Top 5 RTO Areas of Concern: What ASQA Audits Are Finding

Sep 23

10 min read

At the VET Quality and Innovation Summit in Brisbane last week, I sat in on ASQA’s regulatory update session where they gave us – only a small segment of the VET sector - real stories and data on what they see going wrong at an RTO audit. And some of it was pretty shocking. They told us stories of the worst-of-the-worst RTOs, the VET underbelly. Unfortunately, none of those dodgy RTOs were in the room, but for those that were, ASQA talked us through their four Regulatory Risk Priorities and their top 5 areas of concern for Performance Assessments.

The Four Regulatory Risk Priorities

ASQA frames its regulatory focus for 2026-27 around four Regulatory Risk Priorities (RRPs). These set the strategic direction of the regulator and, in essence, where they expect red flags to stand out:

RRP1: Provider governance, market conduct and non-genuine operations: ASQA is watching for governing persons who aren't actively overseeing compliance; business decisions driven by enrolment growth over training outcomes; and third-party or student record practices that aren't properly monitored and documented.
RRP2: Quality, sufficiency and fitness-for-purpose of training delivery: This covers whether training duration, delivery mode and materials practically support competence development, with particular attention to inadequate durations, inappropriate online-only delivery, and generic resources that aren't contextualised to the learner cohort.
RRP3: Integrity of qualifications and competency outcomes: The focus here is whether qualifications are only issued where competence is genuinely demonstrated, with ASQA specifically targeting assessor-led completions, AI-enabled cheating or document fraud, and poor-quality RPL decisions.
RRP4: Transparency, accountability and assurance in complex and international delivery models: This priority targets third-party, offshore and partner-delivered training arrangements, where weak due diligence, undisclosed offshore activity, or heavy reliance on agents and brokers can leave the RTO unable to demonstrate it retains genuine control and oversight.

Those four priorities set the direction the regulator is taking, but they're broad by design. What ASQA is identifying operationally through its performance assessments is considerably more specific. They described their “Top 5 Areas of Concern” – the top 5 areas where RTOs are commonly failing and where improvement is required across the sector.

Top 5 Areas of Concern from Performance Assessments

1. Unsuitable or unqualified trainers and assessors

Standard 3.1: VET Workforce Management

ASQA is identifying a failure of workforce management where trainers and assessors are not suitably qualified or experienced, or where they deliver training and conduct assessment against units for which they do not hold vocational competency. As qualification cancellations and supersessions continue across the sector, keeping trainer and assessor currency genuinely aligned to the units being delivered is becoming harder to sustain, which makes verification of competency and experience essential before a person delivers training or assesses students, not a formality completed after the fact.

IN PRACTICE:

This is a pattern I am seeing with increasing frequency. Operationally stretched RTOs, faced with the choice of cancelling a class or running it regardless, are rostering whichever trainer is available rather than one who is genuinely competent against the unit. The result is a compromised student experience, with the cohort left without the competencies the unit requires. The RTO then has that same trainer complete the assessment so they can be issued with a Statement of Attainment. This does not constitute genuine evidence of training and assessment and is, in substance, a manufactured record, and the integrity of the outcome is lost in the process. It may present as a fast, low-cost fix, but the exposure it creates, for the RTO and for the student, is substantial, and the likelihood of it being detected at audit is high.

ACTIONS:

Review your current trainer cohort against every unit on scope and identify exactly where competency gaps sit before the next intake.
Schedule vocational and VET-specific PD for every trainer and assessor on a quarterly cycle, calendared in advance.
Build a personal PD plan for each trainer, with training coordinators collecting and filing evidence against it on a set schedule.
Cross-skill your trainers so more than one person can competently deliver and assess each high-enrolment unit, removing the single point of failure that forces a compromise under pressure. This means currency and PD.
Document the policy and procedure for competency verification and trainer allocation, and brief every trainer, assessor and training coordinator on it directly, so the standard is understood.
Add trainer competency and currency as a standing agenda item at every trainer meeting, so gaps surface early through conversation.

2. Ineffective or unsuitable organisational leadership

Standard 4.1: Leadership, Integrity and Accountability

ASQA is identifying a withdrawal by governing persons from active oversight of operational compliance and quality improvement. The days when an RTO owner could simply hold the title are gone. There must be visible engagement in governance activity and clear evidence of operational oversight. Governing persons are now expected to understand and contribute to self-assurance discussions and improvement initiatives, and to maintain accountability, demonstrating that leadership has, in substance, led the organisation. As regulatory obligations grow more complex, oversight must be a genuine, evidenced function of leadership itself.

