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Tertiary Education Quality and Standards Agency (TEQSA)—Report for 2017-18


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Annual Report

2017-2018

TEQSA ANNUAL REPORT 2017-18 ISSN 2200-9671

With

the exception of the Commonwealth Coat of Arms, TEQSA’s logo, any material protected by a trade mark and where otherwise noted, all material presented in this document is provided under a Creative Commons Attribution 3.0 Australia licence creativecommons.org/licenses/by/3.0/au/

The details of the relevant licence conditions are available on the Creative Commons website (accessible using the links provided) as is the full legal code for the CC BY 3.0 AU licence creativecommons.org/licenses/by/3.0/au/legalcode

The document must be attributed as the TEQSA Annual Report 2017-18.

Contacts

More information about the Tertiary Education Quality and Standards Agency, including electronic versions of this annual report, is available at teqsa.gov.au/about-us/publications

Comments and enquiries about this report may be directed to: Manager, Executive Office Tertiary Education Quality and Standards Agency Level 14/530 Collins Street MELBOURNE VIC 3001

T: 1300 739 585 E: enquiries@teqsa.gov.au

Acknowledgements

This report reflects the efforts of many people. Special thanks go to TEQSA staff involved in contributing and coordinating material.

TEQSA | Annual Report 2017-2018 i TEQSA | Annual Report 2017-2018 i

Letter to the Minister The Hon Dan Tehan MP Minister for Education Parliament House CANBERRA ACT 2600

31 August 2018

Dear Minister,

As the accountable authority of the Tertiary Education Quality and Standards Agency (TEQSA), we have pleasure in presenting to you the agency’s annual report for the year ended 30 June 2018.

TEQSA’s annual report has been prepared in accordance with section 46 of the Public Governance, Performance and Accountability Act 2013 (the PGPA Act). Subsection 46(1) of the PGPA Act requires the accountable authority of the entity to give an annual report to the entity’s responsible Minister for presentation to Parliament.

In addition, we, as the accountable authority of TEQSA, present the 2017-18 annual performance statements of TEQSA, as required under paragraph 39(1)(a) of the PGPA Act. In our opinion, these annual performance statements are based on properly maintained records, accurately reflect the performance of the entity, and comply with subsection 39(2) of the PGPA Act.

Furthermore, we certify that TEQSA:

a. has prepared fraud risk assessments and fraud control plans

b. has in place appropriate fraud prevention, detection, investigation and reporting mechanisms that meet the specific needs of the agency

c. has taken all reasonable measures to appropriately deal with fraud relating to the agency.

This report describes the progress made over the course of 2017-18 to advance national action to assure the quality of higher education in Australia. This work continues through the staff of TEQSA and a range of stakeholders in the higher education sector.

Yours sincerely,

P rofessor Nicholas Saunders, AO Chief Commissioner Professor Cliff Walsh Commissioner

D r Linley Martin

Commissioner

ii CONTENTS

CONTENTS

About this Report i V

Section 1: Review by the accountable authority 1

Review of the year by the TEQSA accountable authority 2

Section 2: Agency overview 5

About TEQSA 6

Purpose 6

Legislative framework 7

Sector reviews 7

Organisational structure 9

Section 3: Performance review 15

Performance against goals 18

Goal 1: Effective oversight of the quality and reputation of Australian higher education 26

Goal 2: Efficient, effective, responsive, risk-based quality assurance and regulatory activities 30

Goal 3: Constructive and collaborative relationships with governments, higher education providers and other stakeholders 43

Analysis of TEQSA’s financial performance 49

Section 4: Management and accountability 51

Corporate governance 52

Human resources 56

Financial management 57

TEQSA | Annual Report 2017-2018 iii TEQSA | Annual Report 2017-2018 iii

Section 5: Financial report 61

Independent Auditor’s report 62

Statement by the accountable authority and Chief Financial Officer 65

Financial statement 66

Section 6: Appendices 105

Appendix A: Legislative framework 106

Appendix B: Summary of resources 107

Appendix C: Staffing profile 109

Appendix D: Freedom of information 110

Appendix E: Ecologically-sustainable development and environmental performance 110

Appendix F: Advertising and market research 111

Appendix G: Workplace health and safety 111

Appendix H: Complaints handling 111

Appendix I: Disability reporting 112

Section 7: indices and references 115

Acronyms and abbreviations 116

Glossary of terms 117

Compliance index 120

Alphabetical index 134

iV ABOUT THIS REPORT

ABOUT THiS REPORT

This report informs The Hon Dan Tehan MP, Minister for Education, the Parliament of Australia, the Australian higher education community and the general public about the performance of the Tertiary Education Quality and Standards Agency (TEQSA or the agency) during the financial year ending 30 June 2018.

Prepared according to parliamentary reporting requirements, the report describes TEQSA’s achievements against the goals and indicators set out in the TEQSA Corporate Plan 2017-21 and in TEQSA’s 2017-18 Portfolio Budget Statements.

The Annual Report provides information on TEQSA’s performance in relation to its stated outcome in the Portfolio Budget Statements:

‘[To] contribute to a high quality higher education sector through streamlined and nationally consistent higher education regulatory arrangements; registration of higher education providers; accreditation of higher education courses; and investigation, quality assurance and dissemination of higher education standards and performance’.

Section 1: Review by the accountable authority— reflects on the past year, highlighting significant issues faced by TEQSA and initiatives undertaken, as well as current and future challenges.

Section 2: Agency overview — provides information about TEQSA and its governance, roles and functions and organisational structure, as well as its approach to risk- and standards-based regulation.

Section 3: Performance review — reports on how TEQSA performed during the reporting period against the goals set out in the TEQSA Corporate Plan 2017-21, and against its stated outcome and program deliverables contained in the 2017-18 Portfolio Budget Statements.

Section 4: Management and accountability — provides information on corporate governance, external and internal accountability, human resource management, financial management, purchasing, consultants and contract management, legal services and other activities relevant to the administration of the agency.

TEQSA | Annual Report 2017-2018 V TEQSA | Annual Report 2017-2018 V

Section 5: Financial report — presents audited financial statements for the year ending 30 June 2018.

Section 6: Appendices — includes information relating to TEQSA’s staffing and its performance in relation to Australian Government environmental, disability, freedom of information and financial management outcomes.

Section 7: Indices and references — assists readers to locate and understand information in the annual report.

Acronyms and abbreviations page 116

Glossary of terms page 117

Compliance index page 120

Alphabetical index page 134

REVIEW BY THE ACCOUNTABLE AUTHORITY 1

Review of the year by the TEQSA accountable authority

2 Section 1 | REVIEW BY THE ACCOUNTABLE AUTHORITY

SECTiON 1: REViEW BY THE ACCOUNTABLE AUTHORiTY

Review of the year by the TEQSA accountable authority This is TEQSA’s seventh annual report, which analyses the performance of the agency against the TEQSA Corporate Plan 2017-21.

The performance of the agency in 2017-18 continued to reflect the impact of resourcing constraints from previous years. However, the year also included the welcome announcement in the Australian Government’s 2018-19 Budget of an additional $24.3 million over four years to ensure the ongoing financial sustainability of the agency and an increase in permanent staffing. There was also continued endorsement of the overall performance of the agency, with approximately 70 per cent of provider respondents to the 2018 stakeholder survey rating TEQSA’s performance as a regulator as good or excellent. This is particularly the case for those providers that are rated as a low risk to students, where 87 per cent of these providers rated TEQSA as good or excellent.

As in past years, the proportion of applications from prospective providers that were rejected remained high, with only three applications for registration granted from those applications that reached the decision stage. There was also a significant number of applications assessed by the agency during 2017-18 that were withdrawn by the applicants before a decision was made. In the case of those applications that were rejected, a majority of applicants chose to challenge the decision and 2017-18 saw a sharp rise in the number of decisions subject to external review by the Administrative Appeals Tribunal (AAT).

In addition to TEQSA’s core functions of quality assessment and regulatory decision making, the agency undertook significant activity in response to requests from the Minister in relation to the transparency of providers’ admissions processes, the management by providers of incidents of sexual assault and sexual harassment, and the continuing threat to academic integrity posed by contract cheating. The activities of the agency associated with these sector-wide issues have focused on: reviewing evidence of compliance with the Higher Education Standards Framework, identifying areas of risk and developing relevant support materials based on the analysis of risk, and taking regulatory action where necessary.

The agency continued to receive positive feedback to its enhanced program of engagement that was initiated in 2016-17. In 2017-18, this program included:

y the second annual TEQSA conference

y meetings with individual providers to discuss their management of risks identified through TEQSA’s annual risk assessment process

y briefings with provider groups that raised issues through the TEQSA Stakeholder Survey 2017, in order to explore what TEQSA could do to address their concerns

y the establishment of the Student Expert Advisory Group and inclusion of students in the annual TEQSA Conference

y the introduction of a quality enhancement forum series on topics of key interest to providers, commencing with forums on student attrition and contract cheating.

TEQSA | Annual Report 2017-2018 3

The time taken in 2017-18 to assess and make decisions about applications continued to deteriorate for most types of applications. The deterioration was due to a number of factors noted in the last annual report, including high staff turnover. However, 2017-18 also saw a sharp increase in the number of compliance assessments initiated by the agency in response to immediate threats to quality or risks to students. This work required the diversion of resources from application-based work but will now be addressed by a dedicated team, established with new resources that will also manage student complaints about providers.

For the targets related to the Australian Government Regulator Performance Framework (RPF), all but one of TEQSA’s targets were achieved in 2017-18. In the case of KPI 1 ‘Quality assurance and regulation does not unnecessarily impede the efficient operation of higher education providers’, this was only partially achieved because the stakeholder survey results show a small decrease in the percentage of respondents that rated the agency as good or excellent compared with 2016-17.

Looking forward With the additional funding and staffing from the 2018-19 Budget, the key challenge over the coming year will be on rebuilding the required resourcing and enhancing our systems to improve the agency’s performance. Consultation around the arrangements for cost recovery of TEQSA’s expenditure, and then their implementation, will be important activities for 2018-19.

The coming year, in which TEQSA will begin its eighth year of operation, will also see the beginnings of the assessment of ‘Cycle 2’ applications for accreditation and registration. This will require the agency to evolve its regulatory approach to reflect the maturing relationship with providers and our deeper knowledge of their operations.

Policy reviews underway that will impact on the higher education sector will also be a key driver of the agency’s work over the coming year. Reviews of the Australian Qualifications Framework (AQF), the higher education provider categories in the Higher Education Standards Framework, and the arrangements for accreditation by professional bodies are likely to require further adjustment of TEQSA’s approach to assessment and allow further opportunities for the agency to provide guidance and support to the sector.

The TEQSA Corporate Plan 2018-22 has taken on board the performance results for 2017-18 and the key messages delivered through the 2018 stakeholder survey. The plan highlights the need to improve the timeliness of our decision making, to review our approach to case management, to ensure our actions reflect risk to students and the reputation of the sector, and to build our capability in regulatory policy.

Professor Nicholas Saunders AO Chief Commissioner on behalf of the accountable authority

AGENCY OVERVIEW 2

About TEQSA

Purpose

Legislative framework

Sector reviews

Organisational structure

6 Section 2 | AGENCY OVERVIEW

SECTiON 2: AGENCY OVERViEW

About TEQSA TEQSA is Australia’s independent national quality assurance and regulatory agency for higher education. TEQSA commenced operations on 29 January 2012 under the Tertiary Education Quality and Standards Agency Act 2011 (TEQSA Act).

All providers that offer higher education qualifications in or from Australia must be registered by TEQSA. Providers that do not have self-accrediting authority (SAA) must also have their courses of study accredited by TEQSA.

Purpose To safeguard student interests and the reputation of the higher education sector by assuring the quality of Australian higher education through a proportionate risk-reflective approach which allows higher education providers to pursue their individual missions and encourages diversity, innovation and excellence.

In the 2017-18 Portfolio Budget Statements, TEQSA reported on one outcome and one program. The TEQSA Corporate Plan 2017-21 identifies three key goals for delivering the agency’s purpose.

OUTCOME 1

Contribute to a high quality higher education sector through streamlined and nationally consistent higher education regulatory arrangements; registration of higher education providers; accreditation of higher education courses; and investigation, quality assurance, and dissemination of higher education standards and performance.

PROGRAM 1.1: REGULATiON AND QUALiTY ASSURANCE - OBJECTiVE

Regulation and quality assurance ensure that quality standards are being met by all higher education providers so that the interests of students and the reputation of Australia’s higher education sector are promoted and protected. This occurs by reference to the Higher Education Threshold Standards, which are determined

by the Minister for Education and Training on advice from an independent Higher Education Standards Panel. A risk-based approach to planning and implementing assessments of provider compliance with those Standards is used.

GOAL 1

Effective oversight of the quality and reputation of Australian higher education.

GOAL 2

Efficient, effective, responsive, risk-based quality assurance and regulatory activities.

GOAL 3

Constructive and collaborative relationships with governments, higher

education providers and other stakeholders.

TEQSA | Annual Report 2017-2018 7

Legislative framework TEQSA regulates higher education providers against the TEQSA Act, and, for the providers that also offer courses to students in Australia on a student visa, against the Education Services for Overseas Students Act 2000 (ESOS Act). Taken together, the legislative frameworks of these Acts incorporate the following quality standards:

y the Higher Education Standards Framework (Threshold Standards) 2015 (HES Framework)

y the National Code of Practice for Providers of Education and Training to Overseas Students 2018 (National Code)

y the Foundation Program Standards (Foundation Standards)

y the ELICOS Standards 2018 (ELICOS Standards).

In addition, the agency has responsibilities under several other Acts and Rules. See Appendix A for more information about these responsibilities.

Sector reviews In 2017-18, the agency continued to support the Higher Education Standards Panel (the HESP), the Department of Education and Training (the department) and the sector in relation to admissions transparency, academic integrity, and student wellbeing and safety.

Admissions transparency In 2016, the Minister for Education and Training (the Minister) asked the HESP for options to improve the transparency of higher education student admissions policies. Following consultation, the HESP delivered 14 recommendations that the government accepted in December 2016. In early 2017, the

department established the Admissions Transparency Implementation Working Group, with TEQSA’s Chief Executive Officer as a member.

See Performance Indicator 3.4 for more information about the work undertaken by TEQSA in 2017-18 to implement the HESP’s recommendations on admissions transparency.

For more information on TEQSA’s thematic review of admissions transparency www.teqsa.gov.au/admissions-transparency

Academic integrity Academic integrity issues since 2014 have highlighted the need for increased vigilance to protect the integrity of Australia’s higher education system.

Recent issues have included:

y ‘degree mills’ at non-genuine universities

y contract cheating, including essay writing services

y the alleged sale of forged qualifications

y allegations of third parties sitting exams, or taking entire subjects, for students

y concerns about the security of student academic records.

While there is currently no legislation in Australia that permits action to be taken against parties that provide contract cheating services or fake documentation, the HES Framework requires higher education providers to have appropriate policies and measures in place to prevent, detect and address academic misconduct.

8 Section 2 | AGENCY OVERVIEW

In 2017-18, TEQSA continued to monitor the issue of academic integrity through both its ongoing regulatory activities and its risk assessments of providers, and as part of the response to the issue of contract cheating, which first arose with the MyMaster incident in 2014, TEQSA released a Good Practice Note: Addressing contract cheating to safeguard academic integrity. The release of the good practice note was accompanied by a forum in October 2017 on the topic of contract cheating. The forum was attended by over 130 participants from across the sector and received positive feedback, with participants calling for workshops on the issue.

The good practice note, which complements TEQSA’s existing Guidance Note: Academic Integrity, was developed in collaboration with leading academic integrity expert Professor Tracey Bretag to provide practical advice and examples of good practice to guide higher education operations in relation to contract cheating. The good practice note is the first in a new series of materials to support and promote quality assurance approaches of higher education providers. The note provides specific advice in five critical areas:

y policies to promote academic integrity

y policies and procedures to address breaches

y actions to mitigate risks

y the provision of academic integrity guidance

y good practices to maintain academic integrity.

For more information on the good practice note www.teqsa.gov.au/latest-news/ articles/teqsa-outlines-ways-cut-contract-cheating

See Performance Indicator 3.1 for more information on the academic integrity and contract cheating forum. The forum presentation is available at www.teqsa.gov.au/presentations

Student wellbeing and safety All providers registered by TEQSA must meet the requirements of the HES Framework, which includes specific standards relating to student wellbeing and safety, such as the need for:

y promotion and fostering of a safe learning environment

y support services for students who need assistance with personal circumstances which may be having an adverse effect on their education

y formal complaints-handling policies and procedures.

In August 2017, the Australian Human Rights Commission (AHRC) released Change the Course: National Report on Sexual Assault and Sexual Harassment at Australian Universities (2017). The Minister wrote to all 39 Australian universities and to the peak bodies for all other higher education providers, seeking responses to the AHRC’s recommendations in the report. TEQSA wrote directly to the remaining 129 higher education providers. The Minister also asked TEQSA to monitor and report on higher education provider responses to incidents of sexual assault and sexual harassment.

In addressing the Minister’s request, TEQSA commenced a project to support providers with implementing actions to ensure the wellbeing and safety of students. The project involves:

y providing advice and sharing good practice with the sector

y requesting and analysing information about providers’ activities in relation to allegations of sexual assault and sexual harassment

y receiving and responding to complaints about providers’ response to incidents of alleged sexual assault and sexual harassment.

TEQSA | Annual Report 2017-2018 9

The agency undertook a review of the responses received by the 168 providers in March 2018 and will report to the Minister on the outcome of the review in 2018-19, with advice to the sector and examples of good practice to follow.

For more information on TEQSA’s work in relation to the issue of sexual assault and sexual harassment www.teqsa.gov.au/how-does-teqsa-respond-sector-wide-issues

In January 2018, following consultation with providers, students and key advocacy groups, the agency released a revised guidance note on wellbeing and safety to clarify TEQSA’s expectations when assessing providers’ compliance with these requirements of the HES Framework. The response to the revised guidance note

from key advocates was very positive. In late 2017-18, TEQSA included the standards on wellbeing and safety (in Section 2.3 of the HES Framework 2015) in the scope of all of its assessments against applications for renewal of registration (re-registration).

The guidance note on wellbeing and safety is available at www.teqsa.gov.au/ latest-news/publications/guidance-note-wellbeing-and-safety

Complaints and media reports of incidents of alleged sexual assault and sexual harassment are used by TEQSA to identify areas of risk to the provision of quality higher education in Australia, and thereby protect the interests of students.

See Performance Indicator 1.1 for more information about TEQSA’s complaint-handling process.

Organisational structure

Figure 1: TEQSA’s organisational structure.

10 Section 2 | AGENCY OVERVIEW

Commissioners TEQSA currently has three Commissioners; a part-time Chief Commissioner and two part-time Commissioners. Commissioners are appointed by the Minister based on their expertise in higher education, quality assurance, and regulatory practice. Commissioners are responsible for making regulatory decisions, setting strategic directions, monitoring risk in the sector, and deciding on matters relating to the development of the agency’s quality assurance and regulatory framework. The Commissioners are also the accountable authority for TEQSA.

Professor Nicholas Saunders AO, Chief Commissioner Professor Saunders joined the agency as Acting Chief Commissioner and Chief Executive Officer in September 2014. He was appointed by the then Minister as TEQSA Chief Commissioner in March 2015, and this appointment was renewed in March 2018.

Professor Saunders was previously Provost and Deputy Vice-Chancellor of Bond University and prior to that Vice-Chancellor of the University of Newcastle, Australia. His other senior academic roles have included: Dean of Medicine, Nursing and Health Sciences at Monash University (1998-2003); Head of the Faculty of Health Sciences and Dean of Medicine, Flinders University (1993-98); Professor of Medicine at the University of Newcastle (1983-93); and positions at McMaster University, Canada, and Harvard University, USA.

Professor Saunders holds a medical degree with first-class honours from the University of Sydney and has been influential in the advancement of medical education and research through his extensive contribution to, and participation on, many higher education, research and health care national committees, councils and state government bodies.

During his career, Professor Saunders has been Chair of the National Health and Medical Research Council; a member of the Higher Education Council, the Prime Minister’s Science, Engineering and Innovation Council, the Australian Research Council and the Aboriginal and Torres Strait Islander Health Council; Chair of the Committee of Deans of Australian Medical Schools; Chair of the Postgraduate Medical Council of NSW; member of the Board of Universities Australia and Lead Vice-Chancellor for research and international activities; and member of the Victorian Premier’s Council for Knowledge, Innovation, Science and Engineering, and the 2011 Ministerial Review of Health and Medical Research in NSW.

Professor Saunders currently holds the part-time position of Chair of the Repatriation Medical Authority of Australia.

In 2012 he was appointed an Officer in the Order of Australia in recognition of his contribution and distinguished service to medicine and higher education.

Dr Linley Martin, Commissioner Dr Martin was appointed as a TEQSA Commissioner in February 2015. Her appointment was renewed in February 2018.

Previously, she was the Head of University Services and Vice-Principal (Major Projects) at the University of Melbourne from 2009-11, where she had also held the position of Vice Principal and Academic Registrar from 2001-05.

From 2005 to 2008 she was Vice President and Council Secretary at Deakin University and has held many other senior positions at the University of New South Wales, RMIT University, Flinders University and the University of South Australia.

Dr Martin was also a senior adviser to the Review of Australian Higher Education (the Bradley Review) which was pivotal to the establishment of TEQSA.

TEQSA | Annual Report 2017-2018 11

As well as being a part-time Commissioner at TEQSA, during 2016 Dr Martin was also the part-time Ombuds at RMIT University, an independent reviewer of unresolved student and staff complaints. In 2016 Dr Martin was awarded her Doctor of Philosophy by the University of Melbourne for her thesis on the measurement of student learning outcomes in higher education.

Professor Cliff Walsh, Commissioner Professor Walsh was appointed as a TEQSA Commissioner in February 2014 and this appointment was renewed in February 2018.

He has held professorial appointments at the University of Adelaide and the Australian National University, and visiting appointments at universities in Canada, the US and the UK. His teaching, research, publications and advisory specialities have been in public sector economics and public policy; regulatory theory and its application to economic, social and environmental issues; economic and social evaluation of public sector programs and regulatory regimes; and intergovernmental economic, political and administrative relations.

Professor Walsh has also been an adviser to a Prime Minister and State Premiers; an Associate Commissioner for several Productivity Commission Inquiries; an expert adviser to the European Commission and the World Bank; a member of numerous committees of inquiry into public sector policies and programs; and a member of the quasi-judicial Australian Competition Tribunal, which reviews, on appeal, decisions of Australia’s competition regulator, the Australian Competition and Consumer Commission.

He is currently Emeritus Professor of Economics at the University of Adelaide, and a Visiting Research Fellow in the School of Economics.

