Purpose

The purpose of this policy is to establish a set of principles to inform TEQSA’s treatment of providers identified as high risk in relation to students or financial position—at the point of identification, and also in the course of accreditation, re-accreditation and re-registration assessments. It elaborates upon and further specifies the principle, published in TEQSA’s Risk Assessment Framework, that TEQSA may take various forms of action in relation to providers being identified as high risk. The principles that comprise this policy are intended to ensure that identified provider risk-levels drive differential treatment of providers, in line with established good practice in risk-based regulation, and consistent with the basic principles for regulation included in TEQSA’s establishing legislation.

Scope

This policy relates to providers identified as high risk through TEQSA’s annual risk assessment process. It does not relate to providers identified as low or moderate risk. Although the policy may to some extent describe TEQSA’s treatment of providers not identified as high risk, this is intended only to enhance clarity through contrast.

Principles

In-cycle monitoring

1. Where a provider is identified as high risk, the following activities are immediately triggered:
   
   1. a request for information to enable greater differentiation of risk type and extent, with the information requested to be determined on the basis of identified risk factors and other information available to TEQSA
   2. analysis of existing data, supplemented by additional information requested of high risk providers, to more precisely identify any potential areas of concern with the provider
   3. formulation of an action plan that will include consideration of the full range of available and appropriate regulatory options, including in relation to CRICOS applications, consistent with the principles for regulation described in the TEQSA Act
   4. TEQSA will provide advice to the relevant Australian Government department and portfolio Minister to support decision making under the Higher Education Support Act 2003.

Cyclical renewal of accreditation and renewal of registration assessments, and new accreditation assessments

2. In general, TEQSA differentiates the scope (of Threshold Standards tested), and the depth (of evidence required) of accreditation- and registration-related assessments on the basis of assessed risk.
3. For a provider that is not identified as high risk, an assessment will focus on a subset of standards and associated evidentiary requirements considered applicable to each case, and will expand this subset to cover areas of concern as appropriate to each case on the basis of available evidence.
4. Where a provider is identified as presenting a high risk to financial position, in registration- and accreditation-related assessments subsequent to the risk assessment, the starting point for the scope of assessment will include all financial- and resourcing-related standards, any standards related to planning and mitigation in case a provider ceases to operate, and any other standards that may be identified as relevant to the particular case given the financial risks identified, with this scope potentially reduced as appropriate in the context of the particular assessment.
5. Where a provider is identified as presenting a high risk to students, in registration- and accreditation-related assessments subsequent to the risk assessment, the baseline scope and evidence assumption will be reversed so that the starting point includes all standards appropriate to the application type, with standards subsequently excluded where not relevant to the provider or case in question, or where an assessment has recently determined the provider’s compliance, or otherwise where appropriate in the context of the particular assessment.

Contact

Any enquiries about TEQSA’s approach to high-risk providers can be directed to: providerenquiries@teqsa.gov.au.

Purpose

The purpose of this policy is to establish a set of principles to inform decision-making in relation to initial provider registrations, and to establish clear expectations for applicants and for TEQSA case managers. The principles established in this policy are intended to mitigate the inherent risk—due to the uncertainty associated with the absence of a track record in higher education—of new provider registrations.

Scope

This policy is concerned with the initial registration of new providers. It is not concerned with new registrations that take place due to a change of legal entity for an existing provider.

Principles

1. There are a number of inherent risks associated with applicants for initial registration. These include:
   
   1. the absence of a track record associated with higher education delivery leading to the applicant’s own higher education awards
   2. the limited capacity to demonstrate the application of a provider’s internal governance and quality assurance mechanisms in the context of higher education delivery
   3. relative uncertainty about a provider’s financial and student enrolment projections in light of the lack of previous history of higher education delivery and the competitive nature of Australian higher education
   4. once registered, the time required to obtain data which presents a clear picture of the provider’s capacity to provide the requisite standard of higher education.
2. In some cases, applicants place a heavy emphasis on external consultants to prepare aspects of an initial registration application, raising further risks associated with the capacity of the provider’s own staff or governing bodies to deal with fundamental aspects of higher education delivery on a continuing basis.
3. To reflect these risks, TEQSA’s decisions about such applications will specifically consider a number of additional assurance mechanisms. These will commonly include:
   
   1. registration of the provider for a period of less than the maximum seven years. For example, TEQSA may decide to register a provider for a period of five years, with the capacity to extend the registration for a further two years where provider reporting and TEQSA provider visits suggest that the risks are being appropriately managed.
   2. additional targeted collections of information beyond the annual TEQSA data collections, including:
      
