- [Tony] Hi and welcome everyone. My name's Tony Harb from Training Services New South Wales and welcome to the Financial Cap Review number two. So I'd like to start with an acknowledgement of country. We're coming to you from the land of the Burramattagal people of the dark nation in Western Sydney. And we pay our respect to elders past and present as ongoing teachers of knowledge, songlines and stories. And now, if you haven't had the pleasure of walking through Lake Parramatta, I encourage you to do so. It was an important source of fresh water for the Dharug peoples and a beautiful example of how they, the traditional custodians, cared and nurtured the land we all now call home. I'd now like to hand over to Katie Hilton, relieving director of Training market design to present on today's contents.

- Thanks very much Tony and welcome everybody. The agenda for today's session is to give you some background to this financial cap review process, cover off on the scope of the financial cap review. The actual process that will be followed how we'll assess financial caps leading into the review and provide some key messages and demonstration for you of a new system and platform to conduct the financial cap review. So leading into the financial cap review, we've been communicating with providers about this upcoming exercise. And the first thing we want to explain is again that the approach to managing financial caps in this activity period is different to the approach that we've been following in recent years. So we are focused on optimising the use of current financial cap allocations rather than adding more allocations to those that are already available to providers. And this is a very similar approach to that which was taken by the department prior to the pandemic. However, during the pandemic when job trainer funding was available, we did have a different approach where we were able to provide supplementary funding in financial caps and there was greater capacity to make extra allocations. So over the past couple of months we have been providing information to providers about this upcoming cap review process via smart and skilled updates and in particular smart and skilled update 216. So in that update, we reinforce the contractual requirement that providers prioritise financial caps for continuing students and only enroll new students if there was financial cap available after covering the commitments for those continuing students. A couple of other key messages is that through this cap review process is that that there's no guarantee that any individual financial cap will be increased depending on the responses we receive from providers. The amount of financial cap we may have to reallocate across providers can be quite variable. We have already made some adjustments to financial caps in September to cover continuing students and this financial cap review is going to take place in the coming weeks. So as I said, the purpose of this financial cap review process is to optimise the use of financial caps. And so leading into the opening up of this process to providers, we are going through an exercise where we assess the level of utilisation of each financial cap to date. So in particular, we're focusing on financial caps where there is excess allocation that has not been committed or used so far and whether that is able to be returned to the department for us to redistribute elsewhere in the system. The second area that we're really focused on is whether financial caps have been overcommitted or are at risk of being overspent, and we'll be highlighting those to providers and seeking a detailed response on how providers will be managing those financial caps. So in our skills delivery and management policy, we set out some indicative timeframes for the financial cap reviews and the level of commitment and usage that was expected at each of the financial cap reviews. So although we had intended to conduct this second review in mid-September we did have to shift the timeframe that was largely driven by the delayed new South Wales state budget. And then we need a time to assess the outcome of that process and then get ready to run this financial cap review. The scope of the review is always dependent on how the market is performing, what budget is available, and we then tailor the scope of the review according to those elements. So what is the financial cap review process all about? So the financial cap review will allow contracted providers to request adjustments to their activity schedules for the 23/24 activity period. We have developed new functionality in the smart skilled application portal where you'll be able to access the information about how the departments assessed each financial cap and you'll be able to make requests and respond to any actions that the department requires of you in relation to those financial caps that have already been allocated to you. Only providers who are currently approved for Cap programs are invited to participate in the financial cap review process. So I mentioned that we're using a new portal and the reason why we've done that is to really move away from a number of manual processes that used to support financial cap reviews. And we see this as a really positive development. The system's going to enable providers to review the financial cap performance and request adjustments and also request additional approved qualifications to be added to particular financial caps. Once you've entered and checked your data, the submitted data can be analysed in the system and easily extracted for the review and analysis by training services. We expect this will mean a much more efficient process and we'll be aiming to turn around the results as soon as possible. So it's really important to understand who's eligible to apply for this process. And as I mentioned earlier, providers who are already allocated financial caps in one of the capped