An examination of the regulatory blind spot that allows individuals associated with cancelled or non-compliant RTOs to continue operating as compliance consultants—and the systemic risks this poses to the sector
A growing concern within Australia’s vocational education and training (VET) sector has reached a point that can no longer be overlooked: individuals who have held senior compliance, management, or ownership roles within Registered Training Organisations (RTOs) that have subsequently had their registrations cancelled by the Australian Skills Quality Authority (ASQA)—in some cases for serious non-compliance including inadequate assessment practices and issues relating to qualification integrity—are continuing to operate as compliance consultants, offering advisory services to other RTOs. This practice raises fundamental questions about the integrity safeguards within the sector, the adequacy of existing regulatory mechanisms to address this particular risk, and the extent to which RTOs seeking external compliance support can have confidence in the credentials and track record of the consultants they engage.
The Scope of the Issue
The pattern that has emerged is not limited to isolated incidents. Across sector forums, professional networks, and industry discussions, VET practitioners have repeatedly raised concerns about a recurring scenario: individuals who served as compliance managers, directors, or owners of RTOs that were found critically non-compliant—or had their registration cancelled entirely—subsequently establishing or joining consultancy firms that market themselves as specialists in the very areas in which the associated RTO failed. These consultancy services commonly include preparation of training and assessment resources, responding to audit rectifications, assisting with registration and re-registration applications, and advising on compliance with the Standards for Registered Training Organisations.
The concern is straightforward: if an individual held a position of compliance responsibility within an RTO that was found to have issued qualifications without proper training or assessment, or that failed to meet fundamental requirements of the VET Quality Framework, the professional credibility of that individual in offering compliance advice to other providers is, at a minimum, questionable. Where such individuals market their services without disclosing the regulatory history of the organisations with which they were associated, the RTOs engaging those services may unknowingly place their own compliance status at risk.
ASQA’s Own Data Highlights the Scale of the Problem
The scale of non-compliance and cancellation activity in recent years provides important context. ASQA’s Consultation Paper on Cost Recovery, released in January 2026, provides data that underscores the magnitude of integrity issues within the sector. According to that document, in 2021–22, ASQA made 18 cancellation decisions relevant to 11 providers. By 2024–25, that figure had risen to 134 cancellation decisions relevant to 64 providers—a dramatic escalation in enforcement activity. Between October 2024 and December 2025 alone, ASQA cancelled more than 33,000 individual qualifications that were deemed to have been issued without proper training or assessment. ASQA’s Integrity Unit, established to address non-genuine and bad-faith operators, was reported as managing more than 200 serious matters relating to the conduct of 136 providers as at the time of the Consultation Paper’s release.
These figures represent a substantial number of individuals—owners, directors, compliance managers, training managers, and other key personnel—who were associated with RTOs that engaged in serious non-compliance or outright fraud. As those RTOs are removed from the sector, the individuals formerly associated with them do not simply disappear from the VET landscape. Many possess detailed knowledge of regulatory processes, application procedures, and the mechanics of audit preparation—knowledge that, when applied by individuals with a history of association with non-compliant providers, can present a significant risk to the RTOs that subsequently engage their services.
ASQA Itself Acknowledges the Consultant Phoenix Risk
ASQA has publicly acknowledged that individuals from cancelled or non-compliant RTOs re-entering the sector in advisory roles is a recognised risk to sector integrity. On its published guidance page regarding non-genuine providers and bad faith operators, ASQA states that phoenix activity occurs when operators of cancelled RTOs re-emerge under new business identities to evade regulatory scrutiny while continuing unethical practices. The regulator further notes that individuals previously linked to fraudulent or unethical RTO operations may integrate into legitimate providers by assuming roles such as owners, executives, trainers, assessors, consultants, or legal and financial advisors. The explicit inclusion of ‘consultants’ in this list is significant. It confirms that ASQA is aware that the consultancy pathway is one of the mechanisms through which individuals associated with failed providers can continue to exert influence over the operations of other RTOs.
Despite this acknowledgment, the practical regulatory response to this risk remains limited. ASQA’s powers under the National Vocational Education and Training Regulator Act 2011 (NVR Act) are directed primarily at registered providers and the individuals who hold specified roles within them. The regulator can refuse to register, or cancel the registration of, an RTO. It can make findings against governing persons under the Fit and Proper Person Requirements. It can impose conditions on registration. But it does not regulate, license, or register the individuals or firms that provide compliance consultancy services to the sector. A consultant who was previously the compliance manager at a cancelled RTO can establish a new consultancy business the following day without any regulatory barrier, disclosure obligation, or oversight mechanism.
The Regulatory Gap: No Registration, No Licensing, No Minimum Standards
The absence of any regulatory framework for VET compliance consultants stands in contrast to other advisory professions in Australia that are subject to registration and oversight. Migration agents, for example, must be registered with the Office of the Migration Agents Registration Authority (OMARA), meet prescribed qualification and knowledge requirements, maintain professional indemnity insurance, and comply with a Code of Conduct. Financial advisers are regulated by the Australian Securities and Investments Commission (ASIC) and must meet education, training, and ethical standards. Tax agents and BAS agents must be registered with the Tax Practitioners Board (TPB). In each of these fields, the advisory function is recognised as carrying sufficient risk to warrant formal oversight and accountability.
