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Published and authorised bythe Victorian Registration and Qualifications Authority (VRQA)Level 4 Casselden2 Lonsdale StreetMelbourne VIC 3000

GPO Box 2317Melbourne VIC 3001

Tel: 03 9637 2806Fax: 03 9032 [email protected]

October 2016

© State of Victoria (VRQA) 2016

Victorian Registration and Qualifications Authority Annual Report 2015–16 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 MPMinister for Education

The Hon. Steve Herbert MPMinister 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 Annual Report for the year ending 30 June 2016.

Yours sincerely

Pam White PSM

Chair, Victorian Registration and Qualifications Authority

October 2016

ContentsReport of operations—year in review 1

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

Report of operations—governance and organisational structure 20

Ministers 20VRQA Board 20Victorian Registration and Qualifications Authority organisational structure at

30 June 2016 28Report of operations—workforce data 29

Occupational health and safety 29Comparative workforce data 30Executive officers 32

Report of operations—other disclosures 33

Victorian Industry Participation Policy 33Major consultancies and contracts 33Freedom of information 33Compliance with the Building Act 34National Competition Policy 34Compliance with the Protected Disclosure Act 2012 34Compliance with the Carers Recognition Act 2012 35Office-based environmental impacts 35Fees and charges 35Additional information available on request 36Compliance with DataVic Access Policy 36Attestation for compliance with the Australian/New Zealand Risk Management

Standard 37Attestation for compliance with the Ministerial Standing Direction 4.5.5.1—

Insurance 37Financial Statements 38

Accountable Officers’ and Chief Finance and Accounting Officer’s declaration 38Comprehensive operating statement for the financial year ended 30 June 2016 41Balance sheet as at 30 June 2016 42Statement of changes in equity for the financial year ended 30 June 2016 42Cash flow statement for the financial year ended 30 June 2016 43Notes to the financial statements 44

Appendices 73

Report of operations—year in review

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

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

The RITE values are:

R: respect and diversity

I: integrity

T: transparency

E: empowerment.

Report of the Chair It is with pleasure that I present the Victorian Registration and Qualifications Authority (VRQA) Annual Report 2015–16. This is my first report as Chair having commenced my appointment in February 2016.

It is an exciting time to have joined the VRQA. I am pleased to report our significant progress towards achieving the strategic priories set in the VRQA Strategic Plan 2014–16 (Strategic Plan).

In August 2015, the Minister for Education and the Minister for Training and Skills issued a Ministerial Statement of Expectations (SoE). The SoE reaffirms the expectations of the previous statement and includes two additional expectations that the VRQA work closely with the Department of Education and Training (DET) to:

determine how best to implement the government’s commitment to restore support for apprenticeships by retaining and strengthening the role of apprenticeship field officers as essential mediators of apprenticeship contracts

review the Education and Training Reform Regulations 2007 due to sunset in June 2017.

The Strategic Plan was refreshed to reflect these changes and the VRQA Board established a working party to support the review of the Education and Training Reform Regulations 2007.

The VRQA’s role has expanded under amendments to the Education and Training Reform Act 2006. The amendments provide for the VRQA to conduct assessments of independent schools’ financial capability and facilitate the VRQA’s role in implementing the Victorian Government’s zero-tolerance approach to child abuse among its registered and approved education and training providers.

The implementation of child safe standards in the education and training sector as part of the Victorian Government’s response to the Inquiry into the Handling of Child Abuse by Religious and Other Non-Government Organisations has been a key strategic focus of the VRQA throughout 2015–16. Child safety, as it applies to all education and training providers and employers of apprentices and trainees, provided a pivotal theme for discussion at our annual board and stakeholder breakfast.

This report contains further information about the VRQA’s responsibility for ensuring child safety.

In the vocational education and training (VET) sector, the VRQA Board provided information to the Review of Quality Assurance in Victoria’s VET System and the VET Funding Review and has subsequently advised the Minister for Training and Skills of ways we can contribute to implementing these reviews’ recommendations.

In the school sector, the VRQA Board provided feedback to the Minister for Education on the Government Schools Funding Review (the Bracks Review) and areas where the Board can contribute to effectively implementing the recommendations.

The VRQA is now responsible for the regulation of group training organisations as employers of apprentices and trainees. Regulatory arrangements for group training organisations were endorsed by the VRQA Board in April 2016 and begin 1 July 2016.

The VRQA Board introduced the VRQA Integrity Framework (the Framework) to ensure integrity is central to VRQA governance processes. The Framework makes our integrity visible and accountable to ourselves and our stakeholders and aligns with the Public Sector Code of Conduct and the VRQA RITE values.

I wish to recognise the work of my predecessor, Timothy Smith, who chaired the VRQA Board from his appointment in October 2012, and bid farewell to retired board members Graham Spencer and David Windridge whose appointments concluded in October 2015. I thank Mike Perry for his time as Acting Chair and welcome new members, Dr Sara Glover and Jim Williamson whose appointments commenced in February 2016.

I would like to thank all board members, past and present, for their contributions throughout the year.

Finally, I wish to acknowledge the work of VRQA Director Lynn Glover as well as the VRQA staff for their continued expertise and commitment to ensuring quality in Victoria’s education and training sector.

2 VRQA Annual Report 2015-16

Pam White PSMChair

Report of operations—year in review 3

Report of the DirectorThe 2015–16 year has been significant for Victoria’s education and training sector with a number of expanded powers for the Victorian Registration and Qualifications Authority (VRQA), updated guidelines for providers and

preparations for an imminent review of the Education and Training Reform Regulations 2007.

During the year, the VRQA reviewed and updated guidelines and support materials for schools, non-school providers, student exchange organisations, registered training organisations and group training organisations.

The Minister for Education, via Ministerial Order No. 870, set out the specific requirements to meet the child safe standards for schools. The Minister also made a video statement reiterating the Victorian Government’s zero-tolerance approach to child abuse.

Ensuring education and training providers are supported to understand and meet the child safe standards has been a significant VRQA focus. We worked closely with stakeholders to achieve this goal and launched a dedicated child safe standards website featuring a range of information resources.

In February 2016, we distributed the VRQA Child Safe Standards Readiness Tool and received responses from more than 1,000 schools. In May and June 2016, we hosted a number of child safe standards information sessions for education and training providers across the state. More information on the standards’ implementation is contained in this report.

A regulatory campaign in the commercial cookery industry contributed to improving outcomes for apprentices and trainees as did quality training in the apprenticeship and traineeship sector.

The VRQA extended by one year our engagement of the BUSY at Work organisation to continue providing apprenticeship regulatory field services that ensure integrity and quality regulatory practice in the sector. The VRQA is in discussion with the Department of Education and Training (DET) on a review of apprenticeship regulatory and support services in Victoria.

Under Ministerial Direction—Standards for Registered Training Organisations (Instrument No. MD146)—the VRQA updated guidelines for vocational education and training (VET) providers to align Victoria’s requirements with national standards. The updated guidelines strengthen the quality of training and assessment services in Victoria and support a nationally consistent approach to VET regulation.

The VRQA has entered into Memoranda of Understanding with the Victorian WorkCover Authority (WorkSafe), the Australian Curriculum, Assessment and Reporting Authority and the Victorian Curriculum and Assessment Authority to strengthen partnerships with agencies in Victoria’s education and training sector.

I welcome Rick Harrison to the VRQA as Deputy Director and thank Pam White PSM, VRQA Board Chair who commenced in 2016. I also thank retired Chair Timothy Smith; Mike Perry, Acting Chair and all the members who served on the VRQA Board this year for their participation and contributions. I also thank our stakeholders, DET colleagues and VRQA staff for another successful year ensuring quality education and training in Victoria.

Lynn GloverDirector


About this reportIn accordance with Ministerial Financial Reporting Direction 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 identifying the VRQA’s compliance with statutory disclosure requirements is provided on page 77.

Purpose and functions

Strategic purposeRegulation 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 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.

FunctionsThe VRQA was established under the Education and Training Reform Act 2006.

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, or Victoria and Western Australia only

school education providers including approval for registration on the Commonwealth Register 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 exchange

organisations 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 achievementsThe 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. On 4 August 2015, the SoE was reaffirmed by the Minister for Education and the Minister for Training and Skills and updated to reflect two additional expectations. The SoE sets out the Ministers’ expectations of the VRQA to improve the efficiency and effectiveness of its regulatory activities. The revised SoE reinforces the Government’s expectation that the VRQA works to achieve best practice in its critical role as the regulator of education and training providers in Victoria. The revised SoE is available at Appendix 2.

The Strategic Plan aligns to the performance expectations of the SoE.


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

Priority Key achievements SoE activity

1. ‘Right’ touch regulation for quality educational outcomes

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

Yes

Established a board working party to ensure the VRQA is working closely with DET to review the Education and Training Reform Regulations 2007 due to sunset in 2017.

Yes

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

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

Yes

Streamlined the risk framework across all registration types. Yes

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

Designed and implemented policies and procedures to enforce new VRQA powers in relation to the financial capabilities assessment of schools and the use of enforceable undertakings in schools.

Yes

Aligned Victoria’s VET standards with the national standards. Yes

4. Build stakeholder relationships to improve regulation

Hosted the VRQA’s annual board and stakeholder breakfast as well as targeted, industry-specific stakeholder events.