programs, so in entitlement full qualifications and targeted priorities full qualifications, are able to participate. There are five stages to the process that we're going through. The first one is an internal process where we review the New South Wales skills assessment which was previously known as the New South Wales market Assessment and underpinned the 2324 provider application process that was conducted late last year and finalised earlier this year with contract offers. We're going through a process of reviewing that assessment and looking at how enrollments have performed against that assessment and prioritising areas where there is additional skills needs. We're also going through the process of assessing provider's performance against each financial cap and specifying any required actions that a provider might need to take in respect of their financial caps. And I'll talk more about that in a minute. The next step is that providers will be then able to provide a response to their financial cap review and also request any variations to their financial caps. The department will then assess those responses and the variation requests considering what funding is available and our goals for this particular financial cap review and for the program more broadly. And finally, we'll notify providers of the outcome. And for any providers who are awarded a variation, those variation offers will be made through the normal process, which is through STS online. So the method for assessing progress and determining any specified actions a provider needs to take in relation to their financial caps involves the department assessing the progress made. And so this is the level of cap utilisation in terms of commitments or the cap usage estimate and also the level of cap that's already been paid out or the actual cap usage. For each category of financial cap, the department has specified an action or actions that providers must take. So providers are required to address the specified actions against each financial cap. So our method for assessing the financial caps is shown here on the screen. I'm not gonna go through line by line, but very broadly we have a category where providers are utilising their financial cap and are not considered at this stage to either be underutilising or overcommitted. Beyond that, we have a group of categories where providers have underutilised, and this ranges from there being no activity against a financial cap, to a level of activity that is below the level expected. And so we have three levels of under utilisation above that no activity level. We then have four levels of overcommitment, which includes at the extreme end, where caps are already exhausted and there are gradated levels of overcommitted. So the more serious level of overcommitment requires a more specific type of response from providers and the providers should note, in those particular case cases, the department's going to request that they cease further enrollment so as not to expose any further risk to that cap being exceeded. And the department will then consider the responses in those cases and determine whether to allow any further enrollments or not against those caps. We move on to the next slide. So this slide shows in relation to each of the different categories of assessment for the financial cap utilisation, what the types of actions are that a provider may be able to take. So that involves whether the provider is asked to return financial cap to the department, whether there's an option to transfer out financial cap from an underperforming cap and into another financial cap, whether the provider can increase financial cap transfer in, whether there's an opportunity to add qualifications and whether the provider needs to provide an explanation in relation to any under or over commitment in respect of any financial cap. So firstly, we would like to focus on those financial caps that have no activity or are underutilised. And it's important that providers take stock of the level of financial cap that's been allocated and what the realistic expectations are around future activity against that financial cap and determine whether there is capacity for them to return some or all of the remaining financial cap to the department. So if the provider has plans to use the financial cap in this activity period by enrolling students in the future, then the provider should be calculating the standard subsidies expected to be paid by the 30th of June and include this in your response. And if the calculation shows, that the full financial cap won't be used then you're requested to return the extra amount to the department. If you do not agree, to returning financial cap in this situation, then you need to provide an explanation for that in the financial cap review portal. At the other end of the spectrum, for financial caps that are overcommitted or exhausted, it's important that the department understands how the risk that's generated from that overcommitment is going to be managed by each provider. So we ask a number of questions here, which you're required to respond to, and there should be sufficient detail in the response for the department to be able to be assured of how you're going to be able to manage the financial cap. So the first question that we need you to respond to is what is your organisation's own assessment of the estimated cap usage or the commitment against the financial cap? Your level of estimated cap usage may be different to the department's calculation. And so first of all, we provide an opportunity for you to clarify what your expectation is around how much of your financial cap will be used based on your current students. The next question is to understand what's led to the overcommitment and how the issues or events will be prevented from re-occurring during the remainder of the activity period to give us some sense of how you'll be managing the cap