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Victorian Registration & Qualifications Authority

Annual Report 2014–15

Published and authorised by the Victorian Registration and Qualifications Authority (VRQA) Level 4 Casselden 2 Lonsdale Street Melbourne VIC 3000

GPO Box 2317 Melbourne VIC 3001

Tel: (03) 9637 2806 Fax: (03) 9032 1579 [email protected] www.vrqa.vic.gov.au

October 2015

© State of Victoria (VRQA) 2015

Victorian Registration and Qualifications Authority Annual Report 2014–15 is licensed under a Creative Commons Attribution 4.0 licence. You are free to re-use the work under that licence, on the condition that you credit the State of Victoria (VRQA), indicate if changes were made and comply with the other licence terms available here. The licence does not apply to:

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ISSN 2204-0463 (Print) ISSN 2204-0471 (Online)

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The Hon. James Merlino MP Minister for Education

The Hon. Steve Herbert MP Minister for Training and Skills

Dear Ministers

In accordance with the Financial Management Act 1994 and the Education and Training Reform Act 2006 I am pleased to present the Victorian Registration and Qualifications Authority (VRQA) Annual Report for the year ending 30 June 2015.

Yours sincerely

Timothy F Smith Chair Victorian Registration and Qualifications Authority

October 2015

Contents

Report of operations—year in review 1 Mission 1 Values 1 Report of the Chair 2 Report of the Director 3 About this report 4 Purpose and functions 4 Strategic priorities and key achievements 5 Progress towards objectives and indicators 7 Discontinued operations 18 Current year financial review 19

Report of operations—governance and organisational structure 20 Ministers 20 VRQA Board 20 Victorian Registration and Qualifications Authority organisational structure at

30 June 2015 27 Report of operations—workforce data 28

Occupational health and safety 28 Comparative workforce data 28 Workforce inclusion policy 31 Executive Officers 31

Report of operations—other disclosures 32 Victorian Industry Participation Policy 32 Major consultancies and contracts 32 Freedom of information 32 Compliance with the Building Act 1993 33 National Competition Policy 33 Compliance with the Protected Disclosure Act 2012 33 Compliance with the Carers Recognition Act 2012 34 Office-based environmental impacts 34 Fees and charges 34 Additional information available on request 34 Attestation for compliance with the Australian/New Zealand Risk Management

Standard 35 Attestation for compliance with the Ministerial Standing Direction 4.5.5—

Insurance 35 Compliance with DataVic Access Policy 36

Financial statements 37 Notes to the financial statements 44 Appendices 73

Report of operations—year in review 1

Report of operations—year in review

Mission The VRQA’s purpose is to regulate for quality learning outcomes in safe and well-governed environments.

Values The VRQA ‘RITE’ values are embedded in all levels of the organisation and underpin interactions with staff, external stakeholders and the community.

The RITE values are:

R: respect and diversity

I: integrity

T: transparency

E: empowerment.

2 VRQA Annual Report 2014–15

Report of the Chair

I am pleased to report a successful year of working with our stakeholders and providers to ensure quality education and training in Victoria.

This report provides details of the progress the VRQA has made towards achieving the priorities of the VRQA Strategic Plan 2014–16. The Strategic Plan sets out our mission and aligns with the requirements of the Ministerial Statement of Expectations provided to the VRQA in May 2014.

In early August 2015 an updated Ministerial Statement of Expectations was provided to the VRQA. The VRQA will report against this statement in the 2015–16 reporting period.

The VRQA will soon have an expanded role in ensuring child safety as part of the Victorian Government response to the Inquiry into the Handling of Child Abuse by Religious and other Non-Government Organisations. The Education and Training Reform Amendment (Child Safe Schools) Act 2015 allows for a requirement for Victorian schools to comply with Child Safe Standards to be formalised via a Ministerial Order. It also gives the VRQA new responsibilities and powers that may be used to ensure the safety of children in Victorian schools.

In addition, we are consulting with the independent school sector regarding the adoption of Department of Education and Training (DET) Recreational Swimming Guidelines as a condition of registration, in response to a recommendation made by the Victorian Coroner.

The Victorian Government is conducting two important reviews into Vocational Education and Training (VET) provision in Victoria. The VRQA has provided information to the Review of Quality Assurance in Victoria’s VET system and to the VET Funding Review.

A Ministerial Direction and a Ministerial Order were implemented to harmonise arrangements for certain changes to scope of registration for VRQA and Australian Skills and Quality Authority-registered training providers. A Ministerial Order was implemented holding 2015 VET fees at 2014 levels.

We continue to build our relationships with stakeholders to improve regulation. I was particularly pleased to discuss how the VRQA can best contribute to quality education and training with many of our stakeholders at our recent Board and stakeholder breakfast.

I wish to thank my board colleagues for their contribution to education and training in Victoria. I also thank Ms Lynn Glover, Director VRQA, and her staff for their contribution to the implementation of the VRQA’s strategic priorities.

Timothy F Smith Chair


Report of the Director

During 2014–15 the VRQA has continued to work with stakeholders and providers to regulate in the interests of Victorian students.

A common provider risk framework setting out the risks and indicators considered by the VRQA when determining the appropriate level of oversight for registered providers has been published. The framework applies across all sectors regulated by the VRQA, excluding apprenticeships and traineeships, and reflects our guiding regulatory practice principles of transparency and proportionality.

Providers, students and parents are able to reflect on the risks and indicators contained in the VRQA provider risk framework and consider their own circumstances.

The VRQA worked with industry, unions and other government agencies in undertaking a regulatory campaign following the identification of patterns of non-compliance among automotive employers. Regulatory breaches happen in a minority of cases. These cases can, however, undermine the reputation of the Victorian apprenticeship and traineeship system.

The campaign resulted in several employer approvals being revoked and the cancellation of a number of training contracts.

The VRQA has commenced a campaign among commercial cookery apprenticeships with further campaigns planned for the future.

A significant review of the contract of the regulatory field services provider Busy At Work was undertaken. The review concluded that Busy At Work is performing its responsibilities at a high standard.

We continue to work closely with agencies involved in the sectors that we regulate. Memoranda of Understanding (MoUs) have been entered into with the Victorian Institute of Teaching, the Australian Council for Private Education and Training, the Fair Work Ombudsman and the Department of Industry with respect to information-sharing and collaboration.

The VRQA also entered into a Memorandum of Understanding with Seventh-day Adventist Schools Victoria to guide its work as a school review body.

I would like to thank Timothy Smith, VRQA board Chair, and all board members for their support which enables us to achieve the VRQA priorities each year.

I would also like to thank our many stakeholders, DET colleagues and VRQA staff for their important contribution to quality education and training in Victoria.

Lynn Glover Director


About this report In accordance with Ministerial Financial Reporting Direction (FRD) 30B that annual reports be ‘reports of the financial and business operations of an entity, produced to comply with relevant Victorian legislation and pronouncements’, material not required under relevant legislation and pronouncements is not included in this report.

An index which identifies the VRQA’s compliance with statutory disclosure requirements is provided on page 73.

Purpose and functions

Strategic purpose

Regulation is a tool of government to create environments to achieve public policy goals.

The VRQA supports the achievement of the Victorian Government’s education and training goals and contributes to the portfolio-wide efforts of the Department of Education and Training (DET) to help Victorians gain the skills and knowledge they need to thrive and participate in a complex and challenging economy and society. This needs quality learning and work environments.

The VRQA contributes to this by regulating schools, registered training organisations and learning and work that occurs in the apprenticeship and traineeship system.

Our role is to help build, maintain and improve these learning and work environments by ensuring that schools, registered training organisations and employers meet the standards required to participate in Victoria’s high-quality education and training system.

We do this through our regulatory frameworks that include information provision, education, registration, monitoring and enforcement. These services protect Victorians from substandard practices and help create learning and work environments conducive to the broader goal of supporting Victorians to gain the skills and knowledge they need to thrive.

Success for us is learning and work environments that are safe, well-governed, and led by appropriately qualified people who contribute to quality outcomes for learners.

Functions

The VRQA was established under the Education and Training Reform Act 2006 (ETRA).

Ministerial responsibility for the VRQA rests with the Minister for Education for school education and with the Minister for Training and Skills for VET providers and apprenticeships and traineeships.

The VRQA registers:

• VET providers that deliver accredited training to domestic students in Victoria only orVictoria and Western Australia only

• school education providers including approval for registration on the CommonwealthRegister of Institutions and Courses for Overseas Students (CRICOS) for courses delivered by schools

• senior secondary education providers (both school and non-school providers)including approval for registration on CRICOS for courses delivered by schools

• children for home schooling in Victoria.

The VRQA also:

• regulates apprenticeships and traineeships in Victoria

• approves school and non-school providers as overseas secondary student exchangeorganisations


• accredits courses and registers qualifications for VRQA-registered providers and senior secondary courses and qualifications in Victoria

• investigates complaints against providers registered in Victoria by the VRQA

• maintains a register of all education and training organisations registered by the VRQA and the accredited courses they deliver.

Strategic priorities and key achievements The VRQA Strategic Plan 2014–16 (Strategic Plan) reinforces the VRQA’s commitment to demonstrating the following good regulatory practice principles set out in the statement Future Direction for the VRQA:

• transparency—relevant information, other than private and commercial-in-confidence information, is available to providers

• proportionality—processes, incentives and penalties are proportional to the consequences of the particular risk

• consistency and predictability—processes and decisions about any particular matter should be sufficiently consistent as to be predictable to providers

• sector neutrality—all providers are held to the same standards, within and across sectors, while respecting the diversity of providers and not taking a one-size-fits-all approach

• efficiency and agility—processes deliver maximum public benefit for minimum resources; allow for flexible, case-specific responses; and result in prompt decisions.

Progress on the VRQA’s achievements against the Strategic Plan is reported to the VRQA board bi-monthly. A number of significant achievements against the Strategic Plan are shown in Table 1, with further achievements provided throughout the Report of Operations.

A Ministerial Statement of Expectations for the VRQA (SoE) was provided to the VRQA in May 2014 by the then-Minister for Education and the then-Minister for Higher Education and Skills. The SoE set out the Ministers’ expectations of the VRQA to improve the efficiency and effectiveness of its regulatory activities while minimising the regulatory burden on education and training providers.

The Strategic Plan aligns significantly to the performance expectations of the SoE and the activities specified in the VRQA response to the SoE. Further details of the progress made by the VRQA in meeting these performance expectations are set out in Appendix 2.


Table 1—Key achievements against the VRQA Strategic Plan 2014–16

Priority Key achievements SoE

activity

1. ‘Right’ touch regulation for quality educational outcomes

Publication of a common provider risk framework following consultation among education and training providers and stakeholders.

Yes

Integrated financial assessments implemented for education and training providers holding multiple registrations.

Yes

2. Protect students’ (and their parents’ where appropriate) interests

Publication of financial viability risk criteria. Yes

Workshops held to assist education and training providers to identify and address financial stress.

Yes

3. Improve the transparency of processes and provide support to reduce non-compliance

VRQA complaints process published including policies and procedures.

Yes

VRQA communications channels evaluated for effectiveness, including a comprehensive website review.

Yes

Compliance workshops and clinics held in regional Victoria to address individual provider needs.

Yes

4. Build stakeholder relationships to improve regulation

VRQA Stakeholder Engagement and Communications Strategy 2014–16 approved.

Yes

Annual client and stakeholder research expanded to include feedback from stakeholders, education and training providers, apprentices, trainees and employers about VRQA services and emerging industry trends.

Yes

Following feedback from stakeholders, targeted stakeholder events were provided for each sector regulated by the VRQA.

Yes

5. Promote greater cooperation, information-sharing and policy influence through regulatory coherence and efficiency

VRQA and DET data collection requirements for Adult, Community and Further Education providers reviewed and opportunities to reduce regulatory burden identified.

Yes

MoUs for the VRQA and the following agencies established and published:

• Victorian Institute of Teaching with respect to coordinating regulatory activity

• Australian Council for Private Education and Training with respect to collaboration and mutual assistance

• Fair Work Ombudsman with respect to coordinating regulatory activity

• Department of Industry with respect to coordinating regulatory activity

• Seventh-day Adventist Schools Victoria with respect to operating as a school review body.

Yes

Funding secured for the business case for the development of a secure register of apprentices and trainees (DELTA replacement).

Yes

6. Maintain and strengthen board corporate governance, especially financial oversight

Board endorsed budget and approved investment plan. Yes

Annual review of board sub-committee charters and VRQA board delegations of authority completed.

Yes


Progress towards objectives and indicators

School and senior secondary education

Significant activities and achievements

• The Education and Training Reform Amendment (Child Safe Schools) Act 2015 (the Act) received Royal Assent in April 2015. The Act makes provision for a requirement for Victorian schools to comply with Child Safe Standards to be formalised via a Ministerial Order. The Child Safe Standards are currently under development, led by the Department of Health and Human Services. ‒ The VRQA gained several new powers under the Act that may be used to ensure

child safety: ‒ guideline-making powers in respect of schools ‒ the power to review one or more prescribed minimum standards (for example,

student welfare) ‒ widened information-sharing powers ‒ the power to impose interim conditions on schools prior to a review being

completed ‒ the power to accept enforceable undertakings from schools where non-

compliance with a minimum standard is identified.

• The changes form part of the Victorian Government response to the recommendations of the final Betrayal of Trust report of the Inquiry into the Handling of Child Abuse by Religious and other Non-Government Organisations.

• The VRQA also contributed to the promotion among providers and stakeholders of other relevant recommendations of the Betrayal of Trust report, including the introduction of new criminal offences for failing to protect children from child sexual abuse and failing to disclose child sexual abuse.

• In response to a recommendation made by the Victorian Coroner, the VRQA began consulting with the independent school sector regarding the adoption of DET Recreational Swimming Guidelines as a condition of registration.

• The VRQA Guidelines for Registered Schools on Bushfire Preparedness were updated to include several new requirements for schools.

• The Guide to the Minimum Standards and Other Requirements was updated to reflect a number of changed requirements including Ministerial Order 706: Anaphylaxis Management in Victorian Schools and the updated VRQA Guidelines for Registered Schools on Bushfire Preparedness.

• Information sessions were held to assist independent schools to prevent, diagnose and respond to signs of financial stress.

• The VRQA entered into the following MoUs in relation to the regulation of school education:

• the Victorian Institute of Teaching to guide collaboration, coordination and mutual assistance in respect of each organisation’s functions

• Seventh-day Adventist Schools (Victoria) in respect of its role and responsibilities as a school review body.

