How to become an RTO - the ultimate guide [Updated for 2020]

By Jacob Shaw

The game has changed for those wondering how to become a registered training organisation in 2020. The Australian Skills Quality Authority (ASQA) has recently increased scrutiny of new applications for initial registration to ensure only high-quality training providers are approved. This 12-step guide will help you understand the process of new RTO registration and give you a realistic timeframe for each step. While setting up an RTO is not easy, it is well worth the reward of entering the booming Australian VET industry.

Table of contents:

  1. Understand your requirements (1-2 months)
  2. Complete a self-assessment (3-6 months)
    1. Marketing and recruitment
    2. Enrolment
    3. Support and progression
    4. Training and Assessment
    5. Completion
    6. Regulatory compliance and governance
  3. Demonstrate financial viability (1-2 weeks)
  4. Demonstrate people associated with your organisation are fit and proper (1-2 weeks)
  5. Use asqanet to submit your application (1-2 weeks)
  6. Pay initial lodgment fee (1-2 weeks)
  7. Undergo completeness check (1-2 weeks)
  8. Undergo risk assessment (1-2 weeks)
  9. Pay initial assessment fee (1-2 weeks)
  10. Undergo assessment for initial registration (4-6 months)
  11. Receive ASQA’s decision (1 week)
  12. Pay Annual RTO registration charge and maintain compliance (ongoing)

Step 1: Understand your requirements (1-2 months)

The first step involves a huge amount of initial research. You must gain a comprehensive understanding of the Australian vocational education and training system. This includes:

  • The VET Quality Framework
  • Australian Qualifications Framework (AQF)
  • Standards for registered training organisations (RTOs) 2015

As an RTO owner you will be required to ensure your organisation meets a variety of mandatory requirements while delivering high-quality training and assessment expected by Australian learners, employers and industry. You should be aware of the requirements included in the following ASQA documents:

  • Application guide – application for initial registration
  • Users’ guide to the Standards for RTOs 2015

It is important to note that your organisation must not advertise or offer to provide delivery or assessment of VET courses until it is registered and listed on the national vocational education and training (VET) register, training.gov.au.

Step 2: Complete a self-assessment (3-6 months)

The next step involves preparing to submit a mandatory self-assessment for initial RTO registration. This is where the hard work really begins, as you must be 100% ready to begin delivering quality training and assessment before submitting your self-assessment. You must demonstrate you are ready to manage the recruitment, enrolment and support of learners. You will also be required to submit evidence to support all claims made by your organisation. The self-assessment document itself is 48 pages long. You will be required to submit approximately 40 to 50 additional documents to demonstrate your compliance. Many prospective RTO owners utilise RTO registration consultants at this point due to the difficulty and complexity of the process. The self- assessment is split into six sections as explained below.

We're available to help with RTO registration should you need it.

Section 1: Marketing and recruitment

You must abide by strict requirements relating to marketing strategies. In recent years several RTOs have been de-registered as a result of poor marketing practices. Organisations must ensure they have a process for approving and monitoring any marketing that is distributed by the organisation or by a third party on an organisation’s behalf. Examples of documents you will be required to provide include:

  • A marketing and recruitment policy
  • Examples of marketing to be used for each training product
  • A completed marketing checklist

Section 2: Enrolment

During the enrolment stage of the learner journey, your organisation will be required to securely gather and store student data. You will also need to develop processes to inform and protect learners, protect pre-paid fees by learners and provide credit for prior learning. RTOs must also ensure the support needs of learners are identified during the enrolment stage. Examples of documents you will be required to provide include:

  • An enrolment policy
  • A pre-enrolment form
  • An enrolment form
  • A language, literacy and numeracy support (LLN) policy
  • A LLN assessment tool kit
  • A Recognition of Prior Learning (RPL) policy
  • A RPL application form
  • A refund policy
  • A Learner Handbook
  • Evidence of fee protection mechanisms (if applicable)

Section 3: Support and progression

RTOs are required to support learners from pre-enrolment to post-completion. The needs of learners vary, so you will be required to demonstrate you have a comprehensive support system in place. You will need to provide details of the staff members that will provide support services. You will also need to provide details of any external organisations that you have engaged to provide support services. Examples of documents you will be required to provide include:

  • A support and progression policy
  • A list of staff available to provide support
  • Contact with external support providers (if required)

Section 4: Training and assessment

You will be required to demonstrate you are adequately prepared to deliver quality training and assessment. Your RTO must have strategies to deliver training and assessment that are contextualised to the cohorts you will be delivering to. In this section you will also need to demonstrate that your organisation has sourced the required resources, staff and facilities to function as a compliant RTO. Examples of documents you will be required to provide include:

  • Training and assessment strategies
  • Evidence of agreements with trainers and assessors to commence employment
  • Trainer matrices
  • Lease agreements or title deeds for locations owned
  • Approval from a local government authority for use as an educational facility (where applicable)
  • Floor plans for premises used by the applicant
  • A workplace resource list
  • Industry engagement forms
  • Learning resources
  • Validated assessment tools
  • A systematic process for validation
  • A continuing professional development register
  • Learning Management System (LMS) with AVETMISS reporting capabilities

Section 5: Completion

Your RTO must have a process for verifying learner identity and ensuring certification is only issued to learners who have completed a course. Certification documentation must be in a format prescribed by the Standards for RTOs and must be issued in a timely manner upon completion. Examples of documents you will be required to provide include:

  • Statement of Attainment examples

Section 6: Regulatory compliance and governance

This section of the self-assessment requires you to review your arrangements with any third parties, and to provide details of these arrangements to ASQA. RTOs are responsible for recording, monitoring and reporting on any arrangements they have with third parties. RTOs are also required to provide up-to-date information regarding performance and governance in accordance with Data Provision Requirements. Examples of documents you will be required to provide include:

