TEQSA s Risk Based Regulation of the Australian Higher Education Sector
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1 TEQSA s Risk Based Regulation of the Australian Higher Education Sector INQAAHE Biennial Forum 2018 Gregory Simmons Manager, Policy and Analysis 1
2 Agenda 9:30 10:30 Session 1 Exercise Lets get to know each other! Overview of Australian Education Exercise - Similarity / Difference between Australia and your own jurisdiction 10:30 11:00 Morning Tea 11:00 12:00 Session 2 How TEQSA uses its Risk Assessments to inform its regulatory practice Next steps for TEQSA 2
3 Exercise - Lets get to know the room First a little about me Now over to you minutes: Appoint a table leader who will act as a scribe For each person: What does your organisation do? what country are you from? what is your particular role? What are you hoping to get out of the INQAAHE forum? Get to know one another and record the answers for each table on a single sheet. Leader to report back. 3
4 About Australia 4
5 Australia Australia's first inhabitants, the Aboriginal people, are believed to have migrated from some unknown point in Asia to Australia between 50,000 and 60,000 years ago. While Captain James Cook is credited with Australia's European discovery in 1770, a Portuguese possibly first sighted the country, while the Dutch are known to have explored the coastal regions in the 1640s. The first European settlement of Australia was in January 1788, when the First Fleet sailed into Botany Bay under the command of Captain Arthur Phillip 5
6 Australian Facts Geographically speaking Australia is the sixth largest country in the world Australia is home to approximately 25 million people Is an ethnically diverse English speaking country Australia is divided into 6 states and 10 territories Capital is the city of Canberra (located in the Australian Capital Territory) Its three largest states accounts for 80% of the population 6
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8 Australian Government 8
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12 Australian Education Education and training is a shared responsibility of the Australian (Federal) Government and the individual State and Territory Governments. Under the Commonwealth Constitution, education in Australia is primarily the responsibility of the State and Territory Governments. The Council of Australian Governments (COAG) is the peak intergovernmental forum in Australia. There are eight Councils which support COAG. The Councils provide a forum for intergovernmental collaboration and decision-making. The two Councils that relate to Australian education are the Education Council and the Industry and Skills Council. 12
13 Public / Private Distribution The proportion of private (non-government funded) investment in Australian schools is much greater than in other OECD countries (at almost 40 per cent for Australia compared to the OECD average of 16 per cent; 2016 data). The proportion of students in government schools was 65.4 per cent, Catholic schools 20.2 percent and Independent schools 14.4 per cent. 13
14 Public / Private Distribution The majority of higher education enrolments in 2016 (93 per cent) were in public universities. Public funding makes up a relatively low share of primary to tertiary education funding. This is especially the case in higher education where private funding makes up 58 per cent of the overall expenditure, the fifth highest in the OECD. Annual university tuition fees are also the fifth highest in the OECD. 14
15 Four Levels Formal education in Australia has four broad sub-sectors: 1. early childhood education 2. primary and secondary schooling 3. vocational education and training (VET) 4. higher education. 15
16 Early Childhood Education 3 & 4 year old children Responsibilities for child care and pre-school are shared between the Australian, State and Territory Governments, as follows: the Australian Government has policy responsibility for formal care (long day care, family day care, outside school hours care, and some occasional care) State and Territory Governments are responsible for the policy and funding of pre-schools. Pre-school education is delivered using a variety of funding and delivery models, including private provision 16
17 Primary and Secondary Schools 5 years and up Primary and secondary schools in Australia are either government or privately funded. The Australian Government is responsible for: allocating funding to States and Territories to support service delivery and reform to meet nationally agreed outcomes State and Territory Governments are responsible for infrastructure and maintenance funding, the payment of teachers, principals and nonteaching staff and the administration and management of all resources within schools 17
18 Vocational Education & Training Australia has an innovative model of VET. In 2015, the COAG Industry and Skills Council (CISC) formed the Australian Industry and Skills Committee (AISC) to give industry an expanded role in policy direction and decisionmaking for the VET sector. AISC ensures that training packages are developed to an agreed quality standard and are highly responsive to industry s existing and future skills needs. The Australian Skills Quality Authority (ASQA) is the national regulator for Australia s VET sector. ASQA regulates private and public courses and training providers to ensure nationally approved quality standards are met. 18