Yes

Established an Information Technology and Knowledge Management Subcommittee to develop and implement a VRQA digital strategy to influence the improvement of VRQA service models.

Yes

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

Established and published Memoranda of Understanding (MoU) between the VRQA and the following agencies:

Victorian WorkCover Authority (WorkSafe): agreed information-sharing protocols and cooperation in relation to the VRQA’s regulatory functions and WorkSafe’s occupational health and safety regulation

Yes

Australian Curriculum, Assessment and Reporting Authority (ACARA): information sharing arrangements in relation to the collection, management and analysis of school data

Yes

Victorian Curriculum and Assessment Authority (VCAA): a framework for complementary responsibilities between Victorian accredited senior secondary courses and registered senior secondary qualifications.

Yes

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

Board endorsed budget and approved investment plan. Yes

Completed annual review of board subcommittee charters and VRQA Board delegations of authority.

Yes

The Board agreed to establish a governance working party to review and strengthen current governance arrangements.

Yes


Progress towards objectives and indicators

School and senior secondary education

Significant activities and achievementsChild safe standards

Delivered communication and stakeholder engagement activities with school review bodies and industry stakeholders to support the implementation of child safe standards in schools, as specified by Ministerial Order No. 870. The VRQA:

‒ hosted a targeted stakeholder event to plan resources for schools, including sharing and consolidating relevant information and existing resources

‒ hosted 12 information sessions on child safe standards in Melbourne and major regional centres in May and June 2016

‒ published a mobile-friendly website on the child safe standards ‒ published related information and guidance (such as information sheets, video

resources, and a compliance self-assessment and action plan) and linked to other agencies’ resources including those of DET, Department of Health and Human Services and the Commissioner for Children and Young People.

Distributed the VRQA Child Safe Standards Readiness Tool to 2,244 schools in February 2016. The readiness tool was completed by 47 per cent of Victorian schools and allowed them to measure and report on their readiness to comply with the standards. A full report on the findings informed the development of information and guidance for schools and was published on the VRQA child safe standards website.

Developed an online process for schools to attest to their compliance with the child safe standards and distributed to all schools in July 2016.

Other significant activities and achievements

The Education and Training Reform Amendment (Miscellaneous) Bill 2015 provided the VRQA with legislative powers to:

‒ conduct targeted reviews in response to concerns about a school’s financial viability ‒ conduct periodic financial health assessments of non-government schools‒ suspend or cancel the registration of schools which close or cease to operate, or

where a proprietor becomes bankrupt or insolvent.These financial capability assessment powers further allow the VRQA to act to protect the interests of students as consumers of education and training services. The VRQA Board endorsed the VRQA Guideline—School Financial Capability Assessment, which came into effect on 2 December 2015.

The VRQA amended its enforceable undertaking policy, extending it to include schools in addition to registered training organisations. The policy is available on the VRQA website.

The Guidelines to the minimum standards and other requirements for the registration of schools including those offering senior secondary courses were updated to reflect the VRQA’s expanded powers under the Education and Training Reform Act 2006, the introduction of child safe standards, changes to the Crimes Act 1958, and the Education State context.

The Guidelines for non-school senior secondary providers—Minimum standards for registration to provide an accredited senior secondary course were updated to include:

‒ reference to mandatory reporting and the child safe standards‒ information on the requirement for organisations wishing to gain registration as a

non-school senior secondary education provider, to first seek approval to deliver a senior secondary course from the Victorian Curriculum and Assessment Authority (VCAA) before making an application to the VRQA.

The VRQA entered into a memorandum of understanding with the VCAA to record the framework for complementary responsibilities in respect of Victorian accredited senior secondary courses and registered senior secondary qualifications.


The VRQA quality assurance program was extended to all approved school review bodies in 2015. The program monitors the methodology used by school review bodies to establish school compliance with the minimum standards. The results of this process were reported to the school review bodies for their reference and to provide for continuous improvement in school review practices.

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

The VRQA registered 10 new schools in 2015–16. Five were new primary schools, three were new primary/secondary schools, and two were specialist schools. Three are located in regional Victoria and seven in metropolitan Melbourne.

The VRQA provided support for independent schools preparing for cyclical reviews by conducting three information sessions, in Melbourne, Geelong and Dandenong. The sessions outlined the review process for schools and non-school senior secondary providers.

Table 2—Number of registered schools at 30 June 20161

School type 2016 2015

Government 1,538 1,541

Catholic 493 493

Independent 212 207

Total 2,243 2,241

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.


Figure 1—Registered schools by sector at 30 June 2016

69%

22%

9%

Government

Catholic

Independent

Table 1—School registration activity 2015–16

Registration type Government Catholic Independent Total

New school

Primary - - 5 5

Secondary - - - -

Primary/secondary 1 - 2 3

Specialist - - 2 2

Additions and amalgamations

School amalgamations - - 1 1

Additional campuses 6 3 3 12

Additional secondary year levels 1 2 9 12

Additional primary year levels - 1 2 3

Relocations 4 - 1 5

Senior secondary registration 2 1 4 7

Closures

Schools closed 3 - 5 8


Non-school senior secondary education

Table 4—Non-school senior secondary providers at 30 June 2016

Organisation type 2016 2015

Community-based adult education provider 22 21

TAFE institute 17 17

Education/training business or centre 5 5

Adult education institution 1 1

Other 4 5

Total 49 49

International education

Significant activities and achievements: Amendments were made to the VRQA Guidelines, conditions and application forms for the

approval of overseas secondary student exchange organisations (OSSEOs) The amendments:

‒ introduced the requirement for OSSEOs to meet the child safe standards‒ extended the Working With Children Check requirement to all OSSEO staff who

have access to exchange student records‒ added additional vetting requirements for single person households seeking to host

exchange students as a ‘host family’‒ added a new requirement for all OSSEOs to demonstrate that their local OSSEO

coordinators have received training in identifying and reporting child abuse that complies with the child safe standards

‒ strengthened the current provisions prohibiting OSSEOs using student images and personal information in the public recruitment of host families

‒ deleted some details that student exchange organisations had been required to provide for outbound students, to reflect a National Coordinating Committee for International Secondary Student Exchange agreement that these requirements are administratively burdensome and unnecessary.

The updated guidelines came into effect 1 January 2016.

Non-school OSSEOs were required to attest to their compliance with the new guidelines and the child safe standards before 30 June 2016.

The VRQA conducted the following international education events in 2015–16:

‒ an information session for OSSEOs and schools listed on the Commonwealth Register for Institutions and Courses for Overseas Students (CRICOS), outlining the new child safe standards requirements in the international education context

‒ an information session for schools listed on CRICOS (in conjunction with the Commonwealth Department of Education and Training) to outline newly implemented changes to the Education Services for Overseas Students legislation

‒ an information seminar for schools newly listed on CRICOS, or newly appointed overseas exchange coordinators within schools.


Table 5—Education services for overseas students (ESOS) approval activity 2015–16

Approval type Government Catholic Independent Total

ESOS approvals - - 1 1

Re-approvals 1 2 14 17

Table 6—Overseas Secondary Student Exchange Organisations (OSSEOs) at 30 June 2016

Approved student exchange organisations 2016 2015

Government school 9 10

Non-government school 6 6

Community organisation 4 4

Non-school organisation 9 8

Total 28 28

Table 7—Overseas secondary student exchange student activity

Inbound exchange students—Country of origin 2015–16

Germany 152

France 127

Japan 68

Italy 61

Denmark 29

Belgium 20

Finland 20

Brazil 15

Other countries 78

Total 570


Home schooling

Significant activities and achievements:

A home school fact sheet was published, detailing information on Victoria’s home schooled children.

The number of home schooling registrations grew by one per cent, with 4,192 children registered in 2,604 households (Table 8), up from 4,136 children in 2014–15.

Table 8—Home schooling registrations at 30 June 2016

2016 2015

Children 4,192 4,136

Households 2,604 2,488

Vocational education and training

Significant activities and achievements:Updated Guidelines for VET Providers

In December 2015, under Ministerial Direction—Standards for Registered Training Organisations (Instrument No. MD146)— the VRQA released updated Guidelines for VET Providers. This aligns Victoria’s registered training organisations’ (RTOs’) requirements with national standards. The updated guidelines provide for greater consistency in the VRQA’s regulatory approaches and ensure they are aligned with the Australian Quality Training Framework (AQTF). Under the Guidelines:

‒ RTOs with registration at the time of the guidelines’ publication were required to review their business operations against the updated guidelines and demonstrate compliance by 1 April 2016

‒ new applications for RTO registration were required to demonstrate compliance from 1 January 2016.

The VRQA held an information session on 12 February 2016 to help RTOs prepare for the regulatory changes.

Under the new guidelines, changes were made to the Training and Education (TAE) Training Package. An information session was held on 2 May for RTOs with the TAE Package on scope and for those wanting to add it to scope.

At the time of the guidelines’ publication, the VRQA reviewed and subsequently streamlined its registration processes to improve their alignment with Australian Skills Quality Authority (ASQA) processes.


Through the extension of Ministerial Order No. 769, 2016 VET fees continued to be frozen at the August 2014 levels for VRQA RTOs.