VET compliance consultants, by contrast, operate in an entirely unregulated space. There is no minimum qualification requirement, no experience threshold, no registration or licensing obligation, no continuing professional development mandate, no professional indemnity insurance requirement, and no formal complaints mechanism specific to the quality of consultancy services provided. An individual can establish a VET compliance consultancy regardless of their professional history, the regulatory outcomes of RTOs with which they have been associated, or the quality of advice and services they have previously provided. The market is entirely reliant on the due diligence of individual RTOs to identify and avoid consultants with problematic track records—a task made more difficult by the absence of any public register or disclosure requirement for consultants.
The Dual-Role Phenomenon: Employed Compliance Officer and External Consultant
A specific variation of this issue has been identified through sector discussions and involves individuals who are employed in full-time compliance or management roles at one RTO while simultaneously operating a separate consultancy practice offering compliance services to other providers. This dual-role arrangement creates multiple risks. The individual’s primary employer may not be aware of the external consultancy work, or may not have provided informed consent. The time, attention, and professional focus that should be dedicated to the compliance obligations of the primary employer may be compromised by external commitments. And where the individual’s primary employer subsequently experiences a negative regulatory outcome—such as a finding of non-compliance, a notice of intent to cancel qualifications, or cancellation of registration—the RTOs that engaged the individual’s consultancy services may have relied on advice and resources developed by a person whose own compliance responsibilities at their primary place of employment were evidently not being met.
The sector has also observed instances in which external consultants list themselves in an RTO’s contact details or regulatory documentation in a compliance capacity—creating the external appearance of an internal compliance function—when the individual is in fact an external consultant who may hold similar arrangements with multiple providers concurrently. While this practice is not inherently improper, it can create confusion about the nature of the relationship and the degree of oversight and accountability the individual exercises within the organisation. It also raises questions about whether the consultant’s attention and professional commitment to each provider is adequate to ensure genuine compliance outcomes.
The Fit and Proper Person Requirements: A Step Forward, But Not a Complete Answer
The strengthened Fit and Proper Person Requirements (FPPR) under the Standards for Registered Training Organisations 2025, which came into full regulatory effect on 1 July 2025, represent a significant step towards addressing integrity risks at the governance level of RTOs. According to ASQA’s published guidance, the FPPR declaration must be completed by all ‘governing persons’ as defined under the relevant instrument, and the definition includes any person responsible for overseeing, directing, or exercising a degree of control or influence over the management or operation of the RTO. The FPPR declaration also requires applicants to disclose relevant information about managers, consultants, agents, and all owners, including those with indirect ownership arrangements.
The inclusion of ‘consultants’ in the FPPR disclosure requirement is notable and represents a recognition that external advisors can exercise significant influence over an RTO’s operations. However, the FPPR mechanism has important limitations when it comes to addressing the consultant accountability issue. The FPPR operates at discrete regulatory touchpoints: initial registration, renewal, or when ASQA specifically requests a declaration. It is a control applied to the RTO, requiring the RTO to disclose its consultant relationships, rather than a direct regulatory control over the consultants themselves. If a consultant is disclosed on the declaration, ASQA may have regard to that person’s prior associations when making registration decisions. But the consultant faces no direct regulatory consequence for having been associated with a cancelled or non-compliant provider. They are free to continue offering services to other RTOs—including RTOs that may not yet have reached a regulatory touchpoint requiring an FPPR declaration.
A Question of Regulatory Accountability: Who Approved the Provider in the First Place?
The issue also raises a question about ASQA’s own initial assessment processes. When an RTO that ASQA approved for registration is later found to be engaged in fraudulent issuance of qualifications or serious non-compliance, the sector is entitled to ask how that provider passed the initial assessment in the first place. ASQA’s Consultation Paper notes that the agency has significantly strengthened its market entry processes, with the rejection rate for new applications rising from 13 per cent in 2023–24 to over 30 per cent in 2024–25. The Consultation Paper attributes this to more thorough scrutiny of applicants, including enhanced checks on the suitability of key personnel and more detailed assessments of the applicant’s capacity to comply.
This increased scrutiny is welcome, but it also implicitly acknowledges that providers approved under the earlier, less rigorous process may have entered the market without adequate vetting. When such providers are later cancelled, the question of whether ASQA systematically reviews its own initial approval decisions—and whether the officers who assessed those applications are subject to any form of internal review or accountability—is relevant. It is also relevant to the consultant issue: if ASQA identifies that particular consultants or advisory firms were involved in preparing applications for providers that subsequently failed, that intelligence should inform its assessment of future applications involving the same consultants.
The Competency Threshold: What Qualifies a Person to Advise RTOs on Compliance?
