How to become an RTO

One of the most challenging (and frustrating) tasks involved in setting up a Registered Training Organisation (RTO) will be navigating the regulatory requirements of industry registration. This is no walk in the park. Australia was ranked 80th out of 137 countries for the ‘Burden of Government Regulation’ according to the World Economic Forum’s Global Competitiveness Report and the trend is increasing. Today it is ever important for would-be RTO owners to become,

1) Well-informed and

2) Highly organized to facilitate smooth sailing through the RTO compliance process

The single most important source of information is the Australian Skills Quality Authority (ASQA). Being the national regulator for the VET sector their role is to regulate training organisations to meet national quality standards. An education and training provider becomes an RTO once it has registered with ASQA (or in some cases, a state regulator). By registering with ASQA your organisation will be able to deliver nationally recognised courses and accredited Australian Qualifications Framework (AQF) VET qualifications and apply for state and federal funding.

Registration is a two stage process - first applying for initial registration and then undergoing an audit (surprise).

Step 1. Apply for registration

Initial registration takes approximately 4 to 6 months and close monitoring for 2 years after. From the 1st of July 2018, ASQA has implemented tougher scrutiny of applications for initial registration with a revised set of evidence-based requirements to determine the organisation's ability to deliver sustainable quality training.

What you will need to provide:

1. Your business plan and proof of financial viability. Your accountant will help to prepare the Financial Viability Risk Assessment to determine the organisation's financial strength and the likelihood of survival.
2. Self-assessment of organisational systems and processes. Your policies and procedures to manage the business i.e. fee structure, marketing and recruitment, enrolment, student support, and training and assessment documents.
3. Declaration of ownership and evidence of fitness to run an RTO.
4. Supporting documents such as business registration, insurances, address and delivery sites.

Most importantly, before applying for initial registration become familiar with the compliance obligations under the Vocational Education and Training (VET) Quality Framework:  

• Standards for Registered Training Organisations (RTOs) 2015
• Australian Qualifications Framework
• Fit and Proper Person Requirements
• Financial Viability Risk Assessment Requirements 2011
• Data Provision Requirements 2012

Remember that ASQA considers your organisation ready to start as soon as your application is submitted. So be sure to be completely ready before submitting initial registration! The initial registration guide is a good place to start.

Step 2. Prepare for the audit

After preparing thoroughly for initial registration the audit should be straightforward, assuming your RTO is delivering high-quality student-centered training and meeting the required standards. Just like you wouldn’t recommend a student to prepare for a big exam the night before, it would not be wise to ‘prepare’ for an audit immediately before the day. From the outset, ensure your RTOs practices and behaviours throughout the student life-cycle meet the required standards.

Other costs to consider

There are many costs associated with setting up an RTO. The initial registration fees will cost $500 for lodgement and a further $8000 for an initial assessment (extra for additional qualifications, units of competency, and delivery sites). If your application to become an RTO is successful, you will then be required to pay an annual registration fee.

The RTO annual registration fee has four tiers:

1. 0–4 qualifications $1,130
2. 5–10 qualifications $3,220
3. 11–60 qualifications $6,975
4. 61 or more qualifications $10,730

Other expenses to consider will vary depending on the scale and nature of courses offered by your RTO. Consider physical infrastructure (lease of facilities, specialised equipment), staffing costs, legal & accounting fees, insurances (public liability, worker compensation, property insurance), website design and maintenance, social media and marketing strategies. To name a few!

You will also need a comprehensive online student management system to put your RTO on par, if not ahead, in delivering functional and flexible learning, quality assessments and timely compliance. Unfortunately, the area that RTOs fall down in the most is in relation to their training and assessment strategy and practices, and the quality of assessments. Investing in an IT infrastructure that handles every aspect of student management is the best safeguard against risks of non-compliance and audit failure:

• Student management system: $1,000+ per annum
• Financial management system: $1,000+ per annum
• Learning management system: $1,000+ per year (for delivery of online courses)
• Database to maintain AVETMISS compliant student data: from $100 per month

At the end of the day starting an RTO is a challenging but rewarding journey. Obtaining registration with ASQA will be one of the biggest but not the last, of many hurdles. But with the right information, comprehensive planning and robust systems in place, your RTO is sure to succeed. As the regulatory environment becomes more challenging, and reporting requirements continue to rise, it is wise to invest in a comprehensive and functional online student management system. Especially one that combines the above functionality in one system. Then you can get on with doing what RTOs do best - the art of training and engaging with learners.

For more Learning Management info, visit: LMS Essentials or SMS Essentials

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