Failing to manage your RTOs contracts and compliance risks properly can impact on your businesses bottom line. Poor processes, inefficiency and lack of communication can trigger risk and breaches of terms and conditions. Governments and other funding bodies require RTOs to enter into contractual arrangements if applications to deliver subsidised courses are successful. How you manage these arrangements will impact on your RTO’s ability to realise the full contract value from these relationships. Contract compliance is a contract management strategy that focuses on adhering with terms and conditions within the agreement in place. It is the process of ensuring all parties meet the legalities of the contract. The following advice will help your RTO maximise its funding allocations and assist in preventing any losses from poor contract management.

Data errors:

If you do not have a process in place to check your AVETMISS data before submitting your claims for payment to your funders your RTO risks non-payment due to erroneous data. RTOs should review and correct all errors prior to submission to ensure you prevent duplication of effort in claiming your funding and payment delays. Your contract staff need to know the scheduled dates for submission of data from your funding body and undertake data quality checks well in advance of these deadlines.

Unviable courses:

The economic viability of the courses you deliver utilising the funding contract is dependent on income verses cost of course delivery. The delivery models used by your RTO and the costs associated with offering the contracted training and assessment services impact on your financial sustainability. You need to determine the most economical way of running your courses by scaling without compromising on the quality for students and industry. Your course costings should reflect the subsidy you are able to claim and any other additional fees your funding agreement terms and conditions allow you to charge students or employers. You need to determine the minimum enrolments required in your classes that ensures your course is viable and able to proceed as scheduled. It is essential that RTO’s have an effective process for determining course viability.

Ineffective processes:

Your contract performance should be reviewed constantly or you risk failing to deliver on your obligations as agreed. Poor contract management can be attributed to insufficient processes in place to monitor obligations, carry out regular reviews and track performance against contract KPI’s. Your RTO’s unfulfilled obligations can result in you missing out on realising the full contract value that has been allocated.

Always raise issues with your funding body to clarify any contract clauses or areas of concern and determine what action can be taken to meet these obligations. Your contract staff should know how to request a variation to contract terms and conditions if unfair or impacting on your RTO’s ability to deliver services as agreed.

Poor quality:

Breaches of contract or non-compliances can damage your relationships with funding bodies and add additional costs to your business to remedy. There is an opportunity cost for RTOs to consider being loss of money and time spent to undertake rectifications or remediation. Funding bodies conduct regular compliance checks on aspects such as student eligibility, qualification completions and client satisfaction. Your RTO could be selected for such checks at any given time per the funding agreement requirements so you need to ensure you have appropriate internal mechanisms for quality assurance to prevent any breaches or non-compliances being identified at external audit.

Unknown goals and metrics:

Contract staff need to be competent in understanding the set goals and metrics for each stage of the contract lifecycle. They need to know how to identify required milestones and what it takes to achieve the contractual obligations. Co-ordinating these obligations requires a great deal of project management to ensure deliverables are achieved by your RTO and the funding allocation doesn’t diminish throughout the contract period.

Unclear roles and responsibilities:

Your RTO needs to identify roles and responsibilities for contract compliance. If the expectations are unclear, roles are not clearly defined or communication isn’t effective this will put your organisation at risk of non-compliance or breaches that can have a financial impact. Once the roles are stated you should provide training relevant to the contract tasks they need to perform so your RTO can ensure contract outcomes are achieved.