and won't be adding additional pressure to the overcommitment. And the final question is around what steps is the provider going to take to manage the financial cap while continuing to fulfill its obligations to deliver subsidised training to enrolled students? So when a financial cap is overcommitted or has been exhausted, a provider may request a transfer of financial cap from another financial cap that is already allocated or they can ask for an increase to financial cap. It's important to note though that because the financial cap is over committed, that does not guarantee that the department will be able to, or will decide to make an additional allocation against that financial cap. So all decisions in that regard are at the department's discretion and providers should not rely on any additional amount being allocated. So in these particular cases, if the departments you know, identified an overcommitment, then providers are expected to be very prudent in how they manage any enrollments until the outcome of this process is known. And the provider is aware whether there is extra room or not to be able to enroll new students. When it comes to requesting additional financial cap, it's important to make sure that these requests are realistic amounts and they're actually based on calculations of the standard subsidies that are expected to be paid during this activity up to 30 June, 2024. So if providers need a reminder or refresher around standard subsidies and financial cap usage, please refer to the onboarding webinar about financial caps and the relevant guides that are available to help you to in this process. And also feel free to contact your SRM or RPSM if you need assistance. The other thing we want want to kind of emphasise is that transfers in and transfers out of existing allocations should be considered before requesting additional financial cap. And then look, I just need to reiterate again there's no guarantee that any individual financial cap will be increased. A decision to approve any or all requests is at the department's absolute discretion. And again, don't rely on the approval of any additional amount requested.

- And hi everyone, my name's Debi Buttigieg and I'm the relieving manager of market design. I'm just gonna take you through a brief overview of the portal. The portal that will be used for the financial cap review is the same portal that was used for the smart and skilled application conducted last year. I'm just going to sign in as a test user. This is all test data that I'm about to show you. On the left hand side of the dashboard would be the information pertaining to your Smart and Skilled application. On the right hand side is the contract variation section with an option for the financial cap review October, 2023. I should also mention that there will be a user guide available for providers. The user guide will be able to take you through step-by´step every action that you'll be able to do for each relevant financial cap. Providers will be able to have access to three key sections in the financial cap review. The first section, under contracts, is the method and specified action. This is all the information pertaining to the benchmarks and how the department has measured each financial cap. It also contains information regarding the specified action that must be undertaken for each financial cap. By clicking into the second section, which is financial cap performance and adjustments. This section will actually have all the information relating to your financial caps. It includes your program, region, your total financial cap amounts, estimated cap usage in both dollars and percentages, the actual usage in dollars and percentages, the assessment. So this is the performance level that the department has assessed that financial cap and what the action needs to be. From here, you've got a couple of different options. Providers must respond to no activity under utilisation, overcommitment and cap exhausted. You can do this one of two ways. The first way is on the right hand side under actions by dropping down the arrow. This will give you the actual actions that can be done for that financial cap. Those actions will change depending on the performance level that has been categorised for that financial cap. In this scenario, the actions that can be taken is you may ask for an increase of financial cap transfer in or respond to the over commitment. It's good to know that if you were to transfer in financial cap for this particular one, you get the opportunity to respond to the overcommitment in that action. The respond to the overcommitment is an option, if you do not choose to do any other options. But under utilisation, you can see there are a lot more actions that can be taken. So by clicking onto the arrow, you've then got the option to click in to each action and then start that process. The other option that you actually have is just by clicking onto the action and what this does is take you to a screen and you can see the full information about your financial cap and those same actions can appear up the top. So you've got two ways of actually doing that. Once you actually put in the information for each action, you've got the option then to either save or you can actually save and submit that request. The other area that I want to just take you through is the third section of the portal and this is called financial cap request. Under this section you'll be able to see all the requests that you have made for each financial cap. In this section, you will be able to have the opportunity to actually modify, review. You can delete an action or you can actually submit the request through to the department. After you submit, if you change your mind or you actually identify that there's an error in that, you've got the option to also withdraw the request and start again. I'd like to thank all providers for listening to the webinar.