Response to the performance audit report on TEQSA's Regulation of Higher Education
16 April 2020
Summary response for inclusion in ‘Summary’ section of the report
The Tertiary Education Quality and Standards Agency (TEQSA) welcomes the Australian National Audit Office’s performance audit report on its regulation of higher education and thanks the audit team for their efforts and diligence in conducting the audit.
TEQSA has only recently had its resourcing increased following a period of significant reduction in resourcing and reduced capacity. One recent initiative was to establish a dedicated Compliance and Investigations team. The timing of the audit presented an opportunity to reflect on areas for improvement and we are pleased that the findings confirm areas of focus where TEQSA already has work well underway.
In finding TEQSA’s regulatory activities to be effective or largely effective in all but one instance, the ANAO’s report confirms that TEQSA is meeting its purpose under the TEQSA Act to regulate higher education according to the principles of regulatory necessity, risk and proportionality. TEQSA acknowledges the areas for improvement and recommendations in relation to its compliance and enforcement activities.
TEQSA accepts all five recommendations in relation to its compliance and enforcement activities, with action already planned or underway to make improvements consistent with these recommendations. This includes work already undertaken to strengthen TEQSA’s existing compliance monitoring framework, improvements to the planning of compliance assessments and ensuring the timely assessment of material submitted by providers. TEQSA has also implemented processes for consistent handling of material change notifications and reporting of compliance activity, with a full regulatory operations report to be published in July 2020.
TEQSA’s full response to the audit report
TEQSA acknowledges the ANAO’s findings and recommendations and appreciates the opportunity to comment on the Audit Report.
The ANAO report makes five recommendations designed to improve the effectiveness of TEQSA’s compliance activities. Broadly, these emphasise the development of a comprehensive compliance monitoring framework supported by appropriate operational processes, and improving the documentation, timeliness and public reporting of the activities of TEQSA’s compliance activities. TEQSA agrees with all five recommendations, noting that in assessing compliance the agency is required to apply the three basic principles of regulation stated in the TEQSA Act, which are regulatory necessity, reflecting risk and proportionality.
Compliance is monitored and assessed by TEQSA through a number of interconnected and complementary activities, including:
- cyclical assessments for re-registration and re-accreditation
- an annual risk assessment process
- the investigation and monitoring of complaints and other information about providers
- the conduct of sector-wide thematic analyses.
Under the TEQSA Act, TEQSA may review or examine any aspect of an entity’s operations to ensure continuing compliance with the Threshold Standards. However, following the Lee Dow-Braithwaite review1, the agency was directed to focus on simplifying processes and improving the timeliness of decisions about applications by Ministerial Direction 2 – 2013. As noted in Figure 1.2 of the ANAO report, from 2014-15 TEQSA was also subject to a significant reduction in its appropriation, as well as a reduction in the average number of ongoing staff that could be engaged. This restriction severely limited TEQSA’s ability to undertake any additional activities without a diversion of resources from application based assessment. Despite these limitations, TEQSA has been able to act quickly to address incidents that posed serious risk to the interests of students or the reputation of the sector, which was supported by the ANAO report finding that TEQSA has provided appropriate support to the sector to address key sector-wide risks. In 2018-19, with increased resourcing, TEQSA undertook significant recruitment and training of new staff, as well as the review and development of regulatory processes.
TEQSA considers that the overall conclusion that the effectiveness of TEQSA’s regulation of higher education is “mixed” understates the positive findings of the ANAO audit, which found effective or largely effective performance in three of the four elements of the audit. The ANAO report has not provided any indication that TEQSA’s compliance and enforcement processes have been unsuccessful or ineffective in achieving their stated objectives or identified instances of non-compliance that have threatened TEQSA’s core objects of protecting the interests of students and the reputation of Australia for providing quality higher education.
The almost complete absence of failures in Australian higher education since TEQSA’s regulatory functions commenced provides strong evidence of the effectiveness of the agency’s regulatory approach, which is underscored by the assessment of TEQSA’s regulatory approvals processes and sectoral guidance and support as effective. The ANAO has not identified any instances in which TEQSA failed to take appropriate action to address a substantial compliance concern.
The ANAO report acknowledges that the indicators and data used by TEQSA in risk assessment processes are aligned with the key areas of risk to providing quality higher education, but queries the accuracy of provider risk assessments due to the age of the source data used in the assessments. TEQSA notes that the accuracy of the risk assessments is clear, as the results reflect the available data, but that the risk assessments may be affected by the currency of the data. As the ANAO report acknowledges, the Transforming the Collection of Student Information project which is due to be implemented from 2020 by the Department of Education, Skills and Employment should improve the availability of timely student data. Additionally, the ANAO report does not recognise the need for complaints to be assessed by TEQSA for relevance to and compliance with the standards, before they can be considered for inclusion in the risk assessment.
TEQSA acknowledges the areas for improvement for regulatory approvals processes identified by the ANAO, namely: better documenting the rationale for the scope of application assessments in assessment planning; selected guidance for staff and experts on analytical approaches for assessing whether standards have been met; and ensuring advice for decision makers include an analysis of relevant complaints against the provider received by TEQSA.
TEQSA has strengthened the rationale for the scope of its assessments through revisions to its approach and documentation of pre-application scoping. These approaches are well documented, adequately consider matters, including risk and complaints, and provide a suitable framework for the assessment process.
TEQSA accepts further guidance to staff is necessary and will implement improvements as suggested in the audit report. The changes implemented to improve the pre-application scoping process are also relevant for the consideration around analysis of complaints. TEQSA has reviewed its approach to complaints and is implementing the necessary changes so that complaints can be considered in assessments.
TEQSA would like to thank the audit team for their work and the diligent, constructive and professional manner in which the audit was conducted.
Professor Nicholas Saunders AO
Chief Commissioner and Acting CEO
26 March 2020
- Dow, K, Braithwaite, V 2013, Review of higher education regulation: report [Lee Dow-Braithwaite review], Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, Canberra, p.10, accessed 17 March 2020.