Benefits of External Audit for RTOs
Audit is often seen in the RTO world as a dirty word; with lots of stories of negative and frustrating experiences.
So why did the College voluntarily go down the external audit path? And what made it a positive and valuable experience?
There were 3 keys to why this exercise was successful.
1. Be Clear on Your Goals
In a background where the RTO industry is in a critical period of high change and government scrutiny; with all the RTO standards and most funded training contracts having changed, it can be that you just arrange a 鈥渉ealth check鈥�.
But such a general approach means that the audit may lack focus. So it鈥檚 a hit or miss about whether you are satisfied with the benefit vs the time and money invested in the exercise.
There are a range of goals that might suit the audit scope:
- To address compliance with a particular standard
- To review a new process implemented, and its compliance impacts
- Audit against a funding contract requirement or VET FEE-HELP
- Specific focus on third party arrangements
For The College 鈥� our specific focuses were:
a) how we could help an ASQA auditor (eg for re-registration) understand what we are told is a fairly unique and hi-tech business system and workflow "dashboard".
b) whether our industry engagement was good practice (noting we are limited in our relationships with 鈥渋ndustry professional associations鈥� as many of them are competitor RTOs or have paid preferred provider lists)
c) to review the development of our validation system methodology and the ways we prioritise areas for validation under standard 1.10
By being clear on what we wanted out of the exercise 鈥� we found that we explored those issues in greater depth and focus.
2. Select the RIGHT Auditor
There is no point selecting an auditor based on who will give you a 鈥渟oft鈥� outcome. Really, you are paying someone to identify holes in your evidence. You also want them to be experienced enough to suggest compliance approaches that suit your business model.
Equally, what is their actual experience in the field you want audited? If for example you were preparing for a re-registration audit 鈥� wouldn鈥檛 an ASQA Panel auditor be an ideal consultant to assist. Whereas if you specialised in a specific funded program that was to be the focus of your audit 鈥� you would want an auditor that have legitimate background in that area (and not someone who, like you, has given it their best shot at understanding the contract).
The communication style of the auditor, in an external audit context, is also critical. Unlike a government compliance audit, your external auditor consultant should become part of your team and help identify solutions and approaches. So the ability to question and listen, and throw around ideas and options is a key ingredient to this approach. The external audit process then grows its own life as part of your continuous improvement cycle; and allows you to see your world from the eyes of someone completely independent.
Of course, you are, at the end of the day, the one who decides your business systems and approached, but why not get most value from the activity.
The College engaged Stephen Auburn of Pty Ltd for our audit. We valued his experience as an ASQA panel auditor. As part of the consultancy we simulated an ASQA audit and gave staff first-hand experience in what this would be like. Most importantly, as a group we brainstormed ideas of ways to improve our business practices and benefited from fresh eyes helping us look at our processes.
3. Staff Engagement in the Audit Process
Note 鈥� the key is staff engagement (not staff involvement) in the audit process.
Of course staff would be involved in an external audit activity. The auditor would probably want to speak to some of them 鈥�
But did they want to be involved in the process? Did they see benefit to the RTO and to their own professional development? Did they ask if they could be involved? This is engagement.
An external audit process is an excellent opportunity to build engagement. It is a safe environment where staff can explore the implications and ramifications of daily business practices. They can contribute to workable solutions to work place needs and compliance issues. And which trainer/assessor in the country doesn鈥檛 like to have their views considered?
The key is for them to understand the process for what it is. It isn鈥檛 really an audit. It鈥檚 a continuous improvement / system design process. There are no penalties for 鈥渘on-compliance鈥� 鈥� just opportunities to make the compliance parts of our roles more meaningful and useful. It is an opportunity to suggest ways to eradicate red tape and add value for students.
The real gain for the College has been that our staff are still talking about the audit experience and building on the ideas generated about how we can make what they had previously seen as 鈥渃ompliance鈥� tasks a useful part of their processes. Those who were involved now better understand what might occur with an ASQA or other audit. Those not involved want to be next time!
Overall Benefits from External Audit
Did we achieve our objectives? Yes we did. When we next have an audit (ASQA or Dept of Education) we will be now equipped with some great overview diagrams that explain "Dashboard" and how the system elements interact; but also which components address which Standard or contract obligation.
We were originally confident that our industry engagement was good practice, even though we had limited industry association involvement. From the audit we identified some great next step ideas to be better able to show evidence of the engagement.
Our validation system methodology and the risks we consider also got a thorough review. Ironically our oops moment was in the simple things. We have the sophisticated risk rating process and document / process tracking system that addressed the 300 鈥渟ubjects鈥� we deliver. We overlooked an easy way to show ASQA that we have the minimum number of training products from each qualification timetabled to be validated in the 3 yr / 5 yr cycles. It鈥檚 often the things that are so obvious 鈥�
So our 3 goals achieved. Plus more! Special thank you to Stephen Auburn of Pty Ltd who helped us discover some ways we can even further improve our business practices. It's also nice to get confirmation that we are in good shape, and yes Stephen, I agree, the College does have a great team!
I highly recommend undertaking such a valuable exercise and using an experienced auditor like Stephen.