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Principal weaknesses

function, to assist with risk identification. These are all positive steps towards auditing and reviewing quality.

While aspects of the audit and review program and processes have also been identified as weaknesses, the Review believes that its strengths should be

acknowledged. The auditing of training providers is still a very new area for VET and auditing of training delivery has not really begun. But Victoria’s overall approach to audit and review has demonstrated a genuine commitment to continuous

improvement.

Notwithstanding these comments, industry, providers (public and private), unions, GTCs and employers are united in the view that significant improvements are

required in the area of monitoring, audit and review. Similar views were consistently expressed in submissions and at both the Melbourne and the regional consultations.

When asked if they considered PETE’s RTO audit program to be adequate in scope, depth and frequency, 47 of the 99 submissions explicitly addressed the question. 40 submissions clearly indicated they did not believe it to be adequate; 4 indicated they thought it adequate with no indication that any improvement was needed; one

indicated that it is adequate but there is some room for improvement and 2 others suggested specific improvements without directly answering the question.

When asked if they considered PETE’s RTO audit processes sufficient to ensure the quality of the apprenticeship/traineeship system, 46 submissions explicitly addressed the question. 40 submissions clearly indicated they were not; 5 indicated they thought they were adequate; and one suggested they were sufficient but that, in future, specific improvements would be needed.

In the main, support for current audit and review arrangements came from private providers, although a greater number of private providers believed that current arrangements were not adequate.

In addition to workplace delivery, the nature of workplaces themselves and the extent to which they provide suitable learning environments is not audited in any systematic way. The following story, provided in one of the submissions, illustrates just what is possible under the current system. While lengthy, it is worth quoting in full to illustrate just how bad workplaces can be in isolated instances.

. . . the workplace is a 20ft caravan, with annexe, located in a caravan park and home to the employer, his partner and trainee who is his youngest daughter. The employer is an itinerant housepainter and the NAC representative visits the employer in response to a request to sign another daughter’s boyfriend as an apprentice painter. Whilst there the NAC suggests that he employ the youngest daughter part-time as an Office Administration trainee. Both are signed up. The premises are unbelievably untidy with clothes strewn everywhere, dirty dishes, benches with old food stuck to them, the office facilities consist of the fold down table and a filing cabinet. The caravan which contained the office, also doubled as the kitchen table, employer bed and cooking and storage facilities . . . that is where the NAC came and did the signing . . . Now this NAC is an RTO for Office

Administration but for some unknown reason the trainee was referred to [name]

TAFE and the trainee was under the impression that she would be coming to TAFE 4 days a week and working for her father for 1 day a week. The situation became known when a TAFE staff member visited the trainee and employer to carry out enrolment and commence training. We believe the apprentice painter was the comatose body on the floor of the annexe at the time (I am not joking).

The Apprenticeship Field Officer was contacted and the traineeship has been cancelled, but interestingly the NAC officer did not really see that any action should be taken. Now if the trainee had not been referred to [name] TAFE but the NAC in its RTO role had carried out the training . . . I leave that to you but I bet a certificate would have been issued. (And this is a short version of the story.) By coincidence I met with the Manager of the above NAC a few days later on another matter. The meeting commenced with him stating that he considered NAC visits to employers throughout the term of the apprenticeship/traineeship was an unfair expectation of DETYA.16

Heavy reliance on desk-based audit of administrative functions

Stakeholders want to see a more holistic and field-based review of the quality of the training delivery. PETE processes have begun to move in this direction.

Patchy auditing of Training Plans

Auditors look at Training Plans as part of their audit. However, differing

understandings of what is a good training plan make such auditing problematic at this stage.

Lack of industry involvement in the audit and review process

As with initial registration, the absence of industry participation in the audit program and processes makes it difficult to form considered judgements on the extent to which providers are conforming to the requirements of Training Packages. The spirit behind the following comment is typical of many submissions received by the Review.

The Victorian system clearly makes Victoria the easiest state in which to gain

produced; it is a question of whether industry perceives that quality is being delivered. In some States — and Victoria would be one of them — industry has serious doubts as to whether quality outcomes are always being delivered.17

Embryonic auditing of training outcomes

Just what constitutes training outcomes for the purpose of audit and review has not been resolved in Victoria or elsewhere. In the meantime

There does not appear to be any investigation into quality and effectiveness of training under the existing auditing process. Given this lack of investigation, the issuing of qualifications by RTOs under the AQF could be described at times as questionable.