19 Higher Education The Australian Government provides public funding to the higher education sector through the Higher Education Support Act, 2003 Public universities are established or recognised under State and Territory legislation. TEQSA is the national independent regulator for the higher education sector. TEQSA registers and assesses the performance of higher education providers against the Higher Education Standards Framework, and undertakes both compliance and quality assessments of providers. TEQSA is responsible for the registration and re-registration of providers and the accreditation and re-accreditation of courses. 19
20 TEQSA Legislative Framework Tertiary Education Quality and Standards Agency (TEQSA) Act 2011 Higher Education Standards Framework (Threshold Standards) 2011 National Register of Higher Education Providers Education Services for Overseas Students (ESOS) Act 2000 National code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 National Standards for ELICOS providers and courses National Standards for Foundation Programs Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS)
21 Australian Qualifications Framework The AQF provides the standards for Australian qualifications. It is an integrated policy that comprises: The learning outcomes for each AQF level and qualification type The specifications for the application of the AQF in the accreditation and development of qualifications The policy requirements for issuing AQF qualifications The policy requirements for qualification linkages and student pathways 21
22 Blank 22
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25 TEQSA Australia s Regulator of Higher Education 25
26 About TEQSA [1] Established 2011 under the TEQSA Act Began operating 29 January 2012 Single national QA & regulatory agency for HE Replaced eight S&T agencies plus an external QA assessment process specifically for universities TEQSA to apply quality-based standards approach to all providers (universities as well as non-universities) 26
27 About TEQSA [2] TEQSA an arm s-length Statutory Authority Consists of the Commissioners as regulatory decision-makers Commissioners (collectively) also Accountable Authority CEO and Staff a Statutory Agency Support Commissioners in decision-making Delegation of some regulatory decisions to senior staff Minister has only limited authority to direct Commissioners and CEO (through a disallowable legislative instrument) 27
28 TEQSA s Objectives Ensure national consistency in regulation using a standards-based quality framework and applying three regulatory principles Protect and enhance Australia s reputation for quality higher education Protect students and ensure they have access to accurate information Ensure equivalence of student outcomes regardless of where students are studying Encourage and promote a higher education system that is appropriate for Australia s social and economic needs 28
29 What TEQSA does Initial registration and renewal of registration Accredit and re-accredit courses for non-self accrediting providers Conduct compliance assessments CRICOS Registration 29
30 The Threshold Standards The quality standards known as Threshold Standards Made by the Minister on advice from independent, expert HE Standards Panel TEQSA only has advisory role in setting Standards Gives guidance to the sector on interpretation and application of them 30
31 Higher Education Standards Framework 2015 HESF consists of seven domains Standards structured to align with operational characteristics of good practice HE provider 31
32 Example 6.1 Corporate Governance 1. There is a formally constituted governing body, which includes independent members, that exercises competent governance oversight of and is accountable for all of the higher education provider s operations in or from Australia, including accountability for the award of higher education qualifications, for continuing to meet the requirements of the Higher Education Standards Framework and for the provider s representation of itself. 2. Members of the governing body: a) are fit and proper persons, and b) meet the Australian residency requirements, if any, of the instrument under which the provider is established or incorporated, or otherwise there are at least two members of the governing body who are ordinarily resident in Australia. 32
33 Example 6.1 Corporate Governance 3. The governing body attends to governance functions and processes diligently and effectively, including: a) obtaining and using such information and advice, including independent advice and academic advice, as is necessary for informed and competent decision making and direction setting b) defining roles and delegating authority as is necessary for effective governance, policy development and management; and monitoring the implementation of those delegations c) confirming that the provision of higher education and research training and the conduct of research, whether by the provider or through an arrangement with another party, are governed by the registered provider s institutional policies, and the operations of the provider and any associated party(ies) are consistent with those policies d) undertaking periodic (at least every seven years) independent reviews of the effectiveness of the governing body and academic governance processes and ensuring that the findings of such reviews are considered by a competent body or officer(s) and that agreed actions are implemented, and e) maintaining a true record of the business of the governing body. 33