IN PRACTICE:

This is a pattern showing up regularly in regulatory decisions. Governing persons are unable to demonstrate a working understanding of their organisation's regulatory obligations, and governance documentation describes committees, executive teams or roles that do not, in fact, exist within the organisation. In some instances, a declaration submitted to the regulator has failed to disclose a matter the governing person was required to declare. The pattern is consistent: governance exists on paper, but not in the way the organisation is actually run day to day.

ACTIONS:

Diarise a recurring compliance and quality session chaired by the CEO or governing person, with minutes recording the agenda discussed and actionable outcomes, including a standing review of Continuous Improvement Register entries to inform the Annual Declaration.
Confirm that governance documentation (policies and procedures) reflects your organisation's actual structure and scale, including where specific roles or positions are mentioned. Documentation describing roles, positions or committees that do not exist undermines governance credibility and demonstrates a lack of understanding in the organisation’s structure.
Plan and complete governance-specific PD related to the VET sector on a recurring schedule and maintain a PD log to record what was covered, how it impacts the role and what improvements are made as a result.
Add compliance risk as its own standing item on the executive leadership or board agenda, separate from financial and operational reporting, so it can't be quietly folded into a broader update – it’s a reportable item in its own right.

3. Ineffective assessment validation

Standard 1.5: Validation of Assessment Practices and Judgements

ASQA is identifying inappropriately administered validation activity, or a lack of validation activity entirely, where validation is either misunderstood, not conducted against a genuine, cyclical schedule, it lacks independent input, or those conducting it are not appropriately credentialled to do so. Standard 1.3 requires a pre-use review of assessment tools, confirming they are fit for purpose before they are used to judge a student. Standard 1.5 is a separate, later exercise: a structured audit, if you will, of the entire assessment system after delivery has taken place, testing whether assessors' judgements were consistent, accurate and defensible, carried out through a validation plan and a validation activity, by someone competent and credentialled to exercise judgement over judgement.

IN PRACTICE:

A growing number of software platforms marketed as offering AI-driven "validation" are, in substance, performing the Standard 1.3 function, not Standard 1.5, and an automated tool check cannot substitute for the human task the Credential Policy requires. RTOs relying on this software under the belief it satisfies Standard 1.5 are, in effect, never genuinely testing assessor judgement at all, while treating the obligation as met.

ACTIONS:

Confirm whether your current "validation" process is actually testing assessor judgement after delivery or only reviewing tool design before use.
Where an AI or software platform is in use, get clarity from the vendor in writing on exactly what it checks and against which Standard. Don't rely on marketing language that says "validation."
Build a rolling validation schedule covering every product on scope at least once per cycle, with named, credentialled validators locked in from the outset rather than left as "to be confirmed."
Source and formally engage independent validators, whether through a validation partner, an industry network, or a reciprocal arrangement with another RTO.
Check every validator's vocational competency and assessment credentials against the specific unit they're validating before each session, including where using an external consultant to assist.
Run each validation session as a genuine working exercise that produces dated, specific amendments to the assessment tool and system, and log the outcome and resulting changes in the CI Register immediately after.

4. Poor quality recognition of prior learning

Standard 1.6: Recognition of Prior Learning

RPL outcomes are being determined on insufficient or unverifiable evidence, using generic tools not mapped to the relevant unit, or without a credentialled assessor's documented judgement. A persistent misconception across the sector is that RPL represents a shortcut, a faster or lighter-touch route to competency than structured training and assessment. In practice, properly implemented RPL is often more resource intensive. A genuine RPL kit draws on a range of assessment methods, evidence matrices mapped against the specific unit, structured competency conversations, and direct demonstration of skill, and collating, verifying and reviewing that evidence typically takes longer than delivering the unit would have. RPL must be offered wherever the training product permits it, but doing it well is a considerably more demanding undertaking than many RTOs currently treat it as.

IN PRACTICE:

Recent decisions have identified organisations incorrectly excluding entire training products from RPL eligibility, on the mistaken basis that licensing or high-risk work requirements prohibit it. In several such cases, properly implemented RPL remained available, subject only to the mandated licensing assessment. At the other end of the same problem, RPL has been granted on the strength of a single document or a brief conversation, with no evidence matrix, no diversity of assessment method, and no defensible audit trail behind the outcome.

