The National Audit and Registration Agency
With Ministers having called for change within the national regulator ASQA, some in the sector (particularly auditors/former auditors and key stakeholders) have suggested that ASQA could learn from some of the approaches we implemented at the National Audit and Registration Agency (NARA).
NARA was launched on 10 September 2008 by the then Deputy Prime Minister, Julia Gillard. It was established in response to concerns by larger RTOs operating across jurisdictions about the multiple and inconsistent audits they were subject to by different State and Territory regulators. The Commonwealth, States and Territories agreed that NARA would operate under delegation, meaning the States and Territories would retain their regulatory powers to continue to operate their own regulatory agencies and they would also delegate their powers to the Ministerial Company, TVET Australia, allowing it to regulate RTOs operating in more than one jurisdiction who chose to transfer their registration.
Having previously worked in a senior role in a State regulator and been seconded to the Commonwealth to negotiate VET reforms with the States and Territories (which led to the agreement to establish NARA), I was charged with NARA’s establishment. I was assisted by a long list of people (from the Commonwealth, States and Territories, TVET Australia and colleagues across the sector). Most important though were three key NARA senior staff: Simon Hitchick, Julie Northridge PSM, and Catherine Kearney.
Simon went on to run NARA after I left in 2010. He has assisted me in compiling this list of the key features of the regulatory model we implemented – but any and all errors are mine.
Five key features
1. Client Relationship Managers
Instead of ‘audit’ managers or ‘managers of regulatory operations’ – we wanted our senior leadership team to be more focussed on a case management-type approach. We grouped the RTOs we regulated according to ‘type’ and then assigned them to a Client Relationship Manager (eg one looked after all enterprise RTOs and all CRICOS RTOs – as a small agency operating on a full cost recovery basis we didn’t have the luxury of further specialisation; and the other focussed on those private providers with only domestic students).
The Client Relationship Managers (CRMs) had multiple responsibilities – each RTO knew their manager and had their contact details. CRMs took calls and engaged with providers directly. They were able to identify trends and emerging issues impacting on different types of providers. They also managed the audits for their RTOs and worked collaboratively to allocate audit resources.
The language we used for the roles was deliberate. We wanted to engage with RTOs even though we knew that at times it would be challenging. We unfortunately had to cancel the registration of a number of RTOs, but what I observed was that even during those difficult interactions the staff at NARA went above and beyond to at all times remain respectful, available and professional.
2. Quality Consultants
We were concerned at NARA, and I still am, about the poor quality of advice available to RTOs. We were also conscious of the amount of time at audit spent identifying issues which RTOs had found too complex or hadn’t fully understood. While we were clear that we were not consultants we wanted to find a way to make sure RTOs could access good advice and that they used that advice before coming to audit.
The Quality Consultant (QC) model enabled our audit team (all of whom were contract auditors) to either just undertake audits for us or to undertake audits and be an endorsed Quality Consultant. NARA-registered RTOs had to use a Quality Consultant a number of months prior to submitting applications for registration or re-registration. The QC would confirm the RTO was ‘ready for audit’ and then a separate, independent auditor would be assigned to audit. We had a range of checks and balances in place to ensure auditors gave independent judgements about compliance (and we retained the power to audit as and when we deemed it necessary, including in the hypothetical case that an RTO did not act on the advice of a QC or would not engage one).
In a small number of cases we found QCs had not given sufficient, accurate advice to an RTO for them to be compliant and they were removed from our auditor panel. It was also not possible to be endorsed by us as a consultant without also doing audits. The reason for that was our commitment to ensuring the consistency and accuracy of the decisions taken by our auditors.
3. Audit Fact Checks
In instances where we found non-compliances at audit, RTOs were provided a copy of the draft audit report for a limited period of time (usually 1-2 days). This allowed them an opportunity to review the details within the report and raise any concerns with their CRM about its accuracy, prior to us finalising the report and proceeding with any decisions around sanctions.
Importantly, this step was not an opportunity to submit new or amended evidence. Nor was it considered as a ‘rectification’ step. The intent of this ‘fact check’ was just that – to ensure that the details included in the report were an agreed set of facts.
Back in the days before Zoom – group videoconferencing was not an option for us in engaging regularly with an audit team spread right across the country. Instead we relied on teleconferences. We held them once a month and auditors were required to attend at least 10 per year.
During the teleconferences all key NARA staff (including myself) and the auditors would discuss a real or hypothetical audit scenario. We interrogated the ‘shades of grey’ in the Standards to work out what the factors were that would determine compliance or non-compliance and why. While the NARA staff would come to the teleconferences with a view in our heads about the ‘answer,’ we were open to hearing from the experiences of our auditor panel (many of whom worked for States and Territories as well as for us).
The discussions were intensely rewarding for all those of us who took part – respectfully questioning and interrogating the decision making of colleagues and unpicking an issue until we reached agreement on it. On occasion someone would make a point which couldn’t be resolved during the teleconference and required further thought from us. We would come back to the group later with our view.
The NARA view was documented by us after every moderation discussion. It affirmed our interpretation of the ‘grey scenario’ and was shared across the audit team. Auditors were expected to abide by our interpretation (the NARA view) in all of their audit and QC work. Client Relationship Managers explicitly looked for the NARA view when they encountered audit reports documenting practices close to those we’d discussed and agreed on in our moderation sessions.
5. Workshops, breakfasts and professional development
Our engagement with RTOs went well beyond just documenting the activities we had undertaken in the previous year or explaining the Standards. We engaged providers and stakeholders on a range of issues happening in the sector, to build their knowledge and understanding.
There were criticisms of NARA proffered by most States and Territories. We did make some mistakes in our early days, compounded to some extent by a lack of engagement from some of the regulatory agencies which had delegated powers. I am also conscious that in publishing this overview, it will potentially trigger a negative response from some of the former RTOs we took action against.
Nonetheless the commitment of the NARA staff and the audit team to thinking differently about regulation and engaging differently with RTOs was at the core of what we did. I am enormously proud to have been a part of NARA and am grateful for the opportunity to work with the people I did in that role.