34 Example 6.1 Corporate Governance 4. The governing body takes steps to develop and maintain an institutional environment in which freedom of intellectual inquiry is upheld and protected, students and staff are treated equitably, the wellbeing of students and staff is fostered, informed decision making by students is supported and students have opportunities to participate in the deliberative and decision making processes of the higher education provider. 34
35 TEQSA s role TEQSA s activities predominantly demand (applications) driven All providers of HE awards in or from Australia must be registered by TEQSA Max registration period 7 years: TEQSA assesses applications for initial registration and applications for renewals Also assess applications for accreditation and re-accreditation of courses by providers without Self-Accrediting Authority (SAA) All universities have SAA All except 11 non-university providers currently don t have SAA 35
36 Regulation of providers TEQSA has the power to: Approve an application Reject an application Limit the period of registration and/ or accreditation (< 7 years) Apply conditions to the registration and/or accreditation Seek (compulsory) further information relevant to decisions 36
37 Provider Monitoring Monitoring options currently include: Annual risk assessments Provider visits ( inspections/investigations) Within-cycle compliance assessments Complaints assessments Media monitoring Regular engagement with case managers 37
38 Exercise In your groups List how education is governed in your own country. What is common to the Australian approach, what is different? Leader to report back. 38
39 The Current TEQSA Environment 39
40 Higher Education Providers WA 15 NT 2 QLD 16 SA 16 NSW 69 68% of providers are located in NSW and Victoria Provider Category (August 2017) TOTAL University 43 Non University HEP with SAA (full or partial) 11 VIC 44 TAS 1 ACT 3 Non University HEP 112 TOTAL
41 Group All providers Number of Providers SAA % of sector EFTSL % of sector HE revenue For Profit General Pathway Not for Profit TAFE Faith-based Professional Association Government Agency Pathway Other Universities Total
42 Universities Type Public Not-For- Profit Not-For- Profit Private For- Profit Total Australian University Australian University of Specialisation 1 1 Overseas University Total Source: TEQSA National Register, August
43 NUHEPS Group Number of Providers For Profit 60 General 49 Pathway 11 Not for Profit 63 TAFE 11 Faith-based 20 Professional Association 6 Government Agency 5 Pathway 2 Other 19 Total 123 Source: TEQSA National Register, August
44 Students total (headcount) Universities NUHEP Total 25% 1,310,226 75% 41% 26% 124,810 59% 1,435,036 74% Domestic International 44
45 Australia s HE Regulatory Framework 1.4 million students (2015) Universities 93% NUHEPs 7% National Regulation (TEQSA: Standards DET: funding) Provider self regulation (QA/QI) 166 Providers 123 NUHEPs 40 universities 1 university of specialisation 2 overseas universities Professional Regulation (standards/qa) Market regulation (demand/funding schemes) High quality, relevant graduate outcomes 45
46 QA & Regulation in Australia [1] Australia s QA & Regulation regime for HE Conditional self-regulation TEQSA is a meta-regulator We regulate self-regulation by providers (assure self-assurance) We risk-manage risk management of quality by providers Cooperative regulator ( regulating as partner Lee Dow/ Braithwaite) Management-based regulation Rely on providers superior knowledge about how to achieve quality standards Permits diverse and innovative approaches Performance-based regulation (e.g. learning outcomes) not feasible (yet) Input-based regulation inappropriate and inefficient 46
47 QA & Regulation in Australia [2] Like all regulators, we rely heavily on voluntary compliance by most providers A willingness and capability by providers to effectively self-manage and control risks to quality and financial position TEQSA communicates and cooperates with all providers and provides guidance and support to those which need it to assist in achieving compliance Case manager model 47
48 QA & Regulation in Australia [3] Consistent with principles and central purpose of risk-informed regulation, use annual risk assessments to prioritise regulatory effort variable touch Most evident in assessments of renewals or registration and accreditation: (Core+) to minimise admin cost burden on lower-risk providers light touch/limited touch Least obvious in relation to linking RA outcomes to structured regulatory responses and stance with respect to higher-risk providers, though now strengthening this Heavier touch/ intervention and supervision 48
49 Three Regulatory Principles in the TEQSA Act Regulatory necessity Regulatory action is taken only if there is no effective alternative way to ensure compliance. Regulatory action taken is the most effective, least burdensome way of assuring compliance. Reflecting risk Regulatory decisions reflect risks of non-compliance, taking into account the provider s history of HE provision, financial position and regulatory history. Annual risk assessments inform decisions about the level of monitoring or regulatory action that may be necessary. Proportionality Regulatory action taken reflects the nature, extent and degree of risks of non-compliance. Proportionate action may include imposing conditions &/or shortened periods of registration or accreditation. In extreme cases, it may require cancellation of registration or accreditation 49
50 50
51 QA & Regulation in Australia [4] TEQSA s Sector Risk Oversight and Management Framework plays a central role in monitoring the sector and in determining scope of evidence for assessment of applications for registration and accreditation of courses 51
