Legislative requirements and Conditions
A tertiary education organisation (TEO) must comply with the requirements specified in legislation, such as the Education Act 1989 and the Industry Training and Apprenticeships Act 1992.
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The Industry Training funding mechanism requires the Tertiary Education Commission (the TEC) to attach conditions to funding received by a TEO from the Industry Training Fund (ITF). These conditions are imposed under the Education Act section 159YC(2)(a) (on-Plan funding) or 159ZD(2)(b) (off-Plan funding).
The TEC may also attach conditions to funding approval that it considers are necessary to:
- in the case of on-Plan funding, ensure that the specified outcomes in an Investment Plan that relate to tertiary education programmes and activities in relation to which funding is being given are being achieved or will be achieved; or
- in the case of off-Plan funding, ensure that the funding will achieve the purpose for which it has been allocated.
These conditions are imposed under the Education Act section 159YC(2)(b) (on-Plan funding) or 159ZD(2)(a) (off-Plan funding).
A TEO that receives funding from the ITF must comply with the conditions specified in its funding approval letter. Those conditions are also outlined below.
If the TEC is satisfied on reasonable grounds that a TEO has not complied, or is not complying with a condition that has been imposed on funding, the TEC may suspend or revoke some or all of a TEO's funding under section 159YG or section 159ZF of the Education Act.
Tertiary education organisations (TEOs) other than tertiary education institutions (TEIs)
Record keeping for on-Plan (and off-Plan) funding
A TEO that receives on-Plan funding is required under section 159YD (or, for off-Plan funding, section 159ZE) of the Education Act to keep records in the form specified by the TEC for the period to which the funding relates, that fully and fairly show:
- transactions, assets, liabilities, and funds that are or were affected by the funding
- whether any conditions on which the funding approval was given have been complied with.
The TEO must ensure that the records are available for inspection by the TEC at all reasonable times.
In relation to record-keeping under section 159YD (or, for off-Plan funding, section 159ZE) of the Education Act, to demonstrate that a TEO is using funding for the purposes for which it is provided, the TEO must keep enrolment records for each industry trainee and apprentice that specify:
- programmes or qualifications in which the industry trainee or apprentice has been enrolled
- the industry trainee’s or apprentice's identity details including name, date of birth, citizenship, residency (if relevant)
- if the industry trainee or apprentice is in New Zealand on a visa or work permit, the industry trainee’s or apprentice's variation of conditions
- that the TEO has verified that the learner the meets the criteria of:
o an industry trainee for the purposes of Condition ITF006;
o a New Zealand Apprentice for the purposes of Condition ITF007; or
o a Modern Apprentice for the purposes of Condition ITF008
- the industry trainee's or apprentice's national student number (NSN)
- the industry trainee's or apprentice's previous academic achievement or evidence of recognition of prior learning
- changes (if any) made to an enrolment
- whether the industry trainee or apprentice has withdrawn from his or her programme of study and the date of the withdrawal
- the current training status of the industry trainee or apprentice
- the period for which the industry trainee or apprentice is enrolled.
To comply with the reporting requirements under section 159YD (or, for off-Plan funding, section 159ZE) of the Education Act, the TEO must verify an industry trainee’s or apprentice's identity. Once the identity is verified, the TEO is then able to determine if the learner meets the eligibility criteria to be enrolled as an industry trainee or apprentice. To verify an industry trainee or apprentice's identity, the TEO must:
- confirm that all data fields match the student's NSN, or
- receive an assertion through the Department of Internal Affairs’ online identity verification service RealMe®, or
- sight the original or certified copy of one or more of the following documents:
- a current passport or a New Zealand Firearms Licence, or
- one form of identity from each category below:
|Category A ||Category B|
|Full New Zealand Birth certificate (issued after 1 January 1998) ||New Zealand Photo Drivers Licence|
|Certificate of Identity ||HANZ 18+ card|
|New Zealand Citizenship Certificate ||New Zealand Student photo identification |
|Expired passport ||International Photo Drivers Licence|
If a student is unable to obtain a birth certificate, contacting the TEC to confirm that a whakapapa statement signed by both the student and a kaumātua is acceptable evidence of identity.