• An internal review of policies and procedures governing the registration of non-school senior secondary education providers was conducted.

• Reviews were undertaken for all providers seeking registration or re-registration as schools or non-school senior secondary providers and as part of ongoing monitoring and compliance activity.

• A review program was undertaken to quality assure school review bodies’ monitoring of compliance of schools with the minimum standards for registration.

• There was a small increase in the number of registered schools at 30 June 2015 (Table 2). Five new Catholic schools were registered in 2014–15 with no closures in that sector. There was a net increase in government schools of two schools, and


a net decline of two schools in the independent schools sector. The large majority of new schools are located in the outer urban growth areas.

Table 2—Number of registered schools at 30 June 20151

2015 2014

Government 1,541 1,539

Catholic 493 488

Independent 207 209

Total 2,241 2,236

Figure 1—Registered schools by sector at 30 June 2015

1 DET’s census date for registered schools is February; VRQA’s census date is June. Unlike DET’s data, VRQA data includes schools with temporary populations such as hospitals.

69%

22%

9%

Government

Catholic

Independent


Table 3—School registration activity 2014–15

Government Catholic Independent Total

New school

Primary 3 4 1 8

Secondary 1 1 1 3

Primary/secondary - - 1 1

Specialist 1 - - 1

Additions and amalgamations

School amalgamations 1 - - 1

Additional campuses 9 1 5 15

Additional secondary year levels

2 2 12 16

Additional primary year levels 1 - 3 4

Relocations 1 - 1 2

Senior secondary registration 4 - 2 6

Closures

Schools closed 4 - 5 9

Non-school senior secondary education

Table 4—Non-school senior secondary providers at 30 June 2015

Organisation type 2015 2014

Community-based adult education provider 21 24

TAFE institute 17 18

Education/training business or centre 5 2

Adult education institution 1 1

Other 5 5

Total 49 50


International education

Education Services for Overseas Students

Significant activities and achievements:

• The VRQA provided feedback to the Commonwealth Department of Education and Training Reform of the Education Services for Overseas Students Framework discussion paper as part of a Victorian Government submission.

Table 5—Education services for overseas students approval activity 2014–15

Government Catholic Independent Total

ESOS approvals - - 1 1

Re-approvals - 12 24 36

Overseas secondary student exchange organisations


• New information, including FAQs, has been published to assist schools to manage enquiries about overseas secondary student exchange programs.

• In November 2014 the VRQA hosted a national forum for agencies responsible for student exchange organisations (the National Coordinating Committee for International Secondary Student Exchange).

Table 6—Overseas secondary student exchange organisations at 30 June 2015

Approved student exchange organisations 2015 2014

Government school 10 9

Non-government school 6 6

Community organisation 4 4

Non-school organisation 8 8

Total 28 27


Table 7—Overseas secondary student exchange student activity

Inbound exchange students—Country of origin 2014–15

Germany 118

Italy 77

France 74

Japan 47

Finland 26

Belgium 15

Switzerland 14

USA 11

Denmark 10

Austria 9

Brazil 9

Indonesia 9

Other countries 55

Total 474

Home schooling


• An upgrade of the home schooling customer relationship management application used to register children for home schooling was completed in 2014–15. The upgrade simplified the re-registration process for families of home schooled children, increased efficiency in processing applications for home schooling registrations, improved data accuracy, and ensured compliance with legislation.

• The VRQA contributed to an updated version of the DET publication Guide to Home Schooling in Victoria.

• An instrument of authorisation was approved allowing the VRQA to access, use and disclose Victorian Student Numbers under ETRA including in relation to registering students for home schooling.


• The number of home schooling registrations grew by 15 per cent, with 4,136 children registered at 2,488 households (Table 8), up from 3,582 children registered for home schooling in Victoria for 2013–14.

Table 8—Home schooling registration at 30 June 2015

2015 2014

Children 4,136 3,582

Households 2,488 2,071

Vocational education and training


• A Ministerial Direction (MD 142—Standing Application to Amend a Registered Training Organisation’s [RTO’s] Scope of Registration) and a Ministerial Order (790) were implemented to harmonise arrangements for certain changes to scope of registration for VRQA and Australian Skills Quality Authority (ASQA)-registered training providers. A standing application process for changes of scope to registration of RTOs was implemented by the VRQA in October 2014.

• Ministerial Order 769 was implemented, holding 2015 VET fees at 2014 levels.

• The VRQA contributed to consultations for the Review of Quality Assurance in Victoria’s VET System and the VET Funding Review.

• In July 2014 the Victorian Auditor-General’s Office (VAGO) commenced a performance audit of the Regulation of Vocational Education and Training. VAGO deferred the audit to a future date.

• The VRQA worked with ASQA to develop guidelines for RTOs transferring their registration from the VRQA to ASQA. A summary was published that mapped similarities and differences between the Standards for RTOs 2015, the Australian Quality Training Framework and the VRQA Guidelines for VET Providers.

• The VRQA entered into a new MoU with the Australian Council for Private Education and Training to guide collaboration and mutual assistance between the organisations.

• Audit processes were undertaken as part of ongoing monitoring and compliance activity, and for all RTOs seeking registration and re-registration.

• Pre-registration and pre-audit workshops were provided to assist RTOs to understand their compliance obligations and prepare for the registration process, including audits. As a result of these workshops, fewer instances of significant or critical non-compliance were identified.

• The VRQA conducted RTO clinics in regional Victoria and Melbourne. RTO clinics give RTOs an opportunity to have a wide range of queries relating to their registration answered by VRQA staff.

• There has been a reduction in RTOs registered by the VRQA (Table 9). This decline has been influenced by voluntary cancellations and the transfer of some RTOs from the VRQA to ASQA.

• The VRQA reviewed five training packages in 2014–15, a decline from 18 in 2013–14 (Table 14). This decline was influenced by changes to national arrangements for the endorsement of packages, and amendments to VRQA policies with respect to reviewing training packages.


VET registration

Table 9—Number of VRQA-registered RTOs by type at 30 June 2015

Organisation type 2015 2014



Industry association 17 23

Professional association 2 2

Enterprise—non-government 6 12

Enterprise—government 11 10

School—government 28 33

School—independent 22 20

School—Catholic 8 9

Other—not elsewhere classified 3 6

Total 315 398

Table 10—Number of new VRQA-registered RTOs by type

Organisation type 2014–15 2013–14



School—government - 1

School—independent 1 -

Other—not elsewhere classified 1 -

Total 8 13


Table 11—VET registration activity

Registration activity 2014–15 2013–14

New registration 8 13

Cancellation 55 57

Renew registration 86 66

Amendment to scope 652 711

VET accreditation

Table 12—Course accreditation activity

2014–15 2013–14

New courses accredited 6 4

Courses re-accredited 15 26

Course modifications 17 34

Course accreditations extended (for maximum 12 months) 14 11

Courses expired/deleted 52 56

Table 13—VRQA-accredited courses by qualification type at 30 June 2015

2015 2014

Short courses 51 54

Certificate I 14 13

Certificate II 23 25

Certificate III 14 14

Certificate IV 26 34

Diploma 19 23

Advanced Diploma 11 9

Graduate Certificate 7 2

Graduate Diploma 5 2

Vocational Graduate Certificate - 6

Vocational Graduate Diploma - 4

Total 170 186


Table 14—Training packages reviewed 2014–15

2014–15 2013–14

Training packages reviewed 5 18

Apprenticeships and traineeships

Regulatory campaigns:

• A regulatory campaign was conducted in the automotive industry after a pattern of non-compliance was identified by authorised officers and data exchange with industry and government agencies.

• One hundred and fifteen employers employing 160 automotive apprentices were investigated by the VRQA. Significant non-compliance was found relating to: ‒ inappropriate supervision and/or work tasks or facilities ‒ limited evidence of training/lack of support for apprentices to attend training ‒ limited understanding of regulatory obligations.

• As a result of the campaign, 99 training contracts were cancelled (including 39 voluntary cancellations) and eight employer approvals were revoked. The outcomes of the campaign were communicated to stakeholders and the community.

• A further regulatory campaign among employers of commercial cookery apprentice commenced.

Other significant activities and achievements:

• Responsibility for the registration and audit of group training organisations (GTOs) was transferred from DET to the VRQA on 1 January 2015. GTOs are required to meet the requirements of the National Standards for GTOs. There are currently 30 GTOs registered in Victoria.

• Funding was secured for the development of a business case for a secure register of apprentices and trainees that meets DET and VRQA information needs in relation to the planning, policy development and regulation of apprenticeships and traineeships in Victoria. A tender process has commenced in relation to development of the register, which will replace the Direct Entry Level Training Administration (DELTA) database.

• An enhanced employer approval process was implemented that strengthened protections for apprentices and trainees in Victoria by considering the fitness and propriety of employers.

• Information about employers’ obligations in relation to apprenticeships and traineeships, including a plain-English Employer Checklist, was published on the VRQA website.

• A streamlined process was implemented to assist RTOs to ensure that training contracts reflect the most up-to-date qualifications.

• A performance audit action plan was developed in order to implement the recommendations of VAGO’s performance audit on Apprenticeship and Traineeship Completion, published in March 2014.

• The VRQA entered into the following Memoranda of Understanding in relation to the regulation of apprenticeships and traineeships: ‒ the Fair Work Ombudsman for information sharing to facilitate the effective

regulation of apprenticeships and traineeships in Victoria and to protect and enforce the rights of workers and employers under Commonwealth workplace relations laws

‒ the Department of Industry to establish a cooperative and mutually supportive approach to facilitate the effective regulation and administration of apprenticeships and traineeships in Victoria

‒ the Australian Council for Private Education and Training to guide collaboration and mutual assistance between the organisations.


• A contract review of regulatory field services provider Busy At Work was undertaken, indicating that the contract requirements are being performed to a high standard.

• Apprenticeship commencements increased by 11.9 per cent in 2014–15 to 20,115 compared with 17,968 in 2013–14. An increase in apprenticeship commencements is consistent with national trends. Traineeship commencements declined by 34 per cent from 41,871 in 2013–14 to 27,601 in 2014–15. The decline in traineeship commencements has been influenced by changes to Commonwealth incentives for traineeships.

• There were 3,244 planned jobs in the 2014–15 period (Table 16). Planned jobs are risk-based workplace visits that monitor employer compliance with contractual obligations. While the majority of the visits revealed high rates of employer compliance, a small number of visits identified issues that required some form of resolution at the time of the visit or soon after.

• In 2014–15, there were 94 jobs resulting from disputes between employers and apprentices/trainees (Table 16), mainly related to dissatisfaction with workplace conditions. This is a significant decline from 384 disputes in 2013–14. The reduction in the number of disputes occurred as a result of a strengthened focus by the VRQA on point-of-contact issues resolution and referral of non-regulatory matters.

Table 15—Apprenticeship and traineeship activity

2014–15 2013–14

Training contracts registered1 47,716 59,839

Employer approvals 6,283 6,014

Employer approvals revoked 36 2

Training schemes approved 17 18

Apprentice cancellations 9,966 10,983

Trainee cancellations 12,855 17,628

Formal disputes listed 4 4

Delegate as guardian on training contract 39 21

Apprenticeship reductions of duration of training 610 1,485

Delegate ordered cancellations or withdrawals 120 2

Table 16—Apprenticeship and traineeship regulatory field services activity

2014-15 September 2013

–June 2014

Planned visits 3,244 2,571

Disputes 94 384

Term adjustments 1,093 881

Total 4,431 3,836

1 Refers to the number of apprenticeships and traineeships that commenced in the period. This figure in the VRQA Annual Report 2013–14 referred to the total number of apprentices and trainees in training.


Complaints

The role of the VRQA in investigating complaints is set out in the Education and Training Reform Regulations 2007.

Complaints against RTOs are investigated against the Australian Quality Training Framework and the VRQA Guidelines for VET Providers. Complaints against overseas secondary student exchange organisations are investigated against the Guidelines, Conditions and Application Forms for the Approval of Overseas Secondary Student Exchange Organisations.

Complaints against independent schools are investigated against the Guide to the Minimum Standards and Other Requirements for School Registration. Under Memoranda of Understanding, complaints against government schools, Catholic schools and Seventh-day Adventist schools are investigated by DET, the Catholic Education Commission of Victoria and Seventh-day Adventist Schools Victoria respectively.

Where complaints are received against the VRQA, they are assessed and investigated in the context of relevant VRQA policies, procedures and business rules. If complaints relate to specific staff members they will also be investigated in relation to the Code of Conduct for Victorian Public Sector Employees and, in the case of external contractors, the terms of any relevant contract.

The VRQA received 180 complaints in 2014–15, an increase of 37 per cent compared to 2013–14 (Table 17). Complaints received in relation to specific providers in the VET and school education sectors that were the subject of regulatory action by the VRQA contributed to this increase.

An increase in complaints registered in relation to apprenticeships and traineeships is partly attributable to an online complaint registration facility that became available to this sector from January 2015. Poor-quality training, assessment, teacher/trainer conduct, fees and bullying were the most common complaint types.

Table 17—Number of complaints received

VET School VRQA Senior secondary

OSSEO Home-school

Apprentice-ships

Other Total

2014–15 107 29 5 5 - 10 18 6 180

2013–14 83 23 10 1 1 5 6 2 131

Access to information

State Register

The VRQA’s State Register provides consumer access to high-quality information about VRQA-registered providers and the qualifications and courses they deliver. The State Register also provides information about VRQA-accredited courses, and all registered government, Catholic and independent schools’ annual reports. Complaints and enquiries can also be lodged via the State Register. An upgrade of the customer relationship management application used to display information on the State Register began in 2015 and is planned for completion in 2016.

In 2014–15 the VRQA website recorded 60,072 sessions (a period of time a user is actively engaged).

Information sheets

The VRQA publishes information sheets on a range of trends in education and training. The VRQA published information sheets in 2014–15 about:

• registered schools in Victoria

• vocational education and training in Victoria

• international students in schools

• home schooling.


Relationships with stakeholders

A strategic priority of the VRQA is to build stakeholder relationships to improve regulation. In December 2014 the board approved a VRQA Stakeholder Engagement and Communications Strategy 2014–16 setting out how the VRQA collects information on emerging industry trends and seeks stakeholder feedback on VRQA processes. A version of the strategy was published on the VRQA website.