52 Risk assessment framework Our Risk assessment framework informs: Assessment planning, scope and evidence requirements Regulatory decisions and outcomes Sector-wide risk evaluation and quality improvement activities
53 Risk Assessment Process 53
54 Risk Indicators Indicator Cohorts Completed Student Load Attrition Progress Completions Student Satisfaction Graduate Destinations Senior Academic Leaders Student to Staff Ratio Casual Academic Staff Financial Viability Financial Sustainability Description Maturity of provider Growth All AQF levels Completion of units studied Number (not rate) Overall Satisfaction Full-time employment or further study Number per BFOE EFTSL per FTE Proportion of workforce Short term (day-to-day) Medium to long term (investment in future)
55 Risk Assessment Process Regulatory History Context Provider risk management Risk thresholds Risk Rating Analyst s professional judgement 55
56 The TEQSA Risk Assessment Process
57 Sector Risk Matrix (2016) Note: New providers, and providers with a Suspended or No Confidence in Data rating, not included 57
58 Risk rating by grouping (2016) Risk to Students High Moderate Low Total University NFP - Faith-based TAFE Pathway NFP - Other Professional Body For-Profit Total Risk to Financial Position High Moderate Low Total University NFP - Faith-based TAFE Pathway NFP - Other Professional Body 2 2 For-Profit Total Note: Only includes providers with a rating against each indicator 58
59 Risk Indicator Distribution (2016) Cohorts Completed Student Load Attrition Progress Completions Student Satisfaction Graduate Destinations Senior Academic Student to Staff Ratio Casual Academic Staff Financial Viability Financial Sustainability
60 Risk Treatment Investigation & Interventions as follow-up to annual RA outcomes Focus predominantly on providers exhibiting High Risk to Students and/or Financial Position Can result in more intensive monitoring and oversight Or provider visits (inspections) and/or compliance assessments (investigations) could lead to conditions or shortened period of registration (interventions and supervision) or, in extreme cases, cancellation of registration 60
61 Risk ratings and outcomes of renewal of registration 61
62 Re-registration: Core + Core Assessment against core set of 7 standards Student outcomes & support Internal Systems for quality assurance + Extension Assessment of additional targeted areas based on risk and history: e.g. financial e.g. third party e.g. scholarship Extension based on: Overall moderate or high risk to students or financial position Unresolved regulatory issue(s) Limited or no history with TEQSA *New registrations are assessed against all standards 62
63 63
64 64
65 65
66 Looking Forward 66
67 Next Steps: Existing Approach [1] Develop Comprehensive Provider Profiles Track-record of HE provision, financial management and regulatory history Characteristics that give us confidence or not Risk profile and other information and intelligence Information from other regulators ( ASQA, DIBP etc.) Codify case manager insights Undertake Annual Sector Futures Scans Sector intelligence Surveys? Reference ( Futures ) Group (Experts in risk identification and analysis from providers; independent sector analysts; and risk analysts from other sectors)? 67
68 Next Steps: Existing Approach [2] Rethink RA Indicators especially search for more leading indicators? Develop predictive motivational/behavioural insights More structured, principles-based approach to within-cycle regulatory intervention/investigation Development of strategies and tools for targets, graduated follow-up to risk assessments 68
69 Towards the Future? Strategies to further reduce administrative costs on lower-risk providers to meet TEQSA evidence requirements (lighter touch/more limited touch) And free-up internal resources to devote more attention to higher risk providers and systemic issues Increased emphasis on monitoring and intelligence gathering, less on cyclical assessments for lower risk providers, for registration as well as accreditation 69
70 Monitoring Ongoing continual monitoring (all providers) Annual Risk Assessments Self-reporting of material changes and other provider initiated engagement Case Manager information, intelligence and insights Complaints Media scans, including social media Information from other agencies (e.g. ASQA,DIPB) Sector Futures Scans (expert input and surveys of providers and other stakeholders) Enhanced monitoring (selected providers) Real-time data collection from providers Provider visits to inspect and to monitor performance/progress 70
71 Provider visits Range across Monitoring; Inspections; Supervision; and Investigation Scheduled with Assessment for Registrations or Renewal Periodic within-cycle inspections for new providers (monitoring and engagement) and for other providers of concern (inspection or supervision) Other periodic within-cycle: varying patters for varying needs ( e.g. for periodic monitoring or for engagement) Investigative visits ( selected providers where compliance concerns) Random visits (sample from all providers) 71
72 Rethinking our Formal Assessments Cyclical, application-based assessments All Standards (new providers; high risk providers) Core+ (most providers for renewals) Core of the core? (lower risk providers) Self-certification? ( earned autonomy for very low risk, high confidence providers) Within-cycle, TEQSA-initiated assessments Compliance or Accreditation Assessments (selected providers, after investigation) 72
73 73
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