Sydney Business Institute Pty Ltd v NSW Vocational Education and Training Accreditation Board

[2009] NSWADT 322

CITATION:	Sydney Business Institute Pty Ltd v NSW Vocational Education and Training Accreditation Board [2009] NSWADT 322
DIVISION:	General Division
PARTIES:	APPLICANT Sydney Business Institute Pty Ltd RESPONDENT NSW Vocational Education and Training Accreditation Board
FILE NUMBER:	093245
HEARING DATES:	25 and 26 November and 10 December 2009
SUBMISSIONS CLOSED:	10 December 2009
DATE OF DECISION:	24 December 2009
BEFORE:	Hennessy N - Magistrate (Deputy President); Fitzgerald R - Non-Judicial Member
CATCHWORDS:	Registered Training Organisation – cancellation of registration – cancellation of overseas student approval – review of decisions - Vocational Education and Training Act 2005
LEGISLATION CITED:	Vocational Education and Training Act 2005 Administrative Decisions Tribunal Act 1997
CASES CITED:	Lockwood v Commonwealth (1954) 90 CLR 177 Brown v West (1990) 169 CLR 195 Vaw (Kurri Kurri) Pty Ltd v Scientific Committee (established under s 127 of the Threatened Species Conservation Act 1995) [2003] NSWCA 297; (2003) 58 NSWLR 631
REPRESENTATION:	APPLICANT P Singleton, barrister RESPONDENT P Cribb, solicitor
ORDERS:	1.The decision of the NSW Vocational Education and Training Accreditation Board to cancel the registration of Sydney Business Institute Pty Ltd as a Registered Training Organisation is affirmed 2.The decision of the NSW Vocational Education and Training Accreditation Board to cancel approval for Sydney Business Institute Pty Ltd to provide courses for overseas students is affirmed 3. These orders come into effect 14 days from the date of this decision.

REASONS FOR DECISION

Introduction

1 On 5 December 2007, following an audit process in July 2007, the NSW Vocational Education and Training Accreditation Board (the Board) registered Sydney Business Institute Pty Ltd (SBI) as a Registered Training Organisation (RTO). The Board also approved SBI to provide courses to overseas students. Just over two years later, the Board cancelled SBI’s registration and approval and refused its applications to expand. SBI has applied to the Tribunal for a review of those decisions: Vocational Education and Training Act 2005 (VET Act), s 47.

Background

2 SBI began enrolling students in February 2008. The Board had approved it to provide the following courses to a maximum number of 234 overseas students at premises in George Street, Sydney:

Certificate IV in Business Management
Diploma of Business Management
Certificate IV in Information Technology (multimedia)
Diploma of Information Technology (multimedia)

3 Because the pre-registration audit in July 2007 revealed that SBI was not compliant with many of the relevant standards applicable to RTOs, the Board imposed the following five conditions on its registration and approval:

1. That additional evidence of compliance for AQTF standards 7.3, 7.4, 8.1, 9.1, 9.4 as well as National Code 26, 27 and 48, as specified in accompanying report, be submitted to VETAB within 3 months of the date of registration (the ‘additional evidence’ condition);

2. No further applications will be accepted from Sydney Business Institute prior to the conduct by VETAB of a follow up audit to assess compliance with all requirements. This audit will be conduced within the first 12 months of registration and approval (the ‘no new applications’ condition);

3. Copies of final contracts of employment, as well as evidence of continued employment of nominated trainers/assessors, to be retained for audit purposes. Organisation to advise VETAB of any change to nominated assessor/trainers and provide evidence of appropriate qualifications and experience (the ‘trainer qualifications’ condition);

4. Copies of all completed student assessments conducted in the first 12 months of operation are to be retained for audit purposes. Assessments should include all evidence and tools that assessors have used to make the judgment those students are competent (the ‘student assessment’ condition);

5. The maximum number of overseas students being taught does not exceed 234 and the delivery is over 3 shifts. This total capacity relates to Level 11, 301 George Street, Sydney premises and to all VET courses being delivered to overseas students in NSW by the organisation (the ‘student cap’ condition).

4 On 22 August 2008, despite the ‘no new applications’ condition, SBI applied for three new courses to be approved and for approval to increase student capacity from 234 students to 693 students. On 21 January 2009, SBI applied to increase its student capacity to 861 students. The Board advised SBI in writing on 30 January 2009 that 627 students were enrolled to study and that it was in breach of student cap condition.

…it is a condition of your organisation’s registration that the maximum number of students being taught does not exceed 234 and the delivery is over 3 shifts. The Commonwealth’s database indicates your organisation currently has 627 students studying. This is a serious breach of your organisation’s conditions of registration and the matter will be addressed as part of the site audit.

5 On 16 and 17 February 2009 the Board conducted a post registration monitoring audit at SBI’s premises. At that audit, the Board did not assess the new applications because it was yet to review SBI’s progress since the July 2007 audit when it was found to be non-compliant. The conclusion of the February report was that SBI did not comply with the standards or conditions of registration. In particular, SBI was unable to demonstrate that it had addressed the non-compliances brought to its attention following the July 2007 audit or met any of the conditions of registration and approval imposed on it as a start-up provider. On 28 April 2009 the Board advised SBI that it proposed to cancel its registration. SBI responded on 22 May. The Board reviewed that material and produced a revised audit report in August 2009.

6 On 6 August 2009 the Board met and made the following decisions:

a) to cancel the registration of SBI as a training organisation pursuant to s 18(1)(d); ( the ‘cancel registration decision’ )

b) to cancel approval of SBI as a provider of courses to overseas students pursuant to s 35(1)(b) or s 34; ( the ‘cancel approval decision’ )

c) to refuse SBI’s application to add additional courses to its scope of registration pursuant to s 12; ( the ‘refuse addition to scope decision’ )

d) to refuse SBI’s application to increase the number of overseas students to whom it can provide courses ( the ‘refuse increase to student cap decision’ )

7 On 11 September 2009 the Board made the following decision:

e) to impose an additional condition pursuant to s 35(1)(c) in the following terms:

Sydney Business Institute Pty Ltd shall not, in relation to any course to which its approval under section 34 of the VET Act applies:

a. do anything for the purpose of recruiting or enrolling students of the course; or

b. solicit or accept any money from any student or intending student to the course (other than from a student who had begun the course on or before the date Sydney Business Institute Pty Ltd is given notice of this condition and only in relation to that course)

and the director, VETAB, be authorised to take appropriate action to electronically prevent Sydney Business Institute Pty Ltd from enrolling any students in any such course in breach of the above condition ( the ‘no new business condition’ decision ).

