Special Bulletin - Strategic Review into Third Party Arrangements

Special Bulletin - Strategic Review into Third Party Arrangements


Strategic Review into Third Party Arrangements entered into by Registered Training Organisations

Third parties are playing an increasingly important role in the provision of VET programs as they offer opportunities to expand RTO operations to more learners and locations, access to facilities and specialised equipment, marketing and recruitment expertise and educational support services.

In 2019, the Training Accreditation Council (TAC) endorsed a strategic review into third party arrangements established by RTOs following concerns including the extensive use of third parties by RTOs, limited RTO understanding of what constitutes a third party arrangement and an apparent lack of formalised agreements between RTOs and their third parties.

The review inquired into the extent and types of third party arrangements, the content and coverage of third party agreements, and strategies RTOs employ to monitor services delivered by their third parties. It also examined understanding of roles and responsibilities of the parties and the impact of third party arrangements on information provision to learners.

The review included an educational component, with an information campaign more than six months before the audits advising RTOs and stakeholders of the review. The advance communication aimed to prompt RTOs to review their third party arrangements and proved to be effective resulting in a 30% increase in RTO notifications to TAC of third party arrangements and an increase in the number of enquiries received about third parties.

The review also sought views from students and third parties to inform findings and recommendations.

Key findings of the review confirmed:

  • the prevalence of third party arrangements in the VET sector,
  • training and assessment are the most commonly outsourced services,
  • high levels of compliance with the Standards for RTOs relating to third party arrangements
  • almost a quarter of the RTOs audited were non-compliant with the requirement to inform prospective learners about refunds in the event of closure or failure to deliver agreed services,
  • a range of good examples of monitoring and oversight strategies by RTOs,
  • the majority of third party agreements were for VET delivery in secondary schools,
  • RTOs with large numbers of third party arrangements reported their main challenge as working out roles and responsibilities and monitoring the third party to ensure products and services are delivered as agreed.

Recommendations contained in the final report aim to provide further information and guidance to RTOs and third parties, enhance data collection and continued monitoring relating to third party arrangements, including training and assessment practices of third parties.

Click here to view the final report.


Last modified: 24/02/2021 9:40 AM