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457 training benchmarks survey and audit of training organisations is voluntary

THE RESPONSE FROM DIBP IS AS FOLLOWS:

Hi Liana

As mentioned in my email to you last Thursday, the department is currently conducting an audit of known training funds in response to recent allegations, including from you, of misuse of funds contributed for the purpose of meeting the subclass 457 training benchmark requirements.  I have attached a copy of the correspondence with training funds for your information.

The survey is voluntary.  However, if the fund meets the policy requirements on the basis of information provided in the survey then we will be advising case officers of this so that they do not need to send additional request letters to applicants for clarification purposes – this will speed up processing times.  If the fund doesn’t reply then case officers may have to ask clients for additional information about the contributions to assess the training contributions in line with the new policy settings around commissions.

I understand you have approached several officers in the department about this issue.  I appreciate that you were interested in a quick response but I’d be grateful if you could channel high level policy queries like this to me in the first instance (cc/ 457 Policy mailbox) – to ensure you receive a timely and appropriate response.  My team monitors the 457 Policy mailbox so can consider any queries in my absence – noting that yesterday was a public holiday in the ACT.   You separately asked SSSSSSS RRRRRRR [name removed for privacy reasons] as to whether a particular organisation received the survey – we are not in a position to advise which organisations have been sent the survey but you are welcome to continue to refer to the department any particular organisations which concern you.

Regards             

XXXXXX   XXXXXX
A/g Assistant Secretary Economic Mobility
Department of Immigration and Border Protection
Telephone: REMOVED FOR PRIVACY
Mobile: REMOVED FOR PRIVACY
Email: REMOVED FOR PRIVACY

MY RESPONSE FOLLOWING THIS EMAIL TODAY IS AS FOLLOWS:

Hi XXXXX [name removed for privacy]
Thank you for your reply.    I now have quite a few more questions

AUDIT
a) How can the DIBP conduct a voluntary audit?
b) What is the legal basis for the audit? 
c) Why is the DIBP conducting an audit of these organisations and who is the qualified auditor?
d) Why is the auditor not independent from the DIBP and the organisation in question?
Please see the definition of audit as described by PwC: http://www.pwc.com.au/assurance/financial/statements/audit.htm which explains why I am asking these questions.
In particular an auditor should not "Judge the appropriateness of the organisation's business activities or strategies or decisions made by the directors".  I would suggest the audit be done by qualified auditors outside of the DIBP.

COMMISSIONS
It's pretty simple to get around  the commissions 'policy position'.  Anyone can work out how to do this.
All an organisation needs to do is take the commission in, deliver the training then move the funds to an 'operating account' straight after that.  Commissions can then be paid out of that other account and not the account taking in the funds.  If an organisation has a large enough operating or consolidated revenue account then the commission can be paid from there.
The process will just (is already) going to turn into 'robbing Peter to pay Paul' scenario.
There are a million and one ways organisations can create offset accounts and other sorts of accounts to hide the fact that they are still paying commission.
And on top of all of this is my very serious concern that the DIBP is not in a position to dictate to Australian businesses how to conduct their day-to-day business, including whether or not they are 'allowed' to pay commission.
e) Absent a formal application and approvals process with the DIBP to become an approved training fund, and absent any agreement how is it that the DIBP can tell training funds how to operate? 
f) Or is it a voluntary compliance which is actually not that voluntary?
g) Is there now an unknown approvals or refusals process or policy within the DIBP with respect to training benchmark organisations being 'acceptable' that has not been made known to the public, which would be the basis of the audit?

MY TAKE ON IT AND THE FUTURE
I see this survey as a knee jerk reaction by the DIBP to try and take control of what it sees as a 'commissions to referrers fiasco'.   The survey will not give DIBP the results it is looking for.
Given the fact there is no formal process to approve or refuse, accept or reject organisations, it is not clear whether training organisations will continue to be acceptable to the DIBP if they choose not to complete the survey or respond to any other request letters sent to them by the DIBP.
h) Is there a formal or informal approval or refusal process which would give rise to the parameters for an audit?
 
i) Unless there is a proper legal basis for the requests to these organisations, isn't the DIBP working outside it's powers and scope?

I understand what the DIBP is trying to achieve here, but I think the process needs to start from scratch with an application to become an approved training fund for the purposes of A or B benchmarks under 457 and 186 visas.
 
The agreement would need to use words something like this:

 'To be approved as a training fund for the purpose of training benchmark A and/or B payments under sc457 and sc186 it is understood that my organisation will not pay any commission from any account or any other business to the referrer'.  
SIGNED XXXXXXXX

 That way the money is used only for training Australians and is not disappearing out the back door or side door back to the referrer. 

I would like to apologise for sending emails to numerous people within the DIBP yesterday.  I did that because everyone's auto-response was saying they were not in the office / away and then provided a new person to contact instead (and that person was also away and gave me a new person to contact instead).

Thank you.

Liana Allan

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