The annual VRQA stakeholder breakfast was held on 6 May 2015. Around 60 stakeholders from across the education and training sector engaged in targeted discussions about how the VRQA can contribute to quality education and training in their sector. These discussions continue to inform the VRQA’s strategic planning.

In school and senior secondary education, the VRQA works with school review bodies (DET, the Catholic Education Commission of Victoria and Seventh-day Adventist Schools Victoria) in monitoring the compliance of all Victorian schools with the minimum standards. The VRQA regularly meets with a range of government agencies, peak bodies and school system owners.

In relation to VET and apprenticeships and traineeships the VRQA works with a range of government agencies, unions and industry.

The VRQA communicates with stakeholders, education and training providers, employers, apprentices and trainees through workshops and electronic communications such as the VRQA website and the VRQA e-news. In 2014–15 the VRQA website recorded 282,255 sessions (a period of time a user is actively engaged) and published 10 issues of the VRQA e-news.

Education provider and stakeholder survey

The VRQA conducts annual client and stakeholder research measuring aspects of provider and stakeholder satisfaction with the VRQA and its regulatory processes.

In 2014 the research was expanded to seek feedback about emerging industry trends and the range of services that providers, apprentices, trainees and employers need from the VRQA.

Three hundred and one education and training providers, 186 apprentices and trainees and 184 employers completed online surveys as part of the research. Twenty telephone interviews were conducted with key stakeholders.

Important findings of the research include:

• overall satisfaction with the VRQA is at 74 per cent for education providers, 65 per cent for apprentices and trainees and 59 per cent for employers

• providers, apprentices, trainees and employers believe VRQA staff respond promptly and provide useful information

• there is relatively low awareness of the VRQA among apprentices, trainees and employers

• apprentices, trainees and employers want information about their obligations and rights in relation to training contracts

• stakeholders appreciate the VRQA’s efforts to engage them but seek targeted forums focused on specific issues.

The findings of the research are being used to update services provided by the VRQA. The research results are published on the VRQA website.

Discontinued operations In February 2015 the Tertiary Education Quality and Standards Agency assumed regulatory responsibility for a higher education institution (the Bureau of Meteorology) previously registered by the VRQA. There are now no higher education institutions registered by the VRQA.


Current year financial review The table below provides a summary of financial information for 2014–15 and comparison with previous years. This is the eighth year of operation of the VRQA.

In 2014–15 total income from transactions decreased $3.8 million to $12.94 million. The major sources of revenue for the VRQA are grants and resources received free of charge from DET, representing 81.2 per cent of the total. Fees represent 17.03 per cent, and interest and other income represent 1.78 per cent.

Total expenses from transactions decreased $1.7 million to $12.9 million.

The decrease in revenue is due to a reduction in DET and Commonwealth grants combined with a minor increase in fees and charges.

The decrease in expenses is due to a reduction in depreciation/amortisation, a reduction in grants and transfer payments made by the VRQA and a minor increase in payments to contractors.

The VRQA ended the year with a net surplus of $0.054 million compared to the surplus of $0.34 million in 2013–14.

Total assets increased $0.077 million to $9.42 million, primarily due to an increase in cash and deposits. Total liabilities increased $0.023 million to $1.72 million.

Table 18—Five year financial summary

2015

$ 2014

$ 2013

$ 2012

$ 2011

$

Total income from transactions

12,943,861 16,749,319 15,855,222 11,122,075 15,155,184

Total expenses from transactions

12,889,737 14,589,631 13,998,792 11,427,435 14,659,392

Net result from transactions

54,124 2,159,688 1,856,430 (305,360) 495,792

Net gain/loss on non-financial assets

- (1,822,330) - (641,806) (147,186)

Comprehensive result 54,124 337,358 1,856,430 (947,166) 348,606

Net cash flow from operating activities

384,030 3,429,065 1,973,887 (261,122) 1,616,189

Total assets 9,422,253 9,342,916 8,556,479 7,381,206 8,991,336

Total liabilities 1,718,818 1,693,605 1,244,526 1,925,683 2,588,647


Report of operations—governance and organisational structure

Ministers

Deputy Premier and Minister for Education The Hon. James Merlino MP

James Merlino MP is the Minister for Education and Deputy Premier of Victoria. As Minister for Education, Minister Merlino has responsibility for Victoria’s schooling system, which educates almost 900,000 Victorian students in government, Catholic, and independent schools. This includes responsibilities for improving Victoria’s educational outcomes in literacy, numeracy, science and the arts, as well as students’ wellbeing and engagement, school infrastructure and capital funding, improvement support for developing the expertise of the teaching and education support workforces, school leadership, and support for Victoria’s priority student cohorts.

Together with his ministerial colleagues, the Hon. Jenny Mikakos MP, and the Hon. Steve Herbert, MP, Minister Merlino shares responsibility for improving Victoria’s education, development and training system, from birth through to adulthood.

Minister Merlino is committed to establishing Victoria as the Education State, ensuring access to great schools for every community, excellent learning and teaching in every classroom and the promise of a bright future for every child, where success does not depend on background, circumstance or postcode.

Minister for Training and Skills The Hon. Steve Herbert MP

The Hon. Steve Herbert MP has been Minister for Training and Skills since December 2014.

Minister Herbert is committed to ensuring all Victorians have access to quality training that equips them with the skills they need to get and keep a job, and that industry has the skills required to boost productivity and help grow the Victorian economy.

His responsibilities include ensuring a strong and stable vocational education and training system is in place which meets the needs of individuals, industry and employers, and ensuring that funding is directed to areas of skills shortage. Minister Herbert’s portfolio also includes International Education.

VRQA Board Three member terms ended during 2014–15. Elizabeth Alexander, Stephen Elder and Michael Perry were reappointed to the board for a further term.

VRQA board membership is by Ministerial nomination and appointment is by the Governor in Council. Section 4.2.4 of the Act sets out criteria to which the Minister has regard when considering nominees. Nominations are made to ensure that the board includes members who have skills and experience drawn from appropriate fields relevant to the functions of the VRQA, including education (school education; VET; and adult, community and further education), apprenticeships and traineeships, quality assurance, business management, institutional governance, law, finance and industry. The composition of the VRQA board is a fair and balanced reflection of the diversity of the community, and reflects both metropolitan and regional interests.

The board met every second month during the reporting period (six meetings in total). The board also met once for a strategic planning session and once for a risk workshop.

Report of operations—governance and organisational structure 21

Mr Timothy F Smith BA, BEd Chair

Timothy (Tim) Smith has a diverse career experience in Victoria’s education and training industry. He is a member of the Board of Directors of the VET Development Centre as a Ministerial nominee. For seven years he was the Chief Executive of the Australian Council for Private Education and Training (ACPET). Prior to his ACPET role, he was a senior executive for the Education Department, first as a Ministerial Adviser to Education and Training Ministers in the Victorian Government and then as Assistant Secretary Higher Education, with responsibility for managing the private provider approval process. Mr Smith has also held executive appointments in TAFE and the former CAE systems and was a member of the governing councils of Victoria University and Holmesglen Institute of TAFE.

Ms Elizabeth Alexander AM, BCom, FCPA, FCA, FAICD Member

Ms Elizabeth Alexander is the Chancellor of the University of Melbourne, immediate past Chairman of CSL, recently appointed Chair of Medibank Private and an adviser to Ashurst’s corporate team. She has been the independent Chair of the Portfolio Audit Committee of DEECD (2003–10) and the Audit and Risk Committee of the Australian Prudential Regulations Authority (APRA) (2002–10).

Mr Richard Bolt BE(Electrical), MPubPolMgt Ex officio member until 31 December 2014

Mr Richard Bolt was Secretary of the Department of Education and Early Childhood Development until 31 December 2014.

Mr Bolt joined DEECD as Secretary on 29 August 2011. As Secretary, he led the Department in building a system to support children, students and adults to form the skills and capabilities that make lifelong learning and genuine social and economic participation a reality.

Prior to joining DEECD, Mr Bolt was Secretary of the Victorian Department of Primary Industries.

Ms Gill Callister BA, BSW(Hons) Ex officio member from 1 January 2015

Ms Gill Callister commenced as Secretary of the Victorian Department of Education and Training on 1 January 2015.

Before joining the Department, Ms Callister was Secretary of the Department of Human Services (2009 to 2014) and led policy, legislative and service delivery reform. In this role, Ms Callister led an organisation of more than 11,000 staff with an annual budget of approximately $4 billion. She was responsible for the delivery of child protection, disability, youth, housing and family violence services.

Ms Callister began her career in the community sector serving disadvantaged Victorians. She then led child protection, family services and mental health units within the Department of Human Services and, in 2009, was Deputy Secretary at Skills Victoria.

Ms Callister is President of the Institute of Public Administration Australia (Victoria). Her leadership in public policy was recognised in 2013 when she was named in the Australian Financial Review’s 100 Women of Influence, and received a Sir James Wolfensohn Public Service Scholarship to attend Harvard University’s Kennedy School of Government. In October 2014, Ms Callister was awarded the IPAA National Fellowship award and a Monash University Fellowship.


Mr Stephen Elder BEd, DipEd Member

Mr Stephen Elder is the Executive Director of Catholic Education in the Archdiocese of Melbourne and the Executive Director of the Catholic Education Commission of Victoria. He is also Director and Company Secretary of Catholic Capital Grants (Vic) Ltd. Mr Elder is a member of the National Catholic Education Commission and a Senator of Australian Catholic University. He is a Director of Catholic Network Australia, a Director of the Board of Management of Church Resources, a member of the Board of the Catholic Development Fund and a Director on the Mercy Health Foundation Board.

Mr Elder is also a Director of the Australian Institute for Teaching and School Leadership.

Mr Elder was a member of the Victorian Legislative Assembly from 1988–99 in the Seat of Ballarat North and Ripon. During that time, he was the Parliamentary Secretary for Education.

Mr Paul Kirk BEc Member

Mr Paul Kirk is currently Managing Director of Collins Pitt and Associates, a corporate advisory firm, and has worked in corporate advisory, restructuring and turnaround for more than 30 years. He is a specialist in business strategy and business improvement and is recognised as one of Australia’s leading practitioners in this field. He is a Chartered Accountant and previously held the position of senior partner of PricewaterhouseCoopers, where he led the firm’s global restructuring practice from Tokyo and New York for a number of years. Mr Kirk is also a non-executive director of the Victorian WorkCover Authority.

Ms Patricia Neden BA, DipEd, GradDipBusAdmin, GAICD Member

Ms Patricia Neden is the Chief Executive Officer of Innovation and Business Skills Australia (IBSA) and was recently appointed to the Australian Industry and Skills Committee. Ms Neden is a member of the Australian Human Resources Institute’s National Accreditation Committee. Ms Neden worked in the Victorian Public Service for many years, holding the position of Deputy Secretary, Skills Victoria, between 2005 and 2008.

Mr Michael Perry BCom, FCA, SAFSIA, MAICD Member

Mr Michael Perry is a retired Chartered Accountant. He has extensive experience in financial consulting services, with specialist skills in auditing, government services, public company floats and takeovers, the preparation of prospectuses, the valuation of companies, corporate financing, risk management and internal audit structures. He is the current Chair of the Department of Economic Development, Jobs, Transport and Resources (DEDJTR) Audit and Risk Committee.

Mr Graham Spencer HGHR, DipT Member

Mr Graham Spencer is chair of the Statewide Fit to Drive (F2D) Coordinating Committee. As a director of GSC Partners, he provides road safety education services to the Transport Accident Commission and other government agencies. Mr Spencer has 20 years’ experience as a principal of technical colleges and state secondary schools and is a registered teacher. Mr Spencer’s background is in school governance and management, specifically strategic planning, regulatory requirements, financial management, communication, policies and procedures and risk management. Mr Spencer was appointed to the VRQA board in 2013.


Mr Rick Tudor OAM, BSc(Hons), MSc, DipEd, FACE, FACEL Member

Mr Rick Tudor held the position of Headmaster of Trinity Grammar School, Kew, for 15 years. Previously he was Deputy Headmaster (Curriculum) at The Peninsula School, Deputy Headmaster and Head of Senior School of Melbourne Grammar School, and Headmaster of Beaconhills Christian College. Mr Tudor has also contributed to the broader educational arena through involvement in the Association of Heads of Independent Schools, the Council of the Centre for Strategic Education, the Anglican Co-ordinating Committee on Education, and as Chair of the Victorian Branch of the Anglican Schools’ Network. He is currently Chair of the ConocoPhillips Science Experience, is a board member of Ivanhoe Girls’ Grammar School, the King David School, the Anglican Diocesan Schools’ Commission, Trinity College (University of Melbourne), the Chapter of St Paul’s Cathedral and the Melbourne Indigenous Transition School. He was previously a member of the Ethics Committee of the Royal Woman’s Hospital, and of the Board of Anglicare Victoria.

Ms Michonne van Rees BA, DipEd, MA, GradDipMgt, GradDipGovLaw Member

Ms Michonne van Rees retired as the Regional Director (Gippsland) for DEECD in early 2011 to set up her own consulting business. Ms van Rees has previously worked as a senior executive with Parks Victoria. She has held senior leadership roles with a focus on public sector and organisational reform in a number of State Government departments, including the Department of Premier and Cabinet. She has also worked within the TAFE sector. Ms van Rees has held a number of board and committee positions, including membership of the Gippsland Advisory Council of Monash University.

Mr Brian Welch Dip(Company Directors) Member

Mr Brian Welch recently retired as the Executive Director of the Master Builders Association of Victoria after 19 years of service. He has had long-term involvement with accredited training for the building industry and brings strong industry and governance experience to the board. Mr Welch is currently a member of the Victorian Building Authority. Mr Welch was an inaugural member of the Building Advisory Council and is Secretary of the Victorian Congress Employer Association.

Mr David Windridge BEc, GradDip(Teaching), GradDipAcc, GAICD Member

Mr David Windridge is Chief Executive Officer of MEGT (Australia) Ltd and is on the board of directors. He oversees the operational and strategic management of the company. Mr Windridge has an extensive background in the provision of education services, organisational management and service delivery.


Standing committee

The board has one standing committee, the Audit and Risk Management Committee.

Audit and Risk Management Committee

• Michael Perry (Chair), VRQA board

• Elizabeth Alexander, VRQA board

• Graham Spencer, VRQA board

• Paul Kirk, VRQA board

Ron Cooper-Thomas attended committee meetings as Chief Finance and Accounting Officer until 10 November 2014 (inclusive). Thereafter Matthew Tibb attended committee meetings as Chief Finance and Accounting Officer.