The VRQA received an issues paper published by the VET Funding Review. The review was commissioned by the Victorian Government, chaired by Bruce Mackenzie and completed in December 2015. The VRQA advised on ways it can help implement some review recommendations.

The VRQA provided information to the Review of Quality Assurance in Victoria’s VET System and has subsequently advised on areas for contribution to the review’s recommendations.

The VRQA undertook audit processes as part of ongoing monitoring and compliance activity for all RTOs seeking registration and re-registration.

The VRQA conducted RTO compliance investigations in response to concerns about training and assessment quality. When needed, the VRQA provided information and


support to students, as well as replacement certificates and statements of attainment to ensure that students are protected as consumers of education and training.

A new common application review process was established to ensure consistency in VRQA VET application assessments. Under the process, new applications for RTO registration and applications for extension to scope of registration are both given a 28-day rectification period should the VRQA require further information.

Pre-registration and pre-audit workshops were provided to help RTOs understand their compliance obligations and prepare for the registration process and subsequent audits. Following these workshops, the VRQA identified fewer instances of significant or critical non-compliance.

Twenty-five RTO registrations were cancelled in 2015–16 and there was a general decline in providers maintaining registration. Of the cancellations, 12 were voluntary, largely due to RTO profitability issues. One registration was cancelled by the VRQA for continuing critical non-compliance (Table 11). Twenty-three RTOs transitioned to ASQA.

VET registration

Table 9—Number of VRQA-registered RTOs by type at 30 June 2016

Organisation type 2016 2015


Community-based adult education provider 84 91

Industry association 14 17

Professional association 2 2

Enterprise—non-government 5 6

Enterprise—government 11 11

School—government 24 28

School—independent 22 22

School—Catholic 8 8

Other—not elsewhere classified 3 3

Total 271 315

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

Organisation type 2015–16 2014–15


Community-based adult education provider - 1

School—government 1 -

School—independent - 1

Other—not elsewhere classified - 1

Total 2 8


Table 11—VET registration activity

Registration activity 2015–16 2014–15

New registration 2 8

Cancellation 25 55

Renew registration 73 86

Amendment to scope 397 652

VET accreditation

Table 12—Course accreditation activity

Activity type 2015–16 2014–15

New courses accredited 7 6

Courses re-accredited 11 15

Course modifications 10 17

Course accreditations extended (for maximum 12 months) 13 14

Courses expired/deleted 22 52

Table 13—VRQA-accredited courses by qualification type

Qualification type 2016 2015

Short courses 47 51

Certificate I 9 14

Certificate II 16 23

Certificate III 13 14

Certificate IV 27 26

Diploma 18 19

Advanced Diploma 7 11

Graduate Certificate 4 7

Graduate Diploma 3 5

Total 144 170

Table 14—Training packages reviewed 2014–15

2015–16 2014–15

Training packages reviewed 52 5


Apprenticeships and traineeships

Regulatory campaigns

The VRQA, in its role as regulator of the apprenticeship and traineeship system, supported the Victorian Government’s VET quality agenda. The ‘campaign’ approach involves analysing data and collecting industry intelligence to concentrate field resources where there is evidence of systematic non-compliance with regulatory requirements.

In 2015–16, the VRQA conducted a commercial cookery apprenticeship campaign. This exposed multiple cases of inappropriate work and training arrangements, including commercial cookery apprentices in unsuitable jobs involving little skilled food preparation or cooking, such as fast food establishments and sandwich bars.

The VRQA used authorised officer workplace visits to investigate 76 employers employing 152 commercial cookery apprentices. As a result, 45 employers had their approval to employ commercial cookery apprentices revoked, and 94 apprentices’ training contracts were cancelled—64 by the VRQA and 30 voluntarily by the apprentices and/or the employers.

On 28 October 2015, the Minister for Training and Skills used a media statement to announce the campaign results, with information provided to the DET Higher Education and Skills Group. A report was posted on the VRQA website.

The results of the campaign were also shared with ASQA and the Commonwealth Department of Education and Training, enabling action to be taken (where appropriate) in relation to RTOs, apprenticeship network providers and employers that may have breached the relevant requirements.


The VRQA Director approved to September 2017 the optional fourth year of the contract with BUSY at Work, the organisation that provides apprenticeship and traineeship regulatory field services in Victoria. Discussions are underway between VRQA and DET on a review of Victoria’s apprenticeship regulatory and support services.

Changes to the regulatory model for group training organisations (GTOs) resulted in a VRQA-Apprentice Employment Network co-regulatory model, effective from July 2016. Under the model, GTOs undertake an annual self-assessment of their compliance against the standards and are allocated a score card and risk rating for consideration by the VRQA—the sole decision maker on new applications, re-registrations and cancellations.

The EPSILON Project commenced in July 2015 and a supplier was appointed following a tender process. EPSILON’s goal is to replace the DELTA system currently used to manage the contract relationship between employers, apprentices/trainees and RTOs. EPSILON will provide a secure register for apprentices and trainees and shorten the time taken to approve contracts. The EPSILON system’s new portal enables faster and more efficient management throughout the lifecycle of a training contract and gives employers and apprentices/trainees electronic access to contract information. Sending correspondence by email and SMS also speeds up information provision.

The VRQA website published a two-minute video, Apprenticeships and Traineeships: Know Your Rights and Responsibilities to improve all parties’ understanding and compliance with their contractual obligations. A link to the video was also sent via SMS to newly commenced employers, apprentices and trainees.

On 29 July 2015, the VRQA hosted a targeted stakeholder forum for the sector. Discussions included the dispute resolution process with a focus on prevention and streamlining resolutions; regulatory campaigns in the apprenticeships and traineeships sector; and communication options for helping all parties to better understand and meet their regulatory requirements.

A review of the apprentice/trainee dispute resolution process introduced a time limit for raising disputes and a two-tier system to manage the process and enable quicker dispute settlements without the need for formal hearings. The process developed with key sector stakeholders is accessible by apprentices and trainees with low literacy skills. The new dispute resolution process is effective 1 July 2016.


The VRQA’s Memorandum of Understanding with the Victorian WorkCover Authority (WorkSafe) provides agreed information-sharing protocols and cooperation between the VRQA’s regulatory functions and WorkSafe’s regulation of occupational health and safety.

Apprenticeship commencements decreased by 11 per cent in 2015–16 to 16,565 compared with 18,638 in 2014–15. Traineeship commencements fell by five per cent to 24,105 compared with 25,377 in 2014–15. The falls reflect changes to Commonwealth incentives for traineeships.

There were 3,638 planned visits in the 2015–16 period (Table 16). Planned visits are risk-based workplace visits that monitor employer compliance with contractual obligations. The majority of visits revealed high rates of employer compliance. However, a small number of visits identified issues requiring resolution.

Table 15—Apprenticeship and traineeship activity


Training contracts registered2 40,670 44,015

Employer approvals 4,697 6,283

Employer approvals revoked 49 37

Training schemes approved 17 17

Apprentice cancellations 8,053 9,966

Trainee cancellations 9,385 12,855

Formal disputes listed 5 4

Delegate as guardian on training contract 1 6

Apprenticeship reductions of duration of training 128 610

Delegate ordered cancellations or withdrawals 60 120

Table 16—Apprenticeship and traineeship regulatory field services activity


Planned visits 3,638 3,244

Disputes 60 94

Term adjustments 219 1,093

Total 3,917 4,431

ComplaintsThe VRQA’s complaints investigation role 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 in relation to independent schools are investigated against the Guidelines to the minimum standards and other requirements for the registration of schools including those offering senior secondary. Under Memoranda of Understanding (MoU), complaints against government schools, Catholic schools and Seventh-day Adventist schools are investigated

1 2014–15 figures were adjusted from the previous reporting year to reflect transitioned contracts and backdated employer approvals revoked.2 Refers to the number of apprenticeships and traineeships that commenced in the period.


by DET, the Catholic Education Commission of Victoria and Adventist Schools Victoria respectively.

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

The VRQA received 167 complaints in 2015–16, a decrease of seven per cent compared to 2014–15 (Table 17).

Table 17—Number of complaints received

Year VET School VRQA Senior secondary

OSSEO Home-school

Apprentice-ships

Other Total

2015–16 80 57 5 9 - 7 5 4 167

2014–15 107 29 5 5 - 10 18 6 180

Access to informationA new MoU between the VRQA and the Australian Curriculum, Assessment and Reporting Authority (ACARA) established information-sharing arrangements in relation to school data collection, management and analysis.

State RegisterThe VRQA’s State Register provides convenient consumer access to quality information on VRQA-registered education and training providers and the qualifications and courses they deliver.

The State Register also provides information about VRQA-accredited courses and all Victorian schools’ annual reports.

In 2015–16, an upgrade of the register’s customer relationship management application commenced to improve data quality and efficiencies. The upgrade is expected to be completed mid–2017.

The State Register recorded 58,531 sessions (duration of a user’s engagement) in 2015–16.

Information sheetsThe VRQA publishes information sheets on trends emerging in the education and training sector.

In 2015–16, the VRQA published information sheets on:

home schooling

international students in schools

vocational education and training registration

school registration.

Relationships with stakeholdersBuilding stakeholder relationships is strategic priority for the VRQA. The VRQA Stakeholder Engagement and Communications Strategy 2014–16 sets out how the VRQA collects information on emerging industry trends and seeks stakeholder feedback on VRQA processes.

