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Fees and charges consultation - frequently asked questions

Updated 21 May 2021

Why is TEQSA seeking to increase its cost-recovery?

The 2018–19 Commonwealth Budget provided for TEQSA to begin operating as a full cost recovery agency from 1 July 2020. 

This was subsequently delayed, with the Australian Government extending a waiver on regulatory fees until 31 December 2021, as part of the Australian Government’s support for the sector in response to the COVID-19 pandemic.

Under the Australian Government Charging Framework, full cost recovery means an agency’s activities are fully funded by fees and charges.

TEQSA presently operates as a partial cost-recovery agency, with fees and charges covering about 10 per cent of TEQSA’s regulatory and quality assurance costs.

The proposal outlined in the consultation paper would see TEQSA’s fees and charges cover about 90 per cent of TEQSA’s regulatory and quality assurance costs.

The transition to a new fees and charges model will bring TEQSA into line with other regulatory agencies that operate on a full cost recovery model in accordance with Australian Government policy.

What is the consultation process?

TEQSA has released a consultation paper outlining a new fees and charges model for the agency to support full cost recovery.

You can view the consultation paper and make a submission in response to the discussion paper’s questions via the TEQSA website.

To support stakeholders in providing feedback, you can make use of a response template, if you wish.

The consultation period closes on Thursday 3 June 2021 at 5pm AEST.

If you have any questions, please email consultation [at] teqsa.gov.au.

How much extra does TEQSA expect to raise from this proposed fees and charges model compared to its current partial recovery approach?

TEQSA presently operates as a partial cost-recovery agency, with fees and charges covering about 10 per cent of TEQSA’s regulatory and quality assurance costs.

The proposal outlined in the consultation paper would see TEQSA’s fees and charges cover about 90 per cent of the agency’s regulatory and quality assurance costs.

The transition to a new fees and charges model will bring TEQSA into line with other regulatory agencies that operate on a full cost recovery model in accordance with Australian Government policy.

What are the features of the proposed model? How does this vary from the current model?

The approach to cost recovery set out in the consultation paper is structured around three key elements. 

These are:

  • Application-based charges to be calculated in accordance with the Australian Government Charging Framework (AGCF) and introduced from 1 January 2022. These fees will recover 100 per cent of the cost of delivering the service. For course accreditation and reaccreditation assessments only, a sliding scale of up to 70 per cent of the actual cost, linked to the relative size of the provider’s student load, will be applied.
  • Single provider charges for ‘stand-alone’ or provider specific regulatory activities (investigations, compliance assessments and conditions monitoring), to be calculated on a per hour basis and charged to that provider (introduced at 100 per cent from 1 January 2022).
  • An annual levy that covers the costs of TEQSA’s regulatory effort for non-application based activities that cannot be attributed to a single provider. This will be phased in over three years, commencing at 20 per cent of the cost of delivery from 1 January 2022, increased to 50 per cent of cost on 1 January 2023 and then 100 per cent on 1 January 2024).

More information about this is detailed in the consultation paper.

When will the proposed model take effect?

As outlined in the consultation paper, TEQSA will introduce the new fees and charges model from 1 January 2022.

The Australian Government has confirmed there will be a three-year transition period, with the new model being in fully in place by 1 January 2024.

The Government also announced TEQSA’s new cost recovery model will include reductions to course accreditation fees for providers with less than 5,000 enrolled students (equivalent full-time student load) to support innovation and market responsiveness in course design.

Will TEQSA waive fees and charges from providers who are experience financial distress due to COVID?

Any registered providers experiencing financial distress due to COVID or any other reason should contact their TEQSA case manager.

My institution is undergoing re-registration in late 2021 and it will likely not be completed by TEQSA this year. Will we have to pay for work that takes place in 2022?

TEQSA will re-commence charging regulatory fees from 1 January 2022. In accordance with the implementation of the increased cost-recovery arrangements, any TEQSA work on re-registrations or other regulatory activities will be subject to fees. These fees will be communicated to the sector in late 2021, once the agency’s final cost recovery model has been confirmed.

