{"id":"F2021L01040","name":"National Vocational Education and Training Regulator (Financial Viability Risk Assessment Requirements) Instrument 2021","slug":"national-vocational-education-and-training-regulator-financial-viability-risk-assessment-requirement","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":101987,"registerId":"commonwealth-F2021L01040-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Name","content":"#### 1 Name\n\n This instrument is the National Vocational Education and Training Regulator (Financial Viability Risk Assessment Requirements) Instrument 2021.","sortOrder":0},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n (1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n```html\n

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1. The whole of this instrument

On the day after it is registered

\n```\n\n> Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.\n\n (2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Authority","content":"#### 3 Authority\n\n This instrument is made under subsection 158(1) of the National Vocational Education and Training Regulator Act 2011.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Definitions","content":"#### 4 Definitions\n\n In this instrument:\n\n> Act means the National Vocational Education and Training Regulator Act 2011.\n\n> Financially viable means the ability of an organisation to generate sufficient income to meet operating payments, debt commitments and, where applicable, to allow growth while delivering quality training and assessment services and outcomes.\n\n> Financial viability risk means the assessed financial performance, operations, and capacity of an organisation as an ongoing concern to deliver quality training and assessment services and outcomes for the duration of its registration, and the potential of its losing this capacity.\n\n(2) The requirements of this legislative instrument apply to:\n\n(a) all organisations seeking registration under the Act and\n\n(b) all training organisations registered under the Act.\n\n> NVR registered training organisation has the same meaning as in the Act.\n\n> National VET Regulator has the same meaning as in the Act.\n\n> An independent qualified auditor is:\n\n1. the Auditor-General of a State, of the Australian Capital Territory or of the Northern Territory; or\n2. a person registered as a company auditor or a public accountant under a law in force in a State, the Australian Capital Territory or the Northern Territory; or\n3. a member of the Institute of Chartered Accountants in Australia, or of the Australian Society of Certified Practising Accountants; or\n4. a person approved by the Minister in writing as a qualified auditor for the purposes of the Higher Education Support Act 2003; and\n5. a person independent from the entity it is auditing.\n\n Note: For the purpose of this legislative instrument, a qualified auditor will be considered to be independent from the entity it is auditing if the qualified auditor meets the independence requirements specified in Part 2M.4, Division 3, of the Corporations Act 2001 as though the qualified auditor is an individual qualified auditor or an audit company and the body corporate seeking approval as a VET provider is the audited body under that Act.\n\nPart 2 Context and intent of these requirements","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"Context","content":"#### 5 Context\n\n The Act in Section 158 requires the National VET Regulator to make the requirements relating to the financial viability of NVR registered training organisations. The requirements are to be made by legislative instrument and are to be known as the “Financial Viability Risk Assessment Requirements”.\n The legislative instrument applies to NVR registered training organisations. Section 24 makes it a condition of registration that an NVR registered training organisation must satisfy the Financial Viability Risk Assessment Requirements.","sortOrder":4},{"sectionNumber":"6","sectionType":"section","heading":"Intent","content":"#### 6 Intent\n\n (1) The National VET Regulator requires an NVR registered training organisation to demonstrate its financial viability at any point in time, upon request.\n (2) The assessment of an organisation’s financial viability risk is directed at evaluating the likelihood of its business continuity, and its capacity to achieve quality outcomes. In particular, the assessment informs a judgement about whether the organisation has the financial resources necessary to:\n (a) acquire the requisite assets and physical resources to deliver all qualifications on its scope of registration\n (b) employ sufficient appropriately qualified staff to cover the courses for which it takes enrolments\n (c) provide appropriate levels of student services to students\n (d) remain in business to ensure that each student can achieve completion\n (e) meet the above requirements, even in an unsure environment.\n\nPart 3 Financial viability risk assessment requirements","sortOrder":5},{"sectionNumber":"7","sectionType":"section","heading":"Obligation to submit to assessment at initial registration","content":"#### 7 Obligation to submit to assessment at initial registration\n\n (1) An organisation seeking registration with the National VET Regulator must submit to an assessment of financial viability risk by a qualified independent financial auditor nominated by the National VET Regulator, as part of the assessment of the application for registration.