Mr Anthony Mcclaran, Chief Executive Officer The Chief Executive Officer (CEO) is a full-time position, appointed by the Minister and with responsibility for the management and administration of TEQSA.

Mr McClaran commenced at the agency in October 2015. He holds a first class honours degree in English and American Literature from the University of Kent.

Before joining TEQSA, Mr McClaran was the Chief Executive of the UK’s Quality Assurance Agency for Higher Education for six years and prior to that the Chief Executive of the UK’s national agency for higher education admissions, the Universities and Colleges Admissions Service.

Mr McClaran has held several leadership positions in the higher education sector, including as Academic Registrar and Acting Registrar and Secretary at the University of Hull. He was previously a member of the Board of the European Association for Quality Assurance in Higher Education. He has held a number of governance roles at all levels of education and was Chair of Council and Pro-Chancellor of the University of Gloucestershire from 2007 to 2009.

Mr McClaran was a member of the Board of the International Network of Quality Assurance Agencies in Higher Education (INQAAHE) until May 2018 and has been on the Advisory Council of the US Council for Higher Education Accreditation (CHEA) International Quality Group since 2016. He is currently on the steering group for My eQuals, serves on the Expert Panel for the National Review of Teacher Registration, and is a member of the Audit Committee of the Australian Accounting Standards Board (AASB) and the Auditing and Assurance Standards Board (AUASB).

12 Section 2 | AGENCY OVERVIEW

Senior management team The Senior Management Team (SMT) comprises the CEO and TEQSA senior managers. The role of the SMT is to support the CEO in discharging his statutory role and provide collective operational leadership for the agency in relation to TEQSA’s operational priorities, including business planning and the management of resources. The SMT reports to the accountable authority through the CEO.

Functional groups TEQSA’s highly skilled staff possess a range of knowledge and expertise in higher education, quality assurance, regulation, risk management and the public sector. Staff members build on their knowledge and experience through regular interactions with providers, professional accreditation bodies, TEQSA experts and overseas quality assurance bodies.

TEQSA’s staff come from diverse backgrounds, including in higher education delivery, data collection, data analysis, risk management, financial analysis, regulation and government. They apply their specialised skills in assessing complex qualitative and quantitative information, with a focus on protecting the interests of students and the reputation of the higher education sector, by:

y ensuring that higher education providers meet minimum standards

y promoting best practice

y improving the quality of the Australian higher education sector.

To respond to ongoing workload pressures and funding arrangements, TEQSA commenced a rebalancing in 2018, and finalised a new organisational structure in April 2018. The rebalancing, which included a staff consultation process, enabled better management of the assessment load and the establishment of a specialised

compliance and investigation capability. A summary of the changes which took effect progressively in 2017-18 are as follows:

y establishment of a dedicated Compliance and Investigations Team

y establishment of a dedicated ESOS/CRICOS Team

y expansion of the Initial Registration Assessment Team (to incorporate course accreditation assessments linked to initial registration applications)

y expansion of the Assurance Group to include responsibility for the case management of all registered higher education providers

y transfer of risk responsibility from the assessment groups to the Policy and Analysis Team (Executive Office).

The functional groups that make up the agency, as at 30 June 2018, are summarised in the following section.

Assessment and Investigations Group and Assurance Group The Assessment and Investigations Group and the Assurance Group are responsible for delivering TEQSA’s core business of undertaking regulatory assessments under the TEQSA Act (using the HES Framework) and the ESOS Act (using the National Code, ELICOS Standards and Foundation Standards). The groups also work in collaboration with the Executive Office’s Policy and Analysis Team to prepare risk profiles of each registered provider.

The Assessment and Investigations Group has responsibility for: handling complaints about providers; ESOS assessments; initial registrations; compliance assessments; and cases requiring investigations and sanctions (under both the TEQSA and ESOS Acts). Specialisation within the group is structured around assessment of applications for initial

TEQSA | Annual Report 2017-2018 13

registration, and investigations. Within the group are staff with technical expertise in relation to ESOS obligations. Towards the end of 2017-18, additional resourcing allowed for the establishment of a dedicated team with responsibility for compliance investigations and complaints handling.

The Assurance Group has responsibility for managing and assessing applications from higher education providers for re-registration and for accreditation of their courses (where providers do not have SAA). This group is also responsible for assessing applications from registered higher education providers for authority to self-accredit one or more courses and applications for change of provider category to one of the University categories.

Legal Group TEQSA’s Legal Group, led by the General Counsel, is responsible for legal services required by TEQSA as a Commonwealth regulatory agency, including providing TEQSA staff with strategic legal advice and training on legal issues, managing claims by or against TEQSA, and managing AAT matters.

Corporate Group The Corporate Group provides strategic management of TEQSA’s resources, which includes: finance, human resources, information management, and information and communications technology.

The Information Management Team within the Corporate Group is responsible for scoping and collecting provider data, developing and enhancing reporting capability, and analysing and reporting on information required to support regulatory activity. The team is also responsible for managing TEQSA’s annual Provider Information Request (PIR).

Engagement Group The Engagement Group is responsible for managing the agency’s relationship with its stakeholders including: provider, student and industry professional bodies; other regulators; and international agencies.

The Engagement Group manages TEQSA’s annual conference, and the agency’s internal and external communication, as well as its external experts.

Executive Office The Executive Office has primary responsibility for coordinating overall agency activities, including liaising with government and public service stakeholders (including the Minister’s Office, the department and the HESP). The Executive Office is made up of two teams; the Governance Team, and the Policy and Analysis Team.

The Governance Team is responsible for: managing development of, and reporting against, the Corporate Plan, the Annual Report and the RPF; supporting the maintenance of internal procedures of regulatory assessments; preparing for Senate Estimates appearances; coordinating agency security and enterprise risk management; and providing executive and administrative support to the Commissioners, CEO, accountable authority, Senior Management Team and other internal committees.

The Policy and Analysis Team is responsible for: undertaking risk analysis, including financial risk analysis; and undertaking quantitative and qualitative analysis that contributes to regulatory policies.

PERFORMANCE REVIEW 3

Performance against goals

Goal 1: Effective oversight of the quality and reputation of Australian higher education

Goal 2: Efficient, effective, responsive, risk-based quality assurance and regulatory activities

Goal 3: Constructive and collaborative relationships with governments, higher education providers and other stakeholders

Analysis of TEQSA’s financial performance

16 Section 3 | PERFORMANCE REVIEW

SECTiON 3: PERFORMANCE REViEW

Statement of preparation

We, the TEQSA Commissioners, as the accountable authority of the Tertiary Education Quality and Standards Agency (TEQSA), present the 2017-18 annual performance statements of TEQSA, as required under paragraph 39(1)(a) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). In our opinion, these annual performance statements are based on properly maintained records, accurately present the performance of the entity, and comply with subsection 39(2) of the PGPA Act.

TEQSA’s purpose The TEQSA Corporate Plan 2017-21 sets out TEQSA’s performance indicators over a four-year period under three goals:

1. Effective oversight of the quality and reputation of Australian higher education.

2. Efficient, effective, responsive, risk-based quality assurance and regulatory activities.

3. Constructive and collaborative relationships with governments, higher education providers and other stakeholders.

TEQSA works toward safeguarding student and provider interests by assuring the quality of Australian higher education. TEQSA’s strategies during 2017-21 are to:

y identify, monitor and respond to significant trends, incidents and risks to higher education that is delivered in or from Australia

y promote the role, importance and effectiveness of Australia’s quality assurance and regulatory system in maintaining the reputation of Australian higher education nationally and internationally

y maintain a strong focus on the educational experience and outcomes for students

y continue to implement a program of improvement of quality assurance and regulatory approaches involving key stakeholders

y strengthen the collaborative relationship with the Australian Skills Quality Authority (ASQA), the Australian Institute for Teaching and School Leadership (AITSL), the HESP and other agencies with mutual interests both in Australia and internationally

y optimise TEQSA’s application of the HES Framework to enhance internal quality assurance of providers.

TEQSA | Annual Report 2017-2018 17

TEQSA regulator performance framework report 2016-17 The TEQSA Regulator Performance Framework Report 2016-2017 (RPF Report) was published in December 2017 and the TEQSA Stakeholder Survey Report 2017: Report of Overall Findings was released in March 2018. The RPF Report discussed the results of the stakeholder survey in the context of the performance indicators required for the RPF and included analysis of the correlation between the risk profile of providers and the outcome of assessments of applications.

For more information on the TEQSA Regulator Performance Framework Report 2016-2017 www.teqsa.gov.au/ latest-news/publications/teqsa-regulator-performance-framework-report-2016-2017

For more information on the TEQSA Stakeholder Survey Report 2017: Report of Overall Findings www.teqsa.gov.au/latest-news/publications/teqsa-stakeholder-survey-2017-report-overall-findings

TEQSA stakeholder survey 2018 The principal contact of each provider (including some prospective providers) and the contact of each Australian body or agency that has a Memorandum of Understanding (MoU) with TEQSA were invited to participate in the 2018 stakeholder survey of TEQSA’s performance in 2017-18. Where relevant, performance information references results from the 2018 stakeholder survey. The principal contact participation rate for the 2018 survey was 66 per cent, compared with a response rate of 74 per cent for the 2017 survey.

The TEQSA Corporate Plan 2017-21 integrated the performance indicators of the RPF. TEQSA’s annual performance statement below reports a summary of results achieved in 2017-18 and includes cross-references to the 2017-18 Portfolio Budget Statements, the 2017-21 Corporate Plan and the 2017-18 RPF Key Performance Indicators.

18 Section 3 | PERFORMANCE REVIEW

Performance against goals

Goal 1

EFFECTIVE OVERSIGHT OF THE QUALITY AND REPUTATION OF AUSTRALIAN HIGHER EDUCATION

SOURCE PERFORMANCE

INDICATOR

TARGET ANNUAL

RESULT AGAINST THE TARGET

2017-21 Corporate Plan, p.14

2017-18 Portfolio Budget Statements, p.226

1.1 TEQSA has effective mechanisms to identify, monitor and respond to risks to higher education across the sector.

See page 26.

New mechanisms are implemented to manage out-of-cycle regulatory work, including responding to emerging risks to quality and the assessment of applications received from prospective entrants.

Achieved

An approach is established on enhanced monitoring, sector intelligence gathering and analysis of risk, with a correspondingly targeted approach to assessment.

Partially achieved

Further integration of risk analysis and regulatory decision making is achieved, through the use of comprehensive datasets to inform risk analysis and regulatory interventions.

Achieved

2017-21 Corporate Plan, p.14

1.2 Enhanced levels of information about the sector are made available to stakeholders and the sector.

See page 27.

Aggregate observations of performance and risks are published including: annual statistics on registered higher education providers, key financial metrics, assessment outcomes reporting, and the role of risk analyses in assessment outcomes.

Partially achieved

TEQSA | Annual Report 2017-2018 19

EFFECTIVE OVERSIGHT OF THE QUALITY AND REPUTATION OF AUSTRALIAN HIGHER EDUCATION

SOURCE PERFORMANCE

INDICATOR

TARGET ANNUAL

RESULT AGAINST THE TARGET

2017-21 Corporate Plan, p.14

2017-18 Portfolio Budget Statements, p.226

1.3 TEQSA engages in regular, constructive dialogue with international quality agencies to contribute to the development of transnational policy.

See page 28.

Cross border regulatory activity is strengthened and streamlined through engagement with international quality agencies.

Achieved

TEQSA’s understanding and effectiveness in international higher education, and contribution to development of transnational policy is increased through signing or re-signing MoUs for the sharing of information with international quality agencies including provider visits and staff exchanges.

Achieved

20 Section 3 | PERFORMANCE REVIEW

Goal 2

EFFICIENT, EFFECTIVE, RESPONSIVE, RISK-BASED QUALITY ASSURANCE AND REGULATORY ACTIVITIES

SOURCE PERFORMANCE

INDICATOR

TARGET ANNUAL

RESULT AGAINST THE TARGET

2017-21 Corporate Plan, p.15

Regulator Performance Framework KPI 1

2.1 Quality assurance and regulation does not unnecessarily impede the efficient operation of higher education providers.

See page 30.

Tailored and proportionate approaches are applied to all assessments undertaken during the year, based on risks and performance data about providers.

Achieved

TEQSA’s efficient and effective administration of regulatory functions is reflected in the positive results of the 2017-18 survey of providers.

Partially achieved

2017-21 Corporate Plan, p.15

2.2 TEQSA’s decisions are provided in a timely manner, clearly articulating the reasons for decisions, and TEQSA gives all higher education providers a reasonable opportunity to address matters relevant to a decision by TEQSA before TEQSA makes a decision that affects the provider.

See page 31.

Decisions are made in a timely manner and providers are informed in accordance with legislative timeframes.

Not achieved

Where an adverse decision is proposed, a draft summary of findings is sent to providers to allow providers a reasonable opportunity to respond.

Achieved

TEQSA | Annual Report 2017-2018 21

EFFICIENT, EFFECTIVE, RESPONSIVE, RISK-BASED QUALITY ASSURANCE AND REGULATORY ACTIVITIES

SOURCE PERFORMANCE

INDICATOR

TARGET ANNUAL

RESULT AGAINST THE TARGET

2017-21 Corporate Plan, p.15

Regulator Performance Framework KPI 3

2.3 Quality assurance and regulatory actions undertaken by TEQSA are proportionate to the risks being managed.

See page 37.

The risk framework and risk analysis process is publicly available, and changes undertaken in consultation with providers.

Achieved

The risk status of providers is identified and timely and meaningful responses to risks are determined and actioned.

Achieved

The three principles of necessity, risk and proportionality are applied in the tailoring of scope of assessment and regulatory decisions, resulting in reduced burden for low-risk providers.

Achieved

For providers ready to seek self-accrediting authority, support and guidance is made available.

Achieved

2017-21 Corporate Plan, p.15

Regulator Performance Framework KPI 4

2.4 TEQSA’s compliance and monitoring approaches are streamlined and coordinated.

See page 40.

Collaboration with the Department of Education and Training continues to be strengthened, data collection from providers is automated and data access and sharing is enhanced.

Achieved

Collaboration with industry professional bodies to share data reduces the burden of regulatory requirements.

Achieved

Cooperation with international quality agencies is utilised where necessary for regulation of Australian providers operating internationally.

Achieved

22 Section 3 | PERFORMANCE REVIEW

EFFICIENT, EFFECTIVE, RESPONSIVE, RISK-BASED QUALITY ASSURANCE AND REGULATORY ACTIVITIES

SOURCE PERFORMANCE

INDICATOR

TARGET ANNUAL

RESULT AGAINST THE TARGET

2017-21 Corporate Plan, p.15

2.5 Effective implementation of the requirements of regulatory responsibilities is achieved, including the TEQSA and ESOS Acts.

See page 41.

Respond to outcomes of the review of the impact of the TEQSA Act.

Achieved

Implement changes to support transition to the revised National Code in the ESOS Framework.

Achieved

2017-21 Corporate Plan, p.15

Regulator Performance Framework KPI 6

2.6 The quality assurance framework continues to be improved in consultation with stakeholders.

See page 42.

Specific consultation with the sector is undertaken before proposed changes to TEQSA’s practices are made.

Achieved

TEQSA | Annual Report 2017-2018 23

Goal 3

CONSTRUCTIVE AND COLLABORATIVE RELATIONSHIPS WITH GOVERNMENTS, HIGHER EDUCATION PROVIDERS, STUDENTS AND OTHER STAKEHOLDERS

SOURCE PERFORMANCE

INDICATOR

TARGET ANNUAL

RESULT AGAINST THE TARGET

2017-21 Corporate Plan, p.16

Regulator Performance Framework KPI 2

3.1 TEQSA’s communication with higher education providers is clear, targeted and effective.

See page 43.

Information is conveyed to stakeholders regularly and is readily accessible including via an improved TEQSA website.

Achieved

Issues of concern to the sector and stakeholders are included in the program of annual TEQSA Conference.

Achieved

The majority of providers surveyed rate TEQSA’s communication as good or excellent.

Achieved

2017-21 Corporate Plan, p.16

3.2 TEQSA has enhanced engagement with students in consultation with peak student bodies, and other stakeholders.

See page 44.

Direct communication and consultative links with peak student bodies are established.

Achieved

Engagement with TEQSA experts is enhanced. Achieved

Consultative channels to employers are opened up and developed.

Achieved

24 Section 3 | PERFORMANCE REVIEW

CONSTRUCTIVE AND COLLABORATIVE RELATIONSHIPS WITH GOVERNMENTS, HIGHER EDUCATION PROVIDERS, STUDENTS AND OTHER STAKEHOLDERS

SOURCE PERFORMANCE

INDICATOR

TARGET ANNUAL

RESULT AGAINST THE TARGET

2017-21 Corporate Plan, p.16

Regulator Performance Framework KPI 5

3.3 TEQSA’s dealings with higher education providers are open, transparent and consistent.

See page 46.

Providers are kept informed of the approach to assessment through the publication of the assessment framework, application guides and guidance notes.

Achieved

The National Register of Higher Education Providers is enhanced as a public record of regulatory decisions.

Achieved

Increased engagement with private providers and their peak bodies takes place in response to the findings of the stakeholder survey undertaken in 2016.

Achieved

2017-21 Corporate Plan, p.16

3.4 Increased synergies are developed with other agencies and contributions to collaborative goals.

See page 47.

Information relevant to risks to quality, protection of students and reputation of the sector is shared with Commonwealth agencies and the regulatory agencies of other countries.

Achieved

Work is undertaken with the Higher Education Standards Panel to implement the Government response to Report on the Transparency of Admissions Processes for Higher Education, including a formative evaluation of the current position and good practice guidance on meeting the Standards in this area.

Achieved

TEQSA | Annual Report 2017-2018 25

CONSTRUCTIVE AND COLLABORATIVE RELATIONSHIPS WITH GOVERNMENTS, HIGHER EDUCATION PROVIDERS, STUDENTS AND OTHER STAKEHOLDERS

SOURCE PERFORMANCE

INDICATOR

TARGET ANNUAL

RESULT AGAINST THE TARGET

2017-21 Corporate Plan, p.16

3.5 Providers are supported in implementing the 2015 Higher Education Standards Framework.

See page 49.

Further support material is developed for providers in the transition to the requirements of the 2015 Higher Education Standards Framework.

Achieved

26 Section 3 | PERFORMANCE REVIEW

Goal 1: Effective oversight of the quality and reputation of australian higher education

Performance Indicator 1.1

TEQSA has effective mechanisms to identify, monitor and respond to risks to higher education across the sector.

In 2017-18, TEQSA sought to enhance its mechanisms to manage risks to the higher education sector (particularly for prospective providers) and to address emerging risks to the sector. Major developments for TEQSA in achieving this in 2017-18 were:

y the development of the TEQSA high risk provider policy

y the development of the TEQSA initial provider registrations policy

y the establishment of a dedicated Compliance and Investigations Team.

As part of further integration of risk analysis and regulatory decision making, TEQSA will continue to enhance its risk analysis approach to determine the focus of regulatory activity in 2018-19.

See Performance Indicator 2.1 and www.teqsa.gov.au/for-providers/ resources/teqsa-high-risk-provider-policy for information about the high risk provider policy.

Initial provider registrations In October 2017, an initial provider registrations policy was developed to establish clear expectations for prospective providers and for TEQSA case managers. The policy established a set of principles to inform decision making in relation to initial provider registrations and is intended to address the absence of a track record in higher education for prospective providers.

For more information about the TEQSA initial provider registrations policy www.teqsa.gov.au/for-providers/ resources/teqsa-initial-provider-registrations-policy

Compliance investigations Additional funding arising from the Mid-Year Economic and Fiscal Outlook (MYEFO) 2017-18 allowed TEQSA to establish a dedicated Compliance and Investigations Team, the responsibilities of which include undertaking future compliance assessments, monitoring of conditions on providers, and complaints handling. The team commenced work in May 2018 with an initial focus on reviewing student complaints about providers and, in particular, those complaints that relate to sexual assault and sexual harassment.

TEQSA’s complaints process In 2017-18, the agency received over 400 complaints about Australian higher education providers. TEQSA manages complaints about registered higher education providers in relation to their compliance with the HES Framework, the ESOS Act and the National Code. This information contributes to TEQSA’s monitoring of the sector.

TEQSA | Annual Report 2017-2018 27

Following a review in the previous financial year, in 2017-18 TEQSA revised its approach to handling complaints in line with the agency’s strategic priorities. The revised approach included the establishment of complaints-handling principles and development of procedures, as well as exploration of opportunities for staff training to efficiently and effectively capture, respond to, and report on complaints made to TEQSA about registered higher education providers.

A new online form for submitting complaints via the TEQSA website was launched in 2017-18. TEQSA also accepts complaints made by telephone, email and written correspondence.

See Appendix H: Complaints Handling and www.teqsa.gov.au/complaints for more information about TEQSA’s complaints process.

Enhanced monitoring During 2017-18, in addition to information gathered as part of the formative evaluation of providers’ implementation of improved admissions transparency and as part of the review of responses to the AHRC Change the Course report, TEQSA commenced an enhanced monitoring project. The aim of the project is to improve the way the agency uses information to quality assure and regulate higher education providers. In 2017-18, the project scope focused on enhancing the risk categorisation of providers, horizon scanning, and the use of complaints and social media for intelligence gathering.

Performance Indicator 1.2:

Enhanced levels of information about the sector are made available to stakeholders and the sector.

Almost 60 per cent of provider respondents to the 2018 stakeholder survey rated TEQSA as good or excellent in terms of availability of information on trends and observations on sector performance.

In 2017-18, TEQSA continued its efforts to make enhanced levels of information available to the sector with the publication of reports. The third edition of the Key financial metrics on Australia’s higher education sector was released in November 2017.

Further reports will be released in early 2018-19, including the 2018 statistics report on TEQSA registered higher education providers and a report on the assessment insights gathered from the analysis of assessment outcomes from 2014 to 2017.

For more information about the Key financial metrics on Australia’s higher education sector www.teqsa.gov.au/ for-providers/resources/key-financial-metrics-australias-higher-education-sector-3rd-edition

28 Section 3 | PERFORMANCE REVIEW

Performance Indicator 1.3:

TEQSA engages in regular, constructive dialogue with international quality agencies to contribute to the development of transnational policy.

The agency is involved in a number of global higher education quality assurance networks including the:

y International Network for Quality Assurance Agencies in Higher Education (INQAAHE)

y Council for Higher Education Association International Quality Group (CIQG)

y Asia Pacific Quality Network (APQN)

y Quality Beyond Boundaries Group (QBBG).

TEQSA’s membership, and active participation in these groups, allows the agency to play an important role in protecting, enhancing and promoting the quality and integrity of Australia’s higher education sector internationally.

