive your funding payments without delay when your RTO is claiming. Implementing processes to validate your data and correct errors before submission will ensure no disruption to your income from funded training courses.

Contract compliance:

RTOs should consider developing a compliance plan for all funding contracts in place that confirms sufficient controls have been implemented so as to ensure no breach of terms and conditions occurs that could have significant financial and reputational impact on the business. Risks can be mitigated in numerous ways e.g. implementing organisational policies and procedures.


Funding agreements typically require RTOs to submit reports at regular intervals in addition to the data submissions required. These progress reports tend to be a requirement of contract terms and conditions and there can be penalties if they are not submitted in a timely fashion. RTOs should ensure they develop a reporting schedule and have appropriate management oversight of these requirements so as to ensure no breach occurs that affects your RTOs performance against the contract. Failure to report appropriately could affect your RTO securing future contracts in some cases.

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