8 The August 2009 decisions were the subject of an application for internal review. Ms Tweedie conducted the review and gave notice to SBI of its decision to affirm each of the decisions on 14 September 2009. The ‘no new business condition’ decision was not subject to internal review but the Tribunal exercised its discretion to deal with the application even though no such application had been made: Administrative Decisions Tribunal Act 1997 (ADT Act), s 55(3)(b).

Issue

9 The issue is whether the Board’s decisions are the ‘correct and preferable’ decisions: ADT Act, s 63. In determining that issue, the Tribunal must have regard to the material then before it, including any relevant factual material and any applicable written or unwritten law: s 63(1). The Tribunal ‘stands in the shoes’ of the Board and may exercise all of the functions that are conferred or imposed on the Board: ADT Act, 63(2). The Tribunal may affirm, vary or set aside the Board’s decisions. The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice: ADT Act, s 73(2).

Legislative framework

10 The VET Act has the following objects (s 3):

(a) to establish a registration and accreditation framework for vocational education and training, in particular by applying nationally agreed standards,

(b) to ensure the quality and integrity of vocational education and training in this State,

(c) to provide for the approval by the Board of persons (other than official universities) to provide courses for overseas students (such approval forming the basis for registration under the Education Services for Overseas Students Act 2000 of the Commonwealth),

(d) to promote consistency of standards in vocational education and training,

(e) to encourage the recognition of vocational courses that are accredited under this Act.

11 The Board has functions including the registration of training organisations, the accreditation of vocational courses and the approval of persons to provide course for overseas students: VET Act, s 6.

Legislative basis for cancellation decisions

12 The legislative bases on which the Board made its cancellation decisions were as follows:

The cancel registration decision

Section 18 of the VET Act
(1) The Board may do any one or more of the following:

. . .

(d) cancel the registration of a training organisation that has been registered by the Board.

(2) The Board may only take action under subsection (1) in relation to an RTO on any one or more of the following grounds:
. . .

(d) the training organisation has failed to comply with the RTO standards or the registration and accreditation guidelines,
(g) the training organisation does not have the resources to competently provide the courses in respect of which it is registered,
(h) the resources of the training organisation do not comply with the RTO standards or the registration and accreditation guidelines,
(i) the training organisation has contravened this Act or a condition to which its registration is subject.

13 Mr Cribb, acting for the Board did not include s 18(2)(i) in a statement of grounds document he prepared shortly before the hearing. That provision was included in both the decision made on 6 August 2009 and in the internal review.

The cancel approval decision

Section 35 of the VET Act relevantly states that:
(1) The Board may, on its own motion or on the application of any person, do any of the following in relation to an approved provider:

(d) suspend or cancel the approval.
. . .
(3) The Board may not suspend or cancel an approval except on one or more of the following grounds:
(d) the approved provider has failed to comply with the approval guidelines,
. . .
(g) the approved provider does not have the resources to competently provide the courses to which the approval relates,
(h) the resources of the approved provider do not comply with the approval guidelines,
(l) the approved provider has contravened this Act, the regulations or a condition to which the provider’s approval is subject.

14 The ‘refuse addition to scope’ decision, the ‘refuse increase to student cap’ decision and the ‘no new business condition’ decision only arise for consideration if the two cancellation decisions are set aside.

RTO Standards

15 There is no dispute that the Board may not register SBI as an RTO unless it is satisfied that it complies with the RTO Standards. That term is defined in s 4 to mean ‘the Standards for Registered Training Organisations under the AQTF.’ ‘AQTF’ is defined to mean ‘the document entitled Australian Quality Training Framework, as in force from time to time, that defines the criteria and standards for the registration of training organisations and the accreditation of courses in the vocational education and training sector.’ The standards in the AQTF document are described as “the Essential Standards for Registration”. The Essential Standards for Registration include:

a) three standards relating to: training and assessment, client services and management systems;

b) a set of quality indicators or data to be collected; and

c) a set of nine conditions of registration to be met while operating as a training provider.

16 The three RTO standards relate to: training and assessment; client services and management systems. The first standard which relates to training and assessment is set out below:

Standard 1

The Registered Training Organisation provides quality training and assessment across all of its operations.

1.1 The RTO collects, analyses and acts on relevant data for continuous improvement of training and assessment.
1.2 Strategies for training and assessment meet the requirements of the relevant Training Package or accredited course and are developed in consultation with industry stakeholders.
1.3 Staff, facilities, equipment, and training and assessment materials used by the RTO are consistent with the requirements of the Training Package or accredited course and the RTO’s own training and assessment strategies.
1.4 Training and assessment is delivered by trainers and assessors who:
(a) have the training and assessment competencies determined by the National Quality Council or its successors,
(b) have the relevant vocational competencies at least to the level being delivered or assessed,
(c) continue to develop their vocational and training and assessment competencies to support continuous improvements in the delivery of RTO services.
1.5 Assessment, including Recognition of Prior Learning (RPL):
(a) meets the requirements of the relevant Training Package or accredited course,
(b) is conducted in accordance with the principles of assessment and the rules of evidence,
(c) meets workplace and, where relevant, regulatory requirements.

17 Nature of the standards. The AQTF Users’ Guide to the Essential Standards for Registration explains the standards in the following terms:

The standards focus on the quality of services and outcomes being achieved for clients. They allow RTOs some flexibility in demonstrating how they are meeting clients’ needs in the context of the scope and nature of their business. . . .

Each standard is supported by elements that provide more detail about achieving the outcome described in the standard.

18 In the context of Standard 1, this explanation suggests that the outcome of providing ‘quality training and assessment across all of its operations’ may be achieved by complying with each of the elements that support that outcome. Each standard commences with an element relating to continuous improvement.

19 The Introduction to AQTF reinforces this approach:

AQTF 2007 focuses on the quality of services and outcomes being achieved for clients rather than the inputs used to get there. This means that registered training organisations have more flexibility in demonstrating how their individual approaches provide quality training outcomes for their clients.

20 When determining whether an RTO ‘complies with the RTO standards’ the decision maker is being asked, among other things, to make an assessment about the degree to which the RTO is achieving the outcome expressed in each of the three standards based on compliance with each element within the standard. Because the outcomes, in most cases, cannot be objectively measured, that is a judgement about which minds may differ. Nevertheless, a judgement must be made.

The National Code

21 Every course which is approved to be provided to overseas students is registered on the Commonwealth Register of institutions and Courses for Overseas Students (CRICOS). Only CRICOS courses can be offered to international students studying in Australia on a student visa. The National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 (the National Code) is a set of nationally consistent standards that governs the protection of overseas students and delivery of courses to those students by providers registered on CRICOS. It is divided into four parts: Part A sets out the principles and guidelines that underpin the Code; Part B outlines the roles and responsibilities of the Australian and State and Territory Governments which share the responsibility for implementing the Code; Part C outlines the process and requirements for registration of providers and courses on CRICOS. It provides a general description of the registration process and specifies minimum requirements that apply to the registration process. It can be seen from the objects of the VET Act (and from the Note to Part 4 of the VET Act) that the approval by the Board of persons to provide courses for overseas students forms the basis of the registration of that provider under the Education Services for Overseas Students Act 2000 (Cth). The first stage of registration of providers and their courses on CRICOS is undertaken by the Board and the second stage by the Commonwealth Department of Education, Science and Training: National Code, Part C, 2.