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

The annual VRQA board and stakeholder breakfast on 12 May 2016 hosted 86 stakeholders from Victoria’s education and training sector. Targeted discussions, used to refine strategic


planning, focused on implementing the child safe standards and the VRQA’s contribution to quality education and training.

In school and senior secondary education, the VRQA works with school review bodies (DET, the Catholic Education Commission of Victoria and Adventist Schools Victoria) to monitor all Victorian schools’ compliance with the minimum standards. The VRQA regularly meets with government agencies, peak bodies and school system owners.

The VRQA communicates with stakeholders, education and training providers, employers, apprentices and trainees through workshops and electronic communications including the VRQA website and the VRQA e-news. In 2015–16 the VRQA website recorded 264,575 sessions and published seven editions of the VRQA e-news.

Education provider and stakeholder surveyThe VRQA’s annual client and stakeholder research measures aspects of provider and stakeholder satisfaction with the VRQA and its regulatory processes.

The final 2015 research program comprised a mix of quantitative and qualitative research methods involving:

308 internet surveys with education providers

10 phone interviews with education provider stakeholders

220 online surveys with apprentices and trainees

408 online surveys with employers of apprentices and trainees

10 phone interviews with apprenticeship and traineeship stakeholders.

The research results are published on the VRQA website. Findings include:

eighty-one per cent of education providers who responded are satisfied with the VRQA and its services

stakeholders view the VRQA as generally effective in its regulatory function and increasingly proactive and collaborative. The VRQA’s regulatory campaigns, stakeholder forums and educative resources received particularly positive feedback.

all respondent groups suggested that the VRQA could build on and/or improve its provision of information about regulatory requirements.

The research findings are being used to update the VRQA’s services.


Year in financial reviewThis is the VRQA’s ninth year of operation. The table below summarises 2015–16 financial information and compares it with that of previous years.

In 2015–16, total income from transactions increased by $3.05 million to $15.99 million. VRQA’s major sources of revenue are grants and resources received free-of-charge from State and Commonwealth Government, representing 87.3 per cent of the total. Fees represent 11.3 per cent, and interest and other income represent 1.4 per cent.

Total expenses from transactions decreased by $0.52 million to $12.37 million.

The increase in revenue is due to increased capital grants for information technology projects combined with a minor reduction in fees.

The VRQA ended the year with a net surplus of $3.62 million compared to the surplus of $0.054 million in 2014–15.

Total assets increased by $3.4 million to $12.8 million, primarily due to some funds for information technology projects being unspent at year-end and the capitalisation of some project expenditure during the year.

Total liabilities decreased $0.23 million to $1.49 million.

Table 18—Five-year financial summary

2016$

2015$

2014$

2013$

2012$

Total income from transactions 15,995,039 12,943,861 16,749,319 15,855,222 11,122,075

Total expenses from transactions 12,374,293 12,889,737 14,589,631 13,998,792 11,427,435

Net result from transactions 3,620,746 54,124 2,159,688 1,856,430 (305,360)

Net gain/loss on non-financial assets (2,451) – (1,822,330) – (641,806)

Comprehensive result 3,618,295 54,124 337,358 1,856,430 (947,166)

Net cash flow from operating activities 3,720,286 384,030 3,429,065 1,973,887 (261,122)

Total assets 12,810,463 9,422,253 9,342,916 8,556,479 7,381,206

Total liabilities 1,488,733 1,718,818 1,693,605 1,244,526 1,925,683


Report of operations—governance and organisational structure

Ministers

Deputy Premier, Minister for Education and Minister for Emergency ServicesThe Hon. James Merlino MPThe Hon. James Merlino MP is the Deputy Premier, Minister for Education and Minister for Emergency Services with responsibility for Victoria’s schooling system, which educates almost 900,000 Victorian students in government, Catholic, and independent schools. This includes responsibility to improve Victoria’s educational outcomes in literacy, numeracy, science and the arts; students’ wellbeing and engagement; school infrastructure and capital funding; support for developing the expertise of the teaching and education support workforces and school leadership; and support for Victoria’s priority student cohorts.

Minister Merlino is committed to establishing Victoria as the Education State, ensuring access to great schools in 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.

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 for Training and SkillsThe Hon. Steve Herbert MPThe 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 making sure Victoria has a strong and stable vocational education and training system that meets the needs of individuals, industry and employers, and that funding is directed to areas of skills shortage. Minister Herbert’s portfolio also includes international education.

VRQA BoardOn 16 February 2016, Pam White PSM commenced as chair of the VRQA Board. She replaced retiring chair Timothy Smith whose appointment ended on 15 October 2015, and Michael Perry who acted as interim chair.

Also on 16 February 2016, two new board members commenced, Sara Glover and Jim Williamson, replacing retiring members Graham Spencer and David Windridge whose appointments ended on 15 October 2015.

VRQA Board membership is by Ministerial nomination and appointment is by the Governor in Council. Section 4.2.4 of the Education and Training Reform Act sets out criteria to which the Minister has regard when considering nominees. Nominations aim to ensure the Board incorporates appropriate skills and experience from relevant fields 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 VRQA Board’s composition is a fair and balanced reflection of the community’s diversity, and reflects both metropolitan and regional interests.

The Board met six times during the reporting period (every second month) including a strategic planning session. The Board also undertook a risk workshop.

Ms Pam White PSMChair from 16 February 2016Ms Pam White has had more than 30 years’ experience in senior management and leadership positions in the Victorian Public Service in both policy development and operations. She has worked in child protection, disability, housing, youth justice and emergency management. For two years, she led the State Services Authority (now the Victorian Public Sector Commission), the body responsible for public sector administration, governance, service delivery, and workforce management and development.

In 2012 Ms White was awarded the Public Service Medal for her work improving services for vulnerable children and emergency management recovery services.

Ms White appreciates and understands the roles and workings of all levels of government, including the development and administration of legislation and regulations and the importance of good governance in delivering effective and integrated public services.

Mr Timothy F Smith BA, BEdChair until 16 October 2015Mr Timothy (Tim) Smith has 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 this, 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 responsible for managing the private provider approval process. Mr Smith has held executive appointments in TAFE and the former CAE and was a member of the governing councils of Victoria University and Holmesglen Institute of TAFE.

Mr Michael Perry BCom, FCA, SAFSIA, MAICDMember and Acting Chair 17 October 2015–15 February 2016Mr 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, company valuations, 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.

Ms Elizabeth Alexander AM, BCom, FCPA, FCA, FAICDMemberMs Elizabeth Alexander is the Chancellor of the University of Melbourne, immediate past Chairman of CSL, Chair of Medibank Private and an adviser to Ashurst’s corporate team. She was 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).

Ms Gill Callister BA, BSW(Hons)Ex officio memberMs 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 (2009–14) 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 was Deputy Secretary at Skills Victoria in 2009.

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

Mr Stephen Elder OAM, BEd, DipEdMemberMr Stephen Elder is Executive Director of Catholic Education in the Archdiocese of Melbourne and 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.

From 1988–99, Mr Elder was a member of the Victorian Legislative Assembly in the Seat of Ballarat North and Ripon, and served as Parliamentary Secretary for Education.

Dr Sara GloverMember from 16 February 2016Dr Sara Glover has been Director of the Mitchell Institute since October 2015, and was previously the Institute’s Education Program Director.

Dr Glover began her education career as a teacher, before moving into teacher education and curriculum development. Most recently, she was an Executive Director at the former Victorian Department of Education and Early Childhood Development where she was responsible for the strategic development of an integrated research and evaluation program to deliver a powerful evidence base for policy. For eight years prior, she was the Director of Education and Training and a principal researcher at the Centre for Adolescent Health, Royal Children’s Hospital/University of Melbourne.

Mr Paul Kirk BEcMemberMr 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 was previously 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, GAICDMemberMs Patricia Neden is the Chief Executive Officer of Innovation and Business Skills Australia (IBSA). She is a member of the Australian Industry and Skills Committee (AISC) and also 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 Graham Spencer HGHR, DipTMember until 16 October 2015Mr 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, FACELMember Mr Rick Tudor was 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 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, 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 Royal Woman’s Hospital Ethics Committee and of the Anglicare Victoria Board.

Ms Michonne van Rees BA, DipEd, MA, GradDipMgt, GradDipGovLawMemberMs Michonne van Rees retired in 2011 as Regional Director (Gippsland) for DEECD, to establish a consultancy. Ms van Rees previously worked as a senior executive with Parks Victoria. She held senior leadership roles a number of state government departments, focusing on public sector and organisational reform, including the Department of Premier and Cabinet. She also worked within the TAFE sector. Ms van Rees has held a number of board and committee positions, including membership of Monash University’s Gippsland Advisory Council.

Mr Brian Welch Dip (Company Directors)MemberMr Brian Welch recently retired as the Executive Director of the Master Builders Association of Victoria after 19 years of service. He was involved long-term 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 Jim WilliamsonMember from 16 February 2016Mr Jim Williamson is the Director of a public policy research and program development company providing specialised advice to business, government and community organisations for over two decades. During that time, he held senior manager responsibilities in Community Development, Employment and Training at the Brotherhood of St Laurence; and was a Senior Policy Manager, Youth Transition at Mission Australia.