The Audit and Risk Management Committee assists the VRQA board to fulfil its monitoring and oversight responsibilities for governance, risk management, audit and business assurance activities, including monitoring board delegations. The committee exchanges minutes with the DET Portfolio Audit and Risk Committee.

The committee met four times during 2014–15.

Other subcommittees

The VRQA board has subcommittees and working parties that provide advice and make recommendations to the board on specific areas.

The following subcommittees were convened during 2014–15.

Apprenticeships and Traineeships Subcommittee

• Patricia Neden (Chair), VRQA board

• Timothy F Smith, VRQA board

• David Windridge, VRQA board

• Brian Welch, VRQA board.

The role of the subcommittee is to guide the VRQA on all matters related to apprenticeship and traineeship regulation.

The subcommittee met three times during 2014–15.

Compliance and Quality Subcommittee

• Michonne van Rees (Chair) VRQA board

• Stephen Elder, VRQA board

• Paul Kirk, VRQA board, subcommittee member from November 2014

• Graham Spencer, VRQA board

• Rick Tudor, VRQA board.

The role of the subcommittee is to oversee, on behalf of the VRQA board, the compliance of providers consistent with relevant regulatory requirements, provide guidance on specific matters as they arise, and periodically test the VRQA’s regulatory framework to ensure the effectiveness of its quality assurance processes.

The subcommittee met three times in 2014–15.


VRQA staff

The staff of the VRQA perform the following functions, and provide advice and report to the VRQA board about the:

• accreditation of courses and registration of education and training providers

• development and implementation of certification and registration procedures and processes

• quality assurance services related to the Victorian minimum standards for school registration and home schooling

• quality assurance services related to the provision of VET and compliance with national standards and protocols

• regulation of apprenticeships and traineeships

• quality of implementation of the VRQA directions by various institutions and agencies

• strategic planning and directions

• management of the VRQA’s resources.

VRQA staff are employees of the Department of Education and Training.

Director

The Director is responsible to the VRQA board for the effective and efficient implementation of the board’s decisions, and to the Secretary, DET, for the running of the organisation and its effective interaction with the Department.

Staff organisation

Executive Officers were Lynn Glover, Director; Don Hudgson (Acting Deputy Director, replacing Robyn Timmins, Deputy Director, who was on secondment to DEECD until 31 December 2014 and DET until May 2015); and Chris Ingham, Executive Manager, Apprenticeships and Traineeships.

VRQA staffing was organised in six functional areas:

• governance and corporate services

• quality assurance ‒ school education ‒ senior secondary education ‒ international education ‒ VET

• state register

• complaints and student services

• regulatory projects

• apprenticeships and traineeships.

VRQA staff comprise a core establishment and additional staff appointed through secondments or short-term contracts for work on specific projects.

Delegations

Section 4.2.7 and Clause 11 of Schedule 2 of the Act empowers the VRQA board to delegate functions.

The VRQA board has delegated the following functions and powers:

• all functions and powers of the VRQA, other than the power of delegation, to the VRQA Director and Deputy Director

• all functions and powers under Part 5.5 of the Act to the Executive Manager, Apprenticeships and Traineeships

• all functions and powers of the VRQA, other than the power of delegation, to the Manager, Governance and Corporate Services; Manager, Regulatory Projects; and Manager, School Projects, VRQA. These delegated powers are subject and subordinate to the Director or Deputy Director VRQA


• functions and powers under section 4.3.19 of the Act to the Manager, Quality Assurance VET, VRQA

• functions and powers under sections 5.5.2 and 5.5.14 of the Act to the Manager, Apprenticeship Field Services Unit, VRQA

• functions and powers under section 5.5.24 of the Act relating to the payment of subsidies to apprentices were delegated to officers within the Higher Education and Skills Group, DET

• financial delegation to the management team within the VRQA.

A report on all delegations is made at each board meeting to ensure that statutory responsibilities are being met.

Authorised officers

Part 5.8 of the Act provides for the appointment of authorised officers.

As at 30 June 2015, there were 17 approved VRQA office staff authorised officers and 11 authorised officers employed by an approved training agent (28 authorised officers in total).

All authorised officers are issued with identification cards and a document, if applicable, setting out their powers in accordance with Part 5.8 of the Act.


Victorian Registration and Qualifications Authority organisational structure at 30 June 2015


Report of operations—workforce data The VRQA operates within the financial, asset, human resource and information technology policy frameworks of DET.

Public administration values and employment principles

The VRQA applies the employment principles issued by the Victorian Public Sector Commission, which set out the essential requirements for managers to apply the public sector values and employment principles under the Public Administration Act 2004.

The employment principles stipulate that:

• employment decisions are based on merit

• public sector employees are treated fairly and reasonably

• equal employment opportunity is provided

• public sector employees have a reasonable avenue of redress against unfair or unreasonable treatment

• a career in public service is fostered (in the case of the public service bodies).

The VRQA’s human resources policies go beyond the minimum requirements set by these principles and reflect best practice, consistent with the Commissioner’s non-binding guidelines.

The VRQA is committed to developing and supporting its workforce by:

• building leadership capacity

• building the future workforce through enhancing workforce capacity

• actively shaping supply, and managing employee relations

• creating and supporting a culture of health, safety and wellbeing

• creating and supporting a performance and development culture

• implementing robust human resource management systems.

Occupational health and safety The VRQA operates within DET infrastructure and abides by DET occupational health and safety policies and procedures (see the Department of Education and Training Annual Report 2014–15 for more information).

Comparative workforce data

Table 19—Full-time equivalent staffing (FTE) trends 2011–151,2

2015 2014 2013 2012 2011

51.7 55.5 54.6 48.1 51.6

1 Figures are for staff on pay during the last full pay period in June of each year and exclude those on leave without pay or absent on secondment, external contractors and consultants, temporary staff employed by employment agencies, and a small number of people who are not employees but appointees of a statutory office as defined in the Public Administration Act 2004. 2 Victorian Public Service comprises Executive Officers, VPSG-classified staff, Allied Health staff, Nurses, Senior Medical Advisors and Ministerial Transport Officers.

Report of operations—workforce data 29

Table 20—Summary of employment levels in June of 2014 and 20151,2

Ongoing employees (headcount) Fixed-term and casual employees

Employees Full-time Part-time FTE FTE

June 2015 52 47 5 49.9 1.8

June 2014 53 49 4 51.3 4.2



Table 21—Victorian Public Service staff employment levels, June 2014 and 20151,2

2015 2014

Ongoing employees Fixed-term and casual employees

Ongoing employees Fixed-term and casual employees

Employees (headcount)

FTE FTE Employees (headcount)

FTE FTE

Gender

Male 19 18.6 0.0 17 17.0 1.3

Female 33 31.3 1.8 36 34.3 2.9

Total 52 49.9 1.8 53 51.3 4.2

Age

Under 25 0 0.0 0.0 0 0.0 0.0

25–34 7 6.6 0.0 7 6.6 2.0

35–44 16 15.2 0.8 15 14.2 0.0

45–54 14 13.1 0.0 13 12.5 0.0

55–64 12 12.0 1.0 17 17.0 1.5

Over 64 3 3.0 0.0 1 1.0 0.7

Total 52 49.9 1.8 53 51.3 4.2

Classification

VPSG1 0 0.0 0.0 0 0.0 0.0

VPSG2 10 9.1 0.0 9 8.1 1.0

VPSG3 7 6.6 0.0 7 6.6 1.3

VPSG4 10 10.0 0.0 11 11.0 0.5

VPSG5 16 15.6 1.0 15 14.6 1.0

VPSG6 7 6.6 0.8 9 9.0 0.4

STS 0 0.0 0.0 0 0.0 0.0

Executive Officers

2 2.0 0.0 2 2.0 0.0

Allied Health 0 0.0 0.0 0 0.0 0.0

Nurse 0 0.0 0.0 0 0.0 0.0

Other 0 0.0 0.0 0 0.0 0.0

Total 52 49.9 1.8 53 51.3 4.2


Report of operations—workforce data 31

Workforce inclusion policy The VRQA operates within DET infrastructure and abides by DET human resources policies and procedures (see the Department of Education and Training Annual Report 2014–15 for more information).

Executive Officers

Table 22—Number of Executive Officer classified into ‘ongoing’ and ‘special projects’

All Ongoing Special projects

Class No. Variance No. Variance No. Variance

EO-1

EO-2 1 1

EO-3 1 1

Total 2 2

Table 23—Breakdown of Executive Officers into gender for ‘ongoing’ and ‘special projects’

Ongoing Special projects

Male Female Vacancies Male Female Vacancies

Class No. Var. No. Var. No. No. Var. No. Var. No.

EO-1

EO-2 1

EO-3 1 1

Total 1 1 1

Table 24—Reconciliation of Executive Officer numbers

2015 2014

Executives with total remuneration over $100,000 (see Note 13) 2 2

Add Vacancies (Table 23) 1 1

Executives employed with total remuneration less than $100,000

Accountable Officer (Director, included above)

Less Separations

Less Portfolio entity executives N/A N/A

Total executive numbers at 30 June 3 3


Report of operations—other disclosures

Victorian Industry Participation Policy There were no contracts related to the Victorian Industry Participation Policy. Details of contracts that have been disclosed can be viewed at www.contracts.vic.gov.au.

Major consultancies and contracts There were no major consultancies over $10,000 and no contracts over $10,000,000 let by the VRQA for the period 1 July 2014 to 30 June 2015. The VRQA engaged no consultancies at a cost of less than $10,000 each during 2014–15.

Freedom of information The Freedom of Information Act 1982 allows the public a right of access to documents held by the VRQA. For the 12 months ending 30 June 2015, the VRQA received three applications. Of these requests two were from legal firms and the third was from a company.

Of the requests:

• two requests were provided in part

• one request was refused access in full.

Of the three requests all have been subject of review by the FOI Commissioner. One has resulted in a new decision being made by the VRQA. Two reviews remain before the FOI Commissioner.

The information required to be published pursuant to section 7 of the Freedom of Information Act is contained elsewhere in this report or at www.vrqa.vic.gov.au.

Making a request

Access to documents may be obtained through written request to the relevant Freedom of Information Officer as detailed in section 17 of the Freedom of Information Act.

In summary, the requirements for making a request are:

• it should be in writing

• it should identify as clearly as possible which document is being requested

• it should be accompanied by the appropriate application fee (the fee may be waived in certain circumstances).

Requests for documents in the possession of the VRQA should be addressed to:

Freedom of Information Officer Victorian Registration and Qualifications Authority Level 4 Casselden 2 Lonsdale Street Melbourne VIC 3000

Email: [email protected] Telephone: (03) 9032 1532

Access charges may also apply once documents have been processed and a decision on access is made; for example, photocopying and search and retrieval charges.

Further information regarding freedom of information can be found at www.foi.vic.gov.au.

Report of operations—other disclosures 33

Compliance with the Building Act 1993 The VRQA operates within DET infrastructure and abides by DET infrastructure policies and procedures (see the Department of Education and Training Annual Report 2014–15 for more information).

National Competition Policy The review of fees and charges indicated that the VRQA did not add any restrictions on competition between providers of accredited courses.

Compliance with the Protected Disclosure Act 2012 The Protected Disclosure Act 2012 encourages and facilitates people making disclosures of:

• improper conduct by public officers and public bodies

• any detrimental action taken in reprisal for a person making a disclosure.

The Protected Disclosure Act 2012 also provides for the confidentiality of the content of those disclosures and the identity of the people making the disclosures.

Under the Protected Disclosure Act, disclosures made to the VRQA about improper or corrupt conduct are no longer protected. To be protected, a disclosure must be made to the Independent Broad-based Anti-corruption Commission.

The VRQA board does not tolerate improper conduct by employees or reprisals against those who disclose such conduct. It is committed to ensuring transparency and accountability in its administrative and management practices and supports the making of disclosures that reveal corrupt conduct, conduct involving a substantial mismanagement of public resources, or conduct involving a substantial risk to public health and safety or the environment.

The VRQA board will take all reasonable steps to protect people who make such disclosures from any detrimental action in reprisal for making the disclosure. It will also afford natural justice to the person who is the subject of the disclosure to the extent it is legally possible.

Making disclosures

For the disclosure to be protected pursuant to Sections 13 and 16 of the Protected Disclosure Act 2012, disclosures of improper or corrupt conduct by the VRQA board or its employees must be made directly to the Independent Broad-based Anti-corruption Commission or to the Victorian Ombudsman.

Independent Broad-based Anti-corruption Commission GPO Box 24234 Melbourne VIC 3001

Toll-free telephone: 1300 735 135 Website: www.ibac.vic.gov.au

Victorian Ombudsman Level 1, North Tower 459 Collins Street Melbourne VIC 3000

Telephone: (03) 9613 6222 Toll Free: 1800 806 314

Email: [email protected] Website: www.ombudsman.vic.gov.au


Disclosures of detrimental action taken in reprisal for making a protected disclosure by the VRQA board or its employees may be made to:

The Protected Disclosure Coordinator Victorian Registration and Qualifications Authority GPO Box 2317 Melbourne VIC 3001

Procedures under the Protected Disclosure Act 2012

The procedures for the protection of people from detrimental action in reprisal for making a protected disclosure are available upon request.

The VRQA board received no disclosures of detrimental action taken in reprisal for the making of a protected disclosure in 2014–15.

Compliance with the Carers Recognition Act 2012 The VRQA operates within DET infrastructure and abides by DET human resources policies and procedures (see the Department of Education and Training Annual Report 2014–15 for more information).

Office-based environmental impacts The VRQA operates within DET infrastructure and abides by the DET Environmental Management System (see the Department of Education and Training Annual Report 2014–15 for more information).

Fees and charges • Section 5.2.13 of the Education and Training Reform Act 2006 enables the Minister/s

to fix fees and charges. Fees for schools were increased on 1 January 2015. Ministerial Order 769 was implemented, holding 2015 VET fees at 2014 levels. Details of fees and charges are available on the VRQA website.

