FVRA (Financial Viability Risk Assessment) for RTOs
It is a big challenge for RTOs to provide the quality courses and course completion for students during the outbreak of COVID-19. And the business prospects of many RTOs have been greatly affected by home quarantine and travel restrictions. These situations put a lot of pressure on RTOs to meet the financial viability risk assessment (FVRA) requirements. The market research for the courses you may be looking to offer all of a suden need to be carried out differently in light of COVID. And a COVID like eventuality would need to be considered as part of your proposal. If you are looking for a solution to this and this has brought you to this page, please read on.
What is financial viability risk assessment (FVRA) for an RTO?
FVRA is a tool used by ASQA to assess whether the applicant or existing RTO and CRICOS have financial capacity to survive and to achieve the quality outcomes for their students.
The circumstances below for an RTO would be deemed as “viable” as per to FVRA assessment:
- The business has enough financial capacity to acquire the required assets and physical resources to deliver all qualifications during its registration period.
- The business has enough financial resources to hire qualified employees to cover the admin as well as teaching of enrolled courses.
- The business can provide services to students.
- The business can operate continuously to ensure each student can achieve completion.
- The business can maintain the above requirements even in an unsure environment.
Who needs to complete the tool?
- Applicants seeking initial registration as a RTO/CRICOS
- Any RTO looking to change their scope of registration within the first two years of its registration.
- RTO/CRICOS that are notifying ASQA and over 50% change in shareholding in the previous 12 months.
- Existing RTO and CRICOS.
What you need to do?
Any business runs on finances and this is the basis of the Financial Viability risk Assessment. Adequate financial resources to service the proposal and the RA score will be acceptable by the regulators. You would be required to prepare a business proposal and the FVRA tool would reflect this business proposal. If required we can help with this business proposal too.
There are different financial ratios to evaluate the viability comprehensively, and the data for the ratio calculation comes from your financial statements.
What is included in the FVRA?
There are seven worksheets required to be provided:
- Provider Details
- Balance Sheet.
- Profit & Loss statement.
- Cash Flow Statement.
- Bank, Debtors and Creditors.
- Student Number and Course Fees.
- Key Expenses
Apart from the financial information, the current circumstances and future proposals also influence the viability. So you need to provide all the information below to provide ASQA with a comprehensive evaluation.
- Company Overview
- Goals and Objectives
- Strategic and Long term direction
- Market analysis of the industry
- SWOT analysis
- At least next 12 and 24 months financial projections
- Organisation Structure
How can we help you?
As professional accountants, with experience with preparing the FVRA for other clients, we can help you complete the FVRA for submission to the regulators. We shall carry out the market research required as part of your business plan. If you are an applicant or an existing provider of an RTO, kindly feel free to contact us to discuss your Financial Viability Risk Assessment (FVRA) assignment.