22 Part D sets out 15 standards that providers must meet in their interactions with international students. The Standards that providers must meet are expressed as outcomes. As with the RTO standards, they are supported by specific elements. Grounds for cancellation of approval include an RTO failing to comply with the National Code: VET Act, s 35(3)(d). There is some overlap between the RTO Standards and the National Code.

23 When we refer in this decision to ‘the standards’, we are referring to both the RTO standards and the standards in Part D of the National Code.

Preliminary issue

24 A preliminary issue arose in relation to the cancellation decisions as to whether the Board has issued the National Code as an approval guideline as permitted by s 40 of the VET Act.

25 Identification of ‘approval guidelines’. In order to be approved to provide courses to overseas students, SBI must comply with the ‘approval guidelines’: s 34(7)(e). The provision relating to these guidelines is s 40:

40 Approval guidelines

(1) The Board may from time to time issue guidelines to be adopted in relation to the approval of persons to provide courses for overseas students.
(2) Any such guidelines may relate to matters such as the following:
(a) approval procedures,
(b) the resources required to provide a course for overseas students in a competent manner,
(c) the financial requirements and ethical standards to be satisfied by approved providers,
(d) the conditions to be imposed on the approval of persons to provide courses for overseas students.
(3) Copies of each guideline issued under this section are to be kept at the office of the Board and are to be made available for public inspection free of charge, and for purchase, during ordinary office hours.

26 ‘Approval guidelines’ is defined in s 4 to mean ‘the guidelines issued by the Board under section 40.’ The Board has issued the National Code as an approval guideline but it mistakenly invoked s 32 as the source of its power to do so instead of s 40. The Board made the following resolution on 1 July 2009:

That under section 32 of the VET Act the Board ratify the out-of-session resolution to issue the Australian Quality Training Framework 2007 Essential Standards (AQTF 2007) and the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 (the National Code 2007) as Guidelines for the registration of training providers and approval of CRICOS providers in NSW with effect from 1 July 2007.

27 Section 32 is in similar terms to s 40 but relates to the issuing of guidelines in relation to the registration of training organisations and the accreditation of vocational courses, rather than the approval of persons to provide courses for overseas students. The Board accepts that it should have invoked s 40 when issuing the National Code as a guideline but contended that that error or oversight could be remedied by the Tribunal.

28 In Lockwood v Commonwealth (1954) 90 CLR 177 at 184, Fullagar J referred to the “settled principle that an act purporting to be done under one statutory power may be supported under another statutory power.” Similarly, in Brown v West (1990) 169 CLR 195 at 203, five members of the High Court said:

. . . [T]he validity of the Tribunal’s determinations is unaffected by mistaking the source of the power to make them: Moore v Attorney-General (Irish Free State) [1935] AC 484; R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 at 487.

29 In Vaw (Kurri Kurri) Pty Ltd v Scientific Committee (established under s 127 of the Threatened Species Conservation Act 1995) [2003] NSWCA 297; (2003) 58 NSWLR 631, at 643, [53]-[54] Spigelman CJ determined after a comprehensive review of the authorities, that the issue must be determined by reference to the statutory scheme under consideration. In that case because there was an alternative source of power for the making of a particular determination, and there was no procedural or substantive difference depending on whether a matter was commenced in either of two alternative ways, the determination was valid. In this case, the Board had the power under s 40 to issue the National Code as a guideline for the approval of persons to provide courses for overseas students (CRICOS providers). It exercised that power. The fact that it either deliberately or inadvertently referred to the incorrect provision when exercising the power does not affect the validity of the determination. Consequently, the National Code is an approval guideline and the Board may cancel an approval on the basis that SBI has failed to comply with it: VET Act, s 35(3)(d).

Evidence

30 The witnesses for SBI were Mr Bagijn, the Director and principal shareholder of SBI, Mr Oostdyck, the former Principal Executive Officer and Mr Tonkin who has been the Acting Principal Executive Officer since Mr Oostdyck’s departure in October 2009. Ms Watkins conducted the audit in February 2009 and gave evidence for the Board. The only expert witness was a consultant, Mr Feagan. There were several volumes of documentary material including three volumes of the administrator’s documents and two volumes of material provided by SBI not long before the hearing. Apart from the audit reports and the decisions of the Board one of the most significant documents was a report provided by SBI to the Board dated 20 August 2009. That report provided a useful summary of SBI’s response to the Board’s concerns at that time.

31 Ms Watkins gave evidence for the Board. Mr Singleton chose to use the time available for cross-examination by focusing in some detail on Parts C and D of the National Code (up to Standard 11) and on standard 1.2 of the RTO Standards. During the course of that cross-examination Ms Watkins agreed with Mr Singleton that the Board cannot assess an RTO against the standards in Part C of the National Code because those standards are directed to regulators such as the Board and not to RTOs. Ms Watkins also agreed to change several findings of ‘non-compliant’ to findings of ‘compliant’, ‘not applicable’ or ‘not auditable’. She maintained her finding of non-compliant in relation to Standard 10.1 of Part D of the Code relating to course progress. In addition, in relation to Standard 1.2 of the RTO Standards, Ms Watkins withdrew a finding of non-compliance saying that some of the text supporting that standard would have been better placed under element 1.5. On the basis of these concessions on selected parts of the audit report, Mr Singleton submitted that none of the remainder of the audit report can be relied on to support any of the Board’s decisions.

32 Mr Cribb disagreed with that submission but nevertheless agreed that if the Tribunal were minded to affirm the Board’s decision on the basis of material in the audit report on which Mr Singleton did not cross-examine Ms Watkins, a further hearing would be necessary to test that evidence. We do not agree that it follows that Ms Watkins’ concessions in relation to some parts of the audit report mean that we should disregard the remainder of her report. Nevertheless we have not relied on her view in relation to matters about which she was not cross-examined. Rather, we have relied on the remainder of the evidence in forming our own view of compliance or non-compliance.