Additional information available on request In compliance with the requirements of the Standing Directions of the Minister for Finance, details in respect of the items listed below have been retained by the VRQA and are available on request, subject to the provisions of the Freedom of Information Act 1982:

• a statement that declarations of pecuniary interests have been duly completed by all relevant officers

• details of shares held by a senior officer as nominee or held beneficially in a statutory authority or subsidiary

• details of publications produced by the entity about the entity, and how these can be obtained

• details of changes in prices, fees, charges, rates and levies charged by the VRQA

• details of any major external reviews carried out on the VRQA

• details of major research and development activities undertaken by the VRQA

• details of overseas visits undertaken including a summary of the objectives and outcomes of each visit

• details of major promotional, public relations and marketing activities undertaken by the VRQA to develop community awareness of VRQA and its services

Report of operations—other disclosures 35

• details of assessments and measures undertaken to improve the occupational health and safety of employees

• a general statement on industrial relations within the VRQA and details of time lost through industrial accidents or disputes

• a list of major committees sponsored by the VRQA, the purposes of each committee and the extent to which the purposes have been achieved

• details of all consultancies and contractors including: ‒ consultants/contractors engaged ‒ services provided ‒ expenditure committed for each engagement.

This information is available on request from: Manager, Governance and Corporate Services VRQA GPO Box 2317 Melbourne VIC 3001 Telephone: (03) 9032 1532

Attestation for compliance with the Australian/New Zealand Risk Management Standard I, Timothy F Smith, certify that the Victorian Registration and Qualifications Authority has risk management processes in place consistent with AS/NZS ISO 31000:2009 and an internal control system is in place that enables the executive to understand, manage and satisfactorily control risk exposures. The Audit and Risk Management Committee verifies this assurance and that the risk profile of the Victorian Registration and Qualifications Authority has been critically reviewed within the last 12 months.


24 August 2015

Attestation for compliance with the Ministerial Standing Direction 4.5.5—Insurance I, Timothy F Smith, certify that the Victorian Registration and Qualifications Authority has complied with Ministerial Direction 4.5.5—Insurance.


24 August 2015


Compliance with DataVic Access Policy Consistent with the DataVic Access Policy issued by the Victorian Government in 2012, the information included in this Annual Report will be available at DataVic in machine-readable format.

The VRQA contributes to datasets published by DET to DataVic.

Financial statements 37

Financial statements

Accountable Officers’ and Chief Finance and Accounting Officer’s declaration The attached financial statements for the Victorian Registration and Qualifications Authority have been prepared in accordance with Standing Directions 4.2 of the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards including Interpretations, and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and accompanying notes, presents fairly the financial transactions during the year ended 30 June 2015 and financial position of the Victorian Registration and Qualifications Authority at 30 June 2015.

At the time of signing, we are not aware of any circumstance which would render any particulars included in the financial statements to be misleading or inaccurate.

We authorise the attached financial statements for issue on 24 August 2015.

T Smith Chairperson Victorian Registration and Qualifications Authority

Melbourne 24 August 2015

L Glover Director Victorian Registration and Qualifications Authority


M Tibb CFAO Victorian Registration and Qualifications Authority



Comprehensive operating statement for the financial year ended 30 June 2015

Notes 2015 $

2014 $

Income from transactions

Grants and other transfers 2(c) 9,987,118 14,197,153

Interest 2(a) 229,793 186,421

Registration and accreditation fees 2(b) 2,204,528 1,878,663

Fair value of assets and services received free of charge or for nominal consideration

2(d) 522,249 486,643

Other income 2(e) 173 439

Total income from transactions 12,943,861 16,749,319

Expenses from transactions

Administrative expenses 3(a) 5,996,315 6,284,292

Depreciation and amortisation 3(b) 266,793 893,612

Grants and other transfers 3(c) 54,436 1,370,042

Supplies and services 3(d) 6,572,193 6,041,685

Total expenses from transactions 12,889,737 14,589,631

Net result from transactions (net operating balance) 54,124 2,159,688

Other economic flows included in net result

Net gain/(loss) on non-financial assets 7(a) - (1,822,330)

Total other economic flows—other comprehensive income - (1,822,330)

Net result 54,124 337,358

Comprehensive result 54,124 337,358

The comprehensive operating statement should be read in conjunction with the accompanying notes included on pages 44 to 72.


Balance sheet as at 30 June 2015 Notes 2015

$ 2014

$

Assets

Financial assets

Cash and deposits 8,665,315 8,281,285

Receivables 5 226,111 264,010

Total financial assets 8,891,426 8,545,295

Non-financial assets

Equipment and furniture 6 3,155 6,112

Intangible assets 7 527,672 791,509

Total non-financial assets 530,827 797,621

Total assets 9,422,253 9,342,916

Liabilities

Payables 8 1,718,818 1,693,605

Total liabilities 1,718,818 1,693,605

Net assets 7,703,435 7,649,311

Equity

Accumulated surplus 6,290,816 6,236,692

Contributed capital 1,412,619 1,412,619

Net worth 7,703,435 7,649,311

The balance sheet should be read in conjunction with the accompanying notes included on pages 44 to 72.


Statement of changes in equity for the financial year ended 30 June 2015

Contributed capital

$

Accumulated surplus

$ Total

$

Balance at 1 July 2013 1,412,619 5,899,334 7,311,953

Net result for the year - 337,358 337,358

Balance at 30 June 2014 1,412,619 6,236,692 7,649,311

Net result for the year - 54,124 54,124

Balance at 30 June 2015 1,412,619 6,290,816 7,703,435

The statement of changes in equity should be read in conjunction with the accompanying notes included on pages 44 to 72.


Cash flow statement for the financial year ended 30 June 2015

Notes 2015 $

2014 $

Cash flows from operating activities

Receipts

Receipts from Government 9,987,118 14,197,153

Receipts from other entities 2,340,184 2,010,699

Goods and Services Tax recovered from the ATO1 572,859 452,333

Interest received 229,793 186,421

Total receipts 13,129,954 16,846,606

Payments

Payments of grants and other transfers (90,786) (1,324,617)

Payments to suppliers and employees (12,655,138) (12,092,924)

Total payments (12,754,924) (13,417,541)

Net cash flows from/(used in) operating activities 12 384,030 3,429,065

Cash flows from investing activities

Payments for non-financial assets - -

Net cash flows from/(used in) investing activities - -

Net increase/(decrease) in cash and cash equivalents 384,030 3,429,065

Cash and deposits at the beginning of the financial year 8,281,285 4,852,220

Cash and deposits at the end of the financial year 8,665,315 8,281,285

The cash flow statement should be read in conjunction with the accompanying notes included on pages 44 to 72.

1 Goods and Services Tax recovered from the ATO is presented on a net basis.


Notes to the financial statements Note 1 Summary of significant accounting policies 45 Note 2 Income from transactions 54 Note 3 Expenses from transactions 55 Note 4 Resources received free of charge 56 Note 5 Receivables 56 Note 6 Equipment and furniture 57 Note 7 Intangible assets 58 Note 8 Payables 59 Note 9 Commitments for expenditure 59 Note 10 Contingent assets and contingent liabilities 60 Note 11 Financial instruments 60 Note 12 Cash flow information 65 Note 13 Responsible persons 65 Note 14 Remuneration of auditors 68 Note 15 Subsequent events 68 Note 16 Glossary of terms and style conventions 68

Notes to the financial statements 45

Note 1 Summary of significant accounting policies These annual financial statements represent the audited general purpose financial statements for the Victorian Registration and Qualifications Authority (VRQA) for the period ended 30 June 2015. The purpose of the report is to provide users with information about the VRQA’s stewardship of resources entrusted to it.

(a) Statement of compliance

These general purpose financial statements have been prepared in accordance with the Financial Management Act 1994 (FMA) and applicable Australian Accounting Standards (AAS) which include Interpretations, issued by the Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements of AASB 1049 Whole of Government and General Government Sector Financial Reporting.

Where appropriate, those AAS paragraphs applicable to not-for-profit entities have been applied.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

To gain a better understanding of the terminology used in this report, a glossary of terms and style conventions can be found in Note 16.

These annual financial statements were authorised for issue by the Director on 24 August 2015.

(b) Basis of accounting preparation and measurement

The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets, liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

Judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

These financial statements are presented in Australian dollars and prepared in accordance with the historical cost convention.

(c) Reporting entity

The financial statements cover the VRQA as an individual reporting entity.

The VRQA is a state owned public authority established under the Education and Training Reform Act 2006. The Act was proclaimed on 1 July 2007. As an independent public authority the VRQA is a separate legal entity and accountable for resources under its control. Section 4.2.8 of the Act requires the VRQA to maintain a fund to account for all money received and paid by the VRQA.

Its principal address is:

Victorian Registration and Qualifications Authority Level 4, Casselden, 2 Lonsdale Street Melbourne VIC 3000

A description of the nature of the Authority’s operations and its principal activities is included in the report of operations on page 4, which does not form part of these financial statements.


(d) Objectives and funding

The VRQA’s objectives are to ensure:

• high standards of education and training of Victorian registered providers

• information concerning the performance of education and training providers is publicly available

• decisions of the VRQA have regard to the interests of students and the public

• regulatory processes are procedurally fair. The VRQA is economically dependent, predominantly on the Department of Education and Training (DET) in the form of grant funding. The VRQA charges fees and charges for registration of providers of education and training under the Education and Training Reform Act 2006. The fees and charges are set by Ministerial Order.

(e) Scope and presentation of financial statements

Comprehensive operating statement

The comprehensive operating statement comprises three components, being ‘net result from transactions’ (or termed as ‘net operating balance’), ‘other economic flows included in ‘net result’, as well as ‘other economic flows – other comprehensive income’. The sum of the former two, together with the net result from discontinued operations, represents the net result.

The net result is equivalent to profit or loss derived in accordance with AAS.

‘Other economic flows’ are changes arising from market re-measurements. They include:

• gains and losses from disposals of non-financial assets

• revaluations and impairments of non-financial physical and intangible assets

• fair value changes of financial instruments. This classification is consistent with the whole of government reporting format and is allowed under AASB 101 Presentation of Financial Statements.

Balance sheet

Assets and liabilities are presented in liquidity order with assets aggregated into financial assets and non-financial assets.

Current and non-current assets and liabilities (non-current being those assets or liabilities expected to be recovered or settled more than 12 months after the reporting period) are disclosed in the notes, where relevant.

The net result is equivalent to profit or loss derived in accordance with AAS.

Statement of changes in equity

The statement of changes in equity presents reconciliations of non-owner and owner changes in equity from opening balances at the beginning of the reporting period to the closing balances at the end of the reporting period. It also shows separately changes due to amounts recognised in the ‘Comprehensive result’ and amounts related to ‘Transactions with owner in its capacity as owner’.

Cash flow statement

Cash flows are classified according to whether or not they arise from operating, investing or financing activities. This classification is consistent with requirements under AASB 107 Statement of Cash Flows.

For cash flow statement presentation purposes, cash and cash equivalents include bank overdrafts, which are included as current borrowings on the balance sheet.


Rounding of amounts

Amounts in the financial statements have been rounded to the nearest dollar, unless otherwise stated. Figures in the financial statements may not equate due to rounding. Please refer to the end of Note 16 for a style convention for explanations of minor discrepancies resulting from rounding.

(f) Income from transactions

Income is recognised to the extent that it is probable that the economic benefits will flow to the entity and the income can be reliably measured at fair value.

Grants and other transfers

Income from grants (other than contributions by owners) is recognised when the VRQA gains control over the contribution. For reciprocal grants, the VRQA is deemed to have assumed control when the performance has occurred under the terms of the grants. For non-reciprocal grants, the VRQA is deemed to have assumed control when the grant is received or receivable. Conditional grants may be reciprocal or non-reciprocal depending on the terms of the grant.

Interest income

Interest income includes interest received on bank deposits, interest from investments, and other interest received. Interest income is recognised using the effective interest method which allocates the interest over the relevant period.

Income from registration and accreditation fees

Income from registration and accreditation fees is recognised when:

• the amount of income, and the costs incurred or to be incurred in respect of the transactions can be reliably measured

• it is probable that the economic benefits associated with the transactions will flow to the VRQA.

Sale of goods and services includes regulatory fees which are recognised at the time the regulatory fee is billed.

Income from the supply of services

Income from the supply of services is recognised by reference to the stage of completion of the services being performed. The income is recognised when:

• the amount of the income, stage of completion and transaction costs incurred can be reliably measured

• it is probable that the economic benefits associated with the transaction will flow to the VRQA.

Under the stage of completion method, income is recognised by reference to labour hours supplied or to labour hours supplied as a percentage of total services to be performed in each annual reporting period.

Fair value of assets and services received free of charge or for nominal consideration

Contributions of resources received free of charge or for nominal consideration are recognised at their fair value when control is obtained over them, irrespective of whether these contributions are subject to restrictions or conditions over their use. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not received as a donation.


The VRQA shares accommodation with DET, the cost of which is not charged to the VRQA. The value is recognised in the operating statement as an expense offset by an increase in income as resources received free of charge.

(g) Expenses from transactions

Expenses from transactions are recognised as they are incurred and reported in the financial year to which they relate.

Administrative expenses

Administrative expenses relate to employee benefits for VRQA staff who are employees of DET. The VRQA reimburses DET for all employee entitlements including superannuation, long service and annual leave costs including on costs. The costs are classified as administrative expenses in the comprehensive operating statement.

Depreciation and amortisation

All assets, plant and equipment and other non-financial physical assets that have finite useful lives are depreciated. Depreciation is generally calculated on a straight-line basis, at rates that allocate the asset’s value, less any estimated residual value, over its estimated useful life.

Intangible produced assets with finite useful lives are amortised as an expense from transactions on a systematic (typically straight-line) basis over the asset’s useful life. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, and adjustments made where appropriate.

The following estimated useful lives are used in the calculation of depreciation and amortisation:

Useful life (years)

2015 2014

Intangible assets 5 5

Office equipment and furniture 5–10 5–10


Grants and other transfers to third parties (other than contribution to owners) are recognised as an expense in the reporting period in which they are paid or payable. They include transactions such as grants, subsidies, other transfer payments made to state-owned agencies, non-government schools, and community groups.

Other operating expenses

Other operating expenses generally represent the day-to-day running costs incurred in normal operations and include supplies and services costs which are recognised as an expense in the reporting period in which they are incurred. The carrying amounts of any inventories held for distribution are expensed when distributed.

(h) Other economic flows included in net result

Other economic flows measure the change in volume or value of assets or liabilities that do not result from transactions.


Impairment of non-financial assets

Intangible assets with indefinite useful lives (and intangible assets not yet available for use) are tested annually for impairment (as described below) and whenever there is an indication that the asset may be impaired.

All other assets are assessed annually for indications of impairment, except for financial assets (refer to Note 1(I)).

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written off as another economic flow, except to the extent that the write-down can be debited to an asset revaluation reserve amount applicable to that class of asset.