Mr Williamson commenced as a secondary high school teacher, becoming a lecturer in education at the Melbourne College of Advanced Education. He then held senior policy officer roles at the Department of Education and Training, and the Victorian Department of Premier and Cabinet. He is currently on the school council of The Grange P–12.

Mr David Windridge BEc, GradDip (Teaching), GradDipAcc, GAICDMember until 16 October 2015Mr 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 committeeThe Board has one standing committee, the Audit and Risk Management Committee.

Audit and Risk Management Committee

Michael Perry (Chair), VRQA Board—independent

Elizabeth Alexander, VRQA Board—independent

Graham Spencer, VRQA Board—independent (1 July–16 October 2015)

Paul Kirk, VRQA Board—independent

Rick Tudor, VRQA Board—independent (from 5 April 2016)

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 2015–16.

Other subcommitteesThe 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 2015–16.


Apprenticeships and Traineeships Subcommittee

Patricia Neden (Chair), VRQA Board

Timothy F Smith, VRQA Board (until 16 October 2015)

David Windridge, VRQA Board (until 16 October 2015)

Brian Welch, VRQA Board

Jim Williamson, VRQA Board (from 5 April 2016)

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 2015–16.

Compliance and Quality Subcommittee

Michonne van Rees (Chair) VRQA Board

Stephen Elder, VRQA Board

Paul Kirk, VRQA Board

Graham Spencer, VRQA Board (until 16 October 2015)

Rick Tudor, VRQA Board.

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

The subcommittee met five times in 2015–16.

IT and Knowledge Management Subcommittee

Brian Welch (Chair), VRQA Board

Sara Glover, VRQA Board

Jim Williamson, VRQA Board

Matthew Green, Grant Thornton—external

The subcommittee was established on 23 February 2016. It supports the VRQA Board’s governance obligation to major IT development projects and emerging issues and opportunities in the VRQA’s use of information and technology, including business improvement.

VRQA staffVRQA staff are employees of the Department of Education and Training. They perform the following functions, provide advice and report to the VRQA Board on:

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.

DirectorThe Director is responsible to the VRQA Board for the effective and efficient implementation of the Board’s decisions, and to the DET Secretary for the organisation’s management and effective interaction with the Department.

Staff organisationExecutive Officers were: Lynn Glover, Director; Rick Harrison, Deputy Director (from 30 May 2016); Franco Greco, Deputy Director (from 12 October 2015, seconded to the Department of Premier and Cabinet from 2 May 2016); Don Hudgson Acting Deputy Director (1 July–11 October 2015); Chris Ingham, Executive Manager, Apprenticeships and Traineeships and Acting Deputy Director (2–30 May 2016); and Denver Blake, Acting Executive Manager, Apprenticeships and Traineeships (2–30 May 2016).

VRQA staffing was organised into 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 comprises a core establishment and additional staff are appointed through secondments or short-term contracts for work on specific projects.

DelegationsSection 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

all functions and powers of the VRQA under Chapter 4, Part 5.5 and Chapter 6 of the Act, other than the power of delegation, to the Deputy Director

all functions and powers under Part 5.5, other than the power of delegation 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 sections 4.3.16, 4.3.19 and 4.3.25 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 officersPart 5.8 of the Act provides for the appointment of authorised officers.

At 30 June 2016, there were a total of 35 authorised officers—23 approved VRQA office staff authorised officers and 12 authorised officers employed by an approved training agent.

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

.


Victorian Registration and Qualifications Authority organisational structure at 30 June 2016


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

Public administration values and employment principlesThe 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 the public service is fostered (in the case of 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 by 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 safetyThe 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 2015–16 for more information).


Comparative workforce dataTable 19—Full-time equivalent staffing (FTE) trends 2012–161,2

2016 2015 2014 2013 2012

59.7 51.7 55.5 54.6 48.1

Table 20—Summary of employment levels in June of 2015 and 20163,4,

Ongoing employees (headcount) Fixed-term and casual employees

Employees Full-time Part-time FTE FTE

June 2016 58 54 4 55.6 3.1

June 2015 52 47 5 49.9 1.8

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.3 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 2004.4 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 31

Table 21—Victorian Public Service staff employment levels, June 2015 and 20161,2

2016 2015Ongoing employees Fixed-term

and casual employees

Ongoing employees Fixed-term and casual employees

Employees (headcount)

FTE FTE Employees (headcount)

FTE FTE

Gender

Male 22 21.6 0.9 19 18.6 0.0

Female 36 35 2.2 33 31.3 1.8

Total 58 56.6 3.1 52 49.9 1.8

Age

Under 25 1 1 0 0 0.0 0.0

25–34 4 4 1.4 7 6.6 0.0

35–44 18 17.2 0.6 16 15.2 0.8

45–54 15 14.8 0 14 13.1 0.0

55–64 17 16.6 0.6 12 12.0 1.0

Over 64 3 3 0.5 3 3.0 0.0

Total 57 55.6 3.1 52 49.9 1.8

Classification

VPSG1 0 0 0 0 0.0 0.0

VPSG2 10 9.4 0 10 9.1 0.0

VPSG3 7 7 0.9 7 6.6 0.0

VPSG4 11 11 1.6 10 10.0 0.0

VPSG5 18 17.2 0 16 15.6 1.0

VPSG6 9 9 0.6 7 6.6 0.8

STS 0 0 0 0 0.0 0.0

Executive Officers 3 3 0 2 2.0 0.0

Allied Health 0 0 0 0 0.0 0.0

Nurse 0 0 0 0 0.0 0.0

Other 0 0 0 0 0.0 0.0

Total 58 56.6 3.1 52 49.9 1.8

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.


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

All Ongoing Special projects

Class Number Variance Number Variance Number Variance

EO-1

EO-2 1 1

EO-3 2 2

Total 3 3

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. Number No. Var. No. Var. Number

EO-1

EO-2 1

EO-3 2

Total 2 1

Table 24—Reconciliation of Executive Officer numbers

2016 2015

Executives with total remuneration over $100,000 (see Note 13) 3 2

Add Vacancies 1

Executives employed with total remuneration less than $100,000

Accountable Officer (Director, included above)

Less Separations

Less Portfolio entity executives

Total executive numbers at 30 June 3 3

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 33

Report of operations—other disclosures

Victorian Industry Participation PolicyThere 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 contractsThere were no major consultancies over $10,000 and no contracts over $10 million let by the VRQA for the period 1 July 2015 to 30 June 2016. The VRQA engaged no consultancies at a cost of less than $10,000 each during 2015–16.

Freedom of informationThe 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 2016, the VRQA received eight new applications with three matters carried over from 2014–15.

Two of the carried over applications requested a review by the FOI Commissioner and subsequently filed an application with VCAT to have the FOI Commissioner’s decisions reviewed. The VCAT applications were withdrawn and the decision of the FOI Commissioner upheld with the VRQA releasing the documents.

Of the 2015-16 requests, two were from media agencies, three from apprentices or trainees and three from community members. Of the requests:

two applicants were assisted outside the FOI process as the documents related to individual apprenticeship records

one was provided in full

one was provided in part

one request was refused access in full

one is underway

two of the applications are not yet deemed valid and therefore carry over into 2016–17.

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 requestAccess 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).

35 VRQA Annual Report 2015–16

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

Freedom of Information OfficerVictorian Registration and Qualifications AuthorityGPO Box 2317Melbourne VIC 3001

Email: [email protected]: (03) 9032 1554

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.

Compliance with the Building ActThe VRQA operates within DET infrastructure and abides by DET infrastructure policies and procedures (see the Department of Education and Training Annual Report 2015–16 for more information).

National Competition PolicyThe 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 2012The Protected Disclosure Act 1982 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 Act also provides for the confidentiality of the content of those disclosures and the identity of the people making the disclosures.

Under the 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.

Report of operations— other disclosures 36

Making disclosuresFor the disclosure to be protected pursuant to Sections 13 and 16 of the Act, 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 CommissionGPO Box 24234Melbourne VIC 3001

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

Victorian OmbudsmanLevel 1, North Tower459 Collins StreetMelbourne VIC 3000

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

Email: [email protected]: 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 CoordinatorVictorian Registration and Qualifications AuthorityGPO Box 2317Melbourne Victoria 3001

Procedures under the Protected Disclosure Act 1982The 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 2015–16.

Compliance with the Carers Recognition Act 2012The VRQA operates within DET infrastructure and abides by DET human resources policies and procedures (see the Department of Education and Training Annual Report 2015–16 for more information).

Office-based environmental impactsThe VRQA operates within DET infrastructure and abides by the DET Environmental Management System (see the Department of Education and Training Annual Report 2015–16 for more information).

Fees and chargesSection 5.2.13 of the Education and Training Reform Act 2006 enables Minister/s to fix fees and charges. Fees for schools were increased on 1 January 2016. Ministerial Order 769 was extended, holding 2016 VET fees at 2014 levels. Details of fees and charges are available on the VRQA website.


Additional information available on requestIn 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

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 ServicesVRQAGPO Box 2317Melbourne VIC 3001Telephone: (03) 9032 1532

Compliance with DataVic Access PolicyConsistent 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.