During 2017-18, in addition to TEQSA’s participation in regular teleconferences with its international Memorandum of Cooperation (MoC) partners, the agency continued its engagement with international quality assurance agencies and networks, through various activities including:

y participation in the University Quality Assurance Forum, hosted by the National Institution for Academic Degrees and Quality Enhancement of Higher Education (NIAD-QE) in August 2017

y TEQSA’s International Quality Assurance Staff Exchange Program, in which TEQSA:

} hosted delegates from the Chinese Service Center for Scholarly Exchange (August 2017), the Malaysian Qualifications Agency (September 2017), the Council of Private Education/SkillsFuture Singapore (November 2017) and the New Zealand Qualifications Authority in (November 2017)

} staff members were hosted by the Hong Kong Council for Accreditation of Academic and Vocational Qualifications (HKCAAVQ) and NIAD-QE, Japan (November 2017)

y participation in the QBBG annual meeting in Hong Kong in October 2017

y participation in the Council of Higher Education (CHEA) and CHEA International Quality Group (CIQG) meetings in Washington, United States of America in January 2018

y participation in INQAAHE Biennial Forum and Board Meeting in Mauritius in May 2018

y participation in the annual Going Global conference, for leaders of international education, in Kuala Lumpur, Malaysia in May 2018

y participation in the Australia India Education Council’s workshop on online education, in June 2018.

Staff from agencies in China, Indonesia, Japan, Malaysia, New Zealand, Singapore, Sweden, Thailand, and the Philippines were also welcomed for visits to TEQSA during 2017-18.

The agency has established a strong reputation in the sector worldwide, and works with its international quality assurance partners on a regular basis to build capacity.

TEQSA signed or renewed MoCs with a number of peak international bodies in 2017-18, as listed in Table 1.

TEQSA | Annual Report 2017-2018 29

Table 1: MoCs signed or renewed in 2017-18

ORGANISATION DATE ESTABLISHED

Advance HE, United Kingdom May 2018

China Education Association for International Exchange May 2018

Department of Higher Education, Research, Science and Technology, Papua New Guinea May 2018

Knowledge and Human Development Authority, United Arab Emirates January 2018

National Institute for Academic Degrees and Quality Enhancement of Higher Education (previously NIAD-UE), Japan August 2017

Non-local Courses Registry of the Education Bureau, Hong Kong August 2017

Ras Al Khaimah Economic Zone, United Arab Emirates July 2017

More detail on collaboration with stakeholders can be found under Goal 3: Constructive and collaborative relationships with governments, higher education providers, students and other stakeholders.

For more information about TEQSA’s International Engagement Strategy 2016-20 www.teqsa.gov.au/for-providers/resources/teqsa-international-engagement-strategy

30 Section 3 | PERFORMANCE REVIEW

Goal 2: Efficient, effective, responsive, risk-based quality assurance and regulatory activities Approximately 70 per cent of provider respondents to the 2018 stakeholder survey rated TEQSA’s performance as a regulator over the last 12 months as good or excellent.

When the risk ratings of providers are compared with their responses, 87 per cent of the providers rated as low risk to students responded that TEQSA’s overall performance was good or excellent. Of the providers rated as high or moderate risk to students, only 62 per cent rated TEQSA’s overall performance as a regulator as good or excellent.

Performance Indicator 2.1

Quality assurance and regulation does not unnecessarily impede the efficient operation of higher education providers.

High risk providers In October 2017, the agency published the TEQSA high risk provider policy, which was developed using comprehensive datasets to guide risk analysis and regulatory interventions.

The policy establishes a set of principles to inform TEQSA’s regulation of providers identified as high risk in relation to students or financial position — at the point of identification, as well as in the course of accreditation, renewal of accreditation (re-accreditation) and re-registration assessments. The policy 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.

Where a provider is not identified as high risk, reduced evidence requirements apply in subsequent assessments in accordance with TEQSA’s Core+ approach.

For more information about the TEQSA high risk provider policy www.teqsa.gov.au/ for-providers/resources/teqsa-high-risk-provider-policy

TEQSA | Annual Report 2017-2018 31

Stakeholder survey results In the 2018 stakeholder survey, 56 per cent of provider respondents rated TEQSA as good or excellent in relation to regulation not impeding efficient operation. This is a decrease from 66 per cent in the TEQSA Stakeholder Survey 2017. However, 94 per cent of peak, professional and student bodies surveyed in 2018 rated TEQSA as good or excellent. This is an improvement from 92 per cent in 2017.

It is worth noting that there was a significant difference in the response of providers based on their risk rating in relation to students. Of provider respondents with a low risk rating, 63 per cent rated TEQSA as good or excellent in relation to streamlining to reduce burden. However, of the provider respondents with a high or moderate risk rating, 38 per cent rated TEQSA as good or excellent on that measure.

The main reasons given for the deterioration in stakeholder satisfaction were: slow response times, the high turnover in case managers, and the regulator-provider relationship in the case of some providers. The turnover in case managers was primarily a result of previous reductions in average staffing level and continued reliance on contract staff to sustain the agency’s core work. As in 2016-17, TEQSA experienced a high turnover of contract staff and a continued loss of corporate memory and experience through turnover of permanent staff.

Performance Indicator 2.2:

TEQSA’s decisions are provided in a timely manner, clearly articulating the reasons for decisions, and TEQSA gives all higher education providers a reasonable opportunity to address matters relevant to a decision by TEQSA before TEQSA makes a decision that affects that provider.

In 2017-18, the number of assessments decided decreased compared with 2016-17, and although the overall number of days to decision did not deteriorate noticeably from the previous year, there was a marked increase in the time taken to make decisions on applications for re-registration of existing providers and accreditation of new courses from registered providers.

The main factors influencing these results were: the diversion of assessment staff to manage the increased number of compliance assessments, the workload related to matters under consideration by the AAT, the continuing loss of experienced assessment staff and turnover of contractors, and the time taken for staff to familiarise themselves with operationalising the HES Framework 2015.

Caseload in 2017-18 In 2017-18, the decrease in the number of applications received resulted in a reduced number of assessments (132) carried over into 2018-19, in comparison with the 208 assessments carried over into 2017-18. Table 2 sets out TEQSA’s caseload over the last three years.

32 Section 3 | PERFORMANCE REVIEW

Table 2: TEQSA’s caseload

CASELOAD STAGE 2015-16 2016-17 2017-18

Assessments carried over from the previous financial year 194 288 208

Applications received (including initial registration applications) 475 (29)

294 (28)

193 (7)

Completed assessments 381 374 269

Table 3: Completed assessments and decisions

2015-16 2016-17 2017-18

Decisions 298 296 192

Withdrawn/cancelled 83 78 77

TOTAL (completed assessments) 381 374 269

Table 3 sets out the total number of assessments completed and decisions made in 2017-18. The decrease in the number of assessments completed in 2017-18 is partly a reflection of the decrease in the caseload for the year. In 2017-18, 269 assessments were completed, consisting of 192 decisions made and 77 applications that were either withdrawn by the applicant or cancelled by TEQSA. Most of the withdrawals occurred after TEQSA had completed its assessment but before a decision was made.

Six CRICOS registration assessments and 11 CRICOS re-registration assessments were also completed in 2017-18.

In addition, TEQSA completed 605 other assessments of applications made under the ESOS Act, such as changes to student capacity and relocation/new delivery site, compared with 685 assessments of this type in 2016-17.

Meeting caseload timeframes In 2017-18, although the overall median processing time did not deteriorate markedly compared with 2016-17, this was primarily due to the reduced caseload for the year and an improvement in the time taken for decisions about re-accreditation of existing courses.

TEQSA | Annual Report 2017-2018 33

Table 4: Number of assessments decided and number of days to decision

2015-16 2016-17 2017-18

Number of assessments decided 298 296 192

Average number of days to decision 202 303 290

Median number of days to decision 165 295 299

Table 5: Median number of days for processing of applications from submission to decision

2015-16 2016-17 2017-18

Registration 245 349 419

Re-registration 245 377 399

Course accreditation (registered and prospective providers) 193 244 303

Course accreditation (registered providers) 165 160 299

Course re-accreditation 182 363 247

Table 4 provides information regarding the time taken for assessments where a decision was made in 2017-18, in comparison with previous years.

In 2017-18, the overall time taken to make decisions was consistent with 2016-17. However, this was largely due to a reduced caseload and an improvement in the time taken for decisions regarding applications for re-accreditation. In the case of all other assessment types, the median processing time increased (see Table 5).

Regarding applications for registration and accreditation of courses from prospective providers, the increase in the median processing time was primarily a consequence of the need in late 2017 to extend the legislative deadline for nine decisions under section 21 of the TEQSA Act and 26 decisions under section 49. The extensions to legislative deadlines were due to the continuing impact of the large influx of applications submitted prior to the commencement of the HES Framework 2015.

For accreditation of new courses from registered providers, the timeframe for decisions is set in legislation and the time taken increased substantially in 2017-18 compared with 2016-17.

The increase in the median processing time for applications for course accreditation from existing providers was primarily due to the result of the need to divert assessment staff to undertake an increase in the number of compliance assessments, the adjustment by both providers and assessment staff to the HES Framework 2015 and continuing turnover of assessment staff.

Under its governing legislation, TEQSA is obliged to provide particular forms of advice or complete specific processes within specified timeframes. Table 6 contains information about TEQSA’s performance in meeting legislative deadlines required by the TEQSA Act.

34 Section 3 | PERFORMANCE REVIEW

Table 6: Performance in 2017-18 against the requirements of the TEQSA Act

REQUIREMENT PERFORMANCE

Section 19

TEQSA must undertake a preliminary assessment of an application for registration within 30 days after an application is made

Achieved

Section 21

TEQSA must make a decision on the application for registration within 9 months of receiving it, or if TEQSA is satisfied for reasons beyond its control that a decision cannot be made within the 9 months, TEQSA may determine a longer period not exceeding a further 9 months, within which it must make a decision on the application

Not achieved

TEQSA made 13 decisions on applications for registration in 2017-18.

For reasons beyond TEQSA’s control, it extended the legislative deadline for nine of the 13 decisions.

One decision was not made within the legislative deadline.

Section 47

TEQSA must make a preliminary assessment of an application for a course of study to be accredited within 30 days after an application is made.

Not achieved

TEQSA completed preliminary assessment for 58 out of 65 applications for a course of study to be accredited within 30 days after the applications were made.

For seven applications, TEQSA did not complete the preliminary assessment within 30 days after the applications were made.

Section 49

TEQSA must make a decision on the application for accreditation of a course of study within 9 months of receiving it, or if TEQSA is satisfied for reasons beyond its control that a decision cannot be made within the 9 months, TEQSA may determine a longer period not exceeding a further 9 months, within which it must make a decision on the application.

Not achieved

TEQSA made 103 decisions on applications for accreditation in 2017-18.

For reasons beyond TEQSA’s control, it extended the legislative deadline for 26 of the 103 decisions.

10 decisions were not made within the legislative deadline.

TEQSA | Annual Report 2017-2018 35

REQUIREMENT PERFORMANCE

Section 186

TEQSA must make its decision on review reviewable decision within 90 days after receiving the application for review.

Not achieved

TEQSA made decisions on 16 out of 19 internal review applications within the required timeframe.

For three applications, decisions were not made within 90 days after receiving the application for review.

There was a slight improvement in the ratio of APS staff to contractors in the assessment teams compared with the previous financial year from 1.5 APS staff for each contractor to 1.7 APS staff for each contractor. There was also a slight improvement in staff tenure in the assessment teams with 74 per cent of staff having been with the agency for 12 months or more as at 30 June 2018, compared with 53 per cent with 12 months of experience or more as at 30 June 2017.

The continuing deterioration in the time taken to make key decisions is reflected in the 2018 stakeholder survey results in the falling satisfaction of providers, where 52 per cent of principal contact respondents rated TEQSA in relation to timeliness of information after making a decision as good or excellent. This compared with 55 per cent in the 2017 survey and 77 per cent in the 2016 survey.

See the discussion about Human Resources in Section 4: Management and accountability for more information about TEQSA’s staff turnover.

36 Section 3 | PERFORMANCE REVIEW

Increase in the number of compliance assessments In 2017-18, in addition to assessing applications, TEQSA undertook nine compliance assessments of registered higher education providers as a result of increased risk of non-compliance with the HES Framework or the National Code. Compliance assessments were initiated by the agency where it considered there were serious risks to student interests or the reputation of the sector. As of 30 June 2018, seven of these compliance assessments were ongoing.

Prior to late 2017, there was no dedicated team in the agency to undertake compliance assessments and therefore resources were diverted as necessary from the application-based assessment areas. Following the additional funding announced in the MYEFO 2017-18 and a review of workload across assessment groups of the agency, a dedicated team was established to undertake compliance assessments and to manage student complaints about providers.

Adverse decisions TEQSA informs applicants of proposed adverse decisions, including the reasons for those proposed decisions, and no decision is made until the applicant has had an opportunity to respond to the proposed adverse decision. In the 2018 stakeholder survey, close to 64 per cent of all respondents rated TEQSA as good or excellent in terms of providing a reasonable opportunity to address matters relevant to a regulatory decision.

In 2017-18, the proportion of re-registration assessments with an adverse decision increased compared with the last three years (Table 7). Adverse decisions include imposition of conditions, cancellation of registration, or rejection of an application. In 2017-18, 56 per cent of TEQSA’s decisions about re-registration were adverse compared with 50 per cent in 2016-17.

Table 7: Percentage of assessments of re-registration applications with an adverse decision

YEAR ADVERSE (%) POSITIVE (%)

2015-16 45 55

2016-17 50 50

2017-18 56 44

In addition, although six out of the nine decisions made on applications for re-registration (66 per cent) in 2017-18 were to grant the renewal for the maximum seven-year period, two of these decisions included the imposition of conditions on the registration of the providers.

In relation to applications from prospective providers, only three applicants were granted registration and all were granted less than the maximum seven-year period. A total of 30 applications from prospective providers were assessed during 2017-18, with 17 applications withdrawn by the applicants and 10 applications rejected. Of the 10 applications rejected, eight applied for external review in the AAT during 2017-18.

TEQSA | Annual Report 2017-2018 37

External review matters In 2017-18, TEQSA was a party in 17 external review matters in the AAT relating to regulatory decisions.

In addition to two matters carried over from 2016-17, 15 new matters commenced in the AAT in 2017-18. Six of the matters were resolved by agreement with the applicant, three matters were dismissed following withdrawal by applicants for initial registration and eight matters were carried into 2018-19. The most common areas of the HES Framework in relation to the matters involved corporate and academic governance and staffing (including teaching staff), academic leadership, and support staff. Other issues related to course content, staff scholarship/professional development and financial viability.

These external review matters are the agency’s most resource-intensive work, involving case managers and the Legal Group. In 2017-18, matters resolved in the tribunal took an average of 172 days, with withdrawn matters taking less time (73 days) than matters resolved by agreement (214 days).

Performance Indicator 2.3:

Quality assurance and regulatory actions undertaken by TEQSA are proportionate to the risks being managed.

Risk Assessment Framework TEQSA’s Risk Assessment Framework represents a robust approach to assessing risk. The framework is a key tool for providing effective oversight of the quality and reputation of Australian higher education.

In 2017-18, the agency reviewed and made technical changes to the risk assessment framework, process, risk tools and systems to align with the HES Framework 2015. TEQSA published its updated TEQSA’s Risk Assessment Framework in April 2018. As at 30 June 2018, the revised risk assessment framework on the TEQSA website had been viewed over 1,800 times.

For more information about TEQSA’s Risk Assessment Framework www.teqsa.gov.au/latest-news/ publications/risk-assessment-framework

Cycle 5 annual risk assessment In late 2017, TEQSA completed the Cycle 5 annual risk assessment using Higher Education Information Management System (HEIMS) data from the department that had been validated. All providers were sent a risk assessment report for this risk cycle.

In 2018, a combination of factors contributed to TEQSA’s decision to delay risk assessments for standalone ELICOS and Foundation Studies providers including: the decision to establish a new ESOS/CRICOS team, the release of revised ELICOS Standards (which took effect in January 2018), and the timing of CRICOS re-registration for over 25 per cent of providers.

The agency varies the evidence requirements for its assessments based on all available information about each registered provider’s organisational characteristics and risk profile. Analysis of TEQSA’s regulatory decisions has demonstrated a strong alignment between the risk profile of a provider and the outcomes of regulatory decisions.

38 Section 3 | PERFORMANCE REVIEW

Table 8: Risk ratings and outcomes for re-registration

PROVIDER RISK RATING

ADVERSE OUTCOME* (PER CENT) POSITIVE OUTCOME (PER CENT)

2015-16 Moderate to high 70 30

Low 14 86

2016-17 Moderate to high 81 19

Low 0 100

2017-18 Moderate to high 75 25

Low 0 100

*Condition, rejection of application or < 7 years of registration

Table 9: Risk ratings and outcomes for course accreditation and re-accreditation

PROVIDER RISK RATING

ADVERSE OUTCOME* (PER CENT) POSITIVE OUTCOME (PER CENT)

2015-16 Moderate to high 28 72

Low 0 100

2016-17 Moderate to high 66 34

Low 0 100

2017-18 Moderate to high 50 50

Low 58 42

*Condition, rejection of application or < 7 years of accreditation

Table 8 demonstrates the relationship between the risk profile of a provider and the outcome of regulatory decisions about re-registration applications for 2015-16, 2016-17 and 2017-18. The analysis reveals a strong correlation between the risk ratings of providers and the outcomes of assessment of re-registration applications.

Table 9 demonstrates the relationship between the risk profile of a provider and the outcome of regulatory decisions about

course accreditations and re-accreditation applications for 2015-16, 2016-17 and 2017-18. In the case of course accreditations and re-accreditations, there was a very small number of applications for course accreditation or re-accreditation in 2017-18 from providers that are low risk and do not have the authority to accredit their own courses. As a result, the small dataset has impacted the robustness of the analysis.

TEQSA | Annual Report 2017-2018 39

Stakeholder survey results In the 2018 stakeholder survey, 52 per cent of provider respondents rated TEQSA as good or excellent in relation to whether regulatory actions are proportionate to risks. This is a decrease from 57 per cent in the TEQSA Stakeholder Survey 2017.

It is worth noting that there was a significant difference in the responses of providers based on their risk rating in relation to students. In the case of provider respondents with a low risk rating, 73 per cent rated TEQSA as good or excellent in relation to regulatory action being proportionate to risk and in the case of provider respondents with a high or moderate risk rating, 30 per cent rated TEQSA as good or excellent on that measure.

Although the overall provider survey responses show a deterioration in relation to actions being proportionate to risks, over 93 per cent of peak, professional and student bodies surveyed rated TEQSA as good or excellent.

Regulatory principles In assessing applications and making regulatory decisions, TEQSA takes the three basic principles for regulation under the TEQSA Act into consideration: necessity, risk and proportionality. In 2017-18, the agency developed further guidance to support case managers in applying these regulatory principles.

Self-accrediting authority In 2017-18, the first courses that had previously been assessed by TEQSA were submitted for re-accreditation. In order to reduce duplication of evidence requirements and assessment of re-accreditation applications on closely-related courses, the agency implemented a course renewal rationalisation plan and developed advice for providers seeking to apply for SAA. A related objective is to support providers that have a track- record of reliably developing and approving courses that do not to raise material issues in TEQSA’s assessments and encouraging those providers to apply for at least partial SAA.

In 2017-18, TEQSA granted one provider partial SAA.

In order for TEQSA to monitor significant changes and identify any emerging issues in relation to protecting student interests and the reputation of the sector, a core set of data is required for all providers in the sector. The use of a core set of data by multiple areas of government also helps reduce the regulatory burden on providers.

Working with the department In order to monitor the risks to students, TEQSA collects data submitted through the department’s HEIMS. For providers that do not report through HEIMS, TEQSA collects information through a PIR under section 28 of the TEQSA Act. In 2017-18, TEQSA staff continued to participate in meetings with the department to ensure the national data collection is fit for purpose and available when required for annual risk assessments.

40 Section 3 | PERFORMANCE REVIEW

Performance Indicator 2.4:

TEQSA’s compliance and monitoring approaches are streamlined and coordinated.

Working with the Higher Education Standards Panel The HESP is responsible for developing and monitoring the operation of the HES Framework. The TEQSA Commissioners and CEO met regularly with the HESP members during 2017-18, and discussions included:

y the regulatory impact on providers in relation to professional accreditation

y the sector responses to allegations of sexual assault and sexual harassment

y the review of the impact of the TEQSA Act.

The HESP also provided external validation of TEQSA’s self-assessment of its 2016-17 performance against the RPF.

Working with peak and professional bodies TEQSA currently has 25 agreements in place with industry bodies. Agreements with the following bodies were signed or renewed in 2017-18:

y Australian and New Zealand Podiatry Accreditation Council

y Australian Psychology Accreditation Council

y CPA Australia Limited

y Financial Planning Education Council - Financial Planning Association of Australia

y Optometry Council of Australia and New Zealand

y The Financial Adviser Standards and Ethics Authority

y Universities Admissions Centre.

In 2017-18, the agency continued its quarterly meetings with CPA Australia Limited to share information about providers of accounting courses.

The agency also contributed to discussions on professional accreditation with the HESP and submitted a response to the Independent Review of the National Registration and Accreditation Scheme for health professions with a view to further developing models of professional accreditation that reduce duplication in requirements for providers.

TEQSA | Annual Report 2017-2018 41

Working with international quality agencies In late 2017, TEQSA participated in the assessment of a course by the HKCAAVQ. The course, offered by an Australian university, was delivered through a third party in Hong Kong.

The joint assessment represented a pilot program aimed at determining the equivalency of the accreditation processes of the two agencies and the information gathered during this exercise will contribute to TEQSA’s assessment of the university’s application for re-registration, to be undertaken in 2018. It also provided an opportunity to share information and learn from international counterparts as part of TEQSA’s ongoing commitment to continuous improvement.

Performance Indicator 2.5:

Effective implementation of the requirements of regulatory responsibilities is achieved, including the TEQSA and ESOS Acts.

Review of the impact of the TEQSA Act Throughout 2017-18, TEQSA provided the department with further advice in relation to the review of the impact of the TEQSA Act. The agency is awaiting finalisation of the Australian Government’s response to the report of the review.

Amendments to legislation In 2017-18, there were a number of important changes to legislation affecting TEQSA.

In August 2017, the Education Legislation Amendment (Provider Integrity and Other Measures) Act 2017 commenced, which amended the TEQSA Act, ESOS Act and Higher Education Support Act 2003 to improve TEQSA’s ability to assure the quality of Australian higher education by:

y enabling TEQSA to take account of the history of related entities, as well as the history of a provider’s education delivery

y introducing a requirement that all registered higher education providers, and key personnel for those providers, must be fit and proper persons

y clarifying the definition of ‘vocational education and training course’ to make clear that courses which lead to Diplomas, Advanced Diplomas, Graduate Diplomas and Graduate Certificates are required to be accredited under the TEQSA Act or under vocational education laws

y clarifying that TEQSA may delegate its functions or powers to the Chief Executive Officer

y improving information-sharing arrangements under the ESOS Act

y introducing more stringent requirements for applications to access FEE-HELP

y strengthening compliance requirements for FEE-HELP in relation to marketing, admissions and financial viability.