\n (2) The assessment will include an assessment of the source and reliability of the evidence supporting the assumptions underlying the projections.\n (3) The obligation to submit to the assessment referred to in (1) applies also to parent organisations, affiliated companies or organisations that have a vested interest in the organisation.","sortOrder":6},{"sectionNumber":"8","sectionType":"section","heading":"Obligation to submit to assessment at any time","content":"#### 8 Obligation to submit to assessment at any time\n\n (1) An NVR registered training organisation must submit to an assessment of financial viability risk by a qualified independent financial auditor nominated by the National VET Regulator at other times during the registration period as determined by the National VET Regulator in accordance with the Risk Assessment Framework.\n (2) The obligation to submit to the assessment referred to in (1) also applies to parent organisations, affiliated companies or organisations that have a vested interest in the organisation.","sortOrder":7},{"sectionNumber":"9","sectionType":"section","heading":"National VET Regulator may waive requirement where risk is considered low","content":"#### 9 National VET Regulator may waive requirement where risk is considered low\n\n (1) Where the National VET Regulator considers the financial viability risk of an organisation is low, it may waive the requirement for a financial viability risk assessment.\n (2) The waiving of the requirement does not remove the obligation in section 8 to submit to a future assessment if required by the National VET Regulator.\n\nPart 4 Form and content of financial viability risk assessment","sortOrder":8},{"sectionNumber":"10","sectionType":"section","heading":"Assessment to be in required form","content":"#### 10 Assessment to be in required form\n\n Financial data and information must be submitted to the qualified independent financial auditor nominated by the National VET Regulator in a format that is in accordance with Australian Accounting Standards.","sortOrder":9},{"sectionNumber":"11","sectionType":"section","heading":"Assessment to be against common indicators","content":"#### 11 Assessment to be against common indicators\n\n (1) The assessment of financial viability risk will be undertaken by assessing common indicators of financial performance and position. These may include but are not limited to the following indicators:\n\n1. Liquidity– including current ratio and cash flow assessments\n2. Solvency – including debt to assets assessment, debt to equity assessment\n3. Economic Dependency – for example, reliance upon government funded training, or reliance on a particular cohort of students (e.g. overseas students)\n4. Revenue, profit and cash flow\n5. Commercial risk\n6. Audit opinion\n7. Contingencies\n8. Compliance with all of its statutory obligations (for example: GST, taxation, superannuation, Companies Code)\n9. Compliance with accounting standards\n10. Accounting policies – impact of the organisation’s accounting policies on its financial risk.","sortOrder":10},{"sectionNumber":"12","sectionType":"section","heading":"Reviews to have regard to standards","content":"#### 12 Reviews to have regard to standards\n\n Independent reviews of financial projections will have regard to the standard ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information, issued by the Auditing and Assurance Standards Board on 30 May 2017, as existing from time to time.\n\n> Note: The Auditing and Assurance Standards Board standards could in 2021 be viewed on the Auditing and Assurance Standards Board website (www.auasb.gov.au).","sortOrder":11},{"sectionNumber":"13","sectionType":"section","heading":"Information to be assessed","content":"#### 13 Information to be assessed\n\n (1) Information that could be used to assess the common indicators in section 11 and to make a determination about financial viability risk may include, but not be limited to:\n (a) Independent reviews of financial projections including underlying assumptions\n (b) Business planning including forecast income streams and forecast expenditure\n (c) Assets and liabilities\n (d) Financial statements audited by an independent qualified auditor\n (e) Financial records for the previous 12 months, including profit and loss, balance sheets\n (f) Cash flow and bank accounts\n (g) Short term budgets and forecasts, including assumptions\n (h) Information on current and projected student enrolments, including assumptions\n (i) Tax records\n (j) Information about current debts and debtors, credits and creditors, loans and repayment\n (k) Plans, and information on any legal disputes\n (l) Inter-company dealings, transfers, ownerships and loans\n (m) Contingent liabilities\n (n) Ultimate ownership details\n (o) Post reporting activities (includes activities that relate to the period after accounts have been audited that would have a material impact on the organisation’s operations, viability or ownership).","sortOrder":12},{"sectionNumber":"14","sectionType":"section","heading":"Assessment to consider size and scope of operations","content":"#### 14 Assessment to consider size and scope of operations\n\n In managing the financial viability risk of an organisation, the National VET Regulator may take into consideration the size and scope of its operations.