If there is an indication that there has been a change in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, the carrying amount shall be increased to its recoverable amount. This reversal of the impairment loss occurs only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years.

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell.

(i) Assets

Financial assets

Cash and deposits

Cash and deposits recognised on the Balance Sheet comprise cash on hand and cash at bank, deposits at call and those highly liquid investments with an original maturity of three months or less, which are held for the purpose of meeting short-term cash commitments rather than for investment purposes, and which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Receivables

Receivables consist of:

• contractual receivables, such as debtors in relation to goods and services

• statutory receivables, such as amounts owing from the Victorian Government and Goods and Services Tax (GST) input tax credits recoverable.

Receivables consist predominantly of debtors in relation to grants, regulatory fees and GST input tax credits recoverable.

Contractual receivables are classified as financial instruments and categorised as loans and receivables. Loans and receivables are financial instrument assets with fixed and determinable payments that are not quoted on an active market. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

Statutory receivables are recognised and measured similarly to contractual receivables (except for impairment), but are not classified as financial instruments because they do not arise from a contract.


Receivables are subject to impairment testing as described below. A provision for doubtful receivables is recognised when there is objective evidence that the debts may not be collected, and bad debts are written off when identified.

Impairment of financial assets

At the end of each reporting period, the VRQA assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

Receivables are assessed for bad and doubtful debts on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. Bad debts not written off by mutual consent and the allowance for doubtful receivables are classified as other economic flows in the net result.


Equipment and furniture

All non-financial physical assets are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment. Where an asset is acquired for no or nominal cost, the cost is its fair value at the date of acquisition. Assets transferred as part of a machinery of government change are transferred at their carrying amount.

For the accounting policy on impairment of non-financial physical assets, refer to impairment of non-financial assets under Note 1(I) Impairment of non-financial assets.

Intangible assets

Intangible assets are initially recognised at cost.

Subsequently, intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the VRQA.

When the recognition criteria in AASB 138 Intangible Assets are met, internally generated intangible assets are recognised and measured at cost less accumulated depreciation/amortisation and impairment.

An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated:

• the technical feasibility of completing the intangible asset so that it will be available for use or sale

• an intention to complete the intangible asset and use or sell it

• the ability to use or sell the intangible asset

• the intangible asset will generate probable future economic benefits

• the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset

• the ability to measure reliably the expenditure attributable to the intangible asset during its development.

(j) Liabilities

Payables consist of:

• contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent liabilities for goods and services provided to the VRQA prior to the end of the financial


year that are unpaid, and arise when the VRQA becomes obliged to make future payments in respect of the purchase of those goods and services

• statutory payables, such as goods and services tax and fringe benefits tax payables.

Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost.

Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract.

(k) Equity

Contributions by owners

Contributions received from DET from the additions to net assets which have been designated as contributions by owners are recognised as contributed capital. Other transfers that are in the nature of contributions or distributions have also been designated as contributions by owners.

Transfers of net assets arising from administrative restructurings are treated as distributions to or contributions by owners. Transfers of net liabilities arising from administrative restructurings are treated as distributions to owners.

(l) Commitments

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed by way of a note (refer to Note 9) at their nominal value and inclusive of GST payable.

(m) Contingent assets and contingent liabilities

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note (refer to Note 10) and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of GST receivable or payable respectively.

(n) Accounting for the goods and services tax (GST)

Income, expenses and assets are recognised net of the amount of associated GST, except where GST incurred is not recoverable from the taxation authority. In this case, the GST payable is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.

Commitments and contingent assets and liabilities are also stated inclusive of GST.

(o) Events after reporting period

Assets, liabilities, income or expenses arise from past transactions or other past events. Where the transactions result from an agreement between the VRQA and other parties, the transactions are only recognised when the agreement is irrevocable at or before balance date. Adjustments are made to amounts recognised in the financial statements for events which occur after the reporting date and before the date the statements are authorised for issue, where those events provide information about


conditions which existed at the reporting date. Note disclosure is made about events between the reporting date and the date the statements are authorised for issue where the events relate conditions which arose after the reporting period and which may have a material impact on the results of subsequent years.

(p) Australian Accounting Standards issued that are not yet effective

Certain new Australian Accounting Standards have been published that are not mandatory for the 30 June 2015 reporting period. DTF assesses the impact of all these new standards and advises the VRQA of their applicability and early adoption where applicable.

As at 30 June 2015, the following Australian Accounting Standards have been issued by the AASB but not effective. They become effective for the first financial statements for reporting periods commencing after the stated operative dates as follows.

Standard/ Interpretation

Summary Applicable for annual reporting periods beginning

Impact on Authority financial statements

AASB 9 Financial Instruments

The key changes include the simplified requirements for the classification and measurement of financial assets, a new hedging accounting model and a revised impairment loss model to recognise impairment losses earlier, as opposed to the current approach that recognises impairment only when incurred.

1 Jan 2018 The assessment has identified that the financial impact of available for sale (AFS) assets will now be reported through other comprehensive income (OCI) and no longer recycled to the profit and loss.

While the preliminary assessment has not identified any material impact arising from AASB 9, it will continue to be monitored and assessed.

AASB 15 Revenue from Contracts with Customers

The core principle of AASB 15 requires an entity to recognise revenue when the entity satisfies a performance obligation by transferring a promised good or service to a customer.

1 Jan 2017 (Exposure Draft 263—potential deferral to 1 Jan 2018)

The changes in revenue recognition requirements in AASB 15 may result in changes to the timing and amount of revenue recorded in the financial statements. The Standard will also require additional disclosures on service revenue and contract modifications.

A potential impact will be the upfront recognition of revenue from licences that cover multiple reporting periods. Revenue that was deferred and amortised over a period may now need to be recognised immediately as a transitional adjustment against the opening returned earnings if there are no former performance obligations outstanding.


Standard/ Interpretation

Summary Applicable for annual reporting periods beginning

Impact on Authority financial statements

AASB 2014-1 Amendments to Australian Accounting Standards [Part E Financial Instruments]

Amends various standards to reflect the AASB’s decision to defer the mandatory application date of AASB 9 to annual reporting periods beginning on or after 1 January 2018 as a consequence of Chapter 6 Hedge Accounting, and to amend reduced disclosure requirements.

1 Jan 2018 This amending standard will defer the application period of AASB 9 to the 2018-19 reporting period in accordance with the transition requirements.

AASB 2014-4 Amendments to Australian Accounting Standards—Clarification of Acceptable Methods of Depreciation and Amortisation [AASB 116 & AASB 138]

Amends AASB 116 Property, Plant and Equipment and AASB 138 Intangible Assets to:

• establish the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset

• prohibit the use of revenue-based methods to calculate the depreciation or amortisation of an asset, tangible or intangible, because revenue generally reflects the pattern of economic benefits that are generated from operating the business, rather than the consumption through the use of the asset.

1 Jan 2016 The assessment has indicated that there is no expected impact as the revenue-based method is not used for depreciation and amortisation.

AASB 2015-6 Amendments to Australian Accounting Standards—Extending Related Party Disclosures to Not-for-Profit Public Sector Entities [AASB 10, AASB 124 & AASB 1049]

The Amendments extend the scope of AASB 124 Related Party Disclosures to not-for-profit public sector entities. A guidance has been included to assist the application of the standard by not-for-profit public sector entities.

1 Jan 2016 The amending standard will result in extended disclosures on the entity’s key management personnel (KMP), and the related party transactions.

AASB 2015–7 Amendments to Australian Accounting Standards—Fair Value Disclosures of Not-for-Profit Public Sector Entities.

AASB 2015-7 amends AASB 13 Fair Value Measurement to provide disclosure relief to not-for-profit public sector entities from certain disclosures about the fair value measurements of property, plant and equipment held for their current service potential rather than to generate net cash inflows. This includes relief from disclosures of quantitative information about the significant unobservable inputs used in fair value measurements and of the sensitivity of certain fair value measurements to changes in unobservable inputs.

1 July 2016 No expected change.


Note 2 Income from transactions

Note 2015 $

2014 $

(a) Interest

Interest on bank deposits 229,793 186,421

Total interest 229,793 186,421

(b) Registration and accreditation fees

Registration and accreditation fees 2,204,528 1,878,663

Total registration and accreditation fees 2,204,528 1,878,663

(c) Grants and other transfers (other than contributions by owners)

Department of Education and Training 9,067,118 12,197,153

Department of Education and Training (Commonwealth) (formerly Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education: 2014)

920,000 2,000,000

Total grants and other transfers 9,987,118 14,197,153

(d) Fair value of assets and services received free of charge or for nominal consideration:

Accommodation 4 522,249 486,643

Total fair value of assets and services received free of charge or for nominal consideration

522,249 486,643

(e) Other income

Other income 173 439

Total other income 173 439


Note 3 Expenses from transactions

Note 2015 $

2014 $

(a) Administrative expenses

Employee benefits for VRQA staff employed by DET 5,996,315 6,284,292

Total administrative expenses 5,996,315 6,284,292

(b) Depreciation and amortisation

Plant and equipment 2,957 4,485

Intangible asset 263,836 889,127

Total depreciation and amortisation 266,793 893,612

(c) Grants and other transfers

Transfer payments to TAFEs 13,600 1,329,227

Transfer payments to individuals 40,836 40,815

Total grants and other payments 54,436 1,370,042

(d) Supplies and services

Purchase of supplies and consumables 185,608 222,956

Contractors 5,029,057 4,353,056

Board member fees 235,002 260,213

Travel expenses 38,915 38,411

Printing 94,196 118,121

Phone and postage 173,324 251,101

Legal expenses 221,770 221,399

Insurance 28,244 28,846

Minor equipment purchases 9,379 28,470

Rental of buildings 4 522,249 486,643

Advertising 2,989 4,569

Audit fees 14 31,460 27,900

Total supplies and services 6,572,193 6,041,685


Note 4 Resources received free of charge

2015

$ 2014

$

Resources received free of charge1

Accommodation for Level 4, Casselden, 2 Lonsdale Street, Melbourne 522,249 486,643

Total 522,249 486,643

Note 5 Receivables

2015 $

2014 $

Current receivables2

Contractual

Sale of goods and services 176,039 196,008

176,039 196,008

Statutory

GST input tax credit recoverable 50,072 68,002

50,072 68,002

Total receivables 226,111 264,010

Note 5(a) Ageing analysis of contractual receivables

Please refer to Table 11.3 in Note 11 for the ageing analysis of contractual receivables.

Note 5(b) Nature and extent of risk arising from contractual receivables

Please refer to Note 11 for the nature and extent of credit risk arising from contractual receivables.

1 The amounts are recognised in the operating statement as an expense and offset to income as resources received free of charge from DET. 2 The average credit period on receivables is 30 days. No interest is charged on receivables.


Note 6 Equipment and furniture

2015

$ 2014

$

Office equipment and furniture1

At cost 25,610 25,610

Less: accumulated depreciation (22,455) (19,498)

Total property, plant and equipment 3,155 6,112

Note 6(a) Reconciliation

Reconciliations of the carrying amounts at the beginning and end of the financial year are set out below.

Office equipment and furniture 2015

$ 2014

$

Opening balance 6,112 10,597

Additions - -

Depreciation (2,957) (4,485)

Closing balance 3,155 6,112

1

• The useful lives of assets as stated in Policy Note 1 are used in the calculation of depreciation. • All assets are classified primarily by the ‘purpose’ for which the assets are used. The purpose group

for VRQA assets is education. • The office equipment and furniture’s fair value at the end of the reporting period was determined

using level 3 inputs. • There have been no transfers between levels during the period. • The reconciliation for office equipment and furniture's level 3 valuation can be found in Table 6(a). • There were no changes in valuation techniques throughout the period to 30 June 2015. • For all assets measured at fair value, the current use is considered the highest and best use. • The significant unobservable inputs to the valuation of the computers and peripherals and office

equipment and furniture is the useful life of the assets. The range of the useful lives are 5–10 years, with an average of 7.5 years. A significant increase or decrease in the estimated useful life of the assets would result in a significantly higher or lower valuation.


Note 7 Intangible assets

State Register1 2015

$ 2014

$

At cost 5,869,521 5,869,521

Less: accumulated amortisation (2,730,527) (2,466,690)

Less: accumulated impairment (2,611,322) (2,611,322)

Total Intangible assets 527,672 791,509

Note 7(a) Reconciliation

State Register 2015

$ 2014

$

Gross carrying amount

Opening balance 5,869,521 5,869,521

Transfers from Work in progress - -

Closing balance 5,869,521 5,869,521

Accumulated amortisation and impairment

Opening balance 791,509 2,366,555

Amortisation of intangible assets 263,837 889,127

Impairment losses charged to net result - 1,822,330

Closing balance 527,672 5,078,012

Net book value at end of financial year 527,672 791,509

1 • The VRQA has capitalised expenditure for the development of the State Register software. The

State Register can be viewed online and comprises all education and training organisations registered by the VRQA and the accredited courses they deliver. The carrying amount of the capitalised software development expenditure is $0.52 million (2014: $0.79 million).

• Impairment losses are included in the line item ‘net gain/(loss) on non-financial assets’ in the comprehensive operating statement. The VRQA has not taken an impairment charge during the year associated with State Register. An impairment charge was taken in 2014 of $1,822,330.

• Work in progress represents current development expenditure which includes software enhancements and the final phase of the development of the State Register relating to a fee processing solution integrated with the VRQA’s financial systems. This work was completed in September 2012.

• The VRQA Board has reviewed the useful life of the State Register and determined that from 2013 and going forward it should be 5 years from when it or parts thereof are completed and operational (2014: 5 years). The State Register will be fully amortised in 2017 utilising the straight-line method.


Note 8 Payables

2015

$ 2014

$

Current payables1

Contractual payables

Supplies and services 47,007 134,786

Amounts payable to government 240,421 88,369

Other payables 785,417 937,536

Unearned revenue 645,973 532,914

Total contractual payables 1,718,818 1,693,605

Terms and conditions of amounts payable to other government agencies vary according to a particular agreement with that agency. The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice.

8 (a) Maturity analysis of contractual payables

Please refer to Note 11(e) for the maturity analysis of contractual payables.

8 (b) Nature and extent of risk arising from contractual payables

Please refer to Note 11 for the nature and extent of risks arising from contractual payables.