Report of operations— other disclosures 38

http://www.data.vic.gov.au/

Attestation for compliance with the Australian/New Zealand Risk Management StandardI, Pam White PSM, 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.

Pam White PSMChairVictorian Registration and Qualifications Authority

22 August 2016

Attestation for compliance with the Ministerial Standing Direction 4.5.5.1—InsuranceI, Pam White PSM, certify that the Victorian Registration and Qualifications Authority has complied with Ministerial Direction 4.5.5.1—Insurance.

Pam White PSMChairVictorian Registration and Qualifications Authority

22 August 2016


Financial Statements

Accountable Officers’ and Chief Finance and Accounting Officer’s declarationThe 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 2016 and financial position of the Victorian Registration and Qualifications Authority at 30 June 2016.

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 22 August 2016.

Pam White PSM Chair Victorian Registration and Qualifications Authority

Melbourne22 August 2016

L Glover DirectorVictorian Registration and Qualifications Authority


M TibbCFAOVictorian Registration and Qualifications Authority


Financial statements 40

Comprehensive operating statement for the financial year ended 30 June 2016

Notes 2016$

2015$

Income from transactions

Grants and other transfers 2(c) 13,415,298 9,987,118

Interest 2(a) 225,949 229,793

Registration and accreditation fees 2(b) 1,811,504 2,204,528

Fair value of assets and services received free of charge or for nominal consideration 2(d) 542,124 522,249

Other income 2(e) 164 173

Total income from transactions 15,995,039 12,943,861

Expenses from transactions

Administrative expenses 3(a) 6,470,830 5,996,315

Depreciation and amortisation 3(b) 264,541 266,793

Grants and other transfers 3(c) 7,756 54,436

Supplies and services 3(d) 5,631,166 6,572,193

Total expenses from transactions 12,374,293 12,889,737

Net result from transactions (net operating balance) 3,620,746 54,124

Other economic flows included in net resultNet gain/(loss) on non-financial assets 6(a) (2,451) -

Total other economic flows—other comprehensive income (2,451) -

Net result 3,618,295 54,124

Comprehensive result 3,618,295 54,124

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


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

Balance sheet as at 30 June 2016

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

Statement of changes in equity for the financial

year ended 30 June 2016Contributed

capital$

Accumulated Surplus

$

Total$

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

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

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

Comprehensive result for the year - 3,618,295 3,618,295

Balance at 30 June 2016 1,412,619 9,909,111 11,321,730

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

Cash flow statement for the financial year ended 30 June 2016Notes 2016

$2015

$

Cash flows from operating activities

Receipts


Notes 2016$

2015$

AssetsFinancial assetsCash and deposits 11,199,489 8,665,315Receivables 5 161,026 226,111Total financial assets 11,360,515 8,891,426

Non-financial assetsEquipment and furniture 6 - 3,155Intangible assets 7 1,449,948 527,672Total non-financial assets 1,449,948 530,827Total assets 12,810,463 9,422,253

LiabilitiesPayables 8 1,488,733 1,718,818Total liabilities 1,488,733 1,718,818Net assets 11,321,730 7,703,435

EquityAccumulated surplus 9,909,111 6,290,816Contributed capital 1,412,619 1,412,619

Net worth 11,321,730 7,703,435

Receipts from government 13,379,298 9,987,118

Receipts from other entities 1,464,296 2,340,184

Goods and Services Tax recovered from the ATO1

501,924 572,859

Interest received 225,949 229,793

Total receipts 15,571,467 13,129,954

Payments

Payments of grants and other transfers (7,756) (90,786)

Payments to suppliers and employees (11,843,425) (12,655,138)

Total payments (11,851,181) (12,754,924)

Net cash flows from/(used in) operating activities

12 3,720,286 384,030

Cash flows from investing activities

Payments for non-financial assets (1,186,112) -

Net cash flows from/(used in) investing activities

(1,186,112) -

Net increase/(decrease) in cash and cash equivalents

2,534,174 384,030

Cash and deposits at the beginning of the financial year

8,665,315 8,281,285

Cash and deposits at the end of the financial year 11,199,489 8,665,315

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

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


Notes to the financial statementsNote 1. Summary of significant accounting policies 45

Note 2. Income from transactions 56

Note 3. Expenses from transactions 57

Note 4. Resources received free of charge 57

Note 5. Receivables 58

Note 6. Equipment and furniture 58

Note 7. Intangible assets 59

Note 8. Payables 60

Note 9. Commitments for expenditure 61

Note 10. Contingent assets and contingent liabilities 61

Note 11. Financial instruments 62

Note 12. Cash flow information 66

Note 13. Responsible persons 66

Note 14. Remuneration of auditors 68

Note 15. Subsequent events 68

Note 16. Glossary of terms and style conventions 68


Note 1. Summary of significant accounting policiesThese annual financial statements represent the audited general purpose financial statements for the Victorian Registration and Qualifications Authority (VRQA) for the period ending 30 June 2016. The report provides users with information about the VRQA’s stewardship of resources entrusted to it.

(a) Statement of complianceThese 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 that 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 22 August 2016.

(b) Basis of accounting preparation and measurementThe 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 entityThe 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 AuthorityLevel 4, Casselden, 2 Lonsdale StreetMelbourne VIC 3000

Notes to the financial statements 46

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 fundingThe 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 for 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 statementThe 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 sheetAssets 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 equityThe 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 statementCash 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 amountsAmounts 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 transactionsIncome 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 transfersIncome 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 incomeInterest income includes interest received on bank deposits, interest from investments and other interest received. Interest income is recognised using the effective interest method that allocates the interest over the relevant period.

Income from registration and accreditation feesIncome 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 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.


http://www.legislation.vic.gov.au/Domino/Web_Notes/LDMS/PubLawToday.nsf

http://www.legislation.vic.gov.au/Domino/Web_Notes/LDMS/PubLawToday.nsf

Fair value of assets and services received free of charge or for nominal considerationContributions 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 transactionsExpenses from transactions are recognised as they are incurred and reported in the financial year to which they relate.

Administrative expensesAdministrative expenses relate to employee benefits for VRQA staff who are employees of DET. The VRQA reimburses DET for all employee entitlements including wages and salaries, superannuation employer contributions, fringe benefits tax, leave entitlements, termination payments and WorkCover premiums. The costs are classified as administrative expenses in the comprehensive operating statement.

Depreciation and amortisationAll 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:

Asset Class Useful life years Year

Intangible assets 5 2015

Intangible assets 5 2016

Office equipment and furniture 5–10 2015

Office equipment and furniture 5–10 2016

Grants and other transfersGrants 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 expensesOther 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 resultOther economic flows are changes in volume or value of assets or liabilities that do not result from transactions.

Net gain/(loss) on disposal of non-financial assets Any gain or loss on the disposal of non-financial assets is recognised at the date of disposal and is determined after deducting the proceeds from the carrying value of the asset at the time.

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.

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. The 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 depositsCash 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.


ReceivablesReceivables 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 Goods and Services Tax (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. Bad debts are written off when identified.

Impairment of financial assetsAt 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.

Non-financial assets

Equipment and furnitureAll 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.

Intangible assetsIntangible 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:

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

(ii) an intention to complete the intangible asset and use or sell it

(iii) the ability to use or sell the intangible asset

(iv) the intangible asset will generate probable future economic benefits

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

(vi) the ability to measure reliably the expenditure attributable to the intangible asset during its development.

(j) Liabilities

PayablesPayables 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 ownersContributions 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) CommitmentsCommitments 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 liabilitiesContingent 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 periodThese are assets, liabilities, income or expenses that 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 that 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 effectiveCertain new AASs have been published that are not mandatory for the 30 June 2016 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 2016, the following AASs have been issued by the AASB but are not yet 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 on

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 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 licenses 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.

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

Amends various AASs 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 2014–5Amendments to Australian Accounting Standards arising from AASB 15

Amends the measurement of trade receivables and the recognition of dividends.

Trade receivables that do not have a significant financing component are to be measured at their transaction price at initial recognition.

Dividends are recognised in the profit and loss only when the entity’s right to receive payment of the dividend is established. It is probable that the economic benefits associated with the dividend will flow to the entity and the amount can be measured reliably.

This Standard defers the mandatory effective date of AASB 15 from 1 January 2017 to 1 January 2018.

1 Jan 2017 except amendments to AASB 9 (Dec 2009) and AASB 9 (Dec 2010) apply 1 Jan 2018

1 Jan 2018

The assessment has indicated that there will no significant impact for the public sector.

This amending standard will defer the application period of AASB 15 to the 2018-19 reporting period in accordance with the transition requirements.

AASB 2014–7Amendments to Australian Accounting Standards arising from AASB 9

Amends various AAS’s to incorporate the consequential amendments arising from the issuance of AASB 9

1 Jan 2018 The assessment has indicated that there will be no significant impact for the public sector.

AASB 2015–6 Amendments to Australian

The Amendments extend the scope of AASB 124 Related Party Disclosures to not-for-profit public

1 Jan 2016 The amending standard will result in extended disclosures on the





Accounting Standards—Extending Related Party Disclosures to not-for-profit Public Sector Entities[AASB 10, AASB 124 & AASB 1049]

sector entities. A guidance has been included to assist the application of the Standard by not-for-profit public sector entities.

entity's key management personnel (KMP), and the related party transactions.