To verify that an industry trainee is eligible to attract funding from the ITF, the TEO must:
- confirm the age of the industry trainee or apprentice, using the identity verification process outlined above.
For the purposes of this requirement, a certified copy is a photocopy that has been endorsed as a true copy of the original. To be certified, the document must:
- be certified by an official of the issuing authority or a person authorised by law in New Zealand to certify documents, such as a Justice of the Peace, a lawyer or a court official
- have the signature of the person certifying the document on each page, with the name and title of the official shown clearly below his or her signature.
Section 159YD(2) and (3), and section 159ZE(2) and (3) of the Education Act require certain TEOs to provide the TEC with financial information as soon as practicable after the end of the financial year.
The specific requirements are:
- the TEO’s financial report for that year, including:
- a statement of financial performance
- a statement of financial position
- a statement of movements in equity
- a statement of cash flows
- a statement of service performance that compares its performance with the outcomes specified in its Investment Plan as measured by the performance indicators specified in the Investment Plan
- any other financial reports, or statistical or other information that the TEC requires
- any information necessary to demonstrate compliance with any condition attached to funding.
The financial report must be prepared in accordance with generally accepted accounting practice and must be audited by an independent chartered accountant.
The TEC requires this information from all industry training organisations (ITOs).
The TEC has exempted organisations receiving funding from the Industry Training Fund under the direct funding scheme from the requirement unless a particular organisation is advised by the TEC that it is required to comply.
The conditions below refer to the Industry Training Fund only, and not the Industry Training Organisation Strategic Leadership Fund, unless specified otherwise.
Note: For your reference, you can view the archived Industry Training Fund conditions that applied to 2014 and 2015 funding only.
ITF001: TEO to supply information to TEC
As specified in section 159YC(1) and section 159ZD(1) of the Education Act, it is a condition of a TEO receiving funding that the TEO will supply to the TEC, from time to time as required by the TEC, and in the form specified by the TEC, any financial, statistical, or other information that a TEO is required to supply.
TEO to supply enrolment information to the TEC
The TEO must:
a) supply to the TEC information about each industry trainee or apprentice enrolled in a programme or qualification by completing the fields in the Industry Training Register (ITR); and
b) submit the information through the ITR on or before the date specified by the TEC.
For more information, please refer to the ITR User Guide or the ITR schema definition (PDF, 2 Mb).
TEO to supply financial viability information to the TEC
If the TEC notifies the TEO that it requires information relating to the financial viability of the TEO, the TEO must supply the requested information to the TEC.
TEO to supply information about priority groups to the TEC
If we notify the TEO that we require information relating to activities that support priority groups (such as Māori or Pacifika industry trainees and apprentices) the TEO must supply the requested information to the TEC.
TEO to supply information to the TEC in certain situations
The TEO must notify the TEC immediately if:
a) any record required to be kept under section 159YD(1) or 159ZE(1) of the Education Act has been lost or damaged; or
b) it is no longer able to comply with a condition of funding.
TEO to provide progress report on activities funded from the Industry Training Organisation Strategic Leadership Fund
This part of the condition applies to a TEO that receives funding from the Industry Training Organisation Strategic Leadership Fund.
The TEO must provide the TEC with a progress report on activities funded from the Industry Training Organisation Strategic Leadership Fund as specified by the TEC.
ITF002: ITO to be eligible to receive funding from the Industry Training Fund or Industry Training Organisation Strategic Leadership Fund
This condition applies to an ITO that receives funding from the Industry Training Fund or Industry Training Organisation Strategic Leadership Fund.
The ITO must, for the length of the funding period, continue to be an ITO that is fully or provisionally recognised by the Minister for Tertiary Education, Skills and Employment under the Industry Training Act 1992.
ITF003: ITO not to deliver training itself
a) must not deliver training itself; and
b) must not have any ownership stake in, or be a beneficiary of, an organisation with which the ITO arranges to deliver the training.
ITF004: TEO not to subcontract activities without permission
This condition applies to a TEO that receives funding from the Industry Training Fund or an ITO that receives funding from Industry Training Organisation Strategic Leadership Fund.
The TEO must:
a) not subcontract its functions without the TEC's written consent; and
b) comply with any conditions imposed by the TEC on the consent; and
c) ensure that the subcontracted party does not further subcontract any of the TEO's functions.