Note 9 Commitments for expenditure The following commitments relating to the State Register have not been recognised as liabilities in the financial statements:

2015

$ 2014

$

Commitments payable2

Payables—Maintenance agreement on State Register 48,400 48,400

Total commitments for expenditure (inclusive of GST) 48,400 48,400

1 Terms and conditions of amounts payable to other government agencies vary according to a particular agreement with that agency. The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice. 2 The figures presented are inclusive of GST. The commitments are for less than one year.


Note 10 Contingent assets and contingent liabilities There are no known contingent assets and contingent liabilities to be disclosed in the financial period (2014 nil).

Note 11 Financial instruments

11(a) Significant accounting policies

The VRQA’s principal financial instruments comprise:

• cash and deposits

• receivables (excluding statutory receivables)

• payables (excluding statutory payables).

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset financial liability and equity instrument are disclosed in Note 1 to the financial statements.

The main purpose in holding financial instruments is to prudentially manage the VRQA’s financial risks in the government policy parameters. The VRQA’s main financial risks include credit risk, liquidity risk and interest rate risk. The VRQA manages these financial risks in accordance with its financial risk management policy. The VRQA uses different methods to measure and manage the different risks to which it is exposed. Primary responsibility for the identification and management of financial risks rests with the Audit and Risk Management Committee of the VRQA.

The carrying amounts of the VRQA’s financial assets and financial liabilities by category are in Table 11.1 below.

Table 11.1—Categorisation of financial instruments1

2015 $

2014 $

Contractual financial assets

Cash and deposits 8,665,315 8,281,285

Receivables 176,039 196,008

Total contractual financial assets 8,841,354 8,477,293

Contractual financial liabilities

Supplies and services 47,007 134,786

Amounts payable to government and agencies 240,421 88,369

Other payables 1,431,390 1,470,450

Total contractual financial liabilities 1,718,818 1,693,605

1 The financial instruments are contractual financial assets/liabilities designated at fair value through profit/loss. The total amounts disclosed here exclude statutory receivables (e.g. amounts owing from Victorian Government and GST input tax credit recoverable). There are no net holding gains or losses on financial instruments.


11(b) Interest rate risk

The VRQA’s exposure to interest rate risk and the effective weighted average interest rate by maturity periods is set out in Table 11.2. Exposure arises from assets bearing variable interest rates. As at the reporting date there is no event to indicate that any of the financial assets are impaired. The VRQA has no interest bearing liabilities.

Table 11.2—Interest rate exposure1

Weighted average effective

interest rate%

Carrying amount

$

Interest rate exposure

Non-interest bearing

$

Variable interest

rate $

2015

Financial assets

Cash and deposits 2.32 8,665,315 - 8,665,315

Other receivables - 176,039 176,039 -

Total financial assets - 8,841,354 176,039 8,665,315

Financial liabilities

Supplies and services - 47,007 47,007 -

Amounts payable to government - 240,421 240,421 -

Other payables - 1,431,390 1,431,390 -

Total financial liabilities - 1,718,818 1,718,818 -

2014

Financial assets

Cash and deposits 2.53 8,281,285 - 8,281,285

Other receivables - 196,008 196,008 -

Total financial assets - 8,477,293 196,008 8,281,285


Supplies and services - 134,786 134,786 -

Amounts payable to government - 88,369 88,369 -

Other payables - 1,470,450 1,470,450 -

Total financial liabilities - 1,693,605 1,693,605 -

1 The total amounts disclosed here exclude statutory receivables (e.g. amounts owing from Victorian Government and GST input tax credit recoverable).


11(c) Credit risk

Credit risk arises from the contractual financial assets of the VRQA, which comprise cash and deposits and non-statutory receivables. The VRQA’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the VRQA. Credit risk is measured at fair value and is monitored on a regular basis.

Credit risk associated with the VRQA’s financial assets is minimal because the main debtor is the Victorian Government. For debtors other than government the debtors are applying for registration and/or amendments to registration and their applications will not proceed without payment.

The VRQA does not engage in any hedging for its financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. The VRQA’s policy is to use the whole-of-government bank arrangements.

Provision of impairment for contractual financial assets is recognised when there is objective evidence that the VRQA will not be able to collect a receivable. Objective evidence includes advice that the education provider will not be paying the fee, does not lodge an application prior to expiry or withdraws an application prior to assessment.

Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents the VRQA’s maximum exposure to credit risk.

As at the reporting date, there is no event to indicate that any of the financial assets are impaired.

Table 11.3—Ageing analysis of contractual financial assets1

Carrying amount

($)

Not past due and

not impaired

($)

Past due but not impaired

Impaired

Less than

1 month

1–3 months

3 months–1 year

1–5 years

2015

Other receivables 176,039 126,014 21,577 21,820 6,628 - -

Total 176,039 126,014 21,577 21,820 6,628 - -

2014

Other receivables 196,008 141,018 29,085 22,485 2,820 600 -

Total 196,008 141,018 29,085 22,485 2,820 600 -

11(d) Market risk

The VRQA’s exposures to market risk are primarily through interest rate risk. Objectives, policies and processes used to manage interest rate risk is disclosed below. The VRQA’s exposure to interest rate risk is set out in Table 11.4.

1 The carrying amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian government and GST input tax credit recoverable).


Sensitivity disclosure analysis and assumptions

The VRQA’s sensitivity to market risk is determined based on the observed range of actual historical data for the preceding five-year period, with all variables other than the primary risk variable held constant. The VRQA cannot be expected to predict movements in market rates and prices. Sensitivity analyses shown are for illustrative purposes only. The following movements are ‘reasonably possible’ over the next 12 months:

• a movement of 1 percentage points up and down in market interest rates (AUD) from year-end rates (2014: A movement of 1 percentage points up and down).

Table 11.4 discloses the impact on net operating result and equity for each category of financial instrument held by the VRQA at year-end as presented to key management personnel, if the above movements were to occur.

Table 11.4—Interest rate risk sensitivity1

Carrying amount

$

Interest rate risk

-1.0% Net result

+1.0% Net result

2015

Financial assets

Cash and deposits 8,665,315 (86,653) 86,653

Other receivables 176,039


Payables 1,718,818

Total impact (86,653) 86,653

2014

Financial assets

Cash and deposits 8,281,285 (82,813) 82,813

Other receivables 196,008


Payables 1,693,605

Total impact (82,813) 82,813

11(e) Liquidity risk

Liquidity risk arises when the VRQA is unable to meet its financial obligations as and when they fall due. The VRQA operates under the government fair payments policy of settling financial obligations within 30 days and, in the event of a dispute, making payments within 30 days from the date of resolution.

1 Sensitivities of floating rate cash and cash equivalents are:

• 2015—impact on net result due to a 1 per cent movement in market interest rate is $8,665,315 x [+/- 1 per cent] = $86,653.

• 2014—impact on net result due to a 1 per cent movement in market interest rate is $8,281,285 x [+/- 1 per cent] = $82,813.


The VRQA’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet. The VRQA manages its liquidity risk by:

• maintaining an adequate level of uncommitted funds that can be drawn at short notice to meet its short-term obligations

• careful maturity planning of its financial obligations based on forecasts of future cash flows.

The VRQA’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and current assessment of risk. Cash for unexpected events is generally sourced from at call financial investments.


Note 12 Cash flow information Reconciliation of net result for the period to net cash flows from operating activities

2015

$ 2014

$

Net result 54,124 337,358

Non-cash movements

Depreciation and amortisation expense 266,793 893,612

Impairment of non-current assets - 1,822,330

Movements in assets and liabilities

(Increase)/decrease in receivables 37,899 (73,314)

(Decrease)/increase in unearned revenue 113,059 186,914

(Decrease)/increase in payables (87,846) 262,165

Net cash flows from/(used in) operating activities 384,030 3,429,065

Note 13 Responsible persons In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period. The persons who held the positions of Ministers and Accountable Officers in the VRQA are:

Minister for Higher Education and Skills The Hon. Nick Wakeling, MP 1 July 2014 to 3 December 2014

Minister for Training and Skills The Hon. Steve Herbert, MP 3 December 2014 to 30 June 2015

Minister for Education The Hon. Martin Dixon, MP 1 July 2014 to 3 December 2014 The Hon. James Merlino, MP 3 December 2014 to 30 June 2015

Director Lynn Glover 1 July 2014 to 30 June 2015

Chairperson Timothy Smith 1 July 2014 to 30 June 2015

Board members Elizabeth Alexander AM 1 July 2014 to 30 June 2015 Richard Bolt 1 July 2014 to 31 December 2014 Gill Callister 1 January 2015 to 30 June 2015 Stephen Elder 1 July 2014 to 30 June 2015 Paul Kirk 1 July 2014 to 30 June 2015 Patricia Neden 1 July 2014 to 30 June 2015 Michael Perry 1 July 2014 to 30 June 2015 Graham Spencer 1 July 2014 to 30 June 2015 Richard Tudor OAM 1 July 2014 to 30 June 2015 Michonne van Rees 1 July 2014 to 30 June 2015 Brian Welch 1 July 2014 to 30 June 2015 David Windridge 1 July 2014 to 30 June 2015


Remuneration of responsible persons

The number of responsible persons whose emolument/remuneration fell within the following bands1 were:

Income band ($) 2015

Number 2014

Number

0–9,999 - 4

10,000–19,999 10 1

20,000–29,999 - 8

40,000–49,999 1 1

250,000–259,999 - 1

260,000–269,999 1 -

Total 12 15

Total remuneration received, or due and receivable by responsible persons

$497,636 $517,639

Related Party transactions included in the reconciliation amount

Gill Callister, Secretary, DET, from 1 January 2015, is an ex-officio member of the VRQA Board. As this role is ex-officio, she received no remuneration to perform this role. Richard Bolt was the Secretary, DEECD, until 31 December 2014 and was an ex-officio member of the VRQA Board. As this role was ex-officio, he received no remuneration to perform this role. Timothy F Smith is a Director of the VET Development Centre, Elizabeth Alexander is the Chancellor of the University of Melbourne, Stephen Elder is a Director of the Catholic Education Commission of Victoria.

Any transactions between DET, the University of Melbourne, Catholic Education Commission of Victoria, VET Development Centre and the VRQA are at arms’ length. Amounts transacted with DET are $9,162,109 ($12,264,232 for 2014) and resources free of charge of $522,249 ($486,643 for 2014) and transacted with The University of Melbourne are nil ($2,880 for 2014), with the Catholic Education Commission of Victoria are $11,287 ($6,844 for 2014) and with the VET Development Centre $86 ($980 in 2014).

1 Ministers are reported in the financial report of the Department of Premier and Cabinet. One member did not receive any remuneration. (2014: 2 members)


Remuneration of executives

The number of executive officers and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands. The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits. The total annualised employee equivalent provides a measure of full time equivalent executive officers over the reporting period.

Income band ($)

Total remuneration Base remuneration

2015 Number

2014 Number

2015 Number

2014 Number

150,000–159,999 1 1

160,000–169,999 1 1

170,000–179,999 1

180,000–189,999 1

Total number of executives 1 2 1 2

Total annualised employee equivalent1 1 1.96 1 1.96

Total amount $164,993 $333,465 $163,661 $325,771

Other personnel, i.e. contractors with significant management responsibilities

The number of contractors charged with significant management responsibilities is disclosed within the $10,000 expense band. The contractor is responsible for planning or controlling, directly or indirectly, the project management of information technology projects. The change in total expenses from the 2013–14 to the 2014–15 period was because this is the first full year of this function being undertaken by an external contractor. In 2013–14 the services were provided for only 3.5 months and the expenditure was below the reporting threshold.

Expense band ($)

Total Expenses

2015 Number

2014 Number

270,000–279,999 1 -

Total amount $272,962 -

1 Annualised employee equivalent is based on working 38 ordinary hours per week over the reporting period.


Note 14 Remuneration of auditors

2015

$ 2014

$

Victorian Auditor-General’s Office

Audit of the financial statements 31,460 27,900

31,460 27,900

Note 15 Subsequent events There are no known subsequent events that will have a material impact on the financial statements.

Note 16 Glossary of terms and style conventions

Amortisation

Amortisation is the expense which results from the consumption, extraction or use over time of a non-produced physical or intangible asset. This expense is classified as a ‘transaction’ and so reduces the ‘net result from transactions’.

Commitments

Commitments include those operating, capital and other outsourcing commitments arising from non-cancellable contractual or statutory sources.

Comprehensive result

The net result of all items of income and expense recognised for the period. It is the aggregate of operating result and other comprehensive income.

Current grants

Amounts payable or receivable for current purposes for which no economic benefits of equal value are receivable or payable in return.

Depreciation

Depreciation is an expense that arises from the consumption through wear or time of a produced physical or intangible asset. This expense is classified as a ‘transaction’ and so reduces the ‘net result from transactions’.

Effective interest method

The effective interest method is used to calculate the amortised cost of a financial asset or liability and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument or, where appropriate, a shorter period.


Financial asset

A financial asset is any asset that is:

a. cash b. an equity instrument of another entity c. contractual or statutory right

• to receive cash or another financial asset from another entity; or

• to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity; or

d. a contract that will or may be settled in the entity’s own equity instruments and is:

• a non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity instruments; or

• a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments.

Financial liability

A financial liability is any liability that is: a. a contractual obligation:

• to deliver cash or another financial asset to another entity; or

• to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity; or

b. a contract that will or may be settled in the entity’s own equity instruments and is:

• a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity instruments; or

• a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this purpose the entity’s own equity instruments do not include instruments that are themselves contracts for the future receipt or delivery of the entity’s own equity instruments.

Financial statements

A complete set of financial statements comprises:

a. balance sheet as at the end of the period b. comprehensive operating statement for the period c. a statement of changes in equity for the period d. cash flow statement for the period e. notes, comprising a summary of significant accounting policies and other explanatory

information f. comparative information in respect of the preceding period as specified in

paragraphs 38 of AASB 101 Presentation of Financial Statements g. a statement of financial position as at the beginning of the preceding period when an

entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements in accordance with paragraphs 41 of AASB 101.


Transactions in which one unit provides goods, services, assets (or extinguishes a liability) or labour to another unit without receiving approximately equal value in return. Grants can either be operating or capital in nature. While grants to governments may result in the provision of some goods or services to the transferor, they do not give the transferor a claim to receive directly benefits of


approximately equal value. Receipt and sacrifice of approximately equal value may occur, but only by coincidence. For example, governments are not obliged to provide commensurate benefits, in the form of goods or services, to particular taxpayers in return for their taxes. Grants can be paid as general purpose grants which refer to grants that are not subject to conditions regarding their use. Alternatively, they may be paid as specific purpose grants which are paid for a particular purpose and/or have conditions attached regarding their use.