  • Copies of any agreements made with third parties
  • Strategies to monitor third parties

Step 3: Demonstrate financial viability (1-2 weeks)

You will be required to demonstrate the financial viability of your RTO by submitting a financial viability risk assessment (FVRA) tool. Your organisation’s financial history and projections will be taken into account. You will be required to have a certified accountant sign-off on your completed FVRA tool. An independent assessment of the sustainability of your proposed business will be made based on projections. To complete your FVRA, you will need:

  • A business plan
  • Current bank statements
  • A deed of guarantee or some other legally enforceable instrument

Step 4: Demonstrate people associated with your organisation are fit and proper (1-2 weeks)

You will need to complete a fit and proper person declaration for each owner and some executive officers within your RTO. These declarations include information regarding past and present association with other RTOs. You should be confident in the background of anyone involved in your RTO setup.

Step 5: Use asqanet to submit your application (1-2 weeks)

If you reach step 5, much of the hard work required to become an RTO is behind you. Now it’s just a matter of compiling your evidence for submission through asqanet, ASQA’s online registration service. Remember, when submitting your application you are declaring your organisation is ready to go.

Step 6: Pay initial lodgement fee (1-2 weeks)

After submitting your application you will be required to pay the initial lodgement fee of $500. This fee covers the initial processing of your application. Processing will not begin until this fee has been paid. Upon payment, ASQA will conduct a completeness check of your application.

Step 7: Undergo completeness check (1-2 weeks)

The initial completeness check involves a simple assessment by an ASQA auditor to ensure you have submitted all of the required documents. If your application is found to be incomplete, you will have ten working days to provide additional evidence. Your application will be rejected and your initial lodgement fee will be forfeited if you do not submit the required evidence within the ten-day period.

Step 8: Undergo risk assessment (1-2 weeks)

Once an ASQA auditor has deemed your application complete, it will progress to a risk assessment. The auditor will assess whether the people associated with your RTO are of good character and are able to be involved with running an RTO. At this stage the auditor will also review your financial viability risk assessment tool to consider your prospective RTO’s potential financial performance. Even if your organisation is deemed to be of acceptable financial risk at this stage, your application can be rejected at any point in the assessment process if a problem is found with your financial viability.

Step 9: Pay initial assessment fee (1-2 weeks)

If your organisation is found to have an acceptable level of risk you will be required to pay the initial assessment fee of $8,000 before moving on to the major assessment. This is obviously a substantial investment, especially keeping in mind that once you reach this stage there will not be a formal opportunity to submit additional evidence. In extenuating circumstances ASQA may allow this, but you should not bank on it. Please note if you do reach this stage and wish to withdraw your application for whatever reason, you may be able to receive a refund if ASQA has not already begun assessing your application.

Step 10: Undergo assessment for initial registration (4-6 months)

Once payment has been made ASQA will begin the process of assessing your organisation’s compliance with the National Vocational Education Training Regulator Act 2011 and the VET Quality Framework. ASQA will make a decision based on your compliance with the Standards for RTOs 2015. During this assessment, ASQA will consider:

  • Your application form
  • Your self-assessment and accompanying evidence
  • Your financial viability risk assessment tool and accompanying evidence
  • Your fit and proper person declarations
  • Relevant additional evidence

The assessment process will include a desk audit to confirm your organisation is immediately ready to begin delivering training products. A desk audit involves an auditor or team of auditors analysing your application from their office. Depending on the type of RTO you wish to start, a site visit may also be required. This involves an auditor or team of auditors visiting your delivery location to assess whether you are in an adequate position to offer training products to prospective learners. If a site visit is necessary, ASQA will contact you to set a date. Please note you will not be able to provide additional evidence during this site visit. ASQA will finalise initial registration applications within six months of accepting a properly completed and fully compliant application.

Step 11: Receive ASQA’s decision (1 week)

Once the assessment has been completed, an ASQA auditor will document the findings in an audit report. The report will give you a description of any gaps in compliance that may have been identified. ASQA will consider the findings of the report and make a decision about your organisation’s compliance with the requirements of registration. If you are successful, you will receive an RTO number and be listed on the national register. At this point you can start delivering training and assessment for the training products you have on scope.

If your application is unsuccessful there is no formal process for appeal. You will forfeit the $8500 assessment cost, additional RTO setup costs, as well as the enormous amount of time getting to this point. We have seen some cases where applicants are able to submit additional evidence if there is a very minor non- compliance. However we stress that you should not rely on this. The most effective way to ensure a positive outcome and get registered is to make sure your application is as close to perfect as it can be.

Step 12: Pay annual RTO registration charge and maintain compliance (ongoing)

Now that your RTO is registered, you will be required to pay ASQA’s annual registration charge. This charge is payable on the 1 st of July each year while you are registered. The price of annual registration varies depending on the number of qualifications you have on your scope of registration. Currently the prices are:

  • 0-4 qualifications: $1,130
  • 5-10 qualifications $3,220
  • 11-60 qualifications $6,975
  • 61 or more qualifications $10,730

You will also be required to constantly maintain your compliance through the use of a continuous improvement process and compliance monitoring strategy. Many RTO’s hire internal compliance managers or external compliance consultants to assist with this task, as de-registration of non-compliant RTOs is at record levels. If you want more information about how to setup an RTO, you can contact our RTO setup consultants.

Mr. Jacob Shaw just recently succesfully registered Tradie Training, a RTO delivering the White Card course in Queensland (CPCCWHS1001 - prepare to work safely in the construction industry). Tradie Training started operating in January 2020.
The RTO registration with the White Card on scope can be seen on training.gov.au

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