If I lodge my application for an initial registration before 31 December 2021, will I have to pay to the fees outlined in the document?

TEQSA will re-commence charging regulatory fees from 1 January 2022. In accordance with the implementation of the increased cost-recovery arrangements, any TEQSA work on an initial registration or other regulatory activities will be subject to fees. These fees will be communicated to the sector in late 2021, once the agency’s final cost recovery model has been confirmed.

What are the proposed transition arrangements for compliance investigations? If the investigation starts in 2021 but continues into 2022, under what charging model will TEQSA operate?

TEQSA will re-commence charging regulatory fees from 1 January 2022. In accordance with the implementation of the increased cost-recovery arrangements, any TEQSA work on compliance assessments or other regulatory activities will be subject to fees. These fees will be communicated to the sector in late 2021, once the agency’s final cost recovery model has been confirmed.

Can providers speak to someone at TEQSA about this proposal in relation to their specific circumstances?

Registered providers wishing to discuss this proposal in relation to their operations should contact their case manager. 

When will TEQSA release the final fees and charges model?

At the conclusion of the consultation period, TEQSA will review all feedback received and consider how the proposal might be adapted to best support the transition to full cost recovery.

TEQSA will then seek the final approval of the Minister before releasing the approved model to the sector later in 2021 ahead of the planned 1 January 2022 commencement.

What is TEQSA doing to (further) improve the completion times for assessments?

TEQSA is committed to improving the timeliness of its decision-making for assessing applications. A range of strategies are underway to streamline our approach and reduce the administrative burden associated with regulation for providers. This includes (among other strategies) a major IT and records management upgrade, a reduction to the core standards for cyclical assessments and a continued focus on enhancing provider self-assurance. 

If as a consequence of extensions to my assessments they are now going to cost more, can I submit earlier to take advantage of the Fee waiver period?

In late 2019 when engaging with providers invited to consider an extension proposal under the smoothing initiative, TEQSA advised providers that the Australian Government had announced that TEQSA would transition to full cost recovery for its regulatory activities. Subsequently, when engaging with providers in 2020 about proposed extensions to reduce the administrative burden of COVID-19 on providers in 2020, TEQSA advised that the Australian Government had deferred the implementation of cost recovery arrangements for TEQSA by 12 months. At that time, cost recovery arrangements were expected to be phased in from 1 July 2021. 

Providers are able to submit applications at a time of their choosing, for both new applications (e.g. course accreditation) and for renewals. We request that providers engage with us at least six months prior to the date of submission, to allow us to work together to clarify the evidence requirements and scope of the application. For renewal of TEQSA registration and course accreditation (excluding Undergraduate Certificate courses), the requested date of submission is six months prior to expiration date of the registration or accreditation period (or 90 days in the case of a CRICOS re-registration). Any shortening of the submission period is at TEQSA’s discretion.

Once the sector becomes responsible for the cost, how the resources are directed will become of critical importance to the 186 HEPs. How will TEQSA account for its resources use and choices to the sector? 

The CRIS will be updated each year in consultation with the sector. This will be a basis for the providers to discuss the attribution of costs through the proposed fees and levy. Otherwise, as a Commonwealth regulatory agency, TEQSA is accountable to the portfolio minister and to the Parliament.

Will the annual levy be discounted based on a sliding scale for smaller providers? 

No. Discounts will apply to accreditation and re-accreditation costs, but not to the proposed levy.

To what extent will TEQSA commit to agreed service levels with the sector given that it will move towards cost recovery given the prior accepted issues re: timeliness of regulatory response and decision times?

The CRIS has been structured both on historical workload data and an assessment of what should be the case for specific regulatory activity. Over time, consultation with the sector represents an opportunity for agreed service levels.

Has TEQSA reviewed its own activities and systems to avoid duplication of regulation and to effectively streamline workflows? (Clearly there are overlaps between regulation of the TEQSA and ESOS Acts for example)?

Yes, TEQSA continues to have a continuous improvement focus on streamlining and refining its regulatory activity.

