Let's Ask ASQA - Week 10

First, to those who follow this series, I apologise sincerely for the delay between weeks 8 and 9. I had some personal issues that required my attention.

Now to our latest question for ASQA. This week's question is one I get asked often, especially because ASQA auditors frequently allege that RTOs have conflicts of interest in their organisation and want to see evidence of how they are managed. Most commonly, the two areas that ASQA auditors allege conflicts of interest are in training and assessment (including in the conduct of validation under the Standards for Registered Training Organisations (RTOs) 2015), and the second main area is in the governance of one or more RTOs. This article however, will not be focussing on the concurrent governance of numerous RTOs.

Conflict of Interest in Training and Assessment

This particular issue is one that has been a significant area of concern for ASQA auditors since ASQA was established and commenced operations, and prior to that, State-based regulators were also focussing on this issue often - and, in my opinion, rightly so. The allegation was (and continues to be) about how an RTO manages the conflict of interest raised, for example, when a CEO, Managing Director or similar role is being issued with AQF certification from their own RTO.

Following that theme, how is the conflict of interest in training and assessment being managed when an RTO's trainers and assessors are granting competency to their peers for the issue of AQF certification? Another example that we continue to see at RTO Doctor is when a Consultant assists an RTO with a specific problem, assists them with an amendment to scope, or, as part of the governance of the RTO, issues them with AQF certification from the RTO, often through an RPL pathway. It is often not clear, nor is there any evidence of how that conflict of interest is being managed.

So, how does this relate to the national VET regulator ASQA? Let's examine the questions raised by several people across Australia's VET sector.

For the purpose of being fully transparent, the first thing that this article needs to establish is what we mean by ASQA conflicts of interest. Once we have identified that, we are in a much better place to ask how the regulator manages these perceived and/or actual conflicts of interest. What follows is not an exhaustive list of conflicts of interest that the national VET regulator potentially has or could have; the list below is only an example for the purposes of this article and is not listed in any order of priority.

1. AQF certification of its employees and/or contractors;
2. Full cost recovery and audit practices;
3. Employees & contractors exiting the employment or other engagement of the national VET Regulator;
4. Engagement of employees & contractors by the national VET Regulator who have come directly from entities for which ASQA is the regulator.

ASQA auditors commonly state in their 'performance assessments' that it is incumbent upon the provider to do ...'. This article, at the very least, asks the regulator to do the same. It would be reasonable to expect the regulator to review its entire operations and determine whether there are any other areas where a conflict of interest or a perceived conflict of interest may be apparent or has the potential to arise and determine appropriate self-assurance strategies to ensure that those conflicts of interest are managed appropriately. ASQA is encouraged to ensure that its governance arrangements actively monitor actual conflicts of interest, perceived conflicts of interest and the potential for either.

AQF certification of its employees and/or contractors

ASQA auditor competency and currency has always been under the spotlight since it was first established as the national VET regulator. It commenced on or around 10 February 2016, when, in the Senate Estimates Committee meeting, Senator Kim Carr began asking questions about the competency of ASQA audit teams. since then, the question has continually been raised (and rightly so, in my opinion). My opinion has always been that ASQA auditors must, as a minimum, meet the same minimum criteria as a trainer and assessor under the Standards for RTOs 2015 as well as those in the Standards for VET Regulators 2015. I wrote an article specifically addressing this issue on LinkedIn on 20 February 2020 called "Competency Requirements for ASQA Auditors".

The question in this article, however, is about a bit more than the competency of ASQA auditors; it is about what strategies ASQA has in place to ensure that any conflict of interest is managed when ASQA staff/contractors complete AQF qualifications in RTOs that ASQA regulates. Education Issues Australia raised the issue of ASQA auditor competency and how only 30% of ASQA auditors met the mandatory auditor qualifications at the time, suggesting that at least 70% of ASQA's audit team should have and would have obtained the mandatory AQF certification to meet those mandatory qualifications.

These screenshots below:

These screenshots, provided by Education Issues Australia but from the ASQA Annual Report 2018-2019, indicate the unqualified workforce and give rise to the following questions.

