The Tertiary Education Quality and Standards Agency’s proposals for implementing full fee recovery are unlikely to meet with a joyous reception from universities and private providers.

Before going on the attack, however, it is important to understand the context for this move, which has been delayed by more than a year due to the COVID-19 pandemic.

First, the decision to go to full cost recovery was a decision made by the Australian Government, not by TEQSA. It is general government policy to recover the costs of regulation from the corporations that need to be regulated. ASIC (the Australian Securities and Investments Commission) and ASQA (the Australian Skills Quality Authority) have already gone down this path.

As the proposal explains, TEQSA recovered only 15 per cent of its costs in 2019, so there is a lot of ground to make up. The only way to avoid large per centage increases in fees would be to greatly reduce TEQSA’s budget. This has been tried before, and didn’t go well, leading to even longer completion times and staff exhaustion.

Second, the way it works is that the overall envelope of TEQSA’s funding is set by the government, and income from the fees is routed through to general revenue, not to TEQSA. So, there is no incentive for TEQSA to become entrepreneurial and maximise its income by increasing collection of fees.

TEQSA must recover around $18 million a year from 186 providers. How does it propose to allocate fees and charges within that envelope? There will be three components:

* applications for registration, course accreditation, and renewals of the same (from 1 January 2022)

* compliance assessments and investigations (also from 1 January 2022)

* annual levy for expenses that cannot be attributed to assessments (phased in over three years from 2022-24)

Applications for first-time registration are generally similar in scope, generate very similar workloads for TEQSA, and have been set at around $141,000. TEQSA has always maintained quite a high bar for market entry, and it is important to get these assessments right and ensure that providers are only registered if they are securely positioned to meet the Higher Education Standards.

But after they are operating, in accordance with TEQSA’s risk-weighted methodology, assessments for renewal of registration vary greatly in scope and depth, and so have been set at three levels, reflecting risk and complexity. The lowest risk providers will face fees of only $38,487, and moderate risk providers around $100,000. The highest risk providers will have to stump up $163,947, more than four times as much as the lowest risk providers.

How can this be? Figure 1 in TEQSA’s proposal shows that it takes 63 days (EFT) to complete a renewal of registration (risk level unspecified). It is important to note that this is time on task taken to reach the final decision, not the time taken to undertake the assessment, let alone the total duration of calendar days from submission day to decision day.

A draft report might be completed in half that time, but it must then be sent up the line through multiple layers of approval (including legal review if it is adverse) before reaching the commissioners, (registration decisions are not delegated).

And the process is recursive, as it can be sent back for further work at each level (reminiscent of falling down a snake in snakes and ladders). Again, if it is adverse, natural justice requires that it will be sent to the provider for a response, and the provider will need time to assemble its defence, including potentially hundreds of additional documents. All of this material then has to be analysed and a new report prepared, which follows the same recursive process of approval as the initial report. The more adverse the findings, the more contested they will be, dragging the process out further.

Many attempts have been made to review and improve this process, and there are some signs of improvement in completion times in the latest Annual Report as TEQSA moves from “cycle one” (where it was facing applications for each provider and each course for the first time) to ‘cycle two”, where it can expedite approval of some assessments based on the knowledge gained in “cycle one.” The most onerous Cycle One registration renewals have now been cleared.

The opportunities for expediting applications were particularly evident with course renewals, where the fee is set at $23,406.

In many cases, TEQSA can briefly review the provider’s own course review process, instead of undertaking another bottom-up examination of every unit and every course learning outcome. The proposed fee for a course renewal is only a few thousand dollars less than the proposed fee for initial course accreditation, and some consideration could be given to lowering it.

More radical options could include granting many more providers self-accrediting authority (SAA) at least for their existing courses so that they will not need to submit so many applications at all. This would clear more space for high risk assessments, including out-of-cycle compliance assessments. These will be charged at $150 per hour which will cause some concern, being open-ended. But there is no other way of doing it, since they can vary hugely in scope, from a few hours work at one end of the scale to a major project comparable to the most high-risk registration renewal at the other. And the fees will be waived where the investigation does not lead to an adverse outcome.

The annual levy is necessary to pay for things like the annual risk assessments, developing guidance material, processing complaints, and corporate support, for which there are no applications.  At the time we were advised that it cannot be scaled according to the size of each provider or it would be classed as a tax, which would be problematic. However, the course accreditation and renewal fees will be scaled according to a provider’s EFTSL, up to 70 per cenr of full cost recovery (presumably the maximum fees are the ones that are quoted in the fee proposal discussion paper at Appendix A).

CRICOS registration is proposed to be set at $13,082, renewable at $28,494 ($14,736 if you have self-accrediting authority).

Upgrading from Higher Education Institute to University College, or from University College to University, will set you back $88,800, but you will have SAA so will not have to pay course accreditation or course renewal fees. Going for SAA on its own will be $103,700, unless you do it concurrently with renewing registration, in which case there will be no additional fee.

The proposals are reasonable and would be difficult to improve on given the constraints. A low-risk provider that sails through its registration renewal will be faced with charges equivalent to one or two year’s fees for a single overseas student (remember them?).

The strategy for other providers should be to be squeaky-clean and reach this level, including through SAA. Remember that quality should not only be done, it should be seen to be done, viewed from the perspective of the external observer (TEQSA).

It will be fine – really.


Michael Tomlinson is a higher education governance and quality assurance consultant, and was Director of the Assurance Group at TEQSA while the Activity Based Costing behind the proposed fees was being undertaken


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