Feature Article: Common compliance mistakes every RTO makes

Training and assessment strategies do not reflect information contained in marketing material:

The information contained in your TAS’s needs to be consistent with the information you are marketing on your website and other marketing material. Details around course durations; course descriptions; attendance / participation requirements; entry requirements or selection criteria should be accurate in both sources. ASQA often finds non-compliances at audit and with applications for additions to scope in evidence submitted as RTOs can fail to pay attention to details with this critical data. Remember your websites are publicly available and can be accessed by ASQA at any time.

Failure to ensure trainers are maintaining their profiles:

Some RTOs make assumptions that their trainers are current because they are working in industry or appear to be undertaking professional development regularly however, they fall down because they don’t sufficiently document these activities systematically and on a consistent basis. In an audit ASQA wants to see a documented analysis e.g. mapping of how your trainers / assessors meet industry currency requirements for each unit of competency they are delivering. If you don’t have a process in place to document these requirements at the unit of competency level you will not satisfy the requirements of the relevant clauses in the SRTOs 2015. Remember mapping should be at least at the element level for each unit to demonstrate that the maintenance of currency has addressed all the requirements.

Assessment tools do not meet the requirements of the unit of competency:

Not having a process in place to validate / quality check assessment tools pre-use puts your RTO at potential risk of non-compliances as you have not determined if your assessment tools are fit for purpose and meet the requirements of the specific unit of competency.  If you implement these resources without conducting this due diligence you could be impacting on student and industry outcomes and be deemed critically non-compliant in an audit.

Assessment tasks have insufficient instructions for students and assessors:

Assessors cannot collect sufficient evidence from students if assessment task instructions are vague and unclear. This in turn can impact on marking; recordkeeping and overall reliability of the assessors judgement. Instructions in assessment tasks need to be specific as possible. Benchmark answers and  marking guides should be explicit and not be open to interpretation by assessors. 

No benchmark answers or marking guides for assessment tasks:

If you do not have benchmark answers or marking guides for your assessors to refer to when making their judgements you cannot ensure your assessor is meeting the rules of evidence. Your assessors practices will not be consistent without these critical documents to refer to.

References: 

https://www.asqa.gov.au/resources/faqs/compliance

https://www.asqa.gov.au/standards

Vocational education and training key to driving economy out of coronavirus shutdown

Vocational education and training key to driving economy out of coronavirus shutdown
Vocational education and training key to driving economy out of coronavirus shutdown
The Morrison government is considering key micro-economic reforms for the VET sector including a change to the AQF and increased resources to help boost employment and the drive economic growth post pandemic.

Feature Article: RTO financial viability in a crisis

RTO financial viability in a crisis

Managing cashflow:

Use some of the following strategies to manage the economic impact of the COVID-19 pandemic on your RTOs cashflow:

  • Be laser focused on your RTO’s statement of cash flow and income statement so you can keep an eye on how money is moving through your organisation. Review it more frequently than usual e.g. daily or weekly.
  • Access government financial assistance available such as the Cashflow Boost, Payroll Tax Relief and JobKeeper Payment to supplement income.
  • Focus on retaining existing students by implementing adjustments to training and assessment strategies that keeps them in enrolled and prevents attrition within your current courses. This will ensure you continue to receive fees and funding as forecasted. Some ways to do this include:
    • Bringing forward your theory classes and commencing units of competency sooner by resequencing your order of delivery in courses
    • Identifying units of competency that you can continue to deliver practical training for either in a simulated environment or in the workplace by adhering to physical distancing principles.
    • Identifying units of competency that you can continue to conduct assessment for by alternative methods like videoconferencing or by having students submit video evidence that either your assessor can observe directly or a third party can verify.
  • Identify revenue sources such as government funded programs that you can continue to deliver without disruption as most funding bodies have increased the frequency of payments to RTO’s or assured prompt payment to claimants.
  • Consider alternative revenue streams. For example, if one of your primary markets was international students you may now want to consider focusing on reaching them with online courses or you may consider turning your attention to the domestic student market with government funded subsidised courses.
  • Don’t stop marketing for new enrolments or business, you need to ensure your sales pipeline continues whilst taking care of your existing students. Your sales strategy should be focused on where you have pivoted your RTO’s business. Many industries will be focused on upskilling or retraining workers moving into the recovery phase of the crisis therefore, your RTO should be planning now for these future opportunities.
  • Look at your RTO’s insurance policies to see if they cover a significant business disruption such as COVID-19. You may be able to claim for losses arising from an event such as the coronavirus pandemic.
  • Convert fixed to variable costs by selling the RTO’s assets to raise emergency cash and leasing them back.
  • Sell your RTO’s non critical assets that get little or no use. Particularly if they are duplicate assets or surplus to requirements.
  • Top up working capital by utilising available cash or a redraw facility