Given that the issuer of the mandatory qualifications in question must be an RTO, how did ASQA manage the perceived conflict of Interest in seeking to have all relevant staff meet the mandatory qualification requirements? This question is even more concerning when Education Issues Australia reported the following:

ASQA is obviously seeking nationally recognised training and paying for it. For example, and this is just one example, there must be many more, a spreadsheet for AusTender from around the time of the above figures (2021-2022) indicates that ASQA spent a considerable sum on nationally recognised training with ASQA-regulated RTOs. How did ASQA seek to, and ultimately manage, the conflict of interest? If you would like to see the spreadsheet, feel free to contact RTO Doctor.

Full Cost-Recovery and Audit Practices

Firstly, let me let the elephant out of the room here. Some time ago, ASQA tried to change the name of audits to 'performance assessments'. Just changing a name for us by some people and not others does not lead to successful implementation; this has certainly been the case in my experience. ASQA can tell me as much as it likes that audits are now called performance assessments; however, many ASQA staff still call them audits, including auditors themselves in audit reports and notices. As such, I will not change my terminology to performance assessment.

It also has to be said from the outset that as long as ASQA fails to produce more detailed invoices, this issue will only continue to get worse. It is insufficient for the regulator to issue invoices that include the following level of detail (or should I say, lack of detail):

For the purpose of completeness (and the relevance of this will become clearer later in this article), requests by providers for a more detailed invoice for their audits would seem to be consistent with their own provider registration obligations. Examples of this can be found in the Standards for RTOs 2015, clause 5.3 and the National Code 2018 Standard 3. RTOs are consistently reminded of their obligations to ensure they are providing comprehensive and detailed invoices to their students, breaking down all fees so a prospective student can make an informed decision.

If we think about it for a second, the large majority of our bills are itemised (especially upon request), such as Telstra, Optus, gas suppliers, electricity providers and more. I know that as a Consultant I provide a detailed breakdown of my time to my clients that is far more detailed than the ASQA invoice example provided above. Our invoices include the date of each time entry, the start and end times for myself and any other employees or contractors being invoiced (as well as the relevant hourly rates), the task that is being completed (some level of detail is included (such as Review International Student Handbook, V2.1 pages 35-68 against Standards for RTOs, National Code and ELICOS Standards), the total time taken and the rate each task is being charged at a bare minimum. The question, therefore, has to be asked...Why can't ASQA issue invoices along these lines? Especially upon request (even though it should not have to be requested; it is standard business practice).

Now, back to the conflict of interest...

ASQA became a full cost recovery regulator on 1 July 2022. Once the COVID pandemic hit, there was a waiver of fees and charges for some time (until July 2022 for some VET providers; 86 ELICOS-only providers had a fee waiver until 31 December 2022). ASQA has since returned to being a full cost recovery regulator. In the context of the invoicing issues raised previously in this article and the new model of 'performance assessments' whereby ASQA auditors no longer audit a provider "at a point in time", but rather, the 'performance assessment' is dragged out over a period of months, the issue of detailed invoices manifests as a no-brainer!

The current audit process under ASQA goes something like this...

The auditor might touch base usually by phone and/or email, introducing themselves and requesting initial evidence, then a few weeks later, request further evidence, then a few weeks later, request further evidence, then a month or so later conduct an audit via Microsoft TEAMS requesting throughout the desktop audit further evidence and upon completion of the Microsoft TEAMS' audit, request further information. You might receive further requests, usually by telephone, or you might not, but you will at some point then be issued with a Notice of Intention to... You are invited to provide further evidence; after submitting that evidence, you may receive another phone call requesting further evidence before another Notice is distributed with a decision and, where relevant, the opportunity to lodge an internal review and provide further evidence. Historically, ASQA had a statutory requirement to finalise all internal reviews within 90 days however, in the latest changes to the National Vocational Education and Training Regulator Act 2011, this has been extended to 120 days.

At all times during this process, providers are charged an hourly rate and the invoice is issued to providers as per the screenshot above. The performance assessment process can now take place over a duration of literally months and by the time you get through any internal review process, it could be over a year before you even have a decision. If you still wish to appeal that decision in the Administrative Appeals Tribunal or the Federal Court, you can add several more months to this timeframe.

From an audit conflict of interest process, however, and more to the point of this article...one must ask the following question...

Is it not in the regulator's best interests to drag out the audit process as long as possible, given that they are a full-fee recovery agency? Doesn't extending audits simply keep them in business? Even more so, when a panel auditor conducts the audit, is it not in their best interest to drag out the audit timeline? How does ASQA manage these conflicts of interest?