      1. data in relation to student performance, staffing and financial matters, with a particular emphasis on timely quantitative data relevant to TEQSA’s Risk Assessment Framework;
      2. minutes and agenda papers for the provider’s corporate and academic governing bodies—the material would be expected to cover matters including performance against the strategic plan, benchmarking activities, risk management, workforce planning and management, and monitoring and analysis of student outcomes.
   3. the imposition of conditions on registration to restrict or oversee delivery which involves particular risks, such as the delivery of higher education offshore or the provision of higher education using multiple modes of delivery.
4. Where a new provider does not submit information according to the timetable specified in a TEQSA request, or where information raises further concerns, TEQSA will consider additional assurance action.
5. TEQSA will usually undertake a provider visit or meet with a provider within 12 to 18 months from commencement of operations, with subsequent visits or meetings at least annually for the first three years of a provider’s operation. These visits and meetings will also assist in relationship development.

Contact

Any enquiries about TEQSA’s approach to initial provider registrations can be directed to: new.registration.enquiries@teqsa.gov.au.

Purpose

The purpose of this policy is to describe the Tertiary Education Quality and Standards Agency’s (TEQSA’s) approach in responding to a change of control or ownership of a higher education provider (HEP), and describe the reasons for its interest following such an event. 

A change of control or ownership occurs when a new entity obtains substantial ownership of a registered HEP (whether or not that is a majority stake in a provider). A change in control or ownership of a HEP has the potential to significantly impact a provider’s ability to meet the Higher Education Standards Framework (Threshold Standards) 2021 (HES Framework), noting the effect that a change in control or ownership can have on a provider’s governance arrangements and management. 

TEQSA’s interest following a change in control or ownership of a HEP will focus primarily on potential risks to the quality of students’ educational experience, and a provider’s financial viability and sustainability. Examples of events that impact students following a change in control or ownership that would concern TEQSA, while not exhaustive, include:

• a rapid increase in student enrolments in the absence of a planned and managed approach, particularly where there is reliance on growth in single source markets
• course closures in the absence of adequate teach out arrangements
• reductions in staffing (academic and support services) to lower expenses
• reductions in investment in facilities and infrastructure and the financial capacity of the HEP
• reductions in the quality of the learning environment through for example, reductions in senior academic leaders, increases in student to staff ratios, increased rates of academic staff casualisation, or an overreliance on third party teaching/delivery arrangements. 

Scope

This policy relates to providers that have been subject to a change of control or ownership in recent history. 

Principles

1. Before a change of ownership or control of a registered HEP event takes place , TEQSA expects to be provided with notification in accordance with section 29(1)(a) of the TEQSA Act (for further detail, refer to TEQSA’s Material Change Notification Policy). It is not necessary for an acquirer to take a majority ownership stake (i.e. greater than 50 per cent) in a provider in order to exercise effective control.
2. TEQSA’s approach in responding to a change in control or ownership of a HEP will be guided by its regulatory principles of reflecting risk, proportionality and necessity. TEQSA’s investigations and regulatory intervention will be focussed on key risks arising from the change of control or ownership to the quality of students’ educational experience, and the provider’s financial viability and sustainability.
3. Where there is a change of control or ownership of a HEP, TEQSA will seek early engagement with the affected provider (and its new owners). The objective of this engagement is to ensure that the provider can continue to meet the requirements of the HES Framework, to address any concerns TEQSA holds with aspects of the provider’s operations under its previous control and to confirm the future strategic directions of the HEP.
4. At a minimum, HEPs should expect that TEQSA will request documentation on the nature of the transaction, run a background check on any new shareholders and/or directors, and consider the history of prior tertiary education provision by the acquiring entity or its personnel. TEQSA may also request details of changes to key personnel, governance committees, financial statements, and fit and proper person declarations. Examples of sources TEQSA may refer to in its background checks include Australian Securities and Investments Commission’s (ASIC) current and historical company exacts, Equifax’s corporate scorecards and company/director credit reports, and the Australian Financial Security Authority’s National Personal Insolvency Index.
5. HEPs should also be aware that a change of control or ownership may trigger a compliance assessment if appropriate in the circumstances. A compliance assessment can be initiated at any time before or after the change of control or ownership has taken place.
6. If TEQSA’s concerns are not resolved by the provider’s response, TEQSA can take other regulatory steps to mitigate the risk that the provider will not meet the HESF. This includes placing conditions on courses and/or registration, or in serious cases shortening or cancelling a provider’s registration.
7. TEQSA recognises that it is part of a broader regulatory community and will work with other relevant Commonwealth and/or State and Territory agencies to acquire and share regulatory information, for intelligence purposes and to minimise regulatory burden on providers where they have already submitted information to other agencies. 

Further information

Further information about TEQSA’s approach following a change in provider control can be obtained by directing an email enquiry to: providerenquiries@teqsa.gov.au.