Reducing costs:

Labour expenses

While businesses are focusing on protecting their staff and trying to save jobs during the COVID-19 pandemic the reality is a significant cost for RTO’s are wages as they are a large expense directly attributed to your course offerings. Some difficult decisions are being made or currently being considered by RTO managers relating to cut backs. Consider the following cost saving measures to gain efficiencies in your programs:

  • Increase online F2F class sizes and reduce the number of classes offered to save on labour costs but be careful not to overload your trainers with unrealistic caseloads of students. 
  • Consider adjusting your practical classes if it meets performance evidence and assessment conditions to collect video evidence of skills demonstrations or third party reports from workplace supervisors to save cost and time of assessors.
  • Look at reassigning classes to permanent trainers in place of casuals or contractors.
  • Examine your payroll. Consider implementing a hiring freeze. Layoffs are the last thing you want to have to do in this crisis as your RTO’s workforce is critical once you move into the recovery stage. However, in some instances you may need to terminate temporary and casual staff. Be cautious not to damage the confidence and commitment of your remaining workforce in taking these actions. 
  • Consider payroll reduction alternatives by reducing staff hours across the board. This will keep staff employed and make pay cuts more manageable for all concerned. Restrict overtime.
  • Can you place staff on leave without pay until the situation improves?
  • Have you made the best use of available government support to support wages e.g. Job Keeper
  • Identify any non-performing staff on commission e.g. sales staff that may need to be stood down

Other cost saving measures

  • Reduce variable costs such as travel expenses and non-essential items such as entertainment.  
  • Look at your printing costs – can moving to online or remote delivery methods make significant savings in this area?
  • Look at your accounts payable and receivable as a priority.  Talk to your suppliers and ask if you can negotiate time to pay what you owe them? Review outstanding invoices from your debtors. Contact them to see if you can arrange payment of what is due.
  • Consider limiting payment methods to credit cards or cash in advance for your RTO products and services. You may need to cease providing credit to customers e.g. payment plans due to the risk of delayed or non-payment.
  • The payment terms you give your customers should match the ones you accept from your suppliers so you have balance between cash coming in and cash going out.
  • Look at your energy consumption e.g. heat, air conditioning, computers and printers etc. although this may have happened organically if you have moved your workforce to working from home arrangements
  • Consider new suppliers to reduce fixed and variable costs. Many businesses in the RTO supply chain are selling goods and services at a discounted rate currently and in some instances offering free products.
  • Use technology to gain efficiencies (automation) or review technology not being used

Professional Advice: 

Our recommendations should not replace advice from the professionals such as your accountant, your bookkeeper or both on how to manage your business out of the crisis and then take proactive steps to prevent a recurrence. There are some free webinars currently available to RTOs such as COVID-19 Economic Support for Businesses by vetr that you may find informative.

References: 

https://www.cciq.com.au/coronavirus-information/

https://business.gov.au/Risk-management/Emergency-management/Coronavirus-information-and-support-for-business

https://www.business.qld.gov.au/