Employees & contractors exiting the employment or other engagement of the national VET Regulator AND

Engagement of employees & contractors by the national VET Regulator who have come directly from entities for which ASQA is the regulator.

It is important to note that I am not the first person to raise these questions regarding conflicts of interest and employment practices at ASQA. You may recall the earlier Questions on Notice at the Senate Estimates Committee, where Senator Kim Carr asked Mr Chris Robertson (who was, at that time, the CEO of ASQA) a variety of questions, including the following:

1. "Perhaps you could give me what percentage of your audit teams have actually worked as qualified VET teachers with a diploma or higher teaching experience?"
2. "And will you be able to tell me how many of them have actually worked in a private or public RTO, as a percentage? Will you be able to tell me how many of them have worked in administration, management or the operations of a private RTO?"
3. And how many of them have legal training—a degree, for instance? CHAIR: A degree in legal training?

The response was extraordinary. For context, when ASQA conducts surveys while undertaking 'performance assessments' or 'investigations' into its registered providers, it demands that all students and staff be captured in their surveys. Shockingly, ASQA only provided the survey results of 75 audit staff.

Some of the answers provided by ASQA include:

• 15 per cent of ASQA’s surveyed audit staff have worked as teachers and hold a diploma, bachelor or higher qualification relating to training and assessment, vocational education and/or education. Another five per cent have worked as teachers but do not hold a diploma, bachelor or higher qualification relating to training and assessment, vocational education and/or education.
• 56 per cent of ASQA‘s surveyed audit staff have worked in a public or private RTO.

In relation to private RTOs:?

• 16 per cent of ASQA’s surveyed audit staff have worked for a private RTO in an administrative capacity.?
• 31 per cent of ASQA’s surveyed audit staff have worked for a private RTO in a managerial capacity.?
• 29 per cent of ASQA’s surveyed audit staff have worked for a private RTO in an operational capacity (trainer and/or assessor).??
• 5 per cent of ASQA’s surveyed audit staff hold a legal qualification (i.e. four staff).
• Three of these staff work in ASQA’s Regulatory Operations team, while the remaining staff member works in ASQA’s Risk, Intelligence and Regulatory Support team.

Certainly, it would be very interesting to see the answers today if ASQA were asked the same questions.

In early 2020, some VET colleagues and I developed a perception that there were potentially several conflicts of interest in employment practices at ASQA. We considered how those conflicts of interest, whether they were just our perception or actual conflicts of interest that I had identified, were being managed (if they were being managed at all) and whether they were being managed in accordance with the Australian Public Service requirements.

Around May 2020, I held a live webinar in relation to what I considered to be potential perceived conflicts of interest regarding ASQA's employees and contractors after some significant changes in senior management. What I also discussed in that webinar was how potentially perceived and actual conflicts of interest in relation to when ASQA employees transition from their role at ASQA into the general workforce were being managed. This, of course, was not a new concept as the topic itself was captured in the "APS Values and Code of Conduct in Practice Guide" in Chapter 5, specifically, section 5.1. For ease of reading, section 5.1.2, in particular, states:

5.1.2 The APS Code of Conduct (the Code) requires employees to take reasonable steps to avoid any conflict of interest, real or apparent, in connection with their employment.

Importantly, the Guide provides the following advice in section 5.1.5:

5.1.5 The appearance of a conflict can be just as damaging to public confidence in public administration as a conflict which gives rise to a concern based on objective facts.

There is no suggestion of an actual conflict of interest in ASQA's ranks. What is being asked, however, is...How is ASQA managing any potential perceived or actual conflicts of interest when employees and contractors cease working for the regulator? Is ASQA even managing them? Likewise, it is just as important to ask what measures and/or strategies are in place (if at all) to manage the potential for a perceived or actual conflict of interest when a potential employee has been working in the VET sector regardless of whether they worked in a public or private RTO, for example.

There are undoubtedly many more areas of potential perceived and/or actual conflicts of interest within ASQA operations; however, this article is already much longer than intended. If truth be told, there were probably three questions covered here in this week's 'Let's Ask ASQA'. It will be very interesting to see if ASQA responds to this one, although I doubt it will.

RTO Doctor

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