As an RTO, (this organisation) has been audited twice in three years, and on each occasion congratulated by the auditor on our processes.18

Audits not always consistent

Provider audits are largely undertaken through two mechanisms: a panel of private audit contractors and a private company, Curriculum and Training Services, which is guaranteed a minimum number of audits per year. In recent times, some PETE staff have been directly involved in provider audits. Providers who have been audited subsequent to registration report the application of different standards by different auditors. One of the essential elements of a quality auditing program is consistency in the interpretation and application of standards. This has yet to be achieved in Victoria.

The Review found no evidence to suggest that moving from an outsourced model of auditing to an ‘in-house’ model would necessarily overcome this consistency problem or necessarily lead to quality improvements.

Skill composition of the panel of audit contractors no longer appropriate The panel of private audit contractors was established under a time contract which expires at the end of 2000. These contractors were engaged largely on the basis of their financial expertise in the initial stages of the ARF implementation when the financial viability of providers seeking registration was considered to be a primary issue for audit. The panel does however include two assessment experts.

With the passage of time and the benefit of hindsight, a stronger focus on expertise within the panel in monitoring the quality of training and development is needed. The Review notes that Victoria has begun to move in this direction by engaging one of the assessment experts on the panel to meet with the other contracted auditors and then visit workplaces which have been audited by them.

Lack of auditing of TAFE Institutes for quality

Within PETE’s audit strategy, TAFE Institutes are audited on the basis of contracts, financial situation and Module Enrolments. They are not audited against the ARF standards for quality and there are no alternative quality auditing arrangements in place. The Review is aware of only one instance of auditing of TAFE Institutes

17 Ian Blandthorn, Shop, Distributive and Allied Employees Association, statement to public hearing of the Senate Inquiry into the Quality of Vocational Education and Training in Australia,

Melbourne, 28 March 2000

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against the ARF standards and that has been through a strategic audit of training for the cleaning industry through which all providers, public and private, were similarly audited.

Market perceptions that provider breaches are not always dealt with appropriately

There is a perception held by a small number of stakeholders that breaches of conditions of the Training Agreement, in particular, and of provider registration and contracts which have been identified through audits and investigations have not always been vigorously pursued. It has been suggested to the Review that the previous government was somewhat reluctant to take strong decisive action against employers.

It has also been suggested that governments generally are not well placed to pursue legal action or apply significant sanctions swiftly against those who breach

commercial contracts.

This is a very grey and difficult area and the Review has not investigated in detail the way complaints and breaches are handled. It is however aware of instances where PETE has referred matters to the police and sought legal advice. Deregistration is of course a significant sanction which has been applied in one instance on the grounds of non-compliance.

The role that government adopts in relation to audit and review is relevant here. The previous government saw its role more as one of facilitation rather than regulation. As a consequence, non-compliance by a provider was more likely to be addressed by quality improvement measures than by regulatory sanctions such as immediate suspension, de-registration or contract cancellation. Consequently, in some cases, known poor quality providers have been permitted to operate in the market and to receive public funds for and deliver apprenticeship and traineeship training whether the required quality improvements were being effected or not.

Many Victorian providers have therefore come to believe that the sanctions for non- compliance imposed by government are weak or non-existent or that the government is unwilling to impose sanctions. De-registration as the ultimate sanction for non- compliance is sufficient, with the possibility of prosecution always available. The real problem arises when a government lacks the will to apply those sanctions it has at its disposal and poor quality providers are permitted to continue operations.

Market perceptions are important and all players in the apprenticeship and traineeship system must be confident that all complaints are investigated thoroughly, that

breaches are handled in a transparent manner and that the Victorian government is prepared to act swiftly to impose appropriate sanctions where quality audit advice is available.

Insufficient sharing of audit information between DETYA and PETE in relation to audits of apprenticeships and traineeships

PETE’s audit responsibility in relation to apprenticeships and traineeships is restricted to its contractual arrangements with RTOs and GTCs and the delivery of services specified in performance agreements. There are a number of quality-related matters

incentive payments, apprentices/trainees not declaring previous qualifications, employers and apprentices/trainees not declaring previous employment with the employer, employer churning of trainees and the like.

2.5 Aspects of the training market

Under its Terms of Reference, the Review is required to consider whether pricing arrangements, User Choice and Government employer subsidies and rebates ensure value for money in terms of quality of outcomes and completion rates. This section considers the first three of these matters while the question of completion rates is considered in Chapter 3.