ITF005: TEO to ensure employers of industry trainees or apprentices make a financial contribution
The TEO must ensure that all employers of industry trainees or apprentices who are enrolled with the TEO make a financial contribution towards the cost of each industry trainee’s or apprentice’s training.
ITF006: TEO to ensure that industry trainees meet certain criteria
An 'industry trainee' is a person who is:
a) one of the following:
i. an employee who is employed and working in New Zealand and has a training agreement with his or her employer; or
ii. a self-employed contractor working in New Zealand under an arrangement with an organisation in the nature of employment, who has a training agreement with that organisation; or
iii. a person volunteering in New Zealand under an arrangement with an organisation in the nature of employment, who has a training agreement with that organisation;
b) 16 years of age or over (unless the industry trainee has an early leaving exemption certificate from the Ministry of Education).
The TEO must ensure that each industry trainee it enrolls meets, and continues to meet, the above criteria during the funding period.
ITF007: TEO to ensure New Zealand Apprentices meet certain criteria
In addition to criteria for an industry trainee specified under Condition ITF006, a New Zealand Apprentice is a person who is:
a) employed in the occupation for which he or she is training; and
b) supported by a training plan agreed by the New Zealand Apprentice, the employer and the organisation arranging the training, throughout the New Zealand Apprenticeship programme; and
c) enrolled in a TEC-approved programme of training that consists of either:
i. a qualification at level 4 on the NZQF that has a minimum of 120 credits; or
ii. multiple qualifications that together have at least 120 credits, provided those qualifications are at level 3 and 4 on the NZQF, and at least 60 credits are at level 4 on the NZQF.
The TEO must ensure that each New Zealand Apprentice meets and continues to meet the above criteria during the funding period.
ITF008: TEO to ensure Modern Apprentices meet certain criteria
In addition to criteria for an industry trainee specified in condition ITF006, a Modern Apprentice is a person who was enrolled in a Modern Apprenticeship programme prior to 1 January 2014 and continues training as a Modern Apprentice in a Modern Apprenticeship programme.
ITF009: TEO to ensure industry training programmes meet certain criteria
The TEO must ensure that a programme in which an industry trainee or apprentice is enrolled:
a) is, and continues to be one of the following:
i. a National or New Zealand Certificate that
A. has at least 40 credits; and
B. leads to a certificate generally up to level 4 on the NZQF; or
ii. a National or New Zealand Diploma; or
iii. a Limited Credit Programme that:
A. is designed to encourage entry into a full qualification; and
B. has a minimum of 20 credits and a maximum of 70 credits; and
C. is composed of unit standards drawn from a programme that leads to a qualification for which the TEO has TEC funding approval; and
D. meets the minimum limits for progression from the programme to the completion of full qualifications specified by the TEC; or
E. meets any other criteria as specified by the TEC; or
iv. a Supplementary Credit Programme that:
A. is designed to provide post-qualification skill development; and
B. has a minimum of 20 credits and a maximum of 70 credits; and
C. is composed of unit standards drawn from a programme that leads to a qualification for which the TEO has TEC funding approval; or
v. a TEC-approved New Zealand Apprenticeship programme that is either:
A. a qualification at level 4 on the NZQF that has a minimum of 120 credits; or
B. multiple qualifications that together have at least 120 credits, provided those qualifications are at level 3 and 4 on the NZQF, and at least 60 credits are at level 4 on the NZQF; and
b) continues to include a majority of on-job training;and
c) continues to meet any quality assurance requirements of New Zealand Qualifications Authority; and
d) if the programme of learning leads to a qualification at level 1, 2, or 3 on the NZQF, includes embedded literacy and numeracy; and
e) does not include learning that can be defined as:
i. a qualification or programme designed primarily to equip a participant with the skills and knowledge he or she needs to carry out a given task or function in a manner that complies with a specific health and safety or regulatory compliance requirement; or
ii. learning that displaces the responsibility of employers to provide training necessary to mitigate health and safety, and legal risks; and
f) is not a qualification that:
i. contains health and safety and regulatory compliance learning; and
ii. for which it is likely that most enrolments will lead only to the completion of the health and safety or regulatory compliance components, rather than the whole qualification.