AASB 2015–8Amendments to Australian Accounting Standards—Effective Date of AASB 15

This Standard defers the mandatory effective date of AASB 15 from 1 January 2017 to 1 January 2018.

1 Jan 2018 This amending standard will defer the application period of AASB 15 to the 2018–19 reporting period in accordance with the transition requirements

AASB 2016–3Amendments to Australian Accounting Standards – Clarifications to ASSB 15

This Standard amends AASB 15 to clarify the requirements on identifying performance obligations, principal versus agent considerations and the timing of recognising revenue from granting a licence.

1 Jan 2018 The assessment has indicated that there will be no significant impact for the public sector, other than the impact identified in AASB 15.


Note 2. Income from transactions Note 2016

$2015

$

(a) InterestInterest on bank deposits 225,949 229,793

Total interest 225,949 229,793

(b) Registration and accreditation feesRegistration and accreditation fees 1,811,504 2,204,528

Total registration and accreditation fees 1,811,504 2,204,528

(c) Grants and other transfers (other than contributions by owners)Department of Education and Training 12,213,798 9,067,118Department of Education and Training (Commonwealth) 1,070,000 920,000

VicRoads 131,500 -Total grants and other transfers 13,415,298 9,987,118

(d) Fair value of assets and services received free of charge or for nominal consideration:Accommodation 4 542,124 522,249Total fair value of assets and services received free of charge or for nominal consideration 542,124 522,249

(e) Other incomeOther income 164 173

Total other income 164 173


Note 3. Expenses from transactionsNote 2016

$2015

$

(a) Administrative expenses

Employee benefits for VRQA staff employed by DET 6,470,830 5,996,315

Total administrative expenses 6,470,830 5,996,315

(b) Depreciation and amortisation

Plant and equipment 705 2,957

Intangible asset 263,836 263,836

Total depreciation and amortisation 264,541 266,793

(c) Grants and other transfers

Transfer payments to TAFEs 3,625 13,600

Transfer payments to individuals 4,131 40,836

Total grants and other payments 7,756 54,436

(d) Supplies and services

Purchase of supplies and consumables 195,451 185,608

Contractors 3,855,802 5,029,057

Board member fees 215,529 235,002

Travel expenses 15,542 38,915

Printing 116,988 94,196

Phone and postage 182,697 173,324

Legal expenses 387,255 221,770

Insurance 28,613 28,244

Minor equipment purchases 46,235 9,379

Rental of buildings 4 542,124 522,249

Advertising 12,731 2,989

Audit fees 14 32,200 31,460

Total supplies and services 5,631,166 6,572,193

Note 4. Resources received free of charge2016

$2015

$

Resources received free of charge

Accommodation for Level 4, Casselden, 2 Lonsdale Street, Melbourne 542,124 522,249

Total resources received free of charge 542,124 522,249

Note: The amounts are recognised in the operating statement as an expense and offset to income as resources received free of charge from DET.


Note 5. Receivables2016

$2015

$

Current receivablesContractualSale of goods and services 82,819 176,039

82,819 176,039StatutoryGST input tax credit recoverable 78,207 50,072

78,207 50,072Total receivables 161,026 226,111

Note: The average credit period on receivables is 30 days. No interest is charged on receivables.

5 (a) Ageing analysis of contractual receivablesPlease refer to Table 11.3 in Note 11 for the ageing analysis of contractual receivables.

5 (b) Nature and extent of risk arising from contractual receivablesPlease refer to Note 11 for the nature and extent of credit risk arising from contractual receivables.

Note 6. Equipment and furniture2016

$2015

$

Office equipment and furnitureAt cost 14,9391 25,610Less: accumulated depreciation (14,939) (22,455)Total office equipment and furniture - 3,155

1 The movement of $10,671 from $25,610 to $14,939 in the cost value of office equipment and furniture from the 2015 year represents the cost value of assets disposed of during the year.


6 (a) ReconciliationReconciliations of the carrying amounts at the beginning and end of the financial year are set out below.

2016$

2015$

Office equipment and furnitureOpening balance 3,155 6,112Additions - -Gains or losses recognised in net result (2,451) -Depreciation (704) (2,957)Closing balance - 3,155

Notes:

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 2016. 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 assets2016

$2015

$

At cost 5,869,521 5,869,521Work in progress 1,186,112 -Less: accumulated amortisation (2,994,363) (2,730,527)Less: accumulated impairment (2,611,322) (2,611,322)Total Intangible assets 1,449,948 527,672


7 (a) Reconciliation2016

$2015

$

Gross carrying amount

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

Work in progress 1,186,112 -

Closing balance 7,055,633 5,869,521Work in progress

Opening balance - -

Additions 1,186,112 -

Closing balance 1,186,112 -

Reconciliation of Net Book Value of Intangible Assets

Opening balance 527,672 791,509

Amortisation of intangible assets 263,836 263,837

Closing balance 263,836 527,672

Net book value at end of financial year 263,836 527,672

Notes:

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 $0.26 million (2015: $0.52 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.

Work in progress represents current development expenditure on the development of the Apprenticeships and Traineeships database. This work is expected to be completed in September 2017.

The VRQA Board has reviewed the useful life of the State Register and determined that from 2013 and going forward it should be five years from when it or parts thereof are completed and operational (2015: five years). The State Register will be fully amortised in 2017 utilising the straight line method.

Note 8. Payables2016

$2015

$

Current payablesContractual payablesSupplies and services 114,573 47,007Amounts payable to government 79,971 240,421Other payables 1,124,836 785,417Unearned revenue 169,354 645,973


Total contractual payables 1,488,733 1,718,818


Notes:

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

8 (b) Nature and extent of risk arising from contractual payablesPlease refer to Note 11 for the nature and extent of risks arising from contractual payables

Note 9. Commitments for expenditure The following commitments have not been recognised as liabilities in the financial statements. All amounts shown in this note are nominal amounts inclusive of GST.

2016$

2015$

(a) Capital CommitmentsCommitments for the acquisition of the new State Register and Epsilon IT systems contracted for at the reporting date but not recognised as liabilities, payable as follows:Within one year 2,932,842 -Total capital commitments 2,932,842 -

2016$

2015$

(b) Other Expenditure CommitmentsThe commitment is an agreement entered into for provision of IT support and maintenance of the existing State Register until the new system is operational, payable as follows:Within one year 48,400 48,400Total other expenditure commitments 48,400 48,400Total commitments for expenditure 2,981,242 48,400

Notes:

The figures presented are inclusive of GST

Note 10. Contingent assets and contingent liabilities There are no known contingent assets and contingent liabilities to be disclosed in the financial period. (2015 nil)


Note 11. Financial instruments

11 (a) Significant accounting policiesThe 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 VRQAs 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 instruments

2016$

2015$

Contractual financial assetsCash and deposits 11,199,490 8,665,315Receivables 82,819 176,039Total contractual financial assets 11,282,309 8,841,354Contractual financial liabilitiesSupplies and services 114,573 47,007Amounts payable to government and agencies 79,971 240,421Other payables 1,294,190 1,431,390Total contractual financial liabilities 1,488,733 1,718,818

Notes:

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 riskThe 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 exposure

Weighted average effective

interest rate%

Carrying amount

$

Interest rate exposureNon-interest

bearing

$

Variable interest rate

$

2016Financial assetsCash and deposits 2.11 11,199,489 - 11,199,489Other receivables - 82,819 82,819 -Total financial assets - 11,282,309 82,819 11,199,489Financial liabilitiesSupplies and services - 114,573 114,573 -Amounts payable to government

- 79,971 79,971 -

Other payables - 1,294,190 1,294,190 -Total financial liabilities

-1,488,733 1,488,733 -

2015Financial assetsCash and deposits 2.32 8,665,315 - 8,665,315Other receivables - 176,039 176,039 -Total financial assets - 8,841,354 176,039 8,665,315Financial liabilitiesSupplies 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 -

Note:

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

11 (c) Credit riskCredit 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 assets

Carrying amount

($)

Not past due and

not impaired

($)

Past due but not impaired

Less than 1 month

1–3 months

3 months–1 year

Greater than 1 year

Impaired

2016Other receivables 82,819 49,480 17,446 10,836 2,848 2,209 -

Total 82,819 49,480 17,446 10,836 2,848 2,209 -

2015Other receivables 176,039 126,014 21,577 21,820 6,628 - -

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

Note:

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

11 (d) Market riskThe 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.

Sensitivity disclosure analysis and assumptionsThe 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 one percentage point up and down in market interest rates (AUD) from year-end rates (2015: A movement of one percentage point 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 sensitivity

Carrying amount

$

Interest rate risk

-1.0% +1.0%

Net result Net result

2016Financial assetsCash and deposits 11,199,489 (111,995) 111,995Other receivables 82,819Financial liabilitiesPayables 1,488,733Total impact (111,995) 111,9952015Financial assetsCash and deposits 8,665,315 (86,653) 86,653Other receivables 176,039Financial liabilitiesPayables 1,718,818Total impact (86,653) 86,653

Notes:

Sensitivities of floating rate cash and cash equivalents are as follows:

2016—impact on net result due to a one per cent movement in market interest rate is $11,199,490 x [+/- one per cent] = $111,995.