\n\n \n\nSchedule 1—Repeals\n\nFinancial Viability Risk Assessment Requirements 2011\n\n1 The whole of the instrument\n\nRepeal the instrument.","sortOrder":13}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"The instrument aligns with its original intent under section 158 of the National VET Regulator Act 2011, which specifically requires the Regulator to make financial viability requirements. The scope remains focused on financial risk assessment for RTOs without significant expansion beyond this purpose."},"complexity_factors":["Straightforward structure with clear Parts (Context, Requirements, Form/Content)","Only 6 defined terms in section 4, though 'independent qualified auditor' has a 5-part nested definition with a complex note referencing Corporations Act independence requirements","Minimal cross-referencing — primarily references to the parent Act (National VET Regulator Act 2011) and one auditing standard (ASAE 3000)","Some conditional logic in waiver provisions (section 9) and scope considerations (section 14), but no deeply nested exceptions","Single repeal at the end (repealing the 2011 version) — no complex transitional arrangements","Relatively short instrument (14 sections plus Schedule 1)"],"plain_english_summary":"This law requires all current and prospective registered training organisations (RTOs) and related entities to demonstrate ongoing financial viability via independent assessments selected by the National VET Regulator (ASQA). ASQA can require or waive assessments and may examine parent or affiliated entities. The aim is to protect students and public funds by ensuring providers can meet debts, operate through their registration term, and deliver complete, quality training."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"This instrument expressly repeals the Financial Viability Risk Assessment Requirements 2011 (Schedule 1), replacing the prior instrument. The text itself states the new requirements apply to all applicants and registered NVR providers (s4(2)) and sets out initial and ongoing assessment powers (s7–s9). The repeal indicates a formal change in instruments, but the provided text alone does not identify specific substantive expansions or contractions of scope compared with the repealed 2011 instrument."},"complexity_factors":["Wide application: applies to all applicants and all registered NVR training organisations (s4(2)), creating broad coverage and many potential assessment triggers.","Repeated and discretionary assessment power: initial mandatory audit on application (s7) plus ongoing/ad hoc audits 'as determined' under the Risk Assessment Framework (s8) — increases regulatory discretion and uncertainty for providers.","Regulator control of auditor nomination: independent auditor must be 'nominated by the National VET Regulator' (s7(1), s8(1)), concentrating procedural control with the regulator and affecting who pays and contracts for audits.","Waiver power: regulator may waive assessments where risk is low (s9), adding conditional relief but requiring regulator judgement and monitoring.","Detailed content and format requirements: financial information must comply with Australian Accounting Standards (s10) and independent reviews must have regard to ASAE 3000 (s12), requiring providers to meet specific technical standards.","Extensive indicators and information list: numerous common indicators (s11) and a long non‑exhaustive list of documentary evidence (s13) increase compliance burden and record‑keeping demands.","Inclusion of related entities: obligation extends to parent organisations, affiliates or vested‑interest entities (s7(3), s8(2)), widening the perimeter of information and potential consolidation.","Independence rules: definition of 'independent qualified auditor' cross‑references Corporations Act independence requirements (s4 definition), adding legal/accounting complexity.","Replacement of prior instrument: this instrument repeals the 2011 requirements (Schedule 1), which may require providers to compare and adjust to any changed practices or expectations."],"plain_english_summary":"**What it does:** Requires every organisation seeking or holding National VET Regulator (NVR) registration to undergo independent financial‑viability risk assessments (on application and again as required), supplying financial statements, forecasts and other records in accordance with Australian Accounting Standards. The Regulator nominates the independent auditor, may waive assessments for low‑risk providers, and assesses indicators such as liquidity, solvency, revenue dependence and statutory compliance to judge an organisation's ability to continue delivering quality training."}},"importantCases":[],"_links":{"self":"/api/acts/national-vocational-education-and-training-regulator-financial-viability-risk-assessment-requirement","history":"/api/acts/national-vocational-education-and-training-regulator-financial-viability-risk-assessment-requirement/history","analysis":"/api/acts/national-vocational-education-and-training-regulator-financial-viability-risk-assessment-requirement/analysis","conflicts":"/api/acts/national-vocational-education-and-training-regulator-financial-viability-risk-assessment-requirement/conflicts","importantCases":"/api/acts/national-vocational-education-and-training-regulator-financial-viability-risk-assessment-requirement/important-cases","documents":"/api/acts/national-vocational-education-and-training-regulator-financial-viability-risk-assessment-requirement/documents"}}