ITF010: TEO not to claim funding from the Industry Training Fund for recognised prior learning
The TEO must not claim funding for recognised prior learning credited to an industry trainee or apprentice.
To ensure that the TEO is able to comply with this condition, the TEO must:
a) ask the industry trainee or apprentice to specify prior learning he or she has undertaken; and
b) review the information provided by the industry trainee or apprentice when admitting him or her into a programme or qualification; and
c) retain documents that confirm that the industry trainee or apprentice has demonstrated the required knowledge or skill.
For the avoidance of doubt, recognised prior learning does not apply to repeated learning undertaken because a quality assurance body requires an industry trainee or apprentice to repeat training periodically.
ITF011: TEO to arrange training at levels 1 to 4 on the New Zealand Qualifications Framework
The TEO must not spend more than 10% of the funding from the Industry Training Fund it has received for training at level 5 or above on the New Zealand Qualification Framework unless it has approval from the TEC.
ITF012: TEO to use Literacy and Numeracy for Adults Assessment Tool
The TEO must use the Literacy and Numeracy for Adults Assessment Tool to identify the literacy and/or numeracy needs of each industry trainee enrolled in a programme at level 1, or 2 on the NZQF, and measure the industry trainee's progress.
ITF013: TEO to meet minimum performance standards
The TEO must meet any minimum performance standards set by the TEC. In particular, the TEO must ensure that at least 80% of industry trainees and apprentices achieve at least 10 credits where their enrolments were eligible for four months or more in a calendar year.
ITF014: TEO to comply with codes of practice
This condition applies to a TEO that receives funding for an industry trainee that is a New Zealand Apprentice or Modern Apprentice.
The TEO must ensure, as far as reasonably practicable, that the New Zealand Apprenticeship activities, and every training plan for a New Zealand Apprenticeship, is consistent with the Code of Good Practice for New Zealand Apprenticeship issued by the Minister under the Industry Training and Apprenticeship Act 1992.
The TEO must ensure, as far as reasonably practicable, that the Modern Apprenticeship activities, and every training plan for a Modern Apprenticeship, are consistent with the Modern Apprenticeship Code of Practice.
ITF015: ITO to provide information on employment outcomes of tertiary education
This condition applies to an ITO that receives funding from the Industry Training Fund or Industry Training Organisation Strategic Leadership Fund.
The ITO must consent in writing, for the purpose of section 37A(a) of the Statistic Act 1975, to Statistic New Zealand disclosing information to the Ministry of Education from its Integrated Data Infrastructure that identifies the ITO.
The ITO acknowledges:
a) that Statistics Act 1975 does not constrain the ongoing use or sharing of the ITO-level data once it is disclosed, and the ITO’s individual confidentiality may not be maintained; and
b) this condition is to enable education agencies to work with ITOs on the analysis of employment outcomes information and the design of suitable indicators; and
c) that publication of any information is not proposed until at least 2017.
ITF016: TEO not to receive other Crown funding
The TEO must:
a) not (without the TEC’s prior written consent) seek or obtain funding from any Crown source other than the TEC to fund a programme or training scheme which is funded from the Industry Training Fund; and notify the TEC immediately if it becomes aware of any circumstances that might result in a breach of this condition.
ITF017: TEO to use funding appropriately
The TEO must only use funding:
a) lawfully, responsibly, and for the purposes for which it is provided; and
b) in a manner consistent with the appropriate use of public funds.
ITF018: TEO to repay excess funding
If the TEO receives funding that is greater than it should have been, or that it was not entitled to receive, the TEO must treat the amount of the over-funding as a debt due to the Crown that:
a) is repayable on demand; and
b) may be set-off against all or any funding, or any sum of money payable by the TEC to the TEO.