42 Section 3 | PERFORMANCE REVIEW

On 1 January 2018, amended versions of the ESOS National Code and the ELICOS Standards commenced. This occurred after extensive consultation between the department, education quality assurance agencies (including TEQSA), other government agencies and peak bodies representing education providers.

In 2017-18, TEQSA established a new team specialising in ESOS/CRICOS assessments and that team has developed an implementation plan to address the key changes made by these amendments, including staffing and admissions arrangements for ELICOS, improving the information provided to international students and reflecting up-to-date methods of educational delivery.

In the 2018 stakeholder survey, 52 per cent of provider respondents rated TEQSA good or excellent in relation to whether it has a streamlined and coordinated approach. This is a decrease from 55 per cent in the TEQSA Stakeholder Survey 2017. However, 80 per cent of peak, professional and student bodies surveyed in 2018 rated TEQSA as good or excellent. This is a decline from 85 per cent in 2017.

Performance Indicator 2.6:

The quality assurance framework continues to be improved in consultation with stakeholders.

In 2017-18, the agency continued to seek opportunities for continuous improvement of its regulatory processes. Consultation with stakeholders was a valuable tool for not only gathering feedback, but also for seeking the sector’s view on any proposed changes.

Following consultation with the higher education sector on TEQSA’s proposed changes to its approach to public reporting on the National Register of Higher Education Providers (National Register), the agency announced in late 2017 that the proposed changes would take effect from 1 January 2018. These changes aimed to improve transparency of TEQSA’s regulatory decision, and included:

y the publication of decisions to reject applications for initial registration and initial course accreditation prior to the commencement of any external review of the decisions

y the publication of news announcements or media releases about decisions

y corresponding changes to the TEQSA National Register Guidelines.

For more information about the policy on public reporting of TEQSA’s decisions www.teqsa.gov.au/for-providers/ resources/policy-public-reporting-regulatory-decisions

In October 2017, TEQSA consulted with the higher education sector on proposed changes to matters that TEQSA may take into account when determining whether a person or provider is fit and proper, and expects to finalise its new approach early in 2018-19.

In the 2018 stakeholder survey, 57 per cent of provider respondents rated TEQSA as good or excellent in relation to whether it continues to improve its regulatory framework. This is a decrease from 61 per cent in the TEQSA Stakeholder Survey 2017. However, 79 per cent of peak, professional and student bodies surveyed in 2018 rated TEQSA as good or excellent. This is an improvement from 67 per cent in 2017.

TEQSA | Annual Report 2017-2018 43

Goal 3: Constructive and collaborative relationships with governments, higher education providers and other stakeholders

Performance Indicator 3.1:

TEQSA’s communication with higher education providers is clear, targeted and effective.

During 2017-18, the agency engaged with the higher education sector through its website, annual conference and other activities.

TEQSA website In November 2017, the new TEQSA website was successfully launched, incorporating feedback from external stakeholders including current and prospective providers, students, and peak/professional bodies, as well as internal stakeholders.

From the website’s launch to 30 June 2018, there were over 600,000 page views and close to 90,000 visitors.

In 2017-18, TEQSA also engaged with the sector through:

y a monthly external newsletter, with a subscriber count of 3,100

y social media channels, including Twitter and LinkedIn.

TEQSA conference and other sector engagement events The second TEQSA Conference, with the theme of Students, Quality, Success, was held from 28 November to 1 December 2017. The conference program was well received with strong representation across all areas of the higher education sector, including peak bodies, international agencies and students. Feedback about the 2017 conference was very positive, with over 80 per cent of provider respondents to the stakeholder survey rating the program, quality of speakers, relevance of material and opportunity for interaction as good or excellent.

The conference received 784 registrations over the three days and a total of 115 presenters participated in 70 plenary and concurrent sessions. Delegates came from 225 organisations, including 65 student delegates and nine international delegates. Students also featured prominently in the conference sessions, adding a student perspective to discussions.

In 2017-18, TEQSA commenced an occasional forum series, with the first on student attrition attracting over 200 attendees. A second forum on combatting contract cheating attracted 130 attendees. Both events received positive feedback with requests for more forum and workshop events.

44 Section 3 | PERFORMANCE REVIEW

In 2017-18, the agency also held the first of two Higher Education Provider Roundtable events that addressed the areas TEQSA could improve on, as identified in the TEQSA Stakeholder Survey 2017. This engagement was focused on non-university higher education providers and allowed an open discussion with members of the TEQSA Commission and senior management staff on key concerns for these providers in relation to:

y timeliness of decision making

y inconsistency in case manager approach

y appropriateness of the approach to the annual risk assessment

y standing of the TEQSA guidance notes.

The roundtable also gave providers an opportunity to suggest improvements to TEQSA’s processes. Feedback related in particular to engagement with TEQSA assessment staff and the selection of experts from a broader cross-section of the sector.

TEQSA Commissioners and senior staff were frequently invited to present at higher education conferences and events in 2017-18. Agency representatives presented at, or attended, more than 30 events to discuss TEQSA’s approach to quality assurance and regulation.

Stakeholder survey results In the 2018 stakeholder survey, 64 per cent of provider respondents rated TEQSA good or excellent in relation to whether its communication with higher education providers is clear, targeted and effective. This is a decrease from 72 per cent in the 2017 stakeholder survey. However, 87 per cent of peak, professional and student bodies surveyed in 2018 rated TEQSA as good or excellent. This is an improvement from 85 per cent in 2017.

Performance Indicator 3.2:

TEQSA has enhanced engagement with students in consultation with peak student bodies, and other stakeholders.

In 2017-18, the agency continued to strengthen relationships with students, peak student bodies and other stakeholders.

Over 85 per cent of peak, professional and student body respondents to the 2018 stakeholder survey rated TEQSA’s communication with their organisation as good or excellent.

Engagement with student representatives In late 2017, TEQSA established the Student Expert Advisory Group, which aims to provide the agency with advice on approaches and strategies to engage students in regulatory and quality assurance activities. The inaugural meeting of the group was held in March 2018 where the topics discussed included: addressing the issue of sexual assault and sexual harassment at Australian higher education providers, the role of TEQSA and international student complaints, and how the agency can continue to engage with the wider higher education student community.

The feedback from the meeting was used to develop a student engagement strategy, which will assist TEQSA to meet key objects of the TEQSA Act (which include protecting student interests and ensuring students have access to information relating to higher education in Australia).

For more information on the Student Expert Advisory Group www.teqsa.gov.au/ student-engagement

TEQSA | Annual Report 2017-2018 45

In 2017-18, TEQSA also formalised a number of relationships with major student representative bodies by signing MoUs with the:

y National Union of Students on 21 September 2017

y Council of Australian Postgraduate Associations on 10 November 2017

y Council for International Students Australia on 29 November 2017

y National Aboriginal and Torres Strait Islander Postgraduate Association on 30 November 2017.

Engagement of external experts When undertaking assessments, TEQSA staff may engage external expertise in a range of discipline areas and in specialised higher education learning and teaching methodologies. To enable engagement of sector expertise, TEQSA established a Register of Experts that staff use to identify subject matter experts to assist in assessing course accreditation applications. In 2017-18, the agency also sought advice from experts in some registration assessments. Table 10 shows the number of work assignments completed by experts in 2017-18 compared with previous years.

Table 10: Work assignments completed by experts

FINANCIAL YEAR COMPLETED WORK ASSIGNMENTS

2015-16 178

2016-17 191

2017-18 191

In 2017-18, the agency continued its work on a project to review the TEQSA Register of Experts, which will consider all aspects of engagement with this group, as well as improve the quality and efficiency of TEQSA’s interactions with experts.

Consultation with peak and professional student bodies TEQSA has engaged with peak and professional bodies through an ‘MoU approach’.

TEQSA and professional bodies with links to Australian higher education have a mutual interest in maintaining and improving the quality and reputation of the sector and, in 2017-18, TEQSA signed MoUs with 36 organisations.

The agency and its MoU partners aim to work together to share data, intelligence and accreditation loads, reduce duplication and streamline processes and undertake joint assessments where possible.

For more information about TEQSA’s engagement with professional bodies www.teqsa.gov.au/engagement-professional-bodies

See Performance Indicator 2.4 for more information about TEQSA’s interactions with peak and professional bodies.

46 Section 3 | PERFORMANCE REVIEW

Performance Indicator 3.3:

TEQSA’s dealings with higher education providers are open, transparent and consistent.

Publication of regulatory decisions From January 2018, the agency began publishing its decisions to reject applications for initial registration on the TEQSA website www.teqsa.gov.au/ unsuccessful-applications. TEQSA also began publishing decisions to reject new course applications by registered providers on the National Register.

See Performance Indicator 2.6 for more information on changes to TEQSA’s approach to public reporting.

National Register of Higher Education Providers TEQSA is required by section 198 of the TEQSA Act to establish and maintain a National Register, which lists TEQSA’s regulatory decisions and reasons for those decisions, on the TEQSA website www.teqsa.gov.au/national-register.

In 2017-18, four new providers were added to the National Register, including one registration decision made by the AAT. As of 30 June 2018, there were 168 providers registered with TEQSA as per Table 11 and there were 1,593 TEQSA-accredited courses listed on the National Register.

As of 30 June 2018, there were 168 providers registered with TEQSA as per Table 11 and there were 1,593 TEQSA-accredited courses listed on the National Register.

Table 11: National Register breakdown as at 30 June 2018

PROVIDER CATEGORY PROVIDERS

WITH SAA (FULL OR PARTIAL)

PROVIDERS WITH NO SAA

TOTAL

Higher Education Provider* 12 113 125

Australian University 40 0 40

Australian University of Specialisation 1 0 1

Overseas University 2 0 2

Total providers 55 113 168

* includes for-profit, not-for-profit and TAFE providers

TEQSA | Annual Report 2017-2018 47

Almost 75 per cent of provider respondents to the 2018 stakeholder survey rated the quality of information provided on the National Register of Higher Education Providers as good or excellent. As at 30 June 2018, the National Register had been viewed more than 230,000 times since the launch of the new TEQSA website in November 2017.

For-profit, not-for-profit and TAFE providers In 2017-18, in addition to the Higher Education Provider Roundtable session reported under Performance Indicator 3.1, TEQSA’s Commissioners, CEO and staff met with for-profit, not-for-profit, and TAFE providers, both individually and with their peak bodies. These providers have also been invited to TEQSA events, including the 2017 TEQSA Conference and occasional forums.

In the 2018 stakeholder survey, 62 per cent of provider respondents rated TEQSA as good or excellent in relation to whether it is open, transparent and consistent in its dealings. This is a decrease from 68 per cent in the TEQSA Stakeholder Survey 2017. However, 91 per cent of peak, professional and student bodies surveyed in 2018 rated TEQSA as good or excellent. This is a slight improvement from 89 per cent in 2017.

Performance Indicator 3.4:

Increased synergies developed with other agencies and contributions to collaborative goals.

Information sharing In 2017-18, TEQSA continued to strengthen collaboration with Commonwealth agencies and regulatory agencies of other countries through the sharing of information relevant to regulation. The agency participated in meetings of the Education Regulatory Immigration Committee (ERIC) and the working group to exchange information about providers, prospective providers and their related entities.

See Performance Indicator 1.3 for more information about the agency’s MoCs with international regulatory agencies.

Collaboration with ASQA TEQSA and ASQA continued to work together in 2017-18 to share information about existing dual-sector providers and about VET providers seeking entry into the higher education sector. The two agencies also progressed joint policy positions, exchanged intelligence, and oversaw the execution of joint strategic initiatives. Although TEQSA and ASQA are required to assess providers under different sets of quality standards, the two agencies continued to apply coordinated approaches to manage all CRICOS-related matters for dual-sector providers and this has now expanded to the sharing of increased information on providers registered with both agencies.

48 Section 3 | PERFORMANCE REVIEW

In 2017-18, a revised approach for coordinated assessment of dual-sector providers was negotiated with ASQA to focus on a streamlined model with periodic sharing of findings rather than joint assessment.

TEQSA and ASQA have a joint register of the risk profiles of dual-sector providers. The register is used by agency staff to establish evidence requirements and inform the scope of assessment. In 2017-18, the joint ASQA-TEQSA risk register was actively maintained and utilised to further inform TEQSA’s risk-based regulatory approach.

Admissions transparency Following the release of the HESP report Improving the Transparency of Higher Education Admissions in October 2016, the Admissions Transparency Implementation Working Group, a sector-led working group, developed the Admissions Transparency Implementation Plan to respond to the Higher Education Standards Panel’s recommendations. In 2017-18, the Implementation Working Group delivered an implementation plan.

In the 2017-18 Budget, TEQSA was provided with $3.3 million over four years for the monitoring of improved transparency of admissions processes, including a formative evaluation. TEQSA completed the formative evaluation of providers’ implementation of improved admissions transparency in October 2017 and published Advice on Admissions Transparency for providers in February 2018.

The agency has engaged with the sector on good practice guidance for meeting the relevant standards relating to admissions transparency through:

y the publication of Advice on Admissions Transparency in February 2018

y forums held in Adelaide, Melbourne, Perth, Sydney and Brisbane in March and April 2018 for administrators responsible for the implementation of admissions transparency

y the release of a checklist, which was developed in response to provider requests, to support the implementation of admissions transparency.

Further work to monitor and report on admissions transparency in the higher education sector, with a comprehensive review and evaluation of the sector’s response to the HESP’s recommendation, will be completed in future years.

For more information about TEQSA’s work in relation to admissions transparency www.teqsa.gov.au/admissions-transparency

TEQSA | Annual Report 2017-2018 49

Performance Indicator 3.5:

Providers are supported in implementing the 2015 Higher Education Standards Framework.

In 2017-18, the agency continued its efforts to monitor and support providers in implementing the HES Framework 2015. In particular, TEQSA engaged with prospective providers through:

y a joint workshop with Council of Private Higher Education (COPHE) on applying for registration, held to assist prospective providers to prepare applications of the required quality

y targeted individual meetings with all prospective providers that had indicated an intention to apply for registration in 2018.

Guidance notes TEQSA endeavours to provide advice and greater clarity for providers when interpreting and applying the HES Framework 2015 through its publication of guidance notes. In 2017-18, TEQSA published three new guidance notes. Between the launch of the new TEQSA website in November 2017 to 30 June 2018, there were over 40,000 page views of information about TEQSA guidance notes.

Over 80 per cent of provider respondents to the 2018 stakeholder survey rated TEQSA’s guidance and support materials as good or excellent in terms of the relevance, usefulness, quality and quantity of the information as well as the ease of access to that information.

For more information about TEQSA’s guidance notes www.teqsa.gov.au/ guidance-notes

Analysis of TEQSA’s financial performance For the 2017-18 financial year, the agency recorded a total comprehensive loss of $0.53 million, which is $0.59 million or 52.7 per cent lower than the deficit of $1.12 million in 2016-17. The decrease in operating deficit is primarily attributed to the timing of the commencement of the compliance and investigations function associated with the additional funding of $1.9 million given in the MYEFO 2017-18.

The 2017-18 operating deficit is only $0.15 million lower than the estimated deficit of $0.68 million as set out in the 2017-18 Portfolio Budget Statements. Despite the additional funding given at MYEFO, supplier expense has increased due to legal expenditure associated with more applications for review of TEQSA decisions in the AAT, higher than expected utilisation of contractors and external experts to address the increased workload, and the backlog of assessments from 2016-17. This resulted in the small variance between the actual and estimated operating deficit.

Excluding the unfunded depreciation and amortisation expenses of $0.87 million, TEQSA achieved an operating surplus of $0.34 million as against an operating deficit of $0.51 million in 2016-17.

MANAGEMENT AND ACCOUNTABILITY 4

Corporate governance

Human resources

Financial management

52 Section 4 | MANAGEMENT AND ACCOUNTABILITY

SECTiON 4: MANAGEMENT AND ACCOUNTABiLiTY

Corporate governance TEQSA’s corporate governance framework incorporates:

y regulatory and management decision-making bodies

y an integrated planning framework

y systems, policies and directives such as the Enterprise Risk Management Framework, the internal control framework, and accountable authority instructions

y an ethical and accountable organisational culture

y transparency in public reporting.

Decision forums and committees

Accountable authority Section 132 of the TEQSA Act establishes the Commissioners as the accountable authority for the purposes of the PGPA Act. This confers various responsibilities and powers on the accountable authority to promote high standards of accountability and performance. As the accountable authority, TEQSA Commissioners are responsible for the governance of TEQSA’s operations under the PGPA Act.

In 2017-18, Commissioners met regularly as the accountable authority to review performance against the corporate plan and received monthly reports on the assessment workload and financial performance.

Commission meetings The TEQSA Commission is responsible for making regulatory decisions, setting strategic directions, monitoring risk in the sector, and deciding on matters relating to the development of TEQSA’s quality assurance and regulatory framework, and its management of strategic relationships with key stakeholders.

In 2017-18, the Commissioners met on a fortnightly basis to consider and make decisions on regulatory matters.

Senior management team meetings The Senior Management Team (SMT) comprises the Chief Executive Officer (CEO) and senior managers. The role of the SMT is to guide the ongoing development of TEQSA’s management and administration processes and policies. It is also responsible for developing, implementing, coordinating and overseeing the agency’s corporate plan and operational activities and projects. The SMT reviews TEQSA’s performance against the objectives set out in the corporate plan and makes regular reports to the Commission as the accountable authority.

TEQSA | Annual Report 2017-2018 53

Additionally, the SMT is responsible for:

y the development, management and monitoring of the TEQSA Budget, including capital investments

y advising Commissioners on developments, including amendments to and implementation of, regulatory approaches and processes

y the development and approval of corporate policies and procedures for the recruitment, training, development, management and performance of the agency’s staff.

In 2017-18, the Senior Management Team met fortnightly and received regular reports, including quarterly progress reports against the operational plan.

Audit committee TEQSA’s Audit Committee has been established in compliance with section 42 of the PGPA Act and operates under an Audit Committee Charter approved by the accountable authority. The committee comprised two external members (including the Chair) appointed by the accountable authority and a TEQSA Commissioner.

The Audit Committee’s role is to provide independent assurance to the accountable authority on TEQSA’s financial and non-financial performance reporting responsibilities, risk oversight and management and system of internal control. This includes reviewing the proposed internal audit coverage to ensure the approach is focused on TEQSA’s key areas of financial and operational risk.

In 2017-18, two internal audits were carried out:

y a review of the implementation and integration of TEQSA’s procurement framework throughout the agency

y a review of TEQSA’s provider registration and course accreditation processes.

In 2017-18, the Audit Committee met on a quarterly basis.

Security committee TEQSA’s Security Committee comprises the CEO, the Director Corporate, the Agency Security Adviser and the Information Technology Security Adviser. The committee meets quarterly, focuses on all aspects of protective security affecting the agency, and assists the agency to meet its compliance, risk management, business continuity management and reporting requirements under the Australian Government Protective Security Policy Framework.

Planning and management

Corporate planning The TEQSA Corporate Plan 2017-21 was:

y submitted to the Minister by 30 April 2017, as required under the TEQSA Act

y approved in May 2017

y published on the TEQSA website by 31 August 2017

y provided to the Minister for Finance.

54 Section 4 | MANAGEMENT AND ACCOUNTABILITY

Enterprise Risk Management Framework TEQSA accepts that there may be risk in any aspect of its operations and that having an appropriate strategy for risk is critical. TEQSA uses a risk-based approach for its day-to-day business and is committed to the continuous improvement of risk management practices in line with the Commonwealth Risk Management Policy and Department of Finance Resource Management Guide 211 (ISO 31000:2009).

TEQSA’s Enterprise Risk Management Framework is underpinned by a strong organisational culture, a deep understanding of risk in relation to regulatory matters, a risk management policy and risk appetite statement, an internal control framework, an enterprise risk register, a Fraud Control and Anti-Corruption Plan, and arrangements for staff training and support.

In 2017-18, a mandatory training program was rolled out for staff to complete an updated course on security essentials, as well Australian Government eLearning modules on Fraud Awareness, Introduction to Cyber Security, and Introduction to Risk in the Commonwealth. The agency’s Risk Adviser also undertook more detailed training with Comcover.

Protective security TEQSA’s Agency Security Adviser is responsible for coordinating security functions in the agency and providing advice to the CEO, management and staff on security matters. In 2017-18, TEQSA applied appropriate protective security measures, based on its risk profile, to ensure compliance with the majority of the mandatory requirements under the Protective Security Policy Framework. Mitigation plans have been established to address the remainder.

Ethical standards TEQSA’s measures to promote ethical standards within the agency include:

y providing training for all staff in fraud awareness and conflicts of interest

y maintaining policies relating to ethical standards and behaviour relevant to TEQSA’s operational context; for example, in relation to email, internet use, fraud and disclosure of information

y building adherence to the Australian Public Service (APS) Code of Conduct and Values into the individual performance and development plans of TEQSA staff.

External scrutiny TEQSA is subject to external scrutiny by:

y the Office of the Commonwealth Ombudsman

y the Australian National Audit Office

y the AAT

y the Attorney-General’s Department

y the Office of the Australian Information Commissioner

y parliamentary committees.

During 2017-18, the Australian National Audit Office, the Commonwealth Ombudsman and parliamentary committees did not issue any reports on the operations of TEQSA. No judicial decisions, decisions of administrative tribunals, or decisions by the Australian Information Commissioner in 2017-18 had a significant impact on the operations of TEQSA.

TEQSA | Annual Report 2017-2018 55

During 2017-18, TEQSA officials appeared at parliamentary committee hearings for:

y 2017-18 Supplementary Budget Estimates (26 October 2017)

y 2017-18 Additional Estimates (1 March 2018)

y 2018-19 Budget Estimates (31 May 2018).

Fraud control The Commonwealth Fraud Control Policy requires that accountable authorities provide a report about fraud annually to their Minister. Section 10 of the Public Governance Performance and Accountability Rule 2014 requires the agency to take all reasonable measures to prevent, detect and deal with fraud, including by undertaking fraud risk assessments and establishing a fraud-control plan.

TEQSA’s Fraud and Anti-Corruption Plan sets out TEQSA’s policy and approach to fraud control, procedures to effectively manage fraud and corruption risks and incidents, and relevant reporting obligations. The plan, reviewed annually by TEQSA’s Audit Committee, also provides for appropriate training and awareness-raising activities to support TEQSA staff in understanding their responsibilities in relation to fraud control.

TEQSA employees are subject to a robust employment screening process. Ongoing staff commencing with TEQSA are required to be vetted by the Australian Government Security Vetting Agency to obtain a baseline national security clearance.