33 Mr Cribb, representing the Board, described Mr Feagan’s evidence as the ‘best evidence’ of non-compliances. Despite that concession, we found Mr Feagan’s opinions about compliance generally unpersuasive. Examples are noted throughout the decision. Firstly, he was not adequately briefed. He did not know, for example, that SBI’s registration and approval was subject to five conditions imposed by the Board. Secondly, his report was not comprehensive. His response to the 45 specific issues identified by the Board was dealt with in a total of 4 pages with no more than a 5 line response to any one issue. In addition, he appears to have inadvertently not given a response to the issue of a student being permitted to enrol in a course without having completed a pre-requisite and without having any prior learning recognised.

Contravention of conditions of registration

34 One of the grounds on which the Board cancelled SBI’s registration and approval was on the basis of s 18(2)(i) and s 35(3)(l) of the VET Act. Those provisions state that it is a ground for cancellation of registration and approval if the RTO has contravened a condition to which the provider’s approval is subject. In his Statement of Grounds filed on 3 November 2009, Mr Cribb identified s 35(3)(l) as one of the grounds on which approval had been refused but failed to mention s 18(2)(i). Mr Singleton said, in his final submissions, that the Board was not relying on a breach of these conditions or that any breach was not a matter to which the Board had a particular regard. We do not accept those submissions for the following reasons.

35 On 28 April 2009, Ms Willis, the Director of the Board, wrote to Mr Bagijn giving notice of the proposed decision to cancel SBI’s registration and approval to deliver courses to overseas students. Ms Willis listed the most serious areas of non-compliance as including breaches of the conditions of registration. She noted:

The organisation’s July 2007 audit identified non-compliances which have not been addressed at the February 2009 audit.

Breaches of conditions of registration as stated in the ‘Approval of Registration’ letter from the Director, VETAB, 5 December 2007 including:

- organisation to advise VETAB of any change to nominated assessors/trainers and provide evidence of appropriate qualifications and experience

- copies of all completed student assessments conducted in the first 12 months of operation are to be retained for audit purposes

- the maximum number of overseas students being taught does not exceed 234 and the delivery is over 3 shifts. As at 5 February 2009 619 students are enrolled.

36 The letter of 6 August 2009 notifying SBI of the decision to cancel registration and approval referred to both s 18(2)(i) and s 35(3)(l) as grounds for the Board’s decision.

37 In the Statement of Grounds document, in support of the Board’s reliance on s 13(3)(l) Mr Cribb referred to the ‘conditions’ imposed under Standards 7, 9, 11 and 12 of Part C of the National Code. Mr Cribb appears to be referring to the standards rather than to the conditions imposed on SBI on registration. However, Mr Cribb also referred in his Statement of Grounds document to the Internal Review at p 1090 to 1093. That document contains a reference to the conditions of registration including the student cap condition. At page 1093 Ms Tweedie states that:

On 5 December 2007, the Director, VETAB, advised Sydney Business Institute Pty Ltd of her decision to initially register the organisation and approve it to deliver courses to overseas students. One condition, among others, imposed by the Director on the registration and approval was that the maximum number of overseas students being taught did not exceed 234 and the delivery was over 3 shifts.

A second condition imposed on the organisation was that no further applications would be accepted from Sydney Business Institute Pty Ltd prior to the conduct by VETAB of a follow-up audit to assess compliance with all requirements.

. . .

Serious areas of non-compliance are evident in relation to the organisation’s approved capacity with respect to the National Code Part C: 12. The organisation has not complied with a condition of its registration in relation to student capacity and approval on 7 December 2007 with respect to s 13(4) of the VET Act.

38 There can have been no doubt on the basis of this material, that the Board was relying on a breach of the conditions of registration and approval as one of the reasons for the cancellation decisions. SBI was on notice of that fact and Mr Oostdyck specifically addressed each of the alleged breaches of the conditions in his statement.

The ‘no new applications’ condition

39 When SBI was registered and approved a condition was placed on its registration that the Board would not accept any further applications until conducting a follow up audit. Despite that condition, on 22 August 2008 SBI applied for three new courses to be approved and for approval to increase student capacity from 234 students to 693 students. On 21 January 2009, SBI applied to increase its student capacity to 861 students. These applications were not dealt with at that time.

40 The no new applications condition was expressed as applying to the Board, rather than SBI. For that reason, we are not satisfied that SBI breached the condition by making the applications for amendment to the scope of its operations.

The trainer qualifications condition

41 A specific condition was placed on SBI’s registration that:

Copies of final contracts of employment, as well as evidence of continued employment of nominated trainers/assessors, to be retained for audit purposes. Organisation to advise VETAB of any change to nominated assessor/trainers and provide evidence of appropriate qualifications and experience.

42 This condition has two parts: retaining contracts and other evidence of continued employment and advising the Board of the qualifications and experience of any new trainers and assessors. In the February 2008 Audit Report at p 23, Ms Watkins noted that only two of the trainers listed as being on staff during the audit in 2007 were current trainers. Ms Watkins commented that SBI has not notified the Board of any changes to nominated assessors/trainers despite that being a condition of registration.

43 The internal review conducted by Ms Tweedie on 4 September 2009, noted that:

The organisation has not provided evidence of training and assessment competencies and vocational competencies, nor continuous development of these competencies, held by 8 trainers and assessors appointed to Sydney Business Institute Pty Ltd since 16 February 2009 following the departure of 7 trainers since that date.

44 In his evidence, Mr Oostdyck said that during the period he was the Principal Executive Officer with SBI from July to October 2009, he observed that SBI was willing to engage professional and qualified staff and to fully fund necessary changes on his recommendations. His only comment about non-compliance with the condition was that during his time at SBI, the trainer matrix (a document that details the allocation of trainers to units of competence) was mapped and completed around the time of his departure. There was no assertion that SBI had complied with either part of this condition on the basis of the documentary and oral evidence, we find that it did not do so.

The student assessment condition

45 Another condition imposed on SBI at registration was as follows:

Copies of all completed student assessments conducted in the first 12 months of operation are to be retained for audit purposes. Assessments should include all evidence and tools that assessors have used to make the judgment those students are competent.

46 SBI provided the Board with a document in August 2009 setting out its response to the alleged non-compliance with this condition in the following terms: “SBI is currently in the process of collating copies of completed student assessments. Within the next few months SBI will be putting in place appropriate systems and processes for the continuous and systematic retention of completed assessments.” (Emphasis added.)

47 Mr Oostdyck’s evidence in relation to this condition was that student records was an area of compliance which he identified as needing improvement. He said that he initiated a complete review of each student’s individual file to ensure compliance with the standards. All student assessments were retained, filed and coded in boxes and stored with the student services unit. He maintains that historical inconsistencies in records were substantially rectified and systems were put in place for the appropriate retention of assessments and other records. With respect, even if systems are now in place, it is apparent that this condition was not being complied with until relatively recently. The Board conducted its February 2007 audit without the benefit of these documents. We are satisfied that SBI has contravened this condition.

