TAC has adopted a risk management approach in which regulatory responses are risk based, evidence based, targeted and proportionate. This enables a focus on RTOs or sectors deemed to pose the highest risk to quality outcomes, while allowing those with a history of consistent compliance to operate with reduced regulatory scrutiny.
Systemic risk is risk pertaining to a group of RTOs, specific industry areas or Standard, or the VET sector as a whole. The impact of this type of risk is often significant and far-reaching, and could potentially be detrimental to training and employment outcomes for graduates and on the reputation of VET. Factors that may determine systemic risk include:
- changes to assessment arrangements for training products;
- impacts of state and national VET policy and program changes;
- changes in the labour market and their impact on VET delivery; and
- trends of non-compliance with RTO Standards, training products or industry sectors.
Based on the type of risk identified, increased regulatory scrutiny may be required. Any targeted regulatory scrutiny is outlined in TAC's Regulatory Strategy. This strategy informs stakeholders about TAC's priorities and the planned regulatory action to monitor and minimise those risks. The strategy includes the provision of education support and communication strategies.
Provider risk is risk that relates to an individual RTO. It is often the result of decision and actions an RTO takes that if left unmanaged, could impact negatively on training outcomes for students. Each RTO is allocated a risk profile which is variable and influenced by a range of risk factors which may include:
- RTO's specific characteristics;
- overall history of compliance, including areas of re-occurring non-compliance;
- sanctions imposed by TAC;
- nature and frequency of verified complaints;
- delivery of specific high risk training products;
- interstate or overseas delivery;
- modes of delivery, including online, VET in Schools or apprenticeship programs;
- delivery involving third party arrangements; and
- significant changes to RTO operations.
An RTO’s profile is used by TAC in tandem with any identified systemic risks in determining if an RTO is required to undergo an audit and what is the most appropriate audit method. Further information on audit method is available and additional information on provider and systemic risk and how this is managed is available in TAC’s Risk Framework below.