TEQSA adopts a zero-tolerance policy towards fraud and corruption, and aims to manage the fraud risk to a level as low as is reasonably practicable. The success of the fraud initiatives undertaken by TEQSA to date is reflected in the fact that no fraud incidents occurred during 2017-18. TEQSA will continue to take a proactive role in fraud management, prevention and detection, based on its risk profile and in accordance with the Commonwealth Fraud Control Policy.

Service charter The TEQSA Service Charter articulates the agency’s commitment to engaging with stakeholders, its service standards and how it handles complaints. TEQSA believes its quality assurance and regulatory approach should be responsive and service-oriented. To ensure good practice in its handling of complaints, TEQSA ensures students, providers and the general public are informed of options for making complaints about a provider or about TEQSA. More information is contained in this report at Appendix H. TEQSA has begun a review of its arrangements for handling complaints with the intention of further improving this area of service.

More broadly, TEQSA manages its relationships with providers in line with the APS Code of Conduct and Values, which emphasise professionalism and accountability.

In 2017-18, the TEQSA Service Charter was reviewed.

For more information about the Service Charter www.teqsa.gov.au/for-providers/ resources/teqsa-service-charter

56 Section 4 | MANAGEMENT AND ACCOUNTABILITY

Human resources The terms and conditions of employment for non-Senior Executive Service (SES) TEQSA employees are set out in the Tertiary Education Quality and Standards Agency Enterprise Agreement 2018-2021. This new enterprise agreement was voted up by staff in December 2017, approved by the Fair Work Commission, and came into effect on 18 May 2018.

TEQSA maintains a shared-services arrangement with the Productivity Commission for information and communications technology, and payroll services. The arrangement is beneficial for both agencies and for TEQSA’s service delivery, significantly reducing costs.

Staffing statistics As at 30 June 2018 TEQSA employed 31 APS and 26 executive-level staff, including four Office Holders. All were based in Melbourne.

In 2017-18, the agency continued to experience a high attrition rate for APS staff with a turnover rate of 13.3 per cent compared with an APS average of about 7 per cent. In relation to contractors, although the attrition rate improved from the 136 per cent reported for 2016-17, it remained high at 70.7 per cent.

More information on TEQSA’s staffing profile is included at Appendix C.

Remuneration and other terms and conditions The conditions of employment for APS and executive-level employees are set out in the enterprise agreement. It offers competitive terms and conditions of employment, including financial assistance for relevant professional development.

TEQSA Commissioners, including the Chief Commissioner, are appointed by the Minister pursuant to section 138 of the TEQSA Act and are paid the remuneration determined by the Remuneration Tribunal. The CEO of TEQSA is also appointed by the Minister and the CEO’s remuneration is determined by the Remuneration Tribunal.

Non-salary benefits Non-salary benefits provided by the agency to employees include superannuation, home-based computer access, professional development and studies assistance, and flexible working arrangements.

Performance pay TEQSA’s Enterprise Agreement does not include provision for performance pay.

Performance assessment TEQSA has a formal performance management system in place for staff. This assists in:

y clarifying individual employee work tasks, responsibilities and performance

y setting performance expectations and providing feedback

y improving communication between managers and their staff (through performance appraisals)

y providing a basis for determining salary advancement within classifications, identifying learning and professional development needs and opportunities, and identifying and managing underperformance.

TEQSA | Annual Report 2017-2018 57

Learning committee The Learning Committee is driven by a community of staff, focusing on information sharing by enhancing understanding and knowledge of strategic and emerging issues in the higher education sector. In 2017-18, TEQSA’s Learning Committee facilitated 15 interactive sessions for staff with presenters from peak bodies, international agencies and internal experts of TEQSA.

Professional development TEQSA recognises the value of a well-educated workforce and provides staff with learning and development opportunities to develop skills and knowledge for current and future roles and responsibilities. In 2017-18, TEQSA provided staff with the following professional development:

y leadership training for senior managers

y information sessions on the HES Framework 2015

y training in legal writing

y case management system training.

TEQSA’s Enterprise Agreement also provided access for all staff to an annual reimbursement of up to $3000 for the cost of relevant professional development, including fees associated with an approved course of study.

Workplace consultative arrangements The agency consulted regularly with staff through a number of forums. Regular all-staff meetings provided staff with updates on a range of management and operational issues. Each group within the agency held regular meetings to raise issues and put forward ideas for improving the work environment. In addition, staff were able to provide comment and feedback through the TEQSA Staff Consultative Committee.

Financial management

Grants TEQSA does not administer a discretionary grants program.

Legal services TEQSA’s Legal Group provides, or arranges for the provision of, legal services in relation to all aspects of TEQSA’s operations.

Where necessary, the Legal Group obtains additional legal expertise from external legal service providers. The Legal Group ensures that TEQSA complies with the Legal Services Directions and other Commonwealth policies or rules relevant to the provision of legal services.

For more information about TEQSA’s legal services expenditure www.teqsa.gov.au/ our-contracts-senate-order-listing

58 Section 4 | MANAGEMENT AND ACCOUNTABILITY

Performance against core purchasing policies TEQSA adhered to the core policies and principles of the Commonwealth Procurement Rules throughout the reporting period. An appropriate approach to market was made for all procurements covered by the Commonwealth Procurement Rules.

Competitive tendering and contracting TEQSA’s Accountable Authority Instructions and Procurement Manual require compliance with the Commonwealth Procurement Rules.

All contracts worth more than $10 000 entered into by TEQSA in 2017-18 were lodged on AusTender.

Procurement initiatives to support small business TEQSA supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.

TEQSA’s procurement practices support small and medium enterprises by using:

y the Commonwealth Contracting Suite for low-risk procurements valued under $200 000

y the Small Business Engagement Principles to effectively engage and communicate with small businesses

y electronic systems to ensure invoices are paid on time and within the 30-day payment terms.

Exempt contracts No contracts were exempted by the CEO from being published on AusTender on the basis that publication would disclose exempt matters under the Freedom of Information Act 1982.

Australian national audit office access clauses No contracts were let during the year for $100 000 or more with provisions to exempt Australian National Audit Office access to contractors’ premises.

Fees TEQSA operates on a partial cost-recovery basis, consistent with Commonwealth Cost Recovery Guidelines. Section 158 of the TEQSA Act states that TEQSA may determine fees for things done in the performance of its functions. Fees collected by TEQSA under cost recovery arrangements are returned to the Australian Government’s Consolidated Revenue. TEQSA cannot determine fees without the Minister’s approval.

TEQSA developed its initial fee schedule based on parameters set by the Australian Government in 2011 and TEQSA’s status as a partial cost recovery agency. In the 2018-19 Budget it was announced that TEQSA will progressively transition from partial cost recovery to a full cost-recovery model over a four-year period.

Fees payable as at 30 June 2018 are available at www.legislation.gov.au/ Details/F2016C00677

TEQSA | Annual Report 2017-2018 59

Information technology TEQSA’s information technology infrastructure and support is provided by the Productivity Commission under a shared-services agreement.

TEQSA is required to comply with the guidance from the Australian Government Information Management Office Implementation of upgraded accessibility standard across Australian Government websites. This requires TEQSA’s website to conform to Web Content Accessibility Guidelines version 2.0 (WCAG 2.0).

Consultancies Policy on selecting and engaging consultants The agency engages consultants where it requires specialist expertise or when independent research, review or assessment is required.

Consultants are typically engaged to investigate or diagnose a defined issue or problem; carry out defined reviews or evaluations; or provide independent advice, information or creative solutions to assist in the agency’s decision making.

Prior to engaging consultants, the agency takes into account the skills and resources required for the task, the skills available internally and the cost effectiveness of engaging external expertise. The decision to engage a consultant is made in accordance with the PGPA Act and related regulations including the Commonwealth Procurement Rules and relevant internal policies.

In 2017-18, the main purposes for engaging consultants were to:

y provide independent assessments, analysis and advice, and apply high level expertise not otherwise available to the agency

y undertake research, studies and modelling exercises.

Annual reports contain information about actual expenditure on contracts for consultancies.

Information on the value of contracts and consultancies is available on the AusTender website at www.tenders.gov.au

Consultancy contracts During 2017-18, ten new consultancy contracts were entered into, involving total actual expenditure of $274 028 (GST inclusive).

In addition, four ongoing consultancy contracts were active during the period, involving a total expenditure of $149 930 (GST inclusive).

FINANCIAL REPORT 5

Independent auditor’s report

Statement by the accountable authority and Chief Financial Officer

Financial statement

62 Section 5 | FINANCIAL REPORT

GPO Box 707 CANBERRA ACT 2601 19 National Circuit BARTON ACT Phone (02) 6203 7300 Fax (02) 6203 7777

INDEPENDENT AUDITOR’S REPORT

To the Minister for Education

Opinion

In my opinion, the financial statements of the Tertiary Education Quality and Standards Agency for the year ended 30 June 2018:

(a) comply with Australian Accounting Standards - Reduced Disclosure Requirements and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015; and

(b) present fairly the financial position of the Tertiary Education Quality and Standards Agency as at 30 June 2018 and its financial performance and cash flows for the year then ended.

The financial statements of the Tertiary Education Quality and Standards Agency, which I have audited, comprise the following statements as at 30 June 2018 and for the year then ended:

 Statement by the Accountable Authority and Chief Financial Officer;  Statement of Comprehensive Income;  Statement of Financial Position;  Statement of Changes in Equity;  Cash Flow Statement;  Administered Schedule of Comprehensive Income;  Administered Schedule of Assets and Liabilities;  Administered Reconciliation Schedule;  Administered Cash Flow Statement; and  Notes to and forming part of the financial statements, comprising a Summary of Significant

Accounting Policies and other explanatory information.

Basis for Opinion

I conducted my audit in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Tertiary Education Quality and Standards Agency in accordance with the relevant ethical requirements for financial statement audits conducted by the Auditor-General and his delegates. These include the relevant independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) to the extent that they are not in conflict with the Auditor-General Act 1997. I have also fulfilled my other responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Accountable Authority’s Responsibility for the Financial Statements

As the Accountable Authority of the Tertiary Education Quality and Standards Agency, the Commissioners are responsible under the Public Governance, Performance and Accountability Act 2013 for the preparation and fair presentation of annual financial statements that comply with Australian Accounting Standards - Reduced Disclosure Requirements and the rules made under that Act. The Commissioners are also responsible for such internal control as the Commissioners determine is necessary to enable the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Commissioners are responsible for assessing the Tertiary Education Quality and Standards Agency’s ability to continue as a going concern, taking into account whether the entity’s operations will cease as a result of an administrative restructure or for any other

TEQSA | Annual Report 2017-2018 63

reason. The Commissioners are also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the assessment indicates that it is not appropriate.

Auditor’s Responsibilities for the Audit of the Financial Statements

My objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an

audit conducted in accordance with the Australian National Audit Office Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with the Australian National Audit Office Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

 identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;  obtain an understanding of internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control;  evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Accountable Authority;  conclude on the appropriateness of the Accountable Authority’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the entity to cease to continue as a going concern; and  evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

Australian National Audit Office

Peter Kerr

Executive Director

Delegate of the Auditor-General

Canberra

31 August 2018

64 Section 5 | FINANCIAL REPORT

SECTiON 5: FiNANCiAL REPORT

Contents Certification 65

Primary financial statement

Statement of Comprehensive income 66

Statement of Financial Position 68

Statement of Changes in Equity 70

Cash Flow Statement 72

Administered Schedule of Comprehensive income 74

Administered Schedule of Assets and Liabilities 75

Administered Reconciliation Schedule 76

Administered Cash Flow Statement 77

Notes to the financial statements

Overview 78

1. Department Financial Performance

1.1 Expenses 80

1.2 Own-Source Revenue and Gains 82

2. income and Expenses Administered on Behalf of Government

2.1 Administered - Expenses 84

2.2 Administered - Income 84

3. Departmental Financial Position

3.1 Financial Assets 85

3.2 Non-Financial Assets 86

3.3 Payables 89

3.4 Other Provisions 90

4. Assets and Liabilities Administered on Behalf of Government

4.1 Administered - Financial Assets 91

4.2 Administered - Payables 91

5. Funding

5.1 Appropriations 92

5.2 Regulatory Charging Summary 95

5.3 Net Cash Appropriation Arrangements 96

6. People and Relationships

6.1 Employee Provisions 97

6.2 Key Management Personnel Remuneration 98

6.3 Related Party Disclosures 99

7. Managing Uncertainties

7.1 Contingent Assets and Liabilities 100

7.2 Financial Instruments 101

7.3 Administered - Financial Instruments 102

7.4 Fair Value Measurement 103

7.5 Administered - Fair Value Measurement 103

TEQSA | Annual Report 2017-2018 65

66 Section 5 | FINANCIAL REPORT

Statement of Comprehensive Income for the Tertiary Education Quality and Standards Agency for the period ended 30 June 2018

2018 2017

Original Budget

Notes $'000 $'000 $'000

NET COST OF SERVICES

Expenses Employee benefits 1.1A 6,894 5,804 6,959

Suppliers 1.1B 7,266 6,519 5,551

Depreciation and amortisation 3.2A 873 617 676

Finance costs 12 10 -

Losses from asset sales 1 10 -

Total expenses 15,046 12,960 13,186

Own-Source Income

Own-source revenue Sale of goods and rendering of services 1.2A 123 86 5

Rental income 1.2B 255 316 255

Resources received free of charge 54 53 52

Total own-source revenue 432 455 312

Gains Reversal of write-downs and impairment 11 22 -

Total gains 11 22 -

Total own-source income 443 477 312

Net (cost of)/contribution by services (14,603) (12,483) (12,874)

Revenue from Government 1.2C 14,072 11,359 12,198

Surplus/(Deficit) attributable to the Australian Government (531) (1,124) (676)

OTHER COMPREHENSIVE INCOME Total other comprehensive income - - -

Total comprehensive loss attributable to the Australian Government

(531)

(1,124)

(676)

The above statement should be read in conjunction with the accompanying notes.

Original Budget reflects the figures in the 2017-18 Portfolio Budget Statements (PBS).

TEQSA | Annual Report 2017-2018 67

Budget Variances Commentary

Statement of Comprehensive Income for the Tertiary Education Quality and Standards Agency

Suppliers The ASL capping has resulted in the reliance on contractors and experts to address the higher than anticipated regulatory workload and the backlog of assessments from 2016-17. In addition, legal expenditure has risen due to increased legal workload associated with an increased number of applications for review of TEQSA decisions in the Administrative Appeals Tribunal. As a consequence, actual supplier expenses were $1.715 million (31%) higher than budgeted.

Depreciation and amortisation

Capital expenditure on computer equipment and internally developed software was greater than the allocated budget, resulting in actual depreciation and amortisation being $0.197 million (29%) higher than anticipated.

Revenue from Government

Additional funding of $1.874 million was allocated in the 2017-18 MYEFO budget round to enable TEQSA to enhance its compliance capabilities and address immediate resourcing needs associated with an increase in regulatory workload.

68 Section 5 | FINANCIAL REPORT

Statement of Financial Position for the Tertiary Education Quality and Standards Agency as at 30 June 2018

2018 2017

Original Budget

Notes $'000 $'000 $'000

ASSETS Financial assets Cash and cash equivalents 160 112 109

Trade and other receivables 3.1A 6,248 5,982 5,096

Total financial assets 6,408 6,094 5,205

Non-financial assets Buildings - leasehold improvements 3.2A 816 1,006 1,045

Plant and equipment 3.2A 461 367 568

Intangibles - computer software 3.2A 1,684 1,599 2,197

Other non-financial assets 174 180 247

Total non-financial assets 3,135 3,152 4,057

Total assets 9,543 9,246 9,262

LIABILITIES Payables Suppliers 3.3A 494 533 222

Other payables 3.3B 1,265 1,478 1,311

Total payables 1,759 2,011 1,533

Provisions Employee provisions 6.1A 1,490 1,297 1,456

Other provisions 3.4A 826 890 913

Total provisions 2,316 2,187 2,369

Total liabilities 4,075 4,198 3,902

Net assets 5,468 5,048 5,360

EQUITY Contributed equity 11,414 10,463 11,414

Retained surplus/(Accumulated deficit) (5,946) (5,415) (6,054)

Total equity 5,468 5,048 5,360

The above statement should be read in conjunction with the accompanying notes.

Original Budget reflects the figures in the 2017-18 Portfolio Budget Statements (PBS).

TEQSA | Annual Report 2017-2018 69

Budget Variances Commentary

Statement of Financial Position for the Tertiary Education Quality and Standards Agency

Trade and other receivables

Trade and other receivables were $1.152 million (23%) higher than original budget mainly attributed to the undrawn appropriation from the additional funding allocated in the 2017-18 MYEFO budget round.

Property, plant and equipment (PPE) and Intangibles

The net carrying value of PPE and Intangibles were $0.849 million (22%) less than the forecasted net value due to the higher opening balances for the gross book value and accumulated depreciation & amortisation reflected in the budget. As a result, budgeted depreciation was also higher.

Supplier payables The increase in supplier payables of $0.272 million (123%) was driven by the higher than budgeted accrued expenses mainly in respect of the higher than anticipated utilisation of contractors and legal expenditure.

70 Section 5 | FINANCIAL REPORT

Statement of Changes in Equity for the Tertiary Education Quality and Standards Agency for the period ended 30 June 2018

2018 2017

Original Budget

$’000 $'000 $'000

CONTRIBUTED EQUITY Opening balance Balance carried forward from previous period 10,463 9,599 10,463

Opening balance 10,463 9,599 10,463

Transactions with owners Contributions by owners Equity injection - Appropriation 100 - 100

Departmental capital budget 851 864 851

Total transactions with owners 951 864 951

Closing balance as at 30 June 11,414 10,463 11,414

RETAINED EARNINGS Opening balance Balance carried forward from previous period (5,415) (4,291) (5,378)

Opening balance (5,415) (4,291) (5,378)

Comprehensive income Surplus/(Deficit) for the period (531) (1,124) (676)

Total comprehensive income (531) (1,124) (676)

Closing balance as at 30 June (5,946) (5,415) (6,054)

TOTAL EQUITY Opening balance Balance carried forward from previous period 5,048 5,308 5,085

Opening balance 5,048 5,308 5,085

Comprehensive income Surplus/(Deficit) for the period (531) (1,124) (676)

Other comprehensive income - - -

Total comprehensive income (531) (1,124) (676)

Transactions with owners Contributions by owners Equity Injection - Appropriation 100 - 100

Departmental capital budget 851 864 851

Total transactions with owners 951 864 951

Closing balance as at 30 June 5,468 5,048 5,360

The above statement should be read in conjunction with the accompanying notes.

Original Budget reflects the figures in the 2017-18 Portfolio Budget Statements (PBS).

TEQSA | Annual Report 2017-2018 71

Accounting Policy Equity Injections Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Restructuring of Administrative Arrangements Net assets received from or relinquished to another Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity.

Other Distributions to Owners The FRR require that distributions to owners be debited to contributed equity unless it is in the nature of a dividend.

Budget Variances Commentary

Statement of Changes in Equity for the Tertiary Education Quality and Standards Agency

Surplus/Deficit for the period

The increase in expenditure matched the additional funding allocated in the 2017-18 MYEFO budget round. This resulted in a lower deficit of $0.145 million (21%) than budgeted.

72 Section 5 | FINANCIAL REPORT

Cash Flow Statement for the Tertiary Education Quality and Standards Agency for the period ended 30 June 2018

2018 2017

Original Budget

Notes $’000 $'000 $'000

OPERATING ACTIVITIES Cash received Appropriations 14,976 14,346 11,944

Sales of goods and rendering of services 358 427 233

Net GST received 708 581 485

Total cash received 16,042 15,354 12,662

Cash used Employees 6,689 6,836 7,016

Suppliers 8,186 7,259 5,961

Section 74 receipts transferred to OPA 1,174 1,176 -

Total cash used 16,049 15,271 12,977

Net cash from/(used by) operating activities (7) 83 (315)

INVESTING ACTIVITIES Cash used Purchase of property, plant and equipment and intangibles 863 912 636

Total cash used 863 912 636

Net cash (used by) investing activities (863) (912) (636)

FINANCING ACTIVITIES Cash received Contributed equity 918 825 951

Total cash received 918 825 951

Net cash from financing activities 918 825 951

Net increase/ (decrease) in cash held 48 (4) -

112 116 109

160 112 109

The above statement should be read in conjunction with the accompanying notes.

Original Budget reflects the figures in the 2017-18 Portfolio Budget Statements (PBS).

Cash and cash equivalents at the beginning of the reporting period

Cash and cash equivalents at the end of the reporting period

TEQSA | Annual Report 2017-2018 73

Budget Variances Commentary

Cash Flow Statement for the Tertiary Education Quality and Standards Agency

Cash received - Appropriations and Cash used - Section 74 receipts transferred to OPA The appropriations received and cash used for the transfer of Section 74 receipts to the Official Public Account (OPA), were not separately identified but presented on a net basis in the original budget. Net appropriation drawdown was higher than budget by $1.858 million (16%) mainly attributed to increase in supplier expenses.

Cash received - Sales of goods and rendering of services The higher level of cash received from sales of goods and rendering of service of $0.125 million (54%) was mainly due to the TEQSA 2017 Conference, which was not included in the budget.

Cash received - Net GST received The increase in net GST received of $0.223 million (46%) was primarily due to the higher GST paid to suppliers in line with the increased supplier expenses.

Cash used - Suppliers Cash paid to suppliers was higher than budget by $2.225 million (37%) due to a higher than anticipated utilisation of contractors and legal expenditure as well as fluctuations with the timing of payment to suppliers.

Cash used - Purchase of property, plant and equipment and intangibles Higher than anticipated costs incurred on the replacement of computer equipment, the TEQSA website redevelopment as well as the CRM system enhancements resulted in the increase in cash used by $0.227 million (36%).

74 Section 5 | FINANCIAL REPORT

Administered Schedule of Comprehensive Income for the Tertiary Education Quality and Standards Agency for the period ended 30 June 2018

2018 2017

Original Budget

Notes $’000 $'000 $'000

NET COST OF SERVICES

Income

Revenue Non-taxation revenue Fees 2.2A 2,307 2,829 3,643

Total non-taxation revenue 2,307 2,829 3,643

Total income 2,307 2,829 3,643

The above schedule should be read in conjunction with the accompanying notes.

Original Budget reflects the figures in the 2017-18 Portfolio Budget Statements (PBS).

Budget Variances Commentary

Administered Schedule of Comprehensive Income for the Tertiary Education Quality and Standards Agency

Fees

Fees was $1.336 million (37%) lower than budget due to variations in the estimates of initial registration and course accreditation applications.