The student cap condition

48 The Board advised SBI on 30 January 2009 that 627 students were enrolled to study and that SBI was in breach of the condition imposed on its registration and approval not to enrol more than 234 students. It was not until March 2009 that SBI requested that any further enrolments be blocked so that the numbers could not increase any further. As at 3 August 2009 501 students were studying at SBI. Because it voluntarily blocked any further enrolments, and because of the no new business condition imposed on 11 September 2009, as at 16 at November 2009 SBI had 261 students. SBI concedes that it has exceeded its approved student capacity in breach of the condition imposed on it.

Conclusion in relation to conditions on registration

49 In December 2007, when SBI was registered, the Board was not satisfied that it complied with all the applicable standards. Conditions were placed on the registration and approval so that the Board could monitor the quality of training and assessment SBI was providing. After the initial registration at the end of 2007, the Board audited SBI in February 2009. At that stage SBI continued to be in breach of the three conditions of registration and approval referred to above.

50 The kind of sanction to be imposed depends on the nature and extent of the conduct, the degree of risk it presents to consumers and the VET system and any mitigating circumstances.

51 Nature of conduct. The purpose of the trainer qualification condition and the student assessment condition was to allow the Board to assess ongoing compliance with the standards. The trainer qualification condition was imposed to monitor the qualifications and experience of trainers and assessors to ensure that they had the necessary competencies in accordance with RTO Standard 1.4. Similarly, the student assessment condition was imposed to monitor the quality of assessments in accordance with RTO Standard 1.5. The student cap condition was imposed to ensure that prior to any expansion, SBI had satisfied the Board that it was addressing the issues that had been raised in the 2007 audit. By not complying with these conditions, the Board did not have the opportunity to comprehensively monitor the training and assessment SBI was providing.

52 Degree of risk. The risk to consumers and the VET system of SBI’s failure to comply with the three conditions was critical. Having found SBI to be non-compliant, the Board was nevertheless unable to comprehensively monitor its ongoing compliance in relation to the competence of the trainers and assessors and the validity of the assessment process. The focus of the standards reveals that these are two of the most significant components of quality education and training. The Board cannot effectively protect the interests of consumers unless RTOs comply with these kinds of conditions when they are imposed on their registration or approval. Indeed, the importance of doing so was recognised by Parliament when it made it a criminal offence to contravene a condition to which an RTO’s registration is subject: s 13(6). We regard SBI’s continuing preparedness to contravene three of those conditions as constituting a sufficient risk to consumers and to the integrity of the VET system to justify cancelling their registration and approval.

53 Mitigating circumstances. Despite being on notice that breach of the conditions was a significant issue, no explanation was provided as to why SBI did not comply with the trainer qualifications condition or the student assessment condition. We acknowledge that after SBI received the February audit report, it began to address those issues. In mitigation of its actions in relation to the student cap condition, SBI submitted that it had the capacity to accommodate more students, a different organisation had approved it to enrol 54 overseas students in another course and the Board had only recently tightened up on RTOs exceeding their student cap.

54 Mr Oostdyck said that he thought it was acceptable for SBI to have 450 overseas students enrolled when he started working there on 13 July 2009 because SBI had the resources, including the staff and facilities, to adequately accommodate that number of students. When Mr Oostdyck left SBI in September 2009, he said that it was ‘well on the road to compliance”.

55 Another matter which Mr Oostdyck raised in support of his opinion that SBI had sufficient resources to cater for an increase in the number of students was that SBI applied for and successfully obtained approval to teach English language courses in 2009. The approval was issued by National English Language Training Accreditation Scheme (NEAS) under its delegated authority from the Board. NEAS authorised SBI to provide those courses to 54 overseas students. No students have been enrolled in that course pending the Board’s (and now the Tribunal’s) determinations. However the data base which records student capacity (the Provider Registration and International Students Management System or PRISMS) records that SBI’s student capacity is 288 (234 plus 54). Mr Bagijn said the materials before NEAS regarding SBI’s facilities and administration were very similar to those before the Board in relation to the application to increase its student numbers.

56 Mr Singleton put to Ms Watkins that there was a common understanding that RTOs could exceed the maximum number of students. Ms Watkins did not agree with that proposition but said that the Board has been stricter in enforcing the requirements relating to maximum student capacity in the last 18 months to two years.

57 None of these factors satisfy us that cancellation is not the correct and preferable decision. While SBI’s and NEAS’ opinion of its capacity and resources is relevant to the question of whether or not SBI’s application to expand should be granted, those opinions do not explain or excuse SBI’s unilateral decision not to comply with a condition of registration. The decision to put a block on enrolments through the PRISMS data base was not made until March 2009, well after SBI became aware that its numbers were considerably in excess of the cap of 234 students. Finally, even if the Board did ‘tighten’ its approach in the last 18 months to 2 years, that was about the time that SBI was registered. SBI can have been under no illusion that the Board was serious when it placed an explicit condition on its registration and approval and notified it that it was in ‘serious’ breach of the student cap condition in January 2009.

58 Although this conclusion means that it is not strictly necessary to determine whether the cancellation decisions are justified on any other ground, we will proceed to consider that issue for completeness. We have only discussed issues which, in our view, constitute potential non-compliances with the standards.

Inaccurate marketing and advertising – National Code

59 Part D of the National Code is headed “Standards for Registered Providers”. Standard 1 relates to marketing information and practices. It states that:

Registered providers ensure that marketing of the education and training services is professional, accurate and maintains the integrity and reputation of the industry.

1.1 The registered provider must ensure the marketing of its education and training services it undertaken in a professional manner and maintains the integrity and reputation of the industry and registered providers.

60 On the SBI’s website the following description of Mr Bagijn appeared:

Nicolaas Bagijn (Principal/Director)
Qualifications:
Doctorate in Economics at the Erasmus University in Rotterdam (Netherlands)
MBA Executive Program, INSEAD, Fountainbleu (France)

61 Mr Bagijn’s business card described him as Dr. Nicolaas Bagijn. Mr Bagijn agreed that he does not have a doctorate in Economics and he is not entitled to refer to himself as ‘Dr’. Rather, he has what is known as a Doctroamus which entitles him to use the title ‘Drs’. While Mr Bagijn denied that he had deliberately mislead people by allowing that information to be put on the website and on his business card, we find that Mr Bagijn knew that he was not entitled to describe himself or his qualifications in those ways and that he was passing himself off as having a qualification that he did not have. While we are not aware of the exact period of time during which the information recorded above appeared on SBI’s website, we are satisfied that during that period SBI was non-compliant with Standard 1.1 because the marketing of its services was not being undertaken in a manner that maintained the integrity and reputation of the industry and registered providers. We do not accept Mr Feagan’s opinion that whether the PEO holds a doctorate has nothing to do with the standards audited.