Further, as an IT system, the TEQSA portal is incredibly 'clunky' and often requires follow up via email to ensure receipt of attachments. Are we going to be charged per 'inquiry' when there are already known limitations with the TEQSA portal? 

TEQSA is working to improve process flows and interaction with the sector, including the portal system. 

TEQSA will not be charging per inquiry.

As explained, non-application based regulatory activity, including compliance assessments and investigations, will be charged on an hourly basis. 

How will the stand-alone provider costs be charged? These are mostly activities that do not depend on the provider, rather on TEQSA instigating the work - providers will not be able to budget for this. 

Understood, and as proposed by the hour. 

Has it been considered to roll these costs into the annual levy?

The proposal is to charge individual providers for stand-alone activity. A principal consideration here is for providers generally not to have to share or contribute to the costs of investigations and compliance assessments of individual providers.

We have modelled our costs based on TEQSA's model, and we have come up with a range of different costs to TEQSA. 

TEQSA is happy to engage individual providers on estimates of their costs.

The recent Regulator Performance Guide Consultation paper states that: 'Regulators should seek to achieve their objectives in a way that imposes the least cost on those that are regulated...supporting businesses to grow'. How will these proposed fees ensure this requirement? Smaller providers will not be able to afford these costs and stay in business. 

TEQSA recognises the additional impost of cost recovery on providers. The proposed CRIS provides for a discount on course accreditation fees to provide a degree of relief.

Under TEQSA's 'smoothing strategy' our accreditation dates and re-registrations were extended and they will now be heavily impacted by these new fees. If we had known about fee increases, we would not have agreed to extending expiry dates. 

TEQSA initiatives to ‘smooth’ timelines for registration and accreditation, as well as COVID-related extensions of deadlines, were and are not linked to the proposed date of implementation for the proposed CRIS.

The charging for investigations etc seems to be in direct competition with what TEQSA is trying to do - regulate the sector. Institutions doing the 'wrong' thing or concerned they MAY be doing the wrong thing will be more likely to hide from TEQSA or not enter material changes if they are going to be subject to fees that are not budgeted. 

TEQSA acknowledges potential unintended consequences of the proposed CRIS. It is designed to apportion costs associated with assessing and responding to risk to those providers that present a risk or potential risk to the Higher Educations Standards Framework.

I have concerns regarding the cost recovery for activities like the risk assessment and guidance notes given the standards setting role of TEQSA and why those costs are being borne by providers rather than TEQSA. 

TEQSA’s legislated regulatory role extends to engaging the sector on risk and quality assurance, including the annual risk assessment and publications such as guidance notes. The costs of these are captured by the proposed levy applied across the sector.

The cost recovery model seems to be premised on activity-based costings, which confines the bulk of the cost recovery to NUHEP who are not self-accrediting. How will TEQSA ensure there is greater transparency on the equity of TEQSA’s cost recovery model between the university and NUHEP with the former having a much wider portfolio and risk profile? 

The CRIS provides for annual consultations with the sector and adjustments to fees and charges under the scheme. The proposed model provides for discounts that go some way to addressing the identified gap between self-accrediting and non self-accrediting providers.

Some of TEQSA’s current quality assurance activities fall outside their mandated remit in the Act (e.g. responding to untested media reports), and some of the activities listed in the cost recovery model are considered inappropriate for cost recovery in the Australian Government Cost Recovery Guidance Note. Will we really be charged for TEQSA 'investigations' in reaction to orchestrated media beat ups? 

TEQSA’s compliance and investigation activity is provided for in legislation and is structured and assessed on the basis of thresholds and data regarding risks to the standards.

Will the invoices be itemised so as to undertake a reconciliation? 

Yes, invoices will be itemised.

Will providers be required to pay for answers to simple requests such as clarification of unclear, ambiguous, or even contradictory regulatory or other information from TEQSA, including for Zoom or phone conversations proposed by TEQSA as the best way of responding? 

No, TEQSA will not be charging for answers to requests and inquiries.