Definition of funding that is greater than it should have been
The extent to which a TEO will have received funding from the Industry Training Fund that was greater than it should have been must be calculated by applying paragraphs (a) to (e) in the order that they appear:
a) if the TEO does not arrange delivery of training during the funding period up to the dollar value for which it has been funded (in that situation, the TEC will separately recover funding for industry trainees, and apprentices, based on the rates of funding that apply); and
b) if the actual average duration of a programme of training exceeds the nominal duration of a programme (over-duration) to the extent of the over-duration; and
c) if an individual industry trainee or apprentice has been enrolled in more than 10 credits in any calendar month at one or more ITOs (monthly over-enrolment), to the extent of the annual over-enrolment; and
d) if an individual industry trainee or apprentice has been enrolled in more than 70 credits over the calendar year, at one or more ITOs (annual over-enrolment), to the extent of the annual over-enrolment; and
e) if less than 80% of the industry trainees and apprentices achieve the minimum of 10 credits where their enrolments were eligible for funding for four months or more in the calendar year (under-achievement), the TEC will deduct funding for each percentage point below 80% up to a maximum of 5.0% of the net funding.
For information about the calculation of ‘over-duration ‘over-enrolment’ and ‘under-achievement, refer to the document Standard Training Measures, Learner Counts and Offsets - data definitions and data rules.
ITF019: TEO that receives funding from the Industry Training Fund direct funding scheme to meet certain criteria
This condition applies to a TEO that receives funding from the Industry Training Fund direct funding scheme.
The TEO must during the funding period continue to:
a) be one of the following:
i. an employer; or
ii. a group of employers or industry associations that are part of a consortium arrangement; or
iii. a group training scheme; or
iv. a Modern Apprenticeship Coordinator (who is not employed by an ITO); and
b) have at least 40 industry trainees each year who:
i. are actively training towards one or more of the eligible qualifications and programmes set out in ITF009; and
ii. meet specified industry trainee criteria as defined in condition ITF006; and
iii. may be New Zealand Apprentices as defined in condition ITF007 or Modern Apprentice who enrolled before 1 January 2014 and are continuing training as a Modern Apprentice in a Modern Apprenticeship programme.
Definition of group training scheme
For the purposes of this condition, a group training scheme is a scheme that employs apprentices and places them with host employers that provide training for the apprentices.
ITF020: TEO must keep records
The TEO must keep:
a) a record of evidence that the industry trainee or apprentice has a formal training agreement with his or her employer that is intended to lead to the achievement of one or more of the qualifications or programmes set out in ITF009; and
b) a permanent record of evidence that each New Zealand Apprentice and Modern Apprentice has completed his or her apprenticeship.
ITF021: Eligibility for additional funding for New Zealand Apprenticeships
1. This condition applies to funding for New Zealand Apprenticeships only in relation to funding under the Industry Training Fund.
2. The TEC will allocate additional funding up to the limits specified in paragraph 3 of this condition if:
a) the eligible organisation has met, and continues to meet throughout the funding period, the minimum thresholds for organisational and educational performance for determining under which circumstances an eligible organisation qualifies for additional funding, as described below; and
b) the value of provision measured in dollars that is specified in the eligible organisation’s funding approval is less than the value of provision measured in dollars actually delivered by the eligible organisation.
3. Subject to paragraph 4, the limits for additional funding are the greater of:
a) 2% of the eligible organisation’s approved funding allocation; or
b) an additional 10 standard training measures (STMs),
whichever is the greater.
Minimum thresholds for organisational performance
1. Eligible organisations must have an NZQA External Evaluation and Review (EER) rating of “Highly Confident” (Category 1) or “Confident” (Category 2). If an eligible organisation was established in 2015 or will established during the funding period as the result of a merger of two or more TEOs and if the merged organisations each had an EER rating of Category 1 or 2, the TEC will accept those ratings as meeting the minimum threshold.
2. If, at the date of this letter, an eligible organisation does not have an EER rating, the TEC will not make any decisions as to the whether the eligible organisation has met the minimum thresholds until the EER rating, if any, is known.
3. If, at the date of this letter or at any time during the funding period, an eligible organisation is disputing its EER rating, the TEC will not make any decisions as to the whether the eligible organisation has met the minimum thresholds until the dispute is resolved.
4. If an eligible organisation becomes the subject of a TEC investigation during the funding period, the TEC will not make any decisions as to the whether the eligible organisation has met the minimum thresholds for organisational performance until the outcome of the investigation is known.
Minimum threshold for educational performance
The minimum threshold for educational performance is an average credit achievement rate of 70% or higher. [Measures the number of credits that were achieved by New Zealand Apprentices (NZAs) in a given year, as a proportion of the credits NZAs were expected to achieve in that year.]