Inadequate monitoring of course progress – National Code

62 Standard 10.1 of Part D of the National Code states that:

Registered providers systematically monitor students’ course progress. Registered providers are proactive in notifying and counselling students who are at risk of failing to meet course progress requirements. Registered providers report students, under section 19 of the ESOS Act, who have breached the course progress requirements.

10.1 The registered provider must monitor, record and assess the course progress of each student for each unit of the course for which the student is enrolled in accordance with the provider’s documented course progress policies and procedures.

10.2 The registered provider must have and implement appropriate documented course progress policies and procedures for each course . . .

63 It is a condition of the visas issued to overseas students that they be required to attend for 20 hours a week and make satisfactory progress through their course. If they do not do so, they may be reported to the Department of Immigration and Citizenship. Standard 10.2 of Part D of the National Code requires an RTO to have and implement a course progress policy and assess the course progress of the student in accordance with that policy at the end point of every study period.

64 Mr Oostdyck admitted that SBI had previously inadequately implemented the approved course progress policy. He said that SBI introduced such a policy in the second term of 2009 and proper implementation was put in place at that time. This is a frank admission of non-compliance with Standard 10.2 at least until around April 2009, over 12 months after SBI had been registered.

Statements of attainment and testamurs – Condition 6

65 The Standards of Registration in AQTF 2007 include nine conditions of registration. Those conditions also apply to applications for renewal of registration. The relevant part of Condition 6 states that:

The RTO must issue to persons whom it has assessed as competent in accordance with the requirements of the Training Package or accredited course, a qualification or statement of attainment (as appropriate) that:

meets the Australian Qualifications Framework (AQF) requirements.

66 The wording required on Statements of Attainment is set out in the Protocol for defining the form of Statements of Attainment, National Quality Council Resolution, September 2007. Mr Feagan identified two errors in a sample statement of attainment he sighted. He said that at the bottom, the words, ‘The qualification certified herein . .’ should read ‘The statement of attainment is recognised’. Secondly, Mr Feagan pointed out that all statements of attainment are to include the words “A statement of attainment issued by a Registered Training Organisation when an individual has completed one or more units of competency from nationally recognised qualification(s)/course(s).” Mr Feagan has incorrectly recorded the words that are required to be used by omitting the word ‘is’ between the words ‘attainment’ and ‘issued’. We make no criticism of him on that count. The omissions and errors identified by Mr Feagan (apart from his own error) mean that the statements of attainment do not comply with Condition 6 of the AQTF.

67 Mr Cribb submitted that the errors made by SBI on its statement of attainment were significant because this is the document which records a student’s achievements and it must be totally reliable. According to Mr Cribb, if SBI cannot ensure that statements of attainment contain the correct wording, when that wording is prescribed, that shows a fundamental failure by SBI to meet objective requirements. Mr Singleton described these deficiencies as ‘small errors’. In our view, the errors on the Statements of Attainment constitute a minor non-compliance with Condition 6.

Fast tracking, flexible student attendance and rolling monthly enrolments – RTO Standard 1.2

68 RTO Standard 1.2 states that;

Strategies for training and assessment meet the requirements of the relevant Training Package or accredited course and are developed in consultation with industry stakeholders.

69 The Board’s discussion of this issue demonstrated concern in three areas: fast tracking, flexible timetabling and rolling enrolments. Ms Watkins conceded in cross-examination that SBI was not non-compliant with this standard in relation to these matters. However, she was not prepared to concede that it was compliant.

70 Fast tracking. In accordance with the requirements of Standard 7 of Part C of the National Code a course can only be registered on CRICOS if the expected duration is nominated. When SBI applied for registration and approval it nominated a course duration of 35 weeks for the Diploma of Business. Despite that course length, SBI had a practice of ‘fast tracking’ some students. Although SBI told the auditors that that practice was no longer occurring, of the 51 students who enrolled in the Diploma of Business on 21 January 2009, 15 had confirmation of enrolments of 22 weeks, rather than 35 weeks. SBI did not present the Board with a strategy showing that the course could be delivered to a select group of students in that time. According to Ms Watkins, there would need to be two different strategies: one for a 35-week course and the other for a 22-week course. There was only one timetable for the course so she concluded that there was no separate strategy for the 22 week course.

71 Mr Feagan’s comment in relation to this issue was that the matter has been resolved and should not occur again with the abolition of the ‘fast tracking’ process.

72 Flexible student attendance. Ms Watkins noted that three of the four courses being delivered, were timetabled so that the same session is delivered in 4-hour blocks in the morning, the afternoon and the evening. Students could choose which of these three sessions to attend. While this was a flexible arrangement, students would have to attend every day of the week in order to attend for 20 hours which is the minimum requirement. Ms Watkins’ criticism of this arrangement was that the Training Packages require students to work in teams on projects. It is very difficult to do that if they do not attend classes with the same cohort for each lesson. She also said that this timetabling results in a ‘lock step’ approach to training delivery where all classes and all students must progress at the same rate.

73 Mr Feagan noted that the practice of offering flexible timetables has been abolished although some students preferred that approach.

74 Rolling monthly enrolments. Ms Watkins noted that in the initial audit, SBI advised that it intended to undertake monthly rolling enrolments. The PRISMS database confirms that this has been and continues to be the approach even though SBI has said that they have ceased that practice. SBI provided bar graphs and two tables showing start and finish dates for Business and IT Multimedia courses. These were provided to illustrate the difference in course durations according to when the student commences the course. For example, if a student commences during the middle of the term the course duration will be extended by a further 4 weeks to accommodate the 4 week holiday break. Ms Watkins commented that the information indicates only two start dates for Information Technology courses in 2009. That is contrary to the information on the PRISMs date base showing four different start dates. According to Ms Watkins the information that SBI provided did not account for all the variations in course durations identified in the audit report. She concluded that despite saying that they would only have two intakes per year, the PRISMS database indicates that SBI has continued to enrol students on a monthly basis. In her view that practice has a serious impact on the outcomes SBI can deliver.

75 Conclusion. Mr Oostdyck said SBI has ceased the practices of fast tracking students, flexible time tabling and multiple student intakes during term on his arrival in July 2009. He said that he did not believe the ‘fast tracking’ of students was a deliberate act, but rather a response to assist students to remain on track with study requirements. We do not accept that the fast tracking of students was anything other than deliberate. We also accept Ms Watkins’ evidence that SBI has continued to enrol students on a monthly basis. Ms Watkins was persuaded that none of these practices constituted a breach of Standard 1.2. although she said that they would have a serious impact on the outcomes that students can achieve.