General government sector

The general government sector comprises all government departments, offices and other bodies engaged in providing services free of charge or at prices significantly below their cost of production. General government services include those which are mainly non-market in nature, those which are largely for collective consumption by the community and those which involve the transfer or redistribution of income. These services are financed mainly through taxes or other compulsory levies and user charges.

Intangible produced assets

Refer to produced assets in this glossary.

Interest income

Interest income includes interest received on bank term deposits, interest from investments, and other interest received.

Net result

Net result is a measure of financial performance of the operations for the period. It is the net result of items of income, gains and expenses (including losses) recognised for the period, excluding those that are classified as ‘other non-owner changes in equity’.

Net result from transactions/net operating balance

Net result from transactions or net operating balance is a key fiscal aggregate and is income from transactions minus expenses from transactions. It is a summary measure of the ongoing sustainability of operations. It excludes gains and losses resulting from changes in price levels and other changes in the volume of assets. It is the component of the change in net worth that is due to transactions and can be attributed directly to government policies.

Net worth

Assets less liabilities, which is an economic measure of wealth.


Non-financial assets are all assets that are not ‘financial assets’. It includes plant and equipment and intangible assets.


Other economic flows included in net result

Other economic flows included in net result are changes in the volume or value of an asset or liability that do not result from transactions. It includes: • gains and losses from disposals, revaluations and impairments of non-financial

physical and intangible assets

• fair value changes of financial instruments and agricultural assets

• depletion of natural assets (non-produced) from their use or removal.

Other economic flows—other comprehensive income

Other economic flows—other comprehensive income comprises items (including reclassification adjustments) that are not recognised in net result as required or permitted by other Australian Accounting Standards. The components of other economic flows—other comprehensive income include: • changes in physical asset revaluation surplus

• share of net movement in revaluation surplus of associates and joint ventures

• gains and losses on remeasuring available-for-sale financial assets.

Payables

Includes short- and long-term trade debt and accounts payable, grants and interest payable.

Produced assets

Produced assets include buildings, plant and equipment, inventories, cultivated assets and certain intangible assets. Intangible produced assets may include computer software, motion picture films, and research and development costs (which does not include the start-up costs associated with capital projects).

Receivables

Includes amounts owing from government through appropriation receivable, short- and long-term trade credit and accounts receivable, accrued investment income, grants, taxes and interest receivable.

Sales of goods and services

Refers to income from the direct provision of goods and services and includes fees and charges for services rendered, sales of goods and services and fees from regulatory services. User charges includes sale of goods and services income.

Supplies and services

Supplies and services generally represent cost of goods sold and the day-to-day running costs, including maintenance costs, incurred in the normal operations of the VRQA.

Transactions

Transactions are those economic flows that are considered to arise as a result of policy decisions, usually an interaction between two entities by mutual agreement. They also include flows within an entity such as depreciation where the owner is simultaneously acting as the owner of the depreciating asset and as the consumer of the service provided by the asset. Taxation is regarded as mutually agreed interactions between the government and taxpayers. Transactions can be in kind (e.g. assets provided/given


free of charge or for nominal consideration) or where the final consideration is cash. In simple terms, transactions arise from the policy decisions of the government.

Style conventions

Figures in the tables and in the text have been rounded. Discrepancies in tables between totals and sums of components reflect rounding. Percentage variations in all tables are based on the underlying unrounded amounts. The notation used in the tables is:

- zero, or rounded to zero

(xxx.x) negative numbers

200x year period

200x–0x year period

The financial statements and notes are presented based on the illustration for a government department in the 2014–15 Model Report for Victorian Government Departments. The presentation of other disclosures is generally consistent with the other disclosures made in earlier publications of the VRQA’s annual reports.

Appendices 73

Appendices

Appendix 1—Disclosure index The annual report of the VRQA is prepared in accordance with all relevant Victorian legislations and pronouncements. This index has been prepared to facilitate identification of the VRQA’s compliance with statutory disclosure requirements.

Ministerial direction Requirement Page

Report of operations—Financial Reporting Direction guidance

Charter and purpose

FRD 22F Manner of establishment and the relevant Ministers 4

FRD 22F Purpose, functions, powers and duties 4

FRD 8C Departmental objectives, indicators and outputs NA

FRD 22F Initiatives and key achievements 5

FRD 22F Nature and range of services provided 4

Management and structure

FRD 22F Organisational structure 27

Financial and other information

FRD 8C, SD 4.2(k)

Performance against output performance measures NA

FRD 8C Budget portfolio outcomes NA

FRD 10 Disclosure index 73

FRD 12A Disclosure of major contracts 32

FRD 15B Executive officer disclosures 31

FRD 22F Employment and conduct principles 28

FRD 22F Occupational health and safety policy 28

FRD 22F Summary of the financial results for the year 19

FRD 22F Significant changes in financial position during the year 19

FRD 22F Major changes or factors affecting performance NA

FRD 22F Subsequent events 68

Financial report

FRD 22F Application and operation of Freedom of Information Act 1982 32

FRD 22F Compliance with building and maintenance provisions of Building Act 1993

33

FRD 22F Statement on National Competition Policy 33

FRD 22F Application and operation of the Protected Disclosure Act 2012 33

FRD 22F Application and operation of the Carers Recognition Act 2012 34



FRD 22F Details of consultancies over $10,000 32

FRD 22F Details of consultancies under $10,000 32

FRD 22F Statement of availability of other information 34

FRD 24C Reporting of office-based environmental impacts 34

FRD 25B Victorian Industry Participation Policy disclosures 32

FRD 29A Workforce data disclosures 28

SD 4.5.5 Risk management compliance attestation 35

SD 4.5.5.1 Ministerial Standing Direction 4.5.5.1 compliance attestation 35

SD 4.2(g) Specific information requirements 1, 37

SD 4.2(j) Sign-off requirements i

Financial statements required under Part 7 of the FMA

SD4.2(a) Statement of changes in equity 42

SD4.2(b) Operating statement 40

SD4.2(b) Balance sheet 41

SD4.2(b) Cash flow statement 43

Other requirements under Standing Directions 4.2

SD4.2(c) Compliance with Australian accounting standards and other authoritative pronouncements

45

SD4.2(c) Compliance with Ministerial Directions 37, 45

SD4.2(d) Rounding of amounts 47

SD4.2(c) Accountable officer’s declaration 37

SD4.2(f) Compliance with Model Financial Report 37

Other disclosures as required by FRDs in notes to the financial statements

FRD 9A Disclosure of Administered Assets and Liabilities by Activity NA

FRD 11A Disclosure of Ex gratia Expenses NA

FRD 13 Disclosure of Parliamentary Appropriations NA

FRD 21B Disclosures of Responsible Persons, Executive Officers and other Personnel (Contractors with Significant Management Responsibilities) in the Financial Report

65

FRD 102 Inventories NA

FRD 103E Non-Financial Physical Assets (Pending revision) 50

FRD 104 Foreign Currency NA

FRD 106 Impairment of Assets 49

FRD 109 Intangible Assets 50, 58

FRD 107A Investment Properties NA

Appendices 75


FRD 110 Cash Flow Statements 43

FRD 112D Defined Benefit Superannuation Obligations NA

FRD 113 Investments in Subsidiaries, Jointly Controlled Entities and Associates (Pending revision)

NA

FRD 114A Financial Instruments–General Government Entities and Public Non-Financial Corporations

60

FRD 119A Transfers through Contributed Capital 42, 51

Legislation

Freedom of Information Act 1982 32

Building Act 1993 33

Protected Disclosure Act 2012 33

Carers Recognition Act 2012 34

Victorian Industry Participation Policy Act 2003 32

Financial Management Act 1994 i


Appendix 2—Ministerial statement of expectations for the VRQA

In response to the Victorian Competition and Efficiency Commission’s 2011 Inquiry into Victoria’s Regulatory Framework, the Victorian Government agreed to issue Ministerial Statements of Expectations (SoE) to Victorian regulators.

In May 2014, the then-Minister for Education and the then-Minister for Higher Education and Skills provided a SoE for the VRQA.

The SoE sets out the Ministers’ expectations of the VRQA to improve the efficiency and effectiveness of its regulatory activities while minimising the regulatory burden on education and training providers.

The VRQA provided the Ministers with its response outlining how the VRQA intends to meet these expectations.

The SoE applies for the period 2014–15 and 2015–16. Progress for 2014–15 is reported below.

Performance expectation Activity Status

By July 2015, introduce a model of regulation that gives greater autonomy to education and training providers and school systems which consistently demonstrate high levels of compliance with standards.

The model should allow low-risk providers to quality assure their own compliance regime and report to the VRQA. This will allow the VRQA to increase the focus of regulatory activity on higher risk providers.

Investigate current models of regulatory earned autonomy which could have application to education and training providers. The VRQA will consider other examples of earned autonomy from ACECQA, TEQSA, ASQA, ESOS, state and territory bodies, and related international regulatory frameworks.

Underway

Develop a consistent risk framework in schools, VET and OSSEO units to inform the earned autonomy model.

Completed

Consult with education and training providers and stakeholders on the risk framework to inform the earned autonomy model.

Completed

Assess the legal and budgetary implications of options for earned autonomy for the VRQA operations.

Underway

Submit to the April 2015 Board meeting the earned autonomy model for consideration and approval.

Underway

Publish VRQA board-approved examples of earned autonomy.

Underway

Reduce the burden on multi-sector providers by streamlining regulatory processes. By July 2015, the VRQA will establish single, streamlined processes that can apply to all registration types of a provider, rather than separate processes for each registration type, where it is practical to do so.

Establish integrated financial assessments for multi-sector education and training providers so that they undergo one assessment for all registration types.

Completed

Streamline the risk framework across all registration types.

Completed

Appendices 77


Continue to advance and protect the interests of students, apprentices, trainees, parents and employers by actively managing and responding to compliance and financial failure risks. By February 2015, the VRQA will identify and publish key risk factors, and monitor providers against these factors in order to mitigate risks to consumers.

Report to the February 2015 VRQA Board meeting on the proposed financial risk criteria.

Completed

Publish the approved financial risk criteria on the VRQA website by March 2015.

Completed

Provide education and training provider and stakeholder workshops designed to help identify and address financial stress.

Completed

Establish an annual process to reassess the continued relevance of the financial risk framework.

Completed

Where high risk is identified, take appropriate action.

Ongoing

Further improve the transparency of the VRQA’s regulatory processes and support education and training providers to reduce non-compliance. By December 2014, the VRQA will make available information and advice regarding the full range of its regulatory activities, and to ensure its published formal complaints policy includes responding to complaints made about the VRQA and its staff. This will be provided in readily accessible formats.

Review the VRQA website to strengthen accessibility, usefulness and currency of information for education and training providers and stakeholders, with a view to improving online access for business transactions and registration activity.

Completed

Review the range of VRQA communication tools for effectiveness, for example VRQA e-news.

Completed

Review and improve the range of targeted workshops, clinics and seminars to ensure organisations, stakeholders and education and training providers understand VRQA regulatory processes, the roles and responsibilities of all parties, and common problems, and the VRQA understands the changing needs of business and the community throughout the regulatory cycle.

Completed

Publish the update of the whole-of-VRQA complaints process including policies and procedures and how the VRQA will respond to these matters.

Completed

Deepen engagement with education and training providers, employers and other stakeholders to inform the ongoing improvement of regulatory activities. By December 2014, the VRQA will publish a stakeholder engagement strategy that commits to consulting with stakeholders on industry trends and seeks their feedback on the VRQA’s processes.

Develop and publish the stakeholder engagement strategy which will include how the VRQA will collect information from stakeholders on emerging industry trends.

Completed

Expand the VRQA annual stakeholder survey to gather feedback on VRQA processes, and seek feedback from stakeholders, education and training providers, apprentices and trainees, and employers on the range of services that they need from the VRQA.

Completed

Based on feedback provided, review and update the range of services provided by the VRQA.

Ongoing



Promote greater cooperation, information sharing, regulatory coherence and efficiency with other regulators and key partners. By July 2015, the VRQA will establish and publish memoranda of understanding or other formal arrangements to streamline processes and share information.

Establish and publish memoranda of understanding, or other formal arrangements, to streamline processes and share information with other regulators including the:

Victorian Institute of Teaching with respect to the coordination of regulatory activity;

The Department of Education and Early Childhood Development with respect to the Department’s role as a school review body, as the regulatory authority for education and care services, and as the responsible Department for providing policy advice to Ministers about education, early childhood development, children’s services, higher education and training in Victoria; and Commonwealth Government and/or other federal agencies where the cooperative approach has been reciprocated with respect to the coordination of regulatory activity.

Completed

Undertake a stocktake of data collection requirements for ACFE providers with a view to identifying opportunities to reduce duplication and so reduce regulatory burden on providers.

Completed

By January 2016 the VRQA, in collaboration with the Department of Education and Early Childhood Development, will develop a secure register of apprentices and trainees that meets the requirements of the Education and Training Reform Act 2006 and improves the ability of the VRQA and the Department to monitor and analyse industry trends. This will implement the recommendations of the Victorian Auditor General’s Office in its audit of Apprenticeship and Traineeship Completion, published in March 2014.

Secure funding for the business case for the development of the register.

Completed

Redevelop in collaboration with the Department of Education and Early Childhood Development a secure register of apprentices and trainees.

Completed

Appendices 79

Appendix 3—Acronyms and abbreviations

ACECQA Australian Children’s Education and Care Quality Authority

ACFE Adult, Community and Further Education

ASQA Australian Skills Quality Authority

COAG Council of Australian Governments

CRICOS Commonwealth Register of Institutions and Courses for Overseas Students

DEECD Department of Education and Early Childhood Development

DET Department of Education and Training

ESOS Education Services for Overseas Students

ETRA Education and Training Reform Act 2006

FRD Financial Reporting Direction

GTO Group Training Organisation

OSSEO Overseas Secondary Student Exchange Organisation

RTO Registered training organisation

TAFE Technical and further education

TEQSA Tertiary Education Quality and Standards Agency

VAGO Victorian Auditor-General’s Office

VCAL Victorian Certificate of Applied Learning

VCE Victorian Certificate of Education

VET Vocational education and training

VRQA Victorian Registration and Qualifications Authority

victorian registration & qualifications authority · the hon. james merlino mp minister for...

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