There are two types of RTO CEOs. Those that are knee deep in the trenches and took on the CEO role after years’ operating and managing Registered Training Organisations. These CEO’s have an intimate understanding of the Standards for Registered Training Organisations and their organisation’s funding contracts. They understand exactly where their RTO stands in terms of compliance. They understand what processes are in place, why they are in place, and what areas of compliance are at risk in the operation. They can monitor the RTO’s compliance themselves because they understand both the compliance requirements, the compliance systems and the areas for improvement in compliance.
But many CEOs are professional managers and leaders. They know how to run businesses, and often have a range of operations that they are responsible for – an RTO being one of those business areas. The professional CEO is likely to bring with them extensive business management, business development and financial management skills, and those are vital skills for any business. These CEO’s may not be RTO compliance experts, and that’s OK, because that is not their job. Their job is to lead and manage the business.
This message is for professional CEOs.
Do not rely soley upon your RTO Management Team when it comes to compliance.
If you don’t understand every clause of the standards and your funding contract, and you can’t describe your compliance systems or your current compliance standing and risks, without assistance from your RTO managers, then you have a governance risk.
There are some brilliant RTO Managers out there, and if you have one, fantastic! But if you’re basing your judgement of your manager’s performance on budget figures and KPIs, then you’re not measuring compliance performance.
You can have the best performing RTO in terms of enrolments, completions and income, but that is in no way, a measure that can be used for compliance performance. In fact, if those things have not been done compliantly, you could find yourself having to return a whole lot of that funding and cancelling a whole lot of those lovely certificates you issued. And that’s if the regulator or funding body goes easy on you. At worst, you could lose your contracts and your registration, and I’m sure you are aware of what that would cost your business.
Do not make the mistake of holding off on assessing compliance performance until the next audit. You don’t even want to assess based on the last audit – especially if that was a few years back. Don’t think you can rely entirely on your compliance team either. If your compliance team is answering to your RTO Manager, then they are not guaranteed to be a reliable source for assessing or reporting the compliance of your RTO. And if your RTO Manager arranged that external consultant you hired to check compliance, then you could be getting unreliable information on the results of that compliance check too.
I’m writing this because I am sick to death of seeing (and hearing about) the mess that can be made by incompetent or negligent RTO managers and senior RTO staff. In almost every case I know, the CEO’s story is that they trusted that their RTO management team was doing the right thing. Which, in fairness, is reasonable, considering they pay their management team to do a good job. These CEOs were diligent in recruiting, had regular reporting mechanisms and in some cases had external consultants (arranged by the RTO Manager) looking at the operation.
And yet, even with all of this in place, their RTO management team, were able to cause immense damage by not disclosing vital information, not following compliance systems, (sometimes even dismantling existing systems) and just plain laziness and negligence. That or gross incompetence. Either way, a serious issue for the organisations involved.
The messes a senior RTO staff can leave behind are not minor. I’m talking about messes that can cost tens, sometimes hundreds of thousands of dollars to fix. If they can be fixed at all.
If you are a CEO of a large business, then it may not be viable for you to be an expert in your RTO’s compliance situation. However, if you are relying solely on your management team’s word that the operation is doing well compliance wise, and you’re signing off the CEO Declaration of Compliance every year based soley on that trust, you are taking some very big and unwise risks.
My Recommendation
If you cannot be ‘all over’ the compliance of your organisation’s RTO, then I recommend that you do the following:
- Contract an external consultant who will answer ONLY to you. This should not be a person that your current manager recommends, and your consultant should not change when your RTO management changes (unless a serious conflict of interest arises).
- Don’t trust an external consultant who tells you they are fabulous. Do your research, talk to other people in the industry that you trust, and reference check any consultant you contract. A bad consultant can be almost as dangerous as a bad RTO Manager.
- Have the consultant conduct an annual compliance review of your RTO, and have them report back to you exclusively. Do this around December each year when the RTO is generally quieter, and so you can identify, then address, any issues BEFORE you sign your CEO Declaration of Compliance.
- Have the consultant assess compliance to both the standards and your funding contracts.
- Establish a protocol within the operation where all RTO staff are able to report compliance concerns directly to the external consultant. Ensure that these complaints can be made without the identity of the staff member being disclosed. There are circumstances where staff may be worried about upsetting their boss (your RTO Manager), so make it safe for them to report their concerns. Don’t make the mistake of thinking you are approachable, or that your ‘open door policy’ allows for staff to report concerns directly to you. That’s wishful thinking. You are the CEO, and just holding that title makes you a little intimidating for some staff members.
- Your consultant should investigate any concerns (without disclosing the reporting staff member). If the concern is legitimate, then you may have caught an issue before it gets out of hand. If it’s not, well, you can be confident that area of your business is doing just fine.
- Write this whole process up in an RTO Governance Policy. And implement the policy immediately!
And lastly to all the RTO Manager’s out there. I’m not ragging on most of you, in fact I believe most good RTO Manager’s would be absolutely fine with an external set of eyes on their operation.
And if you’re not good with it…what have you got to hide?
Cheers
Coleen
PS – This is not a pitch for Raspberry Training. We’re a very boutique operation and while we do provide this service for some of our key customers, we’re not always available. There are some very good operators out there that can do this for you, but as I said above, do your own due diligence in finding a good consultant. I have a couple who I’d recommend and I’m happy to share those recommendations privately and for free.