ACTIONS:

Audit a sample of recent RPL outcomes against the unit’s performance evidence requirements. If you cannot clearly evidence each requirement, then the RPL process is not robust enough.
The Standards mandate that students are offered opportunities to seek RPL, so verify any assumption that RPL is unavailable for a given unit against the actual training package and licensing requirements.
Review your RPL kits and other RPL tools against the units they cover, and confirm each one includes, at the minimum, an evidence matrix, more than one assessment method, and a structured competency conversation and/or demonstration component, not a checklist or document review alone.

5. Poor quality assessment systems or practices

Standard 1.3: Assessment System Fitness-for-Purpose

ASQA is identifying assessment tools that are not fit for purpose or consistent with the training product they're meant to assess, reflected in gaps in duration, insufficient evidence requirements, or a failure to align with the unit's elements, performance criteria, evidence requirements and assessment conditions. This is frequently treated as a documentation exercise rather than a compliance risk in its own right, with tools assumed to be adequate because a template exists, rather than because the template has actually been checked against the unit or contextualised to the industry sector or the cohort. This is often the case when purchasing “off-the-shelf” resource kits and generating assessments using AI software.

IN PRACTICE:

A pattern is emerging with purchased, off-the-shelf resource kits and AI-generated assessment content: tools that look complete and professionally presented but were never checked against the unit's elements, performance criteria and assessment conditions, and were never contextualised to the RTO's industry sector or cohort. Cost pressure across the sector is compounding this. As cheaper, AI-generated resources become more widely available and margins tighten under rising costs, RTOs are increasingly making resourcing decisions on price rather than quality, often without the internal skill in resource development or validation practice needed to properly check or fix what they have purchased. The result is unverified material being used with students. This is exactly where the pre-use review function discussed under Standard 1.3 in the validation section above earns its keep: a genuine tool review, by a qualified person or a properly scoped software platform, can catch this before it ever reaches a student.

ACTIONS:

Map every assessment tool question by question, line by line against unit elements, performance criteria, evidence requirements and assessment conditions. A gap constitutes non-compliance which must be rectified.
Verify the number of performance occasions required and the specific assessment conditions of the training product and make sure the assessment tools enable this evidence to be collected.
Treat any off-the-shelf kit or AI-generated assessment as a starting draft, not a finished product. Map it against the unit and contextualise it to your industry sector and cohort before it goes anywhere near a student.
Keep a record of who reviewed and contextualised each purchased or generated tool, and when, so the RTO can demonstrate it exercised its own judgement rather than simply adopting the resource as supplied.
Where cost is driving resourcing decisions, build in a mandatory pre-use review step before any purchased or AI-generated tool is used, using either a qualified person or a review platform.

Where this leaves you

None of the five areas above should come as a surprise. Each is a fundamental of RTO operation, and if you relate to any of them while reading this, it's worth having a closer look at your RTO's practices and acting now. These areas need to be properly implemented and properly evidenced if you're going to claim genuine compliance, and "100% compliance" is a claim I've never actually seen substantiated. In nearly 20 years in this sector, I've seen RTOs get there, but never stay there.

There's a common cause behind most of what's described above. Under pressure, whether from staffing shortages, rising costs, or the pace of regulatory and technological change, RTOs are reaching for whatever looks like a fix: whoever's available to roster, software that claims to validate, an RPL shortcut, the cheapest resource kit. None of these meets what the Standards require, and ASQA's performance assessments are catching it. The same problem shows up in documentation that's too big for the organisation using it: policies referencing committees or roles that don't exist do exactly the same thing as a validation schedule with no completed activity behind it. They show intent, not understanding, and not action.

CWTS can help

If reading this left you thinking "how am I supposed to fix all of that," you're right to feel that way. If you recognised your RTO in more than one of the five areas above, that is a genuine compliance risk, so the question now isn't whether it needs fixing. It's whether you fix it before ASQA finds it.

CWTS exists to elevate the standards and outcomes of RTOs through comprehensive compliance support, quality management, and innovative business solutions.

Our online courses build the capability behind the fix, so your team genuinely understands the standard and how to meet it.
If you need more comprehensive, hands-on support, our consulting services work directly with you on specific problems, whether that's compliance guidance, administration assistance, a quality assurance audit, or assessment validation.
And where you need documentation and tools, our resources give you a properly mapped starting point.