Clauses 2.3, 2.4 and 8.3—Recording, monitoring, and reporting third-party arrangements

RTO Clauses

Clause 2.3

The RTO ensures that where services are provided on its behalf by a third party the provision of those services is the subject of a written agreement.

Clause 2.4

The RTO has sufficient strategies and resources to systematically monitor any services delivered on its behalf and uses these to ensure that the services delivered comply with these Standards at all times.

Clause 8.3

The RTO notifies the Regulator:

1. of any written agreement entered into under clause 2.3 for the delivery of services on its behalf within 30 calendar days of that agreement being entered into or prior to the obligations under the agreement taking effect, whichever occurs first, and
2. within 30 calendar days of the agreement ending.

Working with third parties: what RTOs need to know

An RTO can engage a non-RTO (either a natural person or legal entity) under a third-party arrangement to deliver training, conduct assessment and/or provide other services on their behalf as long as this is done entirely in the RTO’s name and on the RTO’s behalf (refer to Sections 116 and 117 of the NVR Act).

An RTO cannot use a third-party arrangement to avoid responsibility for compliance with the NVR Act or the Standards for RTOs and is wholly responsible for all services provided on its behalf.

RTOs are responsible for:

• monitoring third parties providing services on their behalf (clauses 2.3 and 2.4)
• reporting on any third-party arrangements entered into, or concluding (clause 8.3).

If you do not use other organisations to provide any RTO-related services, you do not need to take any action relating to these requirements.

Your RTO must notify ASQA whenever it starts or ends a third-party arrangement within 30 calendar days. This is done via asqanet.

There are many services that can be offered under a third-party arrangement such as:

• training and/or assessment
• providing educational and support services
• marketing and recruiting prospective students

Your RTO is responsible for all services delivered under its registration, regardless of where these are conducted, including in other countries. This means ensuring the third party meets the requirements of the NVR Act and the Standards for RTOs and other obligations as an RTO, including:

• providing data 
• cooperating with ASQA
• complying with advertising and marketing standards
• informing prospective students
• dealing with complaints and appeals
• collecting fees
• record-keeping.

You must have a written agreement with any third party that delivers services under your RTO’s registration. 

The requirement for a written agreement does not apply when:

• you hire trainers and/or assessors as contractors
• a workplace supervisor contributes to evidence collection or training
• referrals.

Third-party arrangements must be documented and transparent to assist you in managing the quality of services and in effectively identifying and managing the risks.

An RTO cannot engage another RTO to deliver a training product on its behalf, unless the third-party RTO has that course on scope. This means that an RTO cannot extend their scope via a third-party arrangement.

Managing third parties

RTOs only need to retain evidence relating to these clauses if they have arrangements with third parties in place.

Your RTO must retain evidence of current written agreements for all third-party arrangements. While you can determine the format of these agreements, any agreements should clearly describe the obligations and responsibilities of each party.

Your RTO must also retain evidence that you have developed and implemented strategies to systematically monitor services provided under third-party arrangements to ensure that these services comply with The Standards. The evidence required to demonstrate compliance will depend on the extent of these arrangements. For example:

• If your RTO has multiple arrangements, or arrangements for delivery outside Australia, a scheduled monitoring program may be required to make sure the monitoring is systematic and that enough resources are available.
• If your RTO has a single, tightly controlled arrangement, less formality may be needed.

Evidence could include schedules of reviews conducted and reports on these reviews. If a review identifies non-compliance, your RTO needs to retain evidence that this has been corrected, and that the RTO is now compliant.

Third-party arrangements may increase risk to the quality of your services; as such, any third-party arrangements will be considered as part of your provider risk profile.

ASQA may interview third parties to verify how your arrangements are being implemented and monitored in practice and how practices align with your written agreements.

Marketing, advertising, and recruitment

A third party may recruit students on behalf of your RTO, using the name of your RTO. They may not undertake recruitment using the name of their business. 

If a third party is directly engaging in two-way communication with individual prospective students about undertaking training and/or assessment at your RTO, they are undertaking activities related to recruitment.

To help each party understand its obligations, your written agreement should explain what is expected from each party in detail. For example, as your RTO is responsible for all marketing of your RTO’s services, details of how marketing undertaken by the third party will be approved by your RTO should be included in the written agreement.

VET Student Loans-approved providers are prohibited from using any third party in recruiting students or providing information about VET Student Loans.

We encourage all ESOS registered providers to review our guidance to ensure the obligations and rights of both the provider and student are clearly set out.

Tips on developing a written agreement

The written agreement with a third-party providing training and assessment services on behalf of the RTO should include:

• the names of the RTO and the third party
• the start and end date of the agreement
• clauses detailing both parties’ obligations under the agreement, for example, making clear that:
  • any training and/or assessment is provided in the name of the RTO, not the third party
  • the third party cannot advertise any VET courses in its own name
  • students are enrolled as students of the RTO, not the third party
  • qualifications and/or statements of attainment are issued in the name of the RTO, not the third party
• clauses detailing the obligations of the third party (that is, setting out which party will provide training and assessment materials, resources and facilities)
• the mechanisms through which the RTO will systematically monitor the third party (for example, if the third party is providing the training and assessment materials, resources and facilities), set out:
  • how these will be reviewed prior to use across all delivery sites
  • how the RTO will ensure that trainers and/or assessors provided by the third party meet the requirements of the Standards for RTOs
• record-keeping procedures for enrolment information and completed assessments
• details of which party will validate completed student assessments
• any obligations (of the RTO or third party) relating to government subsidies or other financial support. 
• clauses requiring the third party to cooperate with ASQA and provide accurate responses to requests about delivery of services.

A written agreement with a third party providing marketing and recruitment services (including education agents) on your behalf might include:

• the name of your RTO and the third party
• the start and end date of the agreement
• clauses detailing both parties’ obligations under the agreement, for example, making clear that:
  • the third party cannot advertise any VET courses in its own name
  • students are enrolled as students of the RTO, not the third party
  • qualifications and/or statements of attainment are issued in the name of the RTO, not the third party
• clauses detailing your RTO’s obligations under the agreement—for example, you might stipulate that your RTO will:
  • review all marketing initiatives
  • provide current and accurate pre-enrolment information
  • ensure that all information provided to a student meets the requirements specified in clauses 4.1, 5.1, 5.2, 5.3, and 5.4 of the Standards
• clauses detailing the obligations of the third party—for example, you might stipulate that the third party will:
  • provide your RTO with all marketing material before publishing
  • provide student enrolment information and student fees to the RTO
  • train their staff to assist with training package and enrolment enquiries
  • any of your RTO’s obligations, or the third party’s obligations, relating to, government-funded subsidies or other financial support
  • detail of arrangements for commission or fees to be retained by the third party
  • the mechanisms through which your RTO will systematically monitor the third party
• clauses requiring the third party to cooperate with ASQA and to provide accurate responses to requests about provision of services.

Supporting your students in a third-party arrangement

The principal provider is responsible for the students enrolled. This includes enrolled students’ training with a third party under a third-party agreement.

You need to tell students before they enrol, if a third party will deliver their VET course under a third-party arrangement.

Students need to know the difference between:

• the registered provider who enrolled them
• the third party who will deliver the training.

If a written agreement is cancelled, the principal provider needs to maintain enrolment and provide support for all affected students.

Invoicing

Where there is a written agreement in place, a third party can invoice a student for course costs on your behalf.

The invoice can include third party branding, but it needs to highlight the principal provider who is offering the course the invoice relates to.