TEQSA | Annual Report 2017-2018 75

Administered Schedule of Assets and Liabilities for the Tertiary Education Quality and Standards Agency

as at 30 June 2018

TEQSA returns all administered revenue to the Consolidated Revenue Fund and does not have any administered assets or liabilities. Hence, the Administered Schedule of Assets and Liabilities is not presented.

76 Section 5 | FINANCIAL REPORT

Administered Reconciliation Schedule for the Tertiary Education Quality and Standards Agency

2018 2017

$’000 $'000

Opening assets less liabilities as at 1 July - -

Net contribution by services Income 2,307 2,829

Transfers (to)/from the Australian Government

Appropriation transfers from Official Public Account (OPA) Special appropriations (limited) Payments to entities other than corporate Commonwealth entities 47 26

Appropriation transfers to OPA Transfers to OPA (2,354) (2,855)

Closing assets less liabilities as at 30 June - -

The above schedule should be read in conjunction with the accompanying notes.

Accounting Policy Administered Cash Transfers to and from the Official Public Account

Revenue collected by TEQSA for use by the Government rather than TEQSA is administered revenue. Collections are transferred to the Official Public Account (OPA) maintained by the Department of Finance. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of Government. These transfers to and from the OPA are adjustments to the administered cash held by TEQSA on behalf of the Government and reported as such in the schedule of administered cash flows and in the administered reconciliation schedule.

TEQSA | Annual Report 2017-2018 77

Administered Cash Flow Statement for the Tertiary Education Quality and Standards Agency for the period ended 30 June 2018

2018 2017

Notes $’000 $'000

OPERATING ACTIVITIES

Cash received Fees 2,354 2,855

Total cash received 2,354 2,855

Cash used Refunds to higher education providers 47 26

Total cash used 47 26

Net cash from operating activities 2,307 2,829

Net increase in cash held 2,307 2,829

Cash and cash equivalents at the beginning of the reporting period - -

Cash from Official Public Account Appropriations 47 26

Total cash from official public account 47 26

Cash to Official Public Account Appropriations (2,354) (2,855)

Total cash to Official Public Account (2,354) (2,855)

Cash and cash equivalents at the end of the reporting period - -

This schedule should be read in conjunction with the accompanying notes.

78 Section 5 | FINANCIAL REPORT

New Accounting Standards

The financial statements have been prepared in accordance with:

The Basis of Preparation

All new, revised, amending standards and/or interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect on TEQSA's financial statements.

a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and

Cash and Cash Equivalents

Cash is recognised at its nominal amount. Cash and cash equivalents include cash on hand, deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

Other Non-Financial Assets

Other non-financial assets consist of prepayments which are expected to be consumed within the next 12 months.

Overview

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars.

Taxation

TEQSA is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

b) Australian Accounting Standards and Interpretations - Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

Except for AASB 116 Leases which is operative from 1 January 2019, all other new, revised, amending standards and/or interpretations that were issued prior to the sign-off date and are applicable to future reporting periods are not expected to have a future material impact on TEQSA's financial statements.

Notes to and forming part of the Financial Statements

TEQSA | Annual Report 2017-2018 79

Departmental

Administered

There was no subsequent event that had the potential to significantly affect the ongoing structure and financial activities of TEQSA.

Events After the Reporting Period

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.

Reporting of Administered activities

There was no subsequent event that had the potential to significantly affect the ongoing structure and financial activities of TEQSA.

Except where otherwise stated, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

80 Section 5 | FINANCIAL REPORT

1.1 Expenses

2018 2017

$’000 $’000

1.1A: Employee Benefits Wages and salaries 5,409 4,703

Superannuation Defined contribution plans 534 469

Defined benefit plans 322 336

Leave and other entitlements 629 218

Separation and redundancies - 78

Total employee benefits 6,894 5,804

Accounting Policy

Accounting policies for employee related expenses are contained in the People and Relationships section.

1.1B: Suppliers Goods and services supplied or rendered

Consultants 386 201

Contractors 2,684 2,587

Travel 370 370

IT services 542 483

Other 2,024 1,691

Total goods and services supplied or rendered 6,006 5,332

Goods supplied 137 100

Services rendered 5,869 5,232

Total goods and services supplied or rendered 6,006 5,332

Other suppliers Operating lease rentals 1,172 966

Workers compensation expenses 88 221

Total other suppliers 1,260 1,187

Total suppliers 7,266 6,519

Financial Performance This section analyses the financial performance of the Tertiary Education Quality and Standards Agency for the year ended 2018

TEQSA | Annual Report 2017-2018 81

Leasing commitments

TEQSA in its capacity as lessee holds one office accommodation lease for its Melbourne office. The lease, which commenced in 2011-12 expires on 30 April 2022, with a five year option.

Lease payments are subject to a fixed percentage annual increase in accordance with the lease agreement.

2018 2017

$’000 $’000

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

Within 1 year 1,659 1,574

Between 1 to 5 years 5,110 6,663

Total operating lease commitments 6,769 8,237

Note: Commitments are GST inclusive where relevant.

Accounting Policy

Operating lease payments are expensed on a straight-line basis, which is representative of the pattern of benefits derived from the leased assets.

82 Section 5 | FINANCIAL REPORT

1.2 Own-Source Revenue and Gains

2018 2017

$’000 $’000

Own-Source Revenue

1.2A: Sale of Goods and Rendering of Services Rendering of services 123 86

Total sale of goods and rendering of services 123 86

Accounting Policy

Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:

a) the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and

b) the probable economic benefits associated with the transaction will flow to TEQSA.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Receivables for services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

1.2B: Rental Income Operating lease Sublease rental 255 316

Total rental income 255 316

Subleasing rental income commitments

TEQSA in its capacity as lessor sublets office accommodation for its surplus office space. The sublease commenced on 21 September 2015 and expires on 28 February 2022.

Lease receipts are subject to a fixed percentage annual increase in accordance with the sublease agreement.

Commitments for sublease rental income receivables are as follows:

Within 1 year 283 302

Between 1 to 5 years 797 1,222

Total sublease rental income commitments 1,080 1,524

TEQSA | Annual Report 2017-2018 83

1.2C: Revenue from Government Appropriations:

Departmental appropriations 14,072 11,359

Total revenue from Government 14,072 11,359

Accounting Policy

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when TEQSA gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

84 Section 5 | FINANCIAL REPORT

2.1 Administered - Expenses

For the year ended 30 June 2018, no administered expenses had been incurred by TEQSA (2017: nil).

2.2 Administered - Income

2018 2017

$'000 $'000

Revenue

Non-Taxation Revenue

2.2A: Fees

Fees from regulatory services 2,307 2,829

Total fees 2,307 2,829

Accounting Policy

All administered revenues are revenues relating to ordinary activities performed by TEQSA on behalf of the Australian Government. As such, administered appropriations are not revenues of the individual entity that oversees distribution of the funds as directed.

Revenue is generated from partial cost recovery arrangements for specified services to higher education providers. Fees are charged on registration and re-registration of providers, accreditation and re-accreditation of courses, and major variations to registrations and accreditations. Administered revenue is recognised on receipt of applications from the higher education providers.

Income and Expenses Administered on Behalf of Government

This section analyses the activities that the Tertiary Education Quality and Standards Agency does not control but administers on behalf of the Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.

TEQSA | Annual Report 2017-2018 85

3.1 Financial Assets

2018 2017

$’000 $’000

3.1A: Trade and Other Receivables Goods and services receivables Goods and services 14 11

Total goods and services receivables 14 11

Appropriations receivables Appropriation receivable 5,819 5,516

Total appropriations receivables 5,819 5,516

Other receivables GST receivable from the Australian Taxation Office 178 166

Sublease incentive 100 127

Operating sublease receivable 123 140

Other 14 22

Total other receivables 415 455

Total trade and other receivables (gross) 6,248 5,982

Credit terms for goods and services were within 30 days (2017: 30 days).

No provision for impairment is provided for as at balance date.

Accounting Policy

Trade and Other Receivables

Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment.

Financial assets are assessed for impairment at the end of each reporting period.

Financial Position This section analyses the Tertiary Education Quality and Standards Agency's assets used to conduct its operations and the operating liabilities incurred as a result. Employee related information is disclosed in the People and Relationships section.

86 Section 5 | FINANCIAL REPORT

3.2 Non-Financial Assets

3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles for 2018

Buildings - Leasehold Improvements Plant and

Equipment

Intangibles -Computer

Software1 Total

$’000 $’000 $’000 $’000

As at 1 July 2017 Gross book value 1,142 493 2,922 4,557

Accumulated depreciation, amortisation and impairment (136) (126) (1,323) (1,585)

Total as at 1 July 2017 1,006 367 1,599 2,972

Additions Purchase 16 219 18 253

Internally developed - - 610 610

Depreciation and amortisation (206) (124) (543) (873)

Disposals Other - (54) - (54)

Write back of accumulated depreciation and amortisation - 53 - 53

Total as at 30 June 2018 816 461 1,684 2,961

Total as at 30 June 2018 represented by Gross book value 1,158 658 3,550 5,366

Accumulated depreciation, amortisation and impairment (342) (197) (1,866) (2,405)

Total as at 30 June 2018 816 461 1,684 2,961

Contractual commitments for the acquisition of property, plant and equipment and intangible assets There were no significant contractual commitments for the acquisition of property, plant and equipment and intangible assets as at balance date.

1. The carrying amount of computer software includes $0.023 million of purchased software and $1.661 million of internally generated software.

No indicators of impairment were found when assessing property, plant and equipment and intangible assets.

No property, plant and equipment or intangibles are expected to be sold or disposed of within the next 12 months.

TEQSA | Annual Report 2017-2018 87

Accounting Policy

2018 2017

Leasehold inprovements Lease term Lease term

Plant and equipment 3 to 10 years 3 to 10 years

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Non-financial assets are initially measured at their fair value plus transaction costs where appropriate. Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

Asset Recognition Threshold Purchases of leasehold improvements, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $2,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by TEQSA where there exists an obligation to restore the property to its original condition. These costs are included in the value of TEQSA’s leasehold improvements with a corresponding provision for the ‘make good’ recognised.

Revaluations Following initial recognition at cost, leasehold improvements, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depend upon the volatility of movements in market values for the relevant assets.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

Impairment All assets were assessed for impairment at 30 June 2018. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reverse a previous revaluation increment for that class. Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Depreciation Depreciable leasehold improvements, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to TEQSA using, in all cases, the straight-line method of depreciation. Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if TEQSA were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition An item of leasehold improvements, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

88 Section 5 | FINANCIAL REPORT

Accounting Judgements and Estimates

All software assets were assessed for indications of impairment as at 30 June 2018.

The fair value of non-financial assets has been taken to be the market value of similar assets as determined by management assessment.

Intangibles TEQSA's intangibles comprise purchased and internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of TEQSA's software are 3 to 5 years (2017: 3 to 5 years).

TEQSA | Annual Report 2017-2018 89

3.3 Payables

2018 2017

$’000 $’000

3.3A: Suppliers payables Trade creditors and accruals 494 533

Total suppliers payables 494 533

Settlement is usually made within 30 days. All supplier payables are expected to be settled within 12 months. Liabilities are recognised to the extent that the goods or services have been received (irrespective of having been invoiced).

3.3B: Other Payables Salaries and wages 50 36

Superannuation 7 10

Lease incentive 654 825

Operating lease payable 553 578

Prepayments received/unearned income - 28

Other 1 1

Total other payables 1,265 1,478

90 Section 5 | FINANCIAL REPORT

3.4 Other Provisions

3.4A: Other Provisions

Provision for

restoration1

Provision for

onerous contracts2 Total

$’000 $’000 $’000

As at 1 July 2017 470 420 890

Additional provisions made - 6 6

Amounts used - (71) (71)

Amounts reversed (11) - (11)

Unwinding of discount or change in discount rate 10 2 12

Total as at 30 June 2018 469 357 826

1. TEQSA currently has 1 (2017: 1) agreement for the leasing of premises, which has a provision requiring TEQSA to restore the premises to their original condition at the conclusion of the lease. TEQSA has made a provision to reflect the present value of this obligation.

2. TEQSA currently has 1 (2017: 1) agreement for the leasing of accommodation, which is surplus to its requirements. TEQSA has made a provision to reflect the present value of the expected costs to be incurred that are in excess of the economic benefit expected to be derived from the lease.

Accounting Judgements and Estimates When the present value of the future cash flows receivable from the operation of leased assets is less than the present value of the rental payments to which TEQSA is committed, TEQSA applies the shortfall firstly against the carrying amount of the assets, and then provides for any further onerous element of the contract.

TEQSA has made a provision for its onerous obligations under non-cancellable operating leases where the leased property is vacant and where the rental expense is in excess of income. Determining the amount of such provision requires estimating the future net cash flows receivable, and in particular, cases where the leased property is vacant, this requires assessing the likely period for which the property will remain vacant, the cost of any works required to enhance its marketability and the rental income receivable when the property is sublet. To the extent that actual cash flows received differ from those estimated, the amount of provision recognised could differ materially.

TEQSA | Annual Report 2017-2018 91

4.1 Administered - Financial Assets

As at 30 June 2018, TEQSA held no administered financial assets (2017: nil).

4.2 Administered - Payables

As at 30 June 2018, TEQSA held no administered payables (2017: nil).

Assets and Liabilities Administered on Behalf of Government

This section analyses assets used to conduct operations and the operating liabilities incurred which the Tertiary Education Quality and Standards Agency does not control but administers on behalf of the Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.

92 Section 5 | FINANCIAL REPORT

5.1 Appropriations

5.1A: Annual Appropriations ('Recoverable GST exclusive')

Annual

Appropriation1

Adjustments to

appropriation2 $'000 $'000 $'000 $'000 $'000

Departmental Ordinary annual services 14,072 1,174 15,246 14,928 318

Capital Budget4 851 - 851 918 (67)

Other services Equity Injections 100 - 100 - 100

Total departmental 15,023 1,174 16,197 15,846 351

Administered Ordinary annual services - - - - -

Capital Budget4 - - - - -

Administered items - - - - -

Other services - - - - -

Total administered - - - - -

Annual Appropriations for 2018

Total

appropriation

Appropriation applied in 2018 (current and prior years) Variance3

1. In 2017-18, there were no appropriations which have been withheld (Section 51 of the PGPA Act) and quarantined for administration purposes.

2. In 2017-18, adjustments to appropriation comprised $1.174 million of PGPA Act Section 74 receipts.

3. In 2017-18, the variance between total appropriation and appropriation applied in 2018 for Ordinary Annual Services relates to additional funding allocated at the 2017-18 MYEFO budget round which has not been fully utilised.

4. Departmental and Administered Capital Budgets are appropriated through Appropriation Acts (No.1,3,5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts.

Funding This section identifies the Tertiary Education Quality and Standards Agency's funding structure.

TEQSA | Annual Report 2017-2018 93

Annual

Appropriation1 Adjustments to appropriation2 $'000 $'000 $'000 $'000 $'000

Departmental Ordinary annual services 11,359 1,176 12,535 14,350 (1,815)

Capital Budget4 864 - 864 825 39

Other services Equity Injections - - - - -

Total departmental 12,223 1,176 13,399 15,175 (1,776)

Administered Ordinary annual services - - - - -

Capital Budget4 - - - - -

Administered items - - - - -

Other services - - - - -

Total administered - - - - -

1. In 2016-17, there were no appropriations which have been withheld (Section 51 of the PGPA Act) and quarantined for administration purposes.

2. In 2016-17, adjustments to appropriation comprised $1.176 million of PGPA Act Section 74 receipts.

3. In 2016-17, the variance between total appropriation and appropriation applied in 2017 for Ordinary Annual Services relates to payments funded from unspent prior year appropriation items.

4. Departmental and Administered Capital Budgets are appropriated through Appropriation Acts (No.1,3,5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts.

Total

appropriation

Appropriation applied in 2017 (current and prior years) Variance3

Annual Appropriations for 2017

94 Section 5 | FINANCIAL REPORT

5.1B: Unspent Annual Appropriations ('Recoverable GST exclusive') 2018 2017

$’000 $’000

Departmental Appropriation Act (No. 1) - Capital Budget (DCB) 2015-16 - 673

Appropriation Act (No. 1) 2016-17 - 4,091

Appropriation Act (No. 1) - Capital Budget (DCB) 2016-17 504 504

Supply Act (No. 1) - Capital Budget (DCB) 2016-17 115 360

Appropriation Act (No. 1) 2017-18 2,283 -

Appropriation Act (No. 1) - Capital Budget (DCB) 2017-18 851 -

Appropriation Act (No. 2) - Equity Injection 2017-18 100 -

Appropriation Act (No. 3) 2017-18 2,126 -

Total departmental 5,979 5,628

5.1C: Special Appropriations ('Recoverable GST exclusive')

2018 2017

Type Purpose $'000 $'000

Public Governance, Performance and Accountability Act 2013 s77 , Administered Refund To provide an appropriation where an Act or other law

requires or permits the repayment of an amount received by the Commonwealth and the Finance Minister is satisfied that, apart from this section, there is no specific appropriation for the repayment.

47 26

Total special appropriations applied 47 26

Authority

Appropriation applied

TEQSA | Annual Report 2017-2018 95

5.2 Regulatory Charging Summary

2018 2017

$’000 $’000

Amounts applied Departmental Annual appropriations 10,124 10,038

Total amounts applied 10,124 10,038

Expenses Departmental 9,613 8,573

Total expenses 9,613 8,573

External revenue Administered 2,307 2,829

Total external revenue 2,307 2,829

Regulatory charging activities:

TEQSA has in place partial regulatory charging for specified services to higher education providers including: registration and re-registration of providers; accreditation and re-accreditation of courses; and major variations to registrations and accreditations.

All fee revenue from regulatory charging activities is administered revenue and is returned to the Consolidated Revenue Fund. TEQSA does not have any administered expenses.

Documentation (Cost Recovery Implementation Statement) for the above activities is available at https://www.teqsa.gov.au/fees.

96 Section 5 | FINANCIAL REPORT

5.3 Net Cash Appropriation Arrangements

2018 2017

$’000 $’000

Total comprehensive income/(loss) less depreciation/amortisation expenses previously funded through revenue appropriations 342 (507)

Plus: depreciation/amortisation expenses previously funded through revenue appropriation (873) (617)

Total comprehensive income/(loss) - as per the Statement of Comprehensive Income (531) (1,124)

TEQSA | Annual Report 2017-2018 97

6.1 Employee Provisions

2018 2017

$’000 $’000

6.1A: Employee Provisions Leave 1,490 1,297

Total employee provisions 1,490 1,297

Accounting Policy Liabilities for short-term employee benefits and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts.

Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave The liability for employee benefits includes provision for annual leave and long service leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including TEQSA’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined by the use of the Australian Government Actuary’s shorthand method using the Standard Commonwealth sector probability profile. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. TEQSA recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

TEQSA's staff are members of the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government.

The PSS is a defined benefit scheme for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

TEQSA makes employer contributions to the employees' defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. TEQSA accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June represents outstanding contributions.

People and Relationships This section describes a range of employment and post employment benefits provided to our people and our relationships with other key people.

98 Section 5 | FINANCIAL REPORT

6.2 Key Management Personnel Remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. TEQSA has determined the key management personnel to be the Commissioners, Chief Executive Officer, Chief Financial Officer and Directors. Key management personnel remuneration is reported in the table below:

2018 2017

$'000 $'000

Short-term employee benefits 1,608 1,542

Post-employment benefits 181 191

Other long-term employee benefits 126 147

Total key management personnel remuneration expenses1 1,915 1,880

The total number of key management personnel that are included in the above table is 10 (2017: 9).

1. The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by TEQSA.

TEQSA | Annual Report 2017-2018 99

6.3 Related Party Disclosures

Related party relationships:

TEQSA is an Australian Government controlled entity. Related parties to TEQSA are Key Management Personnel including the Portfolio Minister and Executive.

Transactions with related parties:

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. These transactions have not been separately disclosed in this note.

Giving consideration to relationships with related parties, and transactions entered into during the reporting period by TEQSA, it has been determined that there are no related party transactions that require disclosure.

100 Section 5 | FINANCIAL REPORT

7.1 Contingent Assets and Liabilities

7.1A: Contingent Assets and Liabilities

TEQSA had no departmental contingencies at 30 June 2018 (2017: nil).

7.1B: Administered - Contingent Assets and Liabilities

TEQSA had no administered contingencies at 30 June 2018 (2017: nil).

Accounting Policy

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent

assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

Managing Uncertainties This section analyses how the Tertiary Education Quality and Standards Agency manages financial risks within its operating environment.

TEQSA | Annual Report 2017-2018 101

7.2 Financial Instruments

2018 2017

$’000 $’000

7.2A: Categories of Financial Instruments Financial Assets Loans and receivables Cash and cash equivalents 160 112

Trade and other receivables 28 33

Total loans and receivables 188 145

Total financial assets 188 145

Financial Liabilities Financial liabilities measured at amortised cost Suppliers payables 494 533

Total financial liabilities measured at amortised cost 494 533

Total financial liabilities 494 533

Accounting Policy

Financial assets The classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. TEQSA only holds financial assets of loans and receivables. Financial assets are recognised and derecognised upon trade date.

Effective Interest Method Income is recognised on an effective interest rate basis.

Impairment of Financial Assets Financial assets are assessed for impairment at the end of each reporting period.

Financial assets held at amortised cost - if there is objective evidence that an impairment loss has been incurred for loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Statement of Comprehensive Income.

Financial liabilities

Financial liabilities are classified as other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

Other Financial Liabilities Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis.

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

102 Section 5 | FINANCIAL REPORT

7.2B: Net Gains or Losses on Financial Assets There were no gains or losses on financial assets - loans and receivables for the year ended 30 June 2018 (2017: nil)

7.2C: Net Gains or Losses on Financial Liabilities

There were no gains or losses on other financial liabilities for the year ended 30 June 2018 (2017: nil)

7.3 Administered - Financial Instruments

TEQSA had no administered financial instruments as at 30 June 2018 (2017: nil).

TEQSA | Annual Report 2017-2018 103

7.4 Fair Value Measurement

Accounting Policy

TEQSA engaged Australian Valuation Solutions (AVS) to conduct a detailed external valuation of its non-financial assets during the 2015-16 financial year and has relied upon the results of this external valuation when establishing the carrying amounts of non-financial assets. AVS had provided written assurance to TEQSA that the valuation models developed are compliant with AASB 13.

An annual assessment is undertaken to determine whether the carrying amount of the assets are materially different from their fair value. Comprehensive valuations are carried out at least once every three years.

TEQSA's policy is to recognise transfers into and transfers out of the fair value hierarchy levels as at the end of the reporting period.

7.4A: Fair Value Measurement

Fair value measurements at the end of the reporting period

2018 2017

$'000 $'000

Non-financial assets2

Buildings - Leasehold improvements1

816

1,006

Plant and equipment1

461

367

1. No non-financial assets were measured at fair value on a non-recurring basis as at 30 June 2018 (2017: Nil).

2. TEQSA's assets are held for operational purpose and not held for the purposes of deriving a profit. The current use of all non-financial assets is considered their highest and best use.