Omission of pre-requisites and inclusion of outdated courses – RTO Standard 1.2

76 Mr Feagan sighted learning and assessment strategies for all courses being provided. He found that the learning and assessment strategy for the ICA40805 training package did not identify the 9 units which are listed as pre-requisites. Two of the units listed had been superseded following the transition from the 1999 package to the 2005 package. Similarly, the learning and assessment strategy for the ICA50905 training package did not identify the 9 units which are listed as pre-requisites. In addition, one of the units listed in the structure of the course has been superseded and should be replaced. Mr Feagan said that while the pre-requisites do not have to be listed, it is typical for them to appear in the strategy. Inclusion of two units from the old version of the course is a breach of the packaging rules and amounts to non-compliance with 1.2. We agree with Mr Feagan’s conclusion.

Recognition of prior learning – RTO Standard 1.2 and 1.5

77 The packaging rules in the Training Package for Certificate IV in Multi Media and the Diploma in Information Technology contain various pre-requisites. While conducting her site audit, Ms Watkins identified a student who had commenced a particular course without having completed a pre-requisite. She found no process to be in place for checking to make sure that a student enrolling in a course had completed pre-requisites. When asked how they went about that task, SBI provided one example of a case where a student’s prior learning had been recognised so that that student did not have to complete the pre-requisite. After examining the documentation on which that assessment had been based, Ms Watkins concluded that it was insufficient to warrant recognising the prior learning of the student. Furthermore, the assessment of prior learning had taken place some two months after the student had commenced the course for which the pre-requisite was required. We do not accept Mr Singleton’s suggestion that this was a practical response to a situation where the student may otherwise have had to wait some months before he or she could commence the course.

78 We accept Ms Watkins’ judgement that it was not sufficiently clear from SBI’s material how it checked that enrolling students met the prerequisites or why it was acceptable to assess a student’s prior learning after he or she had begun the course. Again, Ms Watkins conceded under cross-examination that this was not a breach of the relevant training package and therefore not a breach of Standard 1.2. It may constitute a breach of Standard 1.5 but Ms Watkins was not cross-examined on that issue. Mr Feagan’s only comment was that Recognition of Prior Learning Policy has been re-written.

Competencies of staff – RTO Standard 1.4

79 Element 1.4 of Standard 1 of the RTO Standards requires that training and assessment be delivered by trainers and assessors who:

(a) have the training and assessment competencies determined by the National Quality Council or its successors,
(b) have the relevant vocational competencies at least to the level being delivered or assessed,
(c) continue to develop their vocational and training and assessment competencies to support continuous improvements in the delivery of RTO services.

80 The two main issues reflected in this standard are that staff have the competencies required to deliver the courses and that they continue to develop those competencies. Ms Watkins’ conclusion was that SBI was non-compliant in both these areas.

81 In relation to the issue of professional development, Mr Oostdyck said that professional development of the trainers was arranged and external advisers engaged to ensure an ongoing programme commencing with the term break in September 2009. Mr Oostdyck says he introduced a trainer workshop and presented various topics including validation, compliance, training and assessment and occupational health and safety matters. Mr Feagan’s implied conclusion that SBI now complies with Standard 1.4(c) relating to professional development is supported by the evidence but was an area of non-compliance prior to September 2009.

82 In relation to the Board’s concern that there was inadequate evidence to support trainers’ and assessors’ vocational qualifications and competencies, SBI’s 20 August 2009 response was that further evidence of qualifications and competencies will be collated and appropriately documented and that compliance should be achieved by October 2009. Mr Oostdyck later gave evidence that all relevant staff were reviewed and a comprehensive trainer matrix was completed.

83 Mr Feagan provided a table summarising the qualifications and experience of staff. Of the 17 staff members he audited, five had no teaching experience and nine had no record of recent professional development. He noted that many of those with no record of professional development had been hired recently. Qualifications were not provided for two staff members. Mr Feagan’s conclusion on the basis of that evidence was that although some ‘minor adjustments’ needed to be made regarding the supervision of staff who have little or no teaching experience, SBI now has adequately qualified trainers. We find that conclusion unpersuasive.

84 Mr Feagan’s comment about the two staff members whose qualifications had not been provided was that they were not ‘pivotal’ to SBI’s ability to deliver the courses. With respect, it is irrelevant whether or not that is the case. Standard 1.4 requires that trainers have the necessary competencies. Unless those competencies are sighted and assessed, the decision maker cannot be satisfied that the standard has been met. Consequently, on the basis of the evidence provided to Mr Feagan, we are not satisfied, in accordance with Standard 1.4, that all trainers and assessors have the necessary training and assessment competencies.

85 Finally, we do not agree as a question of fact, with Mr Feagan’s conclusion that only ‘minor adjustments’ are necessary in relation to the supervision of staff. On Mr Feagan’s own evidence nearly 30% of the staff he audited need to be supervised because they have no teaching experience. There was no evidence from SBI as to how they proposed to ensure that supervision was provided within the limits of its current resources.

Inappropriate assessments – RTO Standard 1.5

86 RTO Standard 1.5 relates to assessment and recognition of prior learning:

1.5 Assessment, including Recognition of Prior Learning (RPL):
(a) meets the requirements of the relevant Training Package or accredited course,
(b) is conducted in accordance with the principles of assessment and the rules of evidence,
(c) meets workplace and, where relevant, regulatory requirements.

87 In the audit report Ms Watkins stated that she had sampled the files of five students studying business qualifications and found that one file contained no assessment tools. Four ‘reported’ student files were also sampled. There were no assessment tools in those files. SBI’s response to this concern was that completed assessment tools are now being filed systematically and that as part of the validation process, this area will be reviewed further. Mr Oostdyck gave evidence that assessments were reviewed and improved and the validation process was implemented across all qualifications.

88 Another deficiency identified by Ms Watkins was that the majority of assessments do not include marking criteria or information on what is being assessed or how competence will be determined.

89 Mr Feagan agreed that the missing assessment tools was a problem and that this was being addressed as part of an ongoing implementation of system changes. He acknowledged that it was a ‘work in progress’. Similarly, Mr Feagan agreed that assessments should include the criteria by which they are marked. He said that assessor’s guides have been implemented for some units and work is ongoing to complete all units. Each assessment tool now includes a marking guide. However, given the fact that assessor’s guides exist only for some units, this is an area which, even on Mr Feagan’s evidence, should be the subject of continuous improvement.

Records Management – RTO Standard 3.3

90 RTO Standard 3.3 requires that the RTO manage records to ensure their accuracy and integrity. Mr Feagan found that SBI’s attendance records were not being completed in a consistent manner and were sometimes left unsigned. He acknowledged that this was not ‘best practice’ but was not persuaded that it was not compliant with Standard 3.3. Rather, Mr Feagan expressed the view that SBI’s current practices constituted an ‘opportunity to improve’. In our view, if some attendance records are not signed, they are not being managed in a way which ensures their integrity. We are satisfied that SBI is not compliant with Standard 3.3.in that respect.

