Financial and performance monitoring of TITOs

Te aroturuki ā-pūtea i ngā whakahaere whakangungu ahumahi

Last updated 8 December 2021
Last updated 8 December 2021

This page sets out our requirements for financial reporting by Transitional Industry Training Organisations (TITOs), and the performance monitoring of TITOs. 

Financial reporting by TITOs

Each TITO must provide financial information each year via a template. The information:

  • helps with monitoring TITOs
  • meets our obligations under the Education and Training Act 2020 (Schedule 18, clause 13) to monitor the financial performance of TITOs to ensure that funding is spent in accordance with the purpose for which it was allocated
  • fulfils our obligations under the Industry Training and Apprenticeships Act 1992 (sections 7a and 7b) to monitor the extent to which TITOs are funded by industry, and their capability.

This information helps to ensure that TITOs that receive government funding are financially viable and are able to fulfil their statutory role.

This information is collected at least once a year.

Financial performance guidance for TITOs (PDF, 859 Kb)

Industry Cash Contribution

The Industry Cash Contribution (ICC) is calculated in the template. Since 2014 the ICC rates have been:

  • 30% for trainees 
  • 20% for apprentices

The template still calculates just one rate and we will review the result for each TITO against the proportion of its trainees and apprentices.

TITO Financial Monitoring Framework

We have worked with sector representatives to develop a formal financial monitoring framework (FMF) for TITOs. The FMF provides clarity and transparency for the sector about the financial monitoring assessments made by us. The FMF assessments also inform reporting and engagement for the coming year.

A detailed outline of the FMF can be found in the TITO FMF guidelines. 

Industry training organisation financial monitoring framework guidelines (PDF, 635 Kb)

Performance monitoring of TITOs

We monitor a range of TITO activity that links to both funding and performance. The performance monitoring framework sets out what we look at and why, and covers both regular and ad hoc monitoring.

The outcomes of monitoring inform conversations between investment managers and TITOs, with a view to improving activities and outcomes if needed. The information also informs Investment Plan rounds and in-year Plan amendments, and contributes to operational policy changes, such as funding conditions.

Performance monitoring framework for industry training organisations (PDF, 536 Kb)

Changes from 2019

Since January 2019, your fees-free payment has needed to be included in the ICC.

Previously, fees-free was not considered as a government contribution for ICC purposes; but was accounted for by TITOs as government revenue, rather than fees paid by trainees (either to the TITO or directly to other educational providers).

This change in accounting has reduced the amount of industry contribution declared by TITOs, and as a result, reduced the ICC percentage.

TITOs should consider fees-free payments as part of ‘industry revenue’ in the ICC calculation.

This is on the basis that:

  • fees-free payments are payments on behalf of the trainee;
  • these payments have replaced amounts that were previously paid by employers or trainees; and
  • this is consistent with the wording of the funding condition which acknowledges that some of the ICC may be met through fees-free payments.

Reform of Vocational Education

Please note, under the Reform of Vocational Education (RoVE), the TITOs are required to transition their arranging training functions to other providers before 31 December 2022, pending the TITOs’ disestablishment.

The TITOs’ role in setting standards for vocational qualifications that can be registered by the New Zealand Qualifications Authority (NZQA) transferred in October 2021 to the Workforce Development Councils.