7.5 Administered - Fair Value Measurement

TEQSA had no administered assets and liabilities as at 30 June 2018 (2017:nil), hence fair value measurement is not applicable.

APPENDICES 6

Appendix A: Legislative framework

Appendix B: Summary of resources

Appendix C: Staffing profile

Appendix D: Freedom of information

Appendix E: Ecologically-sustainable development and environmental performance

Appendix F: Advertising and market research

Appendix G: Workplace health and safety

Appendix H: Complaints handling

Appendix I: Disability reporting

106 Section 6 | APPENDICES

SECTiON 6: APPENDiCES

Appendix A: Legislative framework The TEQSA Act is the primary basis of TEQSA’s powers. The objects of the Act are to:

y provide for national consistency in the regulation of higher education

y regulate higher education using a standards-based quality framework and principles relating to regulatory necessity, risk and proportionality

y protect and enhance Australia’s reputation for quality higher education, the international competiveness of Australia’s higher education sector, as well as excellence, diversity and innovation in higher education

y encourage and promote a higher education system that is appropriate to meet Australia’s social and economic needs for a highly educated and skilled population

y protect students undertaking, or proposing to undertake higher education in Australia, by requiring the provision of quality higher education

y ensure that students have access to information relating to higher education in Australia.

TEQSA assures the quality of registered higher education providers through nationally consistent regulation and meets the objects of the TEQSA Act through performing functions including:

y registering providers and accrediting courses of study in accordance with the TEQSA Act

y investigating whether the TEQSA Act has been or is being complied with, including by conducting compliance assessments

y collecting, analysing, interpreting and disseminating information relating to higher education providers, regulated higher education awards, quality assurance practice and improvement in higher education and the HES Framework

y cooperating with counterparts in other countries.

The agency also has responsibility under the Education Services for Overseas Students Act 2000 (ESOS Act) to register providers and courses on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) and make changes to registration, including the addition of courses and changes in student capacity, for the following providers:

y higher education providers registered under the TEQSA Act

y English Language Intensive Courses for Overseas Students (ELICOS) providers if they have an entry arrangement with a registered higher education provider

y Foundation program providers.

TEQSA is also subject to several other acts and legislative instruments including (but not limited to) the:

y Public Governance, Performance and Accountability Act 2013 (PGPA Act)

y Public Service Act 1999

y Work Health and Safety Act 2011

y Safety, Rehabilitation and Compensation Act 1988

y Freedom of Information Act 1982.

TEQSA | Annual Report 2017-2018 107

Appendix B: Summary of resources

Table B.1: Entity Resource Statement 2017-18

ENTITY RESOURCE STATEMENT 2017-18

Actual available appropriation for 2017-18

$’000

Payments made for 2017-18

$’000

Balance remaining 2017-18

$’000

(a) (b) (a)-(b)

Ordinary annual services1

Departmental appropriation2 21 725 15 846 5879

Total ordinary annual services A 21 725 15 846 5879

Other services3

Departmental non-operating

Equity injections 100 - 100

Total other services B 100 - 100

Total available annual

appropriations and payments 21 825 15 846 5979

Special appropriations

Special appropriations limited by criteria/entitlement

Public Governance, Performance and Accountability Act 2013 - s77

47

Total special appropriations C 47

Total resourcing and payments for TEQSA

A + B +C 21 825 15 893

1. Appropriation Act (No. 1) 2017-18 and Appropriation Act (No. 3) 2017-18. This also include prior-year departmental appropriation and section 74 retained revenue receipts.

2. Includes an amount of $0.851m in 2017-18 for the departmental capital budget. For accounting purposes, this amount has been designated as ‘contributions by owners’.

3. Appropriation Act (No. 2) 2017-18.

108 Section 6 | APPENDICES

Table B.2: Expenses for Outcome 1

EXPENSES FOR OUTCOME 1

Outcome 1: Contribute to a high quality higher education sector through streamlined and nationally consistent higher education regulatory arrangements; registration of higher education providers; accreditation of higher education courses; and investigation, quality assurance and dissemination of higher education standards and performance.

Budget*

2017-18

$’000

Actual expenses 2017-18

$’000

Variation

2017-18

$’000

(a) (b) (a)-(b)

Program 1.1: Regulation and Quality Assurance

Departmental expenses

Departmental appropriation1 14 332 14 119 213

Expenses not requiring appropriation in the budget year 728 927 (199)

Total for Program 1.1 15 060 15 046 14

Outcome 1 totals by appropriation type

Departmental expenses

Departmental appropriation1 14 332 14 119 213

Expenses not requiring appropriation in the budget year 728 927 (199)

Total expenses for Outcome 1 15 060 15 046 14

2017-18 2017-18

Average staffing level (number) 51 51

* Full-year budget, including any subsequent adjustment made to the 2017-18 budget at Additional Estimates.

1. Departmental appropriation combines ordinary annual services (Appropriation Act Nos. 1, 3 and 5) and retained revenue receipts under section 74 of the Public Governance, Performance and Accountability Act 2013.

TEQSA | Annual Report 2017-2018 109

Appendix C: Staffing profile As at 30 June 2018, TEQSA employed 31 APS and 26 executive-level staff, including four Office Holders. All were based in Melbourne.

Of these employees:

y 63 per cent were female and 37 per cent were male

y 91 per cent were ongoing employees, and nine per cent were non-ongoing

y at 30 June 2018, TEQSA had one ongoing staff member who identified as Indigenous.

As at 30 June 2018, TEQSA had 24.8 (full-time equivalent) contractors.

Table C.1: Full-time and part-time, and ongoing and non-ongoing employees by gender

ONGOING FEMALE MALE GRAND

TOTAL

ONGOING NON

ONGOING ONGOING NON

ONGOING

EL2 Full-time 1 - 4 - 5

Part-time - - - - -

EL1 Full-time 8 - 8 - 16

Part-time 1 - - - 1

APS6 Full-time 16 - 3 - 19

Part-time 3 - 1 - 4

APS5 Full-time 4 - - - 4

Part-time 2 - - - 2

APS4 Full-time - - 1 1 2

Part-time - - - - -

TOTALS 35 - 14 1 53

NB: Includes all ongoing and non-ongoing employees (active and long-term leave). Excludes Chief Commissioner, Commissioners, CEO and contractors.

110 Section 6 | APPENDICES

Table C.2: Salaries, as at 30 June 2018, in $A available to TEQSA APS staff from commencement of the 2018-2021 TEQSA Enterprise Agreement.

EL2 EL1 APS 6 APS 5 APS 4 APS 3 APS 2 APS 1

AGE

RATES

143 484

134 351

126 759

119 533

112 267

106 621

104 019

101 578

90 840

85 295

82 607

78 556

75 045

73 480

71 173

68 406

66 546

63 724

61 180

58 378

57 300

54 783

50 998

46 643

(20 years) 42 446

(19 years) 37 782

(18 years) 32 650

(under 18 years) 27 985

SES remuneration TEQSA currently has no SES employees.

Appendix D: Freedom of information Entities subject to the Freedom of Information Act 1982 (FOI Act) are required to publish information as part of the Information Publication Scheme (IPS). This requirement appears in Part II of the FOI Act and has replaced the former requirement to publish a section 8 statement in an annual report. Each agency must display a plan on its website showing what information it publishes in accordance with the IPS requirements.

In accordance with these IPS requirements, an agency plan indicating published information is accessible from TEQSA’s website at www.teqsa.gov.au/ information-publication-scheme

Appendix E: Ecologically- sustainable development and environmental performance The information provided is in accordance with section 516A of the Environment Protection and Biodiversity Conservation Act 1999. TEQSA is committed to progressing towards a sustainable future and continued improvement in reducing negative impacts on the environment.

In 2017-18 TEQSA complied with environmental initiatives, participating in recycling initiatives offered by the 530 Collins Street building management. This comprises paper, cardboard, co-mingled organic matter and hard waste recycling; e-waste recycling; and battery recycling. TEQSA is committed to reducing contamination of waste streams and reducing its general waste stream. TEQSA provides all staff with individual under-desk, co-mingled recycling bins.

TEQSA also continued its commitments to other recycling initiatives not provided by building management, including printer toner and waste cartridge recycling.

TEQSA | Annual Report 2017-2018 111

Appendix F: Advertising and market research TEQSA did not conduct any advertising campaigns during 2017-18.

Appendix G: Workplace health and safety TEQSA is committed to safeguarding the health, safety and welfare of staff and visitors and to preventing occupational injury. TEQSA has a Workplace Health and Safety (WHS) Committee that includes representatives from management and staff. TEQSA provides staff with access to an Employee Assistance Program and annual flu vaccinations.

TEQSA also implements a Wellbeing Workshop series, a Disability Action Plan, a Multicultural Plan and a Diversity Program to support staff wellbeing.

No reportable WHS incidents occurred during 2017-18 and TEQSA was not required to give any notices under the Work Health and Safety Act 2011.

Appendix H: Complaints handling

Complaints about higher education providers TEQSA monitors complaints about higher education providers registered with TEQSA as they relate to compliance with the HES Framework and, if applicable, the ESOS Act and National Code.

The HES Framework represents the minimum acceptable requirements for the provision of higher education by higher education providers registered under the TEQSA Act.

In 2017-18, TEQSA reviewed its approach to the handling of complaints to improve the recording of, response to, and reporting of complaints made to TEQSA about registered higher education providers.

The complaints page on TEQSA’s website www.teqsa.gov.au/complaints provides information for the public on options for making a complaint to TEQSA about a registered higher education provider. This website includes links to Commonwealth and state and territory ombudsman offices.

The website states that complaints received about a provider are gathered to assist TEQSA in regulating the sector. The website makes clear that only complaints about the compliance of higher education providers with the HES Framework, the ESOS Act and the National Code can be accepted by TEQSA. The website provides advice to domestic and international students as well as other stakeholders in relation to resolving complaints.

In accordance with the TEQSA Service Charter, TEQSA endeavours to respond within five business days of receiving a complaint.

Complaints about TEQSA TEQSA’s complaints page www.teqsa.gov. au/complaints-about-teqsa and public interest disclosure page www.teqsa.gov. au/public-interest-disclosure also provide information about complaints about TEQSA.

112 Section 6 | APPENDICES

Appendix I: Disability reporting Since 1994, Commonwealth departments and agencies have reported on their performance as policy adviser, purchaser, employer, regulator and provider under the Commonwealth Disability Strategy. In 2007-08, reporting on the employer role was transferred to the Australian Public Service Commission’s State of the Service Report and the APS Statistical Bulletin. These reports are available at www.apsc.gov.au. From 2010-11, entities have no longer been required to report on these functions.

The Commonwealth Disability Strategy has been replaced by the National Disability Strategy 2010-2020, which sets out a 10-year national policy framework to improve the lives of people with disability, promote participation and create a more inclusive society. A high level, two-yearly report will track progress against each of the six outcome areas of the strategy and present a picture of how people with disability are faring. The first of these progress reports was published in 2014, and can be found at www.dss.gov.au.

TEQSA’s disability action plan TEQSA’s Disability Action Plan sets out the agency’s commitment to the inclusion, support and engagement of people with a disability. It aims to promote the equitable participation of staff with a disability in the workplace and to remove barriers and provide improved access and services to people with a disability.

The plan focuses on four key priority areas:

y physical accessibility

y technological accessibility

y employment

y communication and community engagement.

The plan was developed in accordance with the provisions of the Disability Discrimination Act 1992 and was informed by the National Disability Strategy 2010-2020.

For more information about TEQSA’s Disability Action Plan www.teqsa.gov.au/ latest-news/publications/disability-action-plan

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INDICES AND REFERENCES 7

Acronyms and abbreviations

Glossary of terms

Compliance index

Alphabetical index

116 Section 7 | INDICES AND REFERENCES

SECTiON 7: iNDiCES AND REFERENCES

Acronyms and abbreviations ACPET Australian Council for Private Education and Training

APS Australian Public Service

AQF Australian Qualifications Framework

ASL Average Staff Level

ASQA Australian Skills Quality Authority

CEO Chief Executive Officer

CRICOS Commonwealth Register of Institutions and Courses for Overseas Students

ELICOS English Language Intensive Courses For Overseas Students

ESOS Education Services for Overseas Students

ESOS Act Education Services for Overseas Students Act 2000

FOI Act Freedom of Information Act 1982

HEIMS Higher Education Information Management System

HESP Higher Education Standards Panel

HITS HELP IT System

IPS Information Publication Scheme

MoC Memorandum of Cooperation

MoU Memorandum of Understanding

PBS Portfolio Budget Statements

PGPA Act Public Governance, Performance and Accountability Act 2013

QBBG Quality Beyond Boundaries Group

QILT Quality Indicators for Learning and Teaching

SAA Self-accrediting authority

SES Senior Executive Service

SME Small and Medium Enterprises

SMT Senior Management Team

TAFE Technical and Further Education

TEQSA Tertiary Education Quality and Standards Agency

TEQSA Act Tertiary Education Quality and Standards Agency Act 2011

WHS Workplace Health and Safety

TEQSA | Annual Report 2017-2018 117

Glossary of terms

Australian Skills Quality Authority (ASQA) The Australian Skills Quality Authority (ASQA) is the national regulator for Australia’s vocational education and training sector. ASQA regulates courses and training providers to ensure nationally-approved quality standards are met.

Australian Qualifications Framework (AQF) The Australian Qualifications Framework (AQF) is Australia’s national policy for regulated qualifications. The AQF encompasses higher education, vocational education and training, and school education. It provides for national recognition and a consistent understanding of what defines each qualification type.

While TEQSA does not determine the content of the AQF, the agency has regard to the specifications and guidelines throughout the AQF. The HES Framework includes the requirement that the learning outcomes of all higher education qualifications at Levels 5-10 of the AQF must be consistent with the level of the course, which TEQSA will assess against the corresponding specifications for levels in the AQF. TEQSA will also take into consideration the relevant qualification type descriptors in the AQF.

Core+ Under the Core+ model of assessment, providers with a sound history of higher education delivery and no significant compliance or risk concerns benefit from a reduced scope of assessment (requiring less evidence and information at the time of application), compared with those with a limited track record of higher education delivery or with compliance or risk concerns. The model allows applicants to address a sub-set of quality standards and provide a minimum core of evidence relating to the standards.

Any extension beyond the core set of standards (the +) is based on risk. The Core+ model was introduced for assessment of re-registration applications in late 2013 and for course accreditations in September 2015.

Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) Commonwealth Register of Institutions and Courses for Overseas Students is the official Australian Government website that lists all Australian education providers offering courses to people studying in Australia on student visas and the courses offered. CRICOS is a searchable database managed by Department of Education and Training under the ESOS legislative framework. It provides details of Australian education institutions approved to recruit, enrol and deliver education and training services to overseas students and details of the courses that they deliver. TEQSA is responsible for assessing applications for inclusion on the CRICOS and for approving the registration of a provider on CRICOS. The database can be searched by course or provider name/number and can be accessed at cricos.education.gov.au.

118 Section 7 | INDICES AND REFERENCES

Department of Education and Training The Australian Government Department of Education and Training (the department) is responsible for national policies and programs that help Australians to access quality early childhood education, school education, higher education, vocational education and training, international education and research.

English Language Intensive Courses for Overseas Students (ELICOS) English Language Intensive Courses for Overseas Students are courses offered to students studying in Australia on student visas. ‘Intensive’ denotes full-time study comprising a minimum of 20 scheduled course contact hours per week of face-to-face classes of English language instruction.

Education Services for Overseas Students (ESOS) The Education Services for Overseas Students (ESOS) Act 2000 (the ESOS Act) and the associated legislation form the legal framework governing delivery of education to overseas students studying in Australia on a student visa. The framework sets out clear roles and responsibilities for providers of education and training to international students and complements Australia’s student visa laws. On 29 January 2012, TEQSA assumed responsibility for regulating international education for higher education under the ESOS Act.

Higher education provider Higher education provider is defined in the TEQSA Act and means:

a. a constitutional corporation that offers or confers a regulated higher education award, or

b. a corporation that:

i. offers or confers a regulated higher education award

ii. is established by or under a law of the Commonwealth or a Territory

c. a person who offers or confers a regulated higher education award for the completion of a course of study provided wholly or partly in a Territory.

Higher Education Standards Framework Higher Education Standards Framework (Threshold Standards) 2011 (HES Framework 2011) was made by the responsible Minister on the advice of the Department of Industry, Innovation, Science, Research and Tertiary Education and commenced on 5 January 2012. The Higher Education Standards Framework (Threshold Standards) 2015 (HES Framework 2015) was determined by the Minister for Education and Training on advice from the independent HESP and commenced on 1 January 2017.

For more information about the HES Framework 2015 www.legislation.gov.au/ Details/F2015L01639

For more information about the HES Framework 2011 www.legislation.gov.au/ Details/F2013C00169.

TEQSA | Annual Report 2017-2018 119

Higher Education Standards Panel The HESP is responsible for developing and monitoring the Higher Education Standards Framework. HESP members are appointed by the Minister, in consultation with the responsible Minister for Research. As of 1 January 2015, the HESP has been supported by the department.

Higher Education Support Act (HES Act) The Higher Education Support Act 2003 provides for the Commonwealth Government to give financial support for higher education and certain vocational education and training through:

y grants and other payments made largely to higher education providers

y financial assistance to students (usually in the form of loans).

Material change Under subsection 29(1) of the TEQSA Act, it is a condition of registration that TEQSA is notified of events that happen, or are likely to happen, that will either:

y significantly affect the provider’s ability to meet the Higher Education Standards Framework

y require updating the provider’s entry on the National Register of Higher Education Providers.

National Code The National Code of Practice for Providers of Education and Training to Overseas Students 2018 (National Code) provides nationally consistent standards for the conduct of registered providers and the registration of their courses. These standards set out specifications and procedures to ensure that registered providers of education and training courses can clearly understand and comply with their obligations under the National Code.

National Register The National Register of Higher Education Providers (National Register) was established and is maintained under section 198 of the TEQSA Act. The National Register is available at www.teqsa.gov.au/national-register.

Provider category Provider category relates to a category of provider as listed in the Criteria for Classification of Higher Education Provider Categories, available in Part B of the HES Framework at www.legislation.gov.au/ Details/F2015L01639

Registered higher education provider This term refers to a higher education provider registered under Part 3 of the TEQSA Act and listed on the National Register under paragraph 198(1)(a) of the Act.

Regulatory risk In the context of TEQSA’s quality assurance and regulatory operations, regulatory risk refers to actual or potential risk events (regarding a provider’s operations and performance) that indicate that the provider may not meet the HES Framework (either currently or in the future).

Risk assessment The term ‘risk assessment’ captures the overall process of risk identification, risk analysis and risk evaluation.

Risk Assessment Framework TEQSA’s Risk Assessment Framework outlines TEQSA’s approach to undertaking structured risk assessments of registered higher education providers. Risk assessments play a key role in TEQSA’s risk-based quality assurance and regulation of the sector by helping to prioritise TEQSA’s regulatory focus.

For more information about TEQSA’s Risk Assessment Framework www.teqsa.gov. au/risk-assessment-framework

120 Section 7 | INDICES AND REFERENCES

Standards-based regulation Australia’s regulatory system for higher education uses a standards-based quality framework and TEQSA’s approach reflects the risks to the sector and those particular to each provider. The Higher Education Standards Framework (Threshold Standards) 2011 (HES Framework 2011) was made by the responsible Minister on the advice of the Department of Industry, Innovation, Science, Research and Tertiary Education and commenced on 5 January 2012. The Higher Education Standards Framework (Threshold Standards) 2015 (HES Framework 2015) was determined by the Minister for Education and Training (the Minister) on advice from the independent Higher Education Standards Panel (HESP) and commenced on 1 January 2017.

TEQSA case managers TEQSA case managers are assessment staff employed in the Assurance Group and Assessment and Investigations Group of TEQSA who manage activities relating to higher education providers, through communication and cooperation with provider contacts.

TEQSA stakeholder survey 2018 In June 2018, TEQSA undertook a sector-wide survey for 2017-18, to increase TEQSA’s accountability, better understand its impact on higher education providers, and improve its performance. The assessment was against the key performance indicators outlined in TEQSA’s Regulator Performance Framework. Relevant peak, professional and student bodies were also invited to participate in the survey.

Compliance index Table 12 indicates the location of information provided in accordance with paragraph 17AJ(d) of the PGPA Act. References in the first column of the Compliance index are to the relevant paragraph in the PGPA Act.

TEQSA | Annual Report 2017-2018 121

Table 12: List of requirements

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

17AD(g) Letter of transmittal

17AI A copy of the letter of

transmittal signed and dated by accountable authority on date final text approved, with statement that the report has been prepared in accordance with section 46 of the Act and any enabling legislation that specifies additional requirements in relation to the annual report.

Mandatory I

17AD(h) Aids to access

17AJ(a) Table of contents. Mandatory II-II

17AJ(b) Alphabetical index. Mandatory 134-141

17AJ(c) Glossary of abbreviations

and acronyms.

Mandatory 116-120

17AJ(d) List of requirements. Mandatory 121-133

17AJ(e) Details of contact officer. Mandatory Inside

front cover

17AJ(f) Entity’s website address. Mandatory Inside

front cover

17AJ(g) Electronic address

of report.

Mandatory Inside

front cover

17AD(a) Review by accountable authority

17AD(a) A review by the

accountable authority of the entity.

Mandatory 2-3

17AD(b) Overview of the entity

122 Section 7 | INDICES AND REFERENCES

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

17AE(1)(a)(i) A description of the

role and functions of the entity.

Mandatory 6

17AE(1)(a)(ii) A description of the

organisational structure of the entity.

Mandatory 9-13

17AE(1)(a)(iii) A description of

the outcomes and programs administered by the entity.

Mandatory 6

17AE(1)(a)(iv) A description of the

purposes of the entity as included in corporate plan.

Mandatory 6

17AE(1)(b) An outline of the

structure of the portfolio of the entity.

Portfolio departments mandatory

n/a

17AE(2) Where the outcomes and

programs administered by the entity differ from any Portfolio Budget Statement, Portfolio Additional Estimates Statement or other portfolio estimates statement that was prepared for the entity for the period, include details of variation and reasons for change.

If applicable, Mandatory n/a

17AD(c) Report on the Performance of the entity

TEQSA | Annual Report 2017-2018 123

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

ANNUAL PERFORMANCE STATEMENTS

17AD(c)(i); 16F Annual performance

statement in accordance with paragraph 39(1)(b) of the Act and section 16F of the Rule.

Mandatory 16-49

17AD(c)(ii) Report on Financial Performance

17AF(1)(a) A discussion and analysis

of the entity’s financial performance.