Training material – resources to competently provide the courses

91 Under s 18(2)(g) of the VET Act a ground for cancellation of registration is that an RTO does not have the resources to competently provide the courses in respect of which it is registered. In addition, standard 1.5 states that assessment is to meet the requirements of the relevant Training Package and be conducted in accordance with the principles of assessment and the rules of evidence.

92 The Board expressed concerns about the inadequacy of training and assessment material which was said to consist of photocopied booklets from software publications.

93 In its August 2009 document, SBI responded to that concern by acknowledging that there were some modules that require considerable improvement. It was reported that an external consultant had been engaged to assist with that process. Mr Oostdyck said that he initiated development of trainer assessor guidance, student guides and associated resources. Training resources were appropriately acquired from external publishers and resources were further improved through a validation process.

94 Mr Tonkin said that in his view the resources for training and delivery are adequate. This includes having in place appropriate licensing arrangements with external publishers. The validation process, with which he had been involved, was said to have improved SBI’s resources.

95 As recently as August 2009, SBI was still in the process of validating its learning resources and assessment materials. The highest it was able to be put was that plans are in place to implement a systematic approach to this activity for all course materials. Mr Feagan agreed that some moderation had taken place and that there was a plan in place to moderate but it had not been done as at 22 October. Mr Feagan said he was comfortable that there appeared to be a systematic approach to moderation. He emphasised that the thrust of Standard 1 is continuous improvement. His view did not change when Mr Cribb referred him to a document entitled Post Validation Report BSB41101 (Ex E, vol 2, tab 26) and pointed out that performance criteria 1.1 had not been adequately assessed. Mr Feagan said that activities such as moderation are all a ‘work in progress’ and that is the nature of continuous improvement.

96 While we are satisfied, given the evidence that SBI currently has the resources to train and deliver its courses, that was only very recently the case. SBI acknowledged as at August 2009, that considerable improvement was still required. Mr Feagan is correct to the extent that resources can always be improved.

Managing Non-Compliance

97 The Commonwealth government has produced a guideline entitled National Guideline for Managing Non-Compliance. That document sets out how the Board should ensure that an RTO that is not compliant with the standards is treated fairly, given every opportunity to demonstrate compliance and that any restrictions placed on the RTO’s registration is in proportion to the level of non-compliance with the standards. Three categories of non-compliance are identified: minor, significant and critical. Critical non-compliance arises where there is a critical adverse impact on learners and/or consumers. The guidelines make the point that the type of sanction to be imposed depends on the nature and extent of non-compliance and the degree of risk it presents to consumers and the VET system. Compliance history is said to be relevant when determining sanctions.

98 The guidelines suggest that the terms ‘minor’, ‘significant’ and ‘critical’ be used in the audit report. For minor non-compliances, it is suggested that no sanction be imposed provided it is rectified within the applicable period. For significant non-compliances, the suggested sanctions include imposition of conditions and amendments to the registration. In the case of critical non-compliance, the guidelines suggest that an RTO be given up to 20 working days to remedy the non-compliance. Possible sanctions for critical non-compliance are the imposition of conditions, the amendment of registration, suspension of registration and cancellation of registration.

Conclusion

99 A ground for cancelling an RTO’s registration is that it has failed to comply with the RTO standards or the registration and accreditation guidelines (AQTF 2007). A ground for cancelling approval for an RTO to provide courses to overseas students is that the RTO has failed to comply with the approval guidelines (the National Code). In summary, we have concluded that as at the date of the hearing, SBI was not compliant with the following RTO standards:

Condition 6 of AQTF in relation to the wording in Statements of Attainment;
RTO Standard 1.2 in relation to a breach of the packaging rules;
RTO Standard 1.4 in relation to the competencies of trainers and assessors; and
RTO Standard 3.3 in relation to records management.

100 The first non-compliances is relatively minor, although we agree with Mr Cribb that SBI has had ample opportunity to ensure that these documents correctly set out objective criteria. The breach of the packaging rules is an oversight which can easily be remedied. The third non-compliance relates to two trainers whose qualifications were not provided. Given the emphasis that the Board has given to ensuring that the competencies of staff are recorded and comply with the Standard, it is surprising that no explanation was given for the lack of those records in relation to two staff members who Mr Feagan audited. Again, that matter is relatively minor and can easily be rectified. Failure to sign attendance records is a significant matter and one which requires rectification.

101 The appropriate sanction to be imposed should take into account factors including RTO’s compliance history. Areas which were compliant with the standards at the time of hearing but not compliant prior to the hearing were as follows:

National Code, Part D Standard 10.2 in relation to implementation of a course progress policy;
National Code, Part C, 1.1 in relation to marketing and advertising; and
RTO Standard 1.4(c) in relation to professional development.

102 Monitoring students’ attendance and progress through their course is critical to the integrity of the VET system. Mr Oostdyck admitted that SBI had previously inadequately implemented the approved course progress policy and that such a policy had only been introduced and properly implemented in the second term of 2009.

103 The breach of the marketing and advertising standard is a significant matter. Students may have obtained an inaccurate view of Mr Bagijn’s qualifications from the information on the website. The lack of attention to the recording and implementation of professional development of staff is also a significant issue.

104 SBI began enrolling students in February 2008. The Board’s view in February 2009 was that SBI did not comply with the standards or conditions of registration. We accept the Board’s evidence, which was not contradicted by SBI, that it had not addressed the alleged non-compliances brought to its attention following the July 2007 audit. Whether or not all the Board’s conclusions about non-compliance in February 2009 were justified, it was not until after that report was provided, and in many cases until Mr Oostdyck was appointed as the Principal Executive Officer in July 2009, that SBI began seriously to address these issues.

105 SBI has had ample opportunity to address the issues highlighted by the Board in its 2007 audit during its first 15-18 months of operation. The Board registered SBI in the expectation that those matters would be rectified. Even as at the 2009 audit issues as critical as the implementation of the course progress policy had not been addressed. It was not until SBI’s registration and approval was under threat that SBI took significant steps to address these issues. While relatively minor or even significant non-compliances would not normally justify cancellation, in this case those non-compliances together with SBI’s entire compliance history persuades us that cancellation is the preferable decision.

1.The decision of the NSW Vocational Education and Training Accreditation Board to cancel the registration of Sydney Business Institute Pty Ltd as a Registered Training Organisation is affirmed.

2.The decision of the NSW Vocational Education and Training Accreditation Board to cancel approval for Sydney Business Institute Pty Ltd to provide courses for overseas students is affirmed.

3.These orders come into effect 14 days from the date of this decision.