Providers approved by the Minister to offer FEE-HELP under HESA subdivision 16C must be financially viable and likely to remain financially viable. To allow the department to assess ongoing viability, providers must submit financial information to the department as specified in the HEP Guidelines and the Financial Viability Instructions (FVI), on an annual basis within six months following the close of their annual financial reporting period. All financial information received by the department is treated on a commercial-in-confidence basis.
At a minimum, providers must include audited financial statements prepared in accordance with the requirements of the HEP Guidelines and FVI and a completed Financial Performance template in HITS. Providers should note, that the Minister may ask for additional information or place reporting conditions on a provider’s approval in response to emerging risks, or allow a more detailed assessment of financial viability to be undertaken.
The department may take into account all relevant information when considering whether a provider meets the financial viability requirements, including, but not necessarily limited to, the provider’s:
- ability to generate sufficient income to meet operating expenditure, debt obligations, and where applicable, to generate growth while delivering quality higher education
- maintenance of a positive net equity position
- profitability or sustainability of operations if a provider is a charity or not-for-profit organisation
- overall asset and liability makeup
- cash flow
- loans or guarantees that could have a detrimental material effect on their financial position;
- adequacy of business planning and risk mitigation strategies.
The department may also consider:
- the impact that a provider’s broader corporate network is likely to have upon its ongoing viability;
- changes in ownership or any other events that may have a bearing on Fit and Proper Person assessments.
The FVI advise providers on the standard of financial information required and how financial viability is monitored. They are available from the department’s website.
Additionally, providers must notify the department of any event that may significantly affect their capacity to meet the quality and accountability requirements, including the financial viability requirements [HESA section 19-65]. These include such things as changes to ownership, management, or organisational structure; changes to course offerings or delivery models; large asset acquisitions and/or sales; new loan or borrowing arrangements; third-party delivery agreements; and TEQSA regulatory decisions.