Mandatory 49

17AF(1)(b) A table summarising the

total resources and total payments of the entity.

Mandatory 107-108

17AF(2) If there may be

significant changes in the financial results during or after the previous or current reporting period, information on those changes, including: the cause of any operating loss of the entity; how the entity has responded to the loss and the actions that have been taken in relation to the loss; and any matter or circumstances that it can reasonably be anticipated will have a significant impact on the entity’s future operation or financial results.

If applicable, Mandatory n/a

17AD(d) Management and Accountability

124 Section 7 | INDICES AND REFERENCES

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

CORPORATE GOVERNANCE

17AG(2)(a) Information on

compliance with section 10 (fraud systems).

Mandatory 55

17AG(2)(b)(i) A certification by

accountable authority that fraud risk assessments and fraud control plans have been prepared.

Mandatory I

17AG(2)(b)(ii) A certification by

accountable authority that appropriate mechanisms for preventing, detecting incidents of, investigating or otherwise dealing with, and recording or reporting fraud that meet the specific needs of the entity are in place.

Mandatory I

17AG(2)(b)(iii) A certification by

accountable authority that all reasonable measures have been taken to deal appropriately with fraud relating to the entity.

Mandatory I

17AG(2)(c) An outline of structures

and processes in place for the entity to implement principles and objectives of corporate governance.

Mandatory 52-55

TEQSA | Annual Report 2017-2018 125

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

17AG(2)(d) - (e)

A statement of significant issues reported to Minister under paragraph 19(1) (e) of the Act that relates to non-compliance with Finance law and action taken to remedy noncompliance.

If applicable, Mandatory n/a

EXTERNAL SCRUTINY

17AG(3) Information on the most

significant developments in external scrutiny and the entity’s response to the scrutiny.

Mandatory 54

17AG(3)(a) Information on judicial

decisions and decisions of administrative tribunals and by the Australian Information Commissioner that may have a significant effect on the operations of the entity.

If applicable, Mandatory n/a

17AG(3)(b) Information on any

reports on operations of the entity by the Auditor-General (other than report under section 43 of the Act), a Parliamentary Committee, or the Commonwealth Ombudsman.

If applicable, Mandatory n/a

17AG(3)(c) Information on any

capability reviews on the entity that were released during the period.

If applicable, Mandatory n/a

126 Section 7 | INDICES AND REFERENCES

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

MANAGEMENT OF HUMAN RESOURCES

17AG(4)(a) An assessment of the

entity’s effectiveness in managing and developing employees to achieve entity objectives.

Mandatory 56-57

17AG(4)(b) Statistics on the entity’s

APS employees on an ongoing and non-ongoing basis; including the following:

y Statistics on staffing classification level;

y Statistics on fulltime employees;

y Statistics on parttime employees;

y Statistics on gender;

y Statistics on staff location;

y Statistics on employees who identify as Indigenous.

Mandatory 109

17AG(4)(c) Information on any

enterprise agreements, individual flexibility arrangements, Australian workplace agreements, common law contracts and determinations under subsection 24(1) of the Public Service Act 1999.

Mandatory 56-57

TEQSA | Annual Report 2017-2018 127

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

17AG(4)(c)(i) Information on the

number of SES and nonSES employees covered by agreements etc identified in paragraph 17AD(4) (c).

Mandatory 110

17AG(4)(c)(ii) The salary ranges

available for APS employees by classification level.

Mandatory 110

17AG(4)(c)(iii) A description of

non-salary benefits provided to employees.

Mandatory 56

17AG(4)(d)(i) Information on the

number of employees at each classification level who received performance pay.

If applicable, Mandatory n/a

17AG(4)(d)(ii) Information on

aggregate amounts of performance pay at each classification level.

If applicable, Mandatory n/a

17AG(4)(d)(iii) Information on the

average amount of performance payment, and range of such payments, at each classification level.

If applicable, Mandatory n/a

17AG(4)(d)(iv) Information on

aggregate amount of performance payments.

If applicable, Mandatory n/a

128 Section 7 | INDICES AND REFERENCES

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

ASSETS MANAGEMENT

17AG(5) An assessment of

effectiveness of assets management where asset management is a significant part of the entity’s activities.

If applicable, mandatory n/a

PURCHASING

17AG(6) An assessment of entity

performance against the Commonwealth Procurement Rules.

Mandatory 58

CONSULTANTS

17AG(7)(a) A summary statement

detailing the number of new contracts engaging consultants entered into during the period; the total actual expenditure on all new consultancy contracts entered into during the period (inclusive of GST); the number of ongoing consultancy contracts that were entered into during a previous reporting period; and the total actual expenditure in the reporting year on the ongoing consultancy contracts (inclusive of GST).

Mandatory 59

TEQSA | Annual Report 2017-2018 129

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

17AG(7)(b) A statement that “During

[reporting period], [specified number] new consultancy contracts were entered into involving total actual expenditure of $[specified million]. In addition, [specified number] ongoing consultancy contracts were active during the period, involving total actual expenditure of $[specified million].”

Mandatory 59

17AG(7)(c) A summary of the policies

and procedures for selecting and engaging consultants and the main categories of purposes for which consultants were selected and engaged.

Mandatory 59

17AG(7)(d) A statement that

“Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.”

Mandatory 59

130 Section 7 | INDICES AND REFERENCES

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

AUSTRALIAN NATIONAL AUDIT OFFICE ACCESS CLAUSES

17AG(8) If an entity entered into

a contract with a value of more than $100 000 (inclusive of GST) and the contract did not provide the Auditor-General with access to the contractor’s premises, the report must include the name of the contractor, purpose and value of the contract, and the reason why a clause allowing access was not included in the contract.

If applicable, Mandatory n/a

EXEMPT CONTRACTS

17AG(9) If an entity entered into

a contract or there is a standing offer with a value greater than $10 000 (inclusive of GST) which has been exempted from being published in AusTender because it would disclose exempt matters under the FOI Act, the annual report must include a statement that the contract or standing offer has been exempted, and the value of the contract or standing offer, to the extent that doing so does not disclose the exempt matters.

If applicable, Mandatory n/a

TEQSA | Annual Report 2017-2018 131

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

SMALL BUSINESS

17AG(10)(a) A statement that “[Name

of entity] supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.”

Mandatory 58

17AG(10)(b) An outline of the ways in

which the procurement practices of the entity support small and medium enterprises.

Mandatory 58

17AG(10)(c) If the entity is considered

by the

Department administered by the Finance Minister as material in nature — a statement that “[Name of entity] recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website.”

If applicable, Mandatory n/a

132 Section 7 | INDICES AND REFERENCES

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

FINANCIAL STATEMENTS

17AD(e) Inclusion of the annual

financial statements in accordance with subsection 43(4) of the Act.

Mandatory 66-103

17AD(f) Other Mandatory Information

17AH(1)(a)(i) If the entity conducted

advertising campaigns, a statement that “During [reporting period], the [name of entity] conducted the following advertising campaigns: [name of advertising campaigns undertaken]. Further information on those advertising campaigns is available at [address of entity’s website] and in the reports on Australian Government advertising prepared by the Department of Finance. Those reports are available on the Department of Finance’s website.”

If applicable, Mandatory n/a

17AH(1)(a)(ii) If the entity did not

conduct advertising campaigns, a statement to that effect.

If applicable, Mandatory 111

17AH(1)(b) A statement that

“Information on grants awarded to [name of entity] during [reporting period] is available at [address of entity’s website].”

If applicable, Mandatory n/a

TEQSA | Annual Report 2017-2018 133

PGPA RULE REFERENCE PART OF REPORT

DESCRIPTION REQUIREMENT PAGE

NUMBER

17AH(1)(c) Outline of mechanisms

of disability reporting, including reference to website for further information.

Mandatory 112

17AH(1)(d) Website reference

to where the entity’s Information Publication Scheme statement pursuant to Part II of FOI Act can be found.

Mandatory Back

cover

17AH(1)(e) Correction of material

errors in previous annual report.

If applicable, Mandatory n/a

17AH(2) Information required by

other legislation.

Mandatory n/a

134 Section 7 | INDICES AND REFERENCES

Alphabetical index

A academic integrity 2, 7-8

accountable authority 52, 65

review by 2-3

see also Chief Commissioner; Saunders, Prof Nicholas

Accountable Authority Instructions and Procurement Manual 58

accreditation see course accreditation

acronyms and abbreviations 116

additional funding from MYEFO budget 3, 26, 36, 49

Administrative Appeals Tribunal 31, 54

review matters 2, 37

admissions transparency 2, 7, 27, 48

agency engagement with the sector 48

Admissions Transparency Implementation Working Group 7, 48

adverse decisions 36

advertising and market research 111

Advice on Admissions Transparency 48

Agency Security Adviser 53, 54

annual performance statement 15-49

applications and assessments 2

adverse decisions 36

completed 32

course accreditation 33

CRICOS assessments 32

initial registration 12, 32, 37, 42, 46

made under ESOS Act 32

median processing time 33

number carried over from previous year 31, 32

number decided and number of days to decision 33

performance against requirements of TEQSA Act 33-5

provider compliance assessments 3, 36

ratio of APS staff to contractors in assessment teams 35

received 32

risk assessment 30, 37-8, 119

timeliness of assessments 3, 32-5

withdrawn 2, 32

APS Code of Conduct and Values 54, 55

Asia Pacific Quality Network (APQN) 28

Assessment and Investigations Group 9, 12-13

assessments see applications and assessments

Assurance Group 9, 12, 13

Attorney-General’s Department 54

Audit Committee 53

AusTender 58, 59

Australian and New Zealand Podiatry Accreditation Council 40

Australian Government Information Management Office, Implementation of upgraded accessibility standard across Australian Government websites 59

Australian Government Security Vetting Agency 55

Australian Human Rights Commission, Change the Course: National Report on Sexual Assault and Sexual Harassment at Australian Universities 8, 27

Australian Institute for Teaching and School Leadership (AITSL) 16

Australian National Audit Office 54

access clauses 58

independent auditor’s report 62-3

TEQSA | Annual Report 2017-2018 135

Australian Psychology Accreditation Council 40

Australian Public Service Commission’s State of the Service Report 112

Australian Qualifications Framework (AQF) 117

review 3

Australian Skills Quality Authority (ASQA) 16, 117

collaboration with 47-8

coordinated approach to managing dual-sector providers 47

joint risk register of dual-sector providers 48

B Bretag, Tracey 8

C case managers (TEQSA) 26, 31, 37, 39, 120

caseload 31-2

meeting time frames 32-5

cash flow statement 72-3

Chief Commissioner i, 10

review 2-3

Chief Executive Officer 9, 11, 40, 52

Chief Financial Officer 65

collaboration with ASQA 47-8

Commission

meetings 52

responsibilities 52

Commissioners i, 10-11, 16, 40

as accountable authority 2-3, 52, 65

presentations 44

remuneration 56, 98

roles and responsibilities 10, 53

committees 52-3, 57

Commonwealth Cost Recovery Guidelines 58

Commonwealth Disability Strategy 112

Commonwealth Fraud Control Policy 55

Commonwealth Ombudsman 54

Commonwealth Procurement Rules 58

Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) 106, 117

assessments 32

re-registration 37

TEQSA-ASQA approach to managing 47

competitive tendering and contracting 58

complaints process 26-7

complaints about higher education providers 26, 111

complaints about TEQSA 111

Compliance and Investigations Team 12, 26

compliance assessments 3, 36

compliance index 120-33

compliance investigations 26

consultancies

contracts 59

policy on selecting and engaging consultants 59

consultation with peak and professional student bodies 45

contract cheating 2, 7, 8

contractors (staff) 35, 56

Core+ 30, 117

Corporate Group 9, 13

Corporate Plan 2017-21 2, 3, 6, 16, 17, 18-25, 53

corporate planning 53-5

Council for Higher Education Association International Quality Group (CIQG) 28

Council for International Students Australia 45

Council of Australian Postgraduate Associations 45

136 Section 7 | INDICES AND REFERENCES

Council of Higher Education (CHEA) meetings 28

course accreditation 3, 33, 38

Cycle 2 applications 3

see also re-accreditation

CPA Australia Limited 40

CRICOS see Commonwealth Register of Institutions and Courses for Overseas Students

Cycle 5 annual risk assessment 37-8

D Department of Education and Training 118

working with 39

Disability Action Plan 111, 112

Disability Discrimination Act 1992 112

disability reporting 112

Diversity Program 111

dual-sector providers

AQSA—TEQSA coordinated approach to managing 47

ASQA—TEQSA risk register 48

E ecologically-sustainable development and environmental performance 110

Education Legislation Amendment (Provider Integrity and Other Measures) Act 2017 41

Education Regulatory Immigration Committee (ERIC) 47

Education Services for Overseas Students Act 2000 (ESOS Act) 7, 26, 41, 106, 111, 118

assessments made under 32

National Code see National Code of Practice for Providers of Education and Training for Overseas Students

ELICOS see English Language Intensive Courses for Overseas Students

Employee Assistance Program 111

engagement see stakeholder engagement

Engagement Group 9, 13

English Language Intensive Courses for Overseas Students (ELICOS) 37, 42, 106, 118

ELICOS Standards 7, 37, 42

enhanced monitoring project 27

Enterprise Agreement 57, 110

Enterprise Risk Management Framework 52, 54

entity resource statement 107

Environment Protection and Biodiversity Conservation Act 1999 110

ESOS/CRICOS assessment team 12, 37, 42

ethical standards 54

Executive Office 9, 13

exempt contracts 58

external experts

engagement with 45

work assignments completed 45

external review matters 37

external security 54-5

F fake documentation 7

fees 58

finance, additional funding from MYEFO 3, 26, 36, 49

Financial Adviser Standards and Ethics Authority 40

financial management 57-9

financial performance 49

Financial Planning Education Council - Financial Planning Association of Australia 40

financial statements 66-77

notes to 78-103

for-profit providers 47

Foundation Program Standards 7

Foundation Studies providers 37

TEQSA | Annual Report 2017-2018 137

fraud control 55

Fraud Control and Anti-Corruption Plan 54, 55

freedom of information 110

Freedom of Information Act 1982 58, 110

full cost-recovery model 58

functional groups (TEQSA) 12-13

G General Counsel 13

glossary 117-20

goals

Goal 1: Effective oversight of the quality and reputation of Australian higher education, performance against goals 6, 18-19, 26-9

Goal 2: Efficient, effective, responsive, risk-based quality assurance and regulatory activities 6, 20-2, 30-42

Goal 3: Constructive and collaborative relationships with governments, higher education providers, students and other stakeholders 6, 23-5, 43-9

Good Practice Note: Addressing contract cheating to safeguard academic integrity 8

grants 57

guidance notes 49

guide to the report iv-v

H high risk provider policy 26, 30

Higher Education Information Management System (HEIMS) data 37, 39

Higher Education Provider Roundtable events 44, 47

higher education providers 118

2018 statistics report 27

complaints about 26, 111

compliance assessments 3, 36

enhanced monitoring 27

higher education sector

engagement with 43-6

managing risks to 26, 30, 37-8

Higher Education Standards Framework (HES Framework) 2, 7, 9, 16, 26, 36, 111, 118

2015 edition 33, 37

agency monitoring and support in implementing 49

review 3

Higher Education Standards Panel (HESP) 7, 16, 119

Improving the Transparency of Higher Education Admissions 48

working with 40

Higher Education Support Act 2003 41, 119

Hong Kong Council for Accreditation of Academic and Vocational Qualifications (HKCAAVQ) 28, 41

human resources

Enterprise Agreement 56, 57, 110

non-salary benefits 56

performance assessment 56

performance pay 56

professional development 57

shared services with Productivity Commission 56

staff attrition and turnover 56

workplace consultative arrangements 57

see also staff

138 Section 7 | INDICES AND REFERENCES

i independent auditor’s report 62-3

Independent Review of the National Registration and Accreditation Scheme for health professionals, submission to 40

Indigenous staff 109

Information Publication Scheme (IPS) 110 information sharing 47

information technology

compliance with Australian Government Information Management Office guidance 59

shared with Productivity Commission 56, 59

Information Technology Security Adviser 53

initial provider registration policy 26

initial registration 12, 26, 32, 37, 42, 46

International Engagement Strategy 2016-20 29

international higher education quality assurance network activities 28-9

International Network for Quality Assurance Agencies in Higher Education (INQAAHE) 28

international quality agencies, working with 41

International Quality Assurance Staff Exchange Program 28

international visitors 28

K Key financial metrics on Australia’s higher education sector, 3rd edition 27

L Learning Committee 57

Legal Group 9, 13, 57

legal services 57

Legal Services Directions 57

legislation amendments affecting TEQSA 41-2

legislative framework 7, 106

letter of transmittal i

list of requirements 120-33

looking forward 3

M McClaran, Anthony (Chief Executive Officer) 11

management and accountability 52-9

Martin, Dr Linley (Commissioner) i, 10-11

material change 119

Memorandum of Cooperation (MoCs), signed or renewed 28-9

Memorandum of Understanding (MoUs), with student representative bodies 45

Minister for Education and Training i, 7, 8-9

Multicultural Plan 111

N National Aboriginal and Torres Strait Islander Postgraduate Association 45

The National Code of Practice for Providers of Education and Training to Overseas Students 2018 (National Code) 7, 26, 36, 42, 111, 119

National Disability Strategy 2010-2020 112

National Institution for Academic Degrees and Quality Enhancement of Higher Education (NIAD-QE) 28

National Register Guidelines 42

National Register of Higher Education Providers (National Register) 46-7, 119

accredited courses 46

breakdown 46

TEQSA | Annual Report 2017-2018 139

changes to public reporting on 42, 46

new providers added 46

publication of regulatory decisions 46

National Union of Students 45

non-salary benefits 56

not-for-profit providers 47

O Office of the Australian Information Commissioner 54

Optometry Council of Australia and New Zealand 40

organisational structure 9

Commissioners, CEO and Senior Management Team 10-11

functional groups 12-13

rebalancing 12

outcome and program statement 6

expenses 108

see also goals

overview of the agency 6-13

P parliamentary committees, appearance before 55

payroll services, shared with Productivity Commission 56

peak and professional bodies, working with 40

peak and professional student bodies, consultation with 45

performance against goals

Goal 1: Effective oversight of the quality and reputation of Australian higher education 18-19, 26-9

Goal 2: Efficient, effective, responsive, risk-based quality assurance and regulatory activities 20-2, 30-42

Goal 3: Constructive and collaborative relationships with governments, higher education providers, students and other stakeholders 23-5

performance assessment 56

performance pay 56

performance review 16-49

performance against goals 18-49

statement of preparation 16

TEQSA Regulator Performance Framework Report 2016-17 17

TEQSA stakeholder survey 2018 2, 17, 31, 35, 39, 42, 44, 47, 120

timeliness performance against TEQSA Act 33-5

Portfolio Budget Statements 2017-18 6, 17, 18-25

procurement 58

initiatives to support small business 58

Productivity Commission 56, 59

professional development 54, 57

program see outcome and program statement

protective security 54

Protective Security Policy Framework 53, 54

provider category 46, 119

Public Governance, Performance and Accountability Act 2013 i, 16, 52, 55, 106

publications

Advice on Admissions Transparency 48

Key financial metrics on Australia’ higher education sector 27

Q Quality Beyond Boundaries Group (QBBG) 28

quality enhancement forum series 2, 43

140 Section 7 | INDICES AND REFERENCES

R re-accreditation 38, 39

re-registration 33, 38

recycling 110

Register of Experts 45

registered higher education providers 119

see also higher education provider

registration

Cycle 2 applications 3

median days for processing applications 33

see also initial registration; re-registration

Registration Assessment Team 12

Regulator Performance Framework KPIs 3, 20-4

regulatory decisions

changes to reporting 42

publication of 46

regulatory principles 39

regulatory risk 119

remuneration

Commissioners 56, 98

staff 56, 110

risk assessment 119

Cycle 5 annual risk assessment 2, 37-8

framework 30, 37

Risk Assessment Framework 30, 37, 119

risk management

TEQSA 52, 54

to higher education sector 26, 30, 37-8

risk ratings and outcomes

for course accreditation or re-accreditation 38

for re-registration 38

S Saunders, Prof Nicholas (Chief Commissioner) i, 2-3, 10

sector reviews 2, 7-9, 40, 44, 48

Security Committee 53

self-accrediting authority (SAA) 39

Senior Management Team (SMT) 12, 52

meetings 53

role and responsibilities 52-3

Service Charter 55, 111

sexual assault and sexual harassment at higher education providers 2, 8-9, 40, 44

small business, procurement initiatives to support 58

social media 43

staff 109

attrition and turnover rate 56

contractors 56

employment screening 55

Enterprise Agreement 56, 57, 110

non-salary benefits 56

numbers 56, 109

performance assessment 56

professional development and training 54, 57

salaries 56, 110

workplace health and safety 111

see also human resources

Staff Consultative Committee 57

stakeholder engagement

with external experts 45

with higher education sector 2, 43-6

with student representatives 2, 44-5

see also collaboration

stakeholder survey 2018 2, 17, 31, 35, 39, 42, 44, 47, 120

standards-based regulation 120

statement by the Accountable Authority and Chief Financial Officer 65

statement of changes in equity 70-1

statement of comprehensive income 66-7

statement of financial position 68-9

student attrition 2, 43

Student Expert Advisory Group 2, 44

TEQSA | Annual Report 2017-2018 141

student representatives, engagement with 44-5

student wellbeing and safety 8-9, 40, 44

T TAFE providers 47

Tehan, Hon Dan i, iv

TEQSA Conference 2, 43

TEQSA high risk provider policy 26, 30

TEQSA initial provider registrations policy 26

TEQSA Regulator Performance Framework Report 2016-2017 17

TEQSA Stakeholder Survey 2017 2, 17, 31, 35, 39, 42, 44, 47, 120

Tertiary Education Quality and Standards Agency (TEQSA)

committees 6, 52-3, 57

corporate governance 52-5

legislative amendment impacts 41-2

legislative framework 7, 106

organisational structure 9-13

outcome and program statement 6, 108

overview 6-13

purpose 6, 16-17

review by the accountable authority 2-3

Tertiary Education Quality and Standards Agency Act 2011 (TEQSA Act) 6, 7, 39, 40, 41, 44, 52, 56, 58, 106

performance against TEQSA Act requirements 34-5

review of the impact of 41

Tertiary Education Quality and Standards Agency Enterprise Agreement 2018-2021 56, 57, 110

timeliness of assessments 3, 32-5

training 54, 57

U Universities Admissions Centre 40

University Quality Assurance Forum 28

W Walsh, Prof Cliff (Commissioner) i, 11

website 59

complaints process 27

conformity 59

engagement with higher education sector 43

guidance notes 49

Wellbeing Workshop series 111

Work Health and Safety Act 2011 111

workplace health and safety 111

Workplace Health and Safety (WHS) Committee 111

teqsa.gov.au