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

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

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

2016$

2015$

Net result 3,618,295 54,124Non-cash movements:

Depreciation and amortisation expense 264,541 266,793

Net loss on non-financial assets 2,451 -Movements in assets and liabilities:

(Increase)/decrease in receivables 65,085 37,899

(Decrease)/increase in unearned revenue (476,619) 113,059

(Decrease)/increase in payables 246,534 (87,846)Net cash flows from/(used in) operating activities 3,720,286 384,030

Note 13. Responsible personsIn 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.

NamesThe persons who held the positions of Ministers and Accountable Officers in the VRQA are as follows:

Minister for Training and Skills

The Hon. Steve Herbert, MP 1 July 2015 to 30 June 2016

Minister for Education The Hon. James Merlino, MP 1 July 2015 to 30 June 2016

Director Lynn Glover 1 July 2015 to 30 June 2016

Chair Timothy Smith 1 July 2015 to 16 October 2015Michael Perry (acting) 17 October 2015 to

15 February 2016

Pam White PSM 16 February 2016 to 30 June 2016

Board members Elizabeth Alexander AM 1 July 2015 to 30 June 2016

Gill Callister 1 July 2015 to 30 June 2016

Stephen Elder OAM 1 July 2015 to 30 June 2016

Dr Sara Glover 16 February 2016 to 30 June 2016

Paul Kirk 1 July 2015 to 30 June 2016

Patricia Neden 1 July 2015 to 16 March 2016


22 March 2016 to 30 June 2016

Michael Perry 1 July 2015 to 16 October 201516 February 2016 to 30 June 2016

Graham Spencer 1 July 2015 to 16 October 2015

Richard Tudor OAM 1 July 2015 to 30 June 2016

Michonne van Rees 1 July 2015 to 30 June 2016

Brian Welch 1 July 2015 to 30 June 2016

Jim Williamson 16 February 2016 to 30 June 2016

David Windridge 1 July 2015 to 16 October 2015

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

Income band 2016 No. 2015 No.

$0-$9,999 5 -

$10,000-$19,999 9 10

$20,000-$29,999 1 -

$40,000-$49,999 - 1

$260,000-269,999 1 1

Total 16 12

Total remuneration received, or due and receivable by responsible persons $481,944 $497,636

Note:

Ministers are reported in the financial report of the Department of Premier and Cabinet. One member did not receive any remuneration. (2015: 1 member)

Related Party transactions included in the reconciliation amount:Gill Callister, Secretary, DET is an ex-officio member of the VRQA Board. As this role is ex-officio she received no remuneration to perform this role. Timothy 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 $12,282,540 ($9,162,109 for 2015) and resources free of charge of $542,124 ($522,249 for 2015) and transacted with The University of Melbourne are $nil ($nil for 2015), with the Catholic Education Commission of Victoria are $15,000 ($11,287 for 2015) and with the VET Development Centre $2,250 ($86 in 2015).

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 following table 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

2016No.

2015No.

2016No.

2015No.

$10,000–$19,999 1 1

$150,000–$159,999 1 1

$160,000–$169,999 1 1

$170,000–$179,999 1 1

$180,000–$189,999

Total number of executives 3 1 3 1

Total annualised employee equivalent (a) 1.6 1 1.6 1

Total amount $296,060 $164,993 $290,381 $163,661

Note:

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

Note 14. Remuneration of auditors2016

$2015

$

Victorian Auditor-General’s Office

Audit of the financial statements 32,200 31,460

32,200 31,460

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

Note 16. Glossary of terms and style conventions

AmortisationAmortisation 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’.

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


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

DepreciationDepreciation 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 methodThe 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 assetA financial asset is any asset that is:

(a) cash

(b) an equity instrument of another entity

(c) a 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 liabilityA financial liability is any liability that is:

(a) A contractual obligation:

(i) to deliver cash or another financial asset to another entity; or

(ii) 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:


(i) 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

(ii) 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 statementsA 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.

Grants and other transfersTransactions 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 sectorThe 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 assetsRefer to produced assets in this glossary.

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

Net resultNet 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 balanceNet 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 worthAssets less liabilities, which is an economic measure of wealth.

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

Other economic flows included in net resultOther 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.

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


Produced assetsProduced 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).

ReceivablesIncludes 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 servicesRefers 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 servicesSupplies 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.

TransactionsTransactions 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 conventionsFigures 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 as follows:

- zero, or rounded to zero

(xxx.x) negative numbers

201x year period

200x-0x year period

The financial statements and notes are presented based on the illustration for a government department in the 2015–16 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

Appendix 1—Disclosure indexThe 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 5

FRD 22F Purpose, functions, powers and duties 5

FRD 8C Departmental objectives, indicators and outputs N/A

FRD 22F Initiatives and key achievements 6

FRD 22F Nature and range of services provided 5

Management and structure

FRD 22F Organisational structure 29

Financial and other information

FRD 8C,SD 4.2(k)

Performance against output performance measures N/A

FRD 8C Budget portfolio outcomes N/A

FRD 10 Disclosure index 77

FRD 12A Disclosure of major contracts 35

FRD 15B Executive officer disclosures 33

FRD 22F Employment and conduct principles 30

FRD 22F Occupational health and safety policy 30

FRD 22F Summary of the financial results for the year 21

FRD 22F Significant changes in financial position during the year 21

FRD 22F Major changes or factors affecting performance N/A

FRD 22F Subsequent events 68

Financial Report

FRD 22F Application and operation of Freedom of Information Act 1982 35

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

36

FRD 22F Statement on National Competition Policy 36

FRD 22F Application and operation of the Protected Disclosure Act 2012 36

Appendices 76


Financial Report continued

FRD 22F Application and operation of the Carers Recognition Act 2012 37

FRD 22F Details of consultancies over $10,000 35

FRD 22F Details of consultancies under $10,000 35

FRD 22F Statement of availability of other information 38

FRD 24C Reporting of office-based environmental impacts 37

FRD 25B Victorian Industry Participation Policy disclosures 35

FRD 29A Workforce Data disclosures 31

SD 4.5.5 Risk management compliance attestation 39

SD 4.5.5.1 Ministerial Standing Direction 4.5.5.1 compliance attestation 39

SD 4.2(g) Specific information requirements 37

SD 4.2(j) Sign-off requirements 40

Financial statements required under Part 7 of the FMA

SD4.2(a) Statement of changes in equity 44

SD4.2(b) Operating statement 43

SD4.2(b) Balance sheet 44

SD4.2(b) Cash flow statement 45

Other requirements under Standing Directions 4.2

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

47

SD4.2(c) Compliance with Ministerial Directions 47

SD4.2(d) Rounding of amounts 48

SD4.2(c) Accountable officer’s declaration 40

SD4.2(f) Compliance with model financial report 47

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

FRD 9A Disclosure of administered assets and liabilities by activity N/A

FRD 11A Disclosure of ex gratia expenses N/A

FRD 13 Disclosure of parliamentary appropriations N/A

FRD 21B Disclosures of responsible persons, executive officers and other personnel (contractors with significant management responsibilities) in the financial report

66

FRD 102 Inventories N/A

FRD 103E Non-financial physical assets (pending revision) 60

FRD 104 Foreign currency N/A

FRD 106 Impairment of assets 51



FRD 109 Intangible assets 50

FRD 107A Investment properties N/A

FRD 110 Cash flow statements 45

FRD 112D Defined benefit superannuation obligations N/A

FRD 113 Investments in subsidiaries, jointly controlled entities and associates (pending revision) N/A

FRD 114A Financial instruments—general government entities and public non-financial corporations 62

FRD 119A Transfers through contributed capital 44

Legislation

Freedom of Information Act 1982 35

Building Act 1993 36

Protected Disclosure Act 2012 36

Carers Recognition Act 2012 37

Victorian Industry Participation Policy Act 2003 35

Financial Management Act 1994 47

Appendices 78

Appendix 2—Ministerial Statement of Expectations for the VRQAIn 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 (SoEs) to Victorian regulators.

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

On 4 August 2015, the SoE was reaffirmed by the Minister for Education and the Minister for Training and Skills and updated to reflect two additional expectations that the VRQA work closely with the Department of Education and Training (DET) to:

1. determine how best to implement the government’s commitment to restore support for apprenticeships by retaining and strengthening the role of apprenticeship field officers as essential mediators of apprenticeship contracts

2. review the Education and Training Reform Regulations 2007 due to sunset in June 2017.


Appendices 80

Appendix 3—Acronyms and abbreviations

ACARA Australian Curriculum, Assessment and Reporting Authority

ACECQA Australian Children’s Education and Care Quality Authority

AQTF Australian Quality Training Framework

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

GTO Group training organisations

OSSEO Overseas Secondary Student Exchange Organisation

RTO Registered training organisation

TAE Training and Education

TAFE Technical and further education

TEQSA Tertiary Education Quality and Standards Agency

VCAA Victorian Curriculum and Assessment Authority

VCAL Victorian Certificate of Applied Learning

VCE Victorian Certificate of Education

VET Vocational education and training

VRQA Victorian Registration and Qualifications Authority

Appendices 82

annual report 2015-16 - vrqa.vic.gov.au web view32vrqa annual report 2015-16. ... for extension to...

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