Beyond the specific issue of individuals from cancelled RTOs re-entering the sector as consultants, the broader question of minimum competency for VET compliance consultants is increasingly being raised. Sector practitioners have observed that some consultancy practices are established by individuals with limited experience—in some cases, as little as two to three years in a compliance role at a single RTO—who market themselves as compliance experts or specialists. The complexity of the 2025 Standards, the Compliance Standards, the Credential Policy, the FPPR, and the broader VET Quality Framework requires a depth and breadth of knowledge that takes considerable time and diverse experience to develop. The absence of any benchmark or verification mechanism means there is no independent way for an RTO to assess whether a consultant possesses the expertise they claim.
The financial risk to RTOs engaging consultants with inadequate expertise is heightened by ASQA’s proposed 2026–27 fee structure. As detailed in the accompanying article in this edition of RTO News, a performance assessment can cost between $900 and $11,700, depending on the RTO’s size category, and compliance resolution pathways range from $6,650 to $33,300. Additional entity-directed charges—including onsite performance visits ($4,650), student assessment validation ($2,550), and financial viability assessments ($11,800)—can be triggered at ASQA’s discretion. If a consultant’s advice is deficient and leads to adverse findings that trigger one or more of these charges, the RTO bears the full financial consequence. The consultant, by contrast, faces no regulatory penalty and no financial liability under the current framework.
Potential Measures: Towards Greater Accountability
Addressing the consultant accountability gap would require consideration of several potential measures, each carrying its own complexities. A mandatory or voluntary register of VET compliance consultants—akin to the registration frameworks that exist for migration agents, financial advisers, and tax practitioners—could require minimum qualifications, demonstrable experience, professional indemnity insurance, and disclosure of any prior association with non-compliant or cancelled RTOs. Such a register would provide RTOs with a mechanism to verify a consultant’s credentials and track record before engaging their services, and would create a public accountability record that does not currently exist.
A second approach would involve strengthening the practical application of the FPPR to ensure that ASQA’s assessment of governing persons meaningfully captures the role and track record of consultants who exercise influence over an RTO’s compliance function. This would require clearer guidance on the circumstances in which an external consultant is considered to be exercising a degree of control or influence sufficient to bring them within the scope of the FPPR, and a more proactive approach by ASQA to requesting FPPR declarations from consultants rather than relying solely on disclosure by the RTO.
A third approach would involve peak bodies and professional associations within the VET sector establishing voluntary codes of conduct and competency frameworks for compliance practitioners. While such measures would lack regulatory force, they could create a market-based mechanism for quality differentiation and provide RTOs with a basis for assessing the credibility and commitment of prospective consultants.
Practical Guidance for RTOs Engaging External Consultants
In the current regulatory environment, RTOs bear full responsibility for their own compliance regardless of whether they have engaged external consultants. The 2025 Standards make clear that accountability rests with the RTO and its governing persons. This means that an RTO cannot rely on a consultant’s engagement as a defence to a finding of non-compliance. If a consultant’s work is deficient—whether in the preparation of assessment resources, the development of policies and procedures, or the advice provided in response to a performance assessment finding—the regulatory and financial consequences fall on the provider.
Given this reality, RTOs should exercise thorough due diligence before engaging any external consultant. As a minimum, this due diligence should include: verifying the consultant’s professional history, including the specific roles held and the duration of experience in each; requesting references from current and former clients; checking publicly available regulatory records on ASQA’s website and the National Register for any RTOs with which the consultant has been associated; making direct enquiries about the regulatory outcomes of those RTOs; and asking the consultant to disclose whether they or any RTO with which they have been associated has been the subject of regulatory action, including performance assessment findings, compliance resolution processes, or cancellation decisions. RTOs should also consider whether contractual provisions requiring the consultant to warrant the quality and regulatory currency of their advice, and to carry professional indemnity insurance, are appropriate.
A Sector Seeking Assurance
The concerns outlined in this article are not speculative. They reflect issues that have been raised publicly and repeatedly across sector forums by experienced VET practitioners who observe the pattern firsthand. ASQA’s own published material acknowledges that individuals from cancelled RTOs may re-emerge in consultancy roles, and the strengthened FPPR represents a meaningful step towards capturing this risk at certain regulatory touchpoints. However, the FPPR operates as a control on the RTO, not on the consultant, and it functions only at discrete points in the registration lifecycle rather than as ongoing oversight of the advisory services market.
In a sector where ASQA made 134 cancellation decisions relevant to 64 providers in a single year, where more than 33,000 qualifications have been cancelled between October 2024 and December 2025, and where the Integrity Unit is managing more than 200 serious matters relating to 136 providers, the pool of individuals potentially seeking to re-enter the sector through consultancy pathways is not small. The sector’s integrity depends not only on the regulatory oversight of registered providers but also on the quality and accountability of the individuals and firms that advise those providers. Until that advisory space is brought within some form of regulatory perimeter—whether through formal registration, enhanced FPPR application, or industry-led standards—the risk identified by ASQA itself will persist, and the RTOs that engage compromised or incompetent consultants will continue to bear the consequences alone.
