The TEQSA fit and proper person requirements apply to every person who makes, or participates in making, decisions affecting the whole or a substantial part of a higher education provider's affairs. Under the TEQSA Act, an applicant for registration must satisfy TEQSA that it and each such person is fit and proper; a registered provider must continue to satisfy that condition; and the test is applied again at renewal. What TEQSA checks is set out in the Fit and Proper Person Determination: compliance with the law, financial history, record in managing other providers, honesty in dealings with regulators, and prior conduct. What catches people is not the history itself but the failure to disclose it.
This article explains who must satisfy the requirement, what TEQSA looks at, and how to handle disclosure, drawn from fifteen years of TEQSA registration work in which fitness and propriety has been raised more often than owners expect.
Who has to satisfy the TEQSA fit and proper person test?
The TEQSA Act frames the requirement in three places. Section 21 requires TEQSA, before registering an applicant, to be satisfied that the applicant and each person who makes or participates in making decisions that affect the whole or a substantial part of the applicant's affairs is a fit and proper person. Section 25A makes continuing fitness and propriety a condition of registration. Section 36 applies the same test at renewal.
In practice the persons covered are the directors of the provider entity, the CEO and senior executives, substantial owners and shareholders who influence decisions, and, where the provider is part of a group, the directors of a controlling entity. TEQSA's guide to fitness and propriety under the TEQSA Act makes clear that the test attaches to influence, not title: a person who directs the provider from behind a nominee director is a decision-maker for these purposes, and TEQSA looks for that pattern.
Each covered person completes the TEQSA fit and proper person declaration, which is lodged with the application and updated when a new person takes up a covered role. The declaration is a signed statement to a Commonwealth regulator, and a false or incomplete one carries consequences under the Act and the criminal law.
What does TEQSA check?
The Tertiary Education Quality and Standards Agency Fit and Proper Person Determination 2018, as amended, sets out the matters TEQSA may consider. They fall into five groups.
Compliance with the law: convictions, pecuniary penalties and court proceedings, in Australia or overseas, excluding spent convictions. Financial record: insolvency, bankruptcy, debt agreements and involvement with entities placed into external administration. Management history: previous involvement with a provider whose registration was cancelled or accreditation revoked, breaches of conditions, and disqualification from managing corporations.
Honesty with regulators: any false or misleading information given to TEQSA, ASQA, a state regulator or a Minister. And prior conduct: previous fit and proper findings, patterns of unethical behaviour, professional misconduct, and, in TEQSA's phrase, whether the public would be unlikely to have confidence in the person's involvement.
TEQSA does not rely on the declaration alone. It conducts its own checks, including against ASIC records, ASQA and other regulators' registers, and its own files. It also reads the application and the provider's public presence with the declarations beside it. A director's biography that omits a former RTO whose registration was cancelled, when the declaration is silent on the same point, is exactly the kind of inconsistency TEQSA is looking for.
Why omission is worse than the matter itself
This is the point I press hardest with clients. Most of the matters in the Determination are not disqualifying in themselves. A bankruptcy fifteen years ago, a director role in a company that later failed, an adverse audit at a former RTO: each is a matter TEQSA weighs, in context, against the person's subsequent record and the role they will hold. Disclosed with an explanation, most such matters are absorbed.
Undisclosed, the same matter becomes evidence of something far more serious, which is a willingness to give TEQSA incomplete information. The Determination lists honesty with regulators as a ground in its own right, and a discovered omission engages it directly. The question then is no longer whether the person's history is acceptable but whether anything else in the application can be trusted. I have seen applications with strong governance and good courses stall on a single undisclosed matter, and the governance mistakes that stall applications frequently have a fitness and propriety problem underneath them.
The rule, then, is simple. If in doubt, disclose. If a matter is disclosable but seems minor, disclose it with a short explanation of context and outcome. If a matter is overseas, disclose it; TEQSA's reach is not limited to Australian records. If a matter concerns another entity the person controlled, disclose it.
The declaration asks the person to certify completeness, and completeness is what TEQSA tests.
How to handle disclosure well
Good disclosure has a consistent shape. It states the matter plainly, gives the date and the outcome, explains the circumstances briefly and without special pleading, and describes what the person has done since. It attaches the relevant documents rather than summarising them. And it is consistent across every place the matter might appear: the declaration, the director's CV, the corporate history in the application, and the provider's website.
Where a matter is serious, the provider should consider its structure before applying rather than hoping the matter is overlooked. A person whose history would trouble TEQSA can sometimes hold a role that does not involve decision-making about the whole or a substantial part of the provider's affairs, but the arrangement must be real. A "consultant" who in fact directs the board is a decision-maker under the Act, and TEQSA reads board minutes, delegations and correspondence to find out who actually decides.
It also helps to treat fitness and propriety as a governance process rather than a form. A conflicts and disclosures register maintained by the company secretary, reviewed at each board meeting, and updated whenever a director's circumstances change, means the declarations at re-registration are drawn from a record rather than reconstructed from memory.
What happens if a person fails the TEQSA fit and proper person test?
If TEQSA concludes that a person is not fit and proper, the consequences depend on the stage. At initial registration, TEQSA may refuse the application, or may register subject to a condition that the person cease to hold the relevant role. For a registered provider, TEQSA may impose conditions, and continuing to operate with a person found not fit and proper in a decision-making role is a breach of the section 25A condition, which can lead to further regulatory action up to cancellation.
In practice the more common outcome is a request for further information during the application process, asking the person to explain a matter TEQSA has found. That is the point at which candour matters most, and it is much easier to be candid about something already disclosed than to explain why it was left out.
The practical test
Before any application, sit each covered person down with the Determination and the declaration and go through every matter, going back as far as the person's adult working life, in every country they have worked. Ask about companies they have directed, providers they have been involved with, regulators they have dealt with, and proceedings of any kind. Then check the answers against public records before TEQSA does. A provider that knows its own people's histories in full, and has disclosed them, has removed one of the few grounds on which an otherwise strong application can fail.
Download the Darlo Governance Readiness Checklist
— a one-page self-assessment against Standards 6.1 to 6.3, including a fitness and propriety disclosure check, drawn from our TEQSA registration and governance work with private providers. Get the checklist
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Frequently asked questions
Who must satisfy TEQSA's fit and proper person requirements?
The applicant or provider itself and each person who makes or participates in making decisions affecting the whole or a substantial part of its affairs: in practice directors, the CEO and senior executives, substantial owners and, in a group, directors of controlling entities.
What does TEQSA consider in assessing fitness and propriety?
The matters in the Fit and Proper Person Determination 2018: compliance with the law, financial record including insolvency and bankruptcy, history in managing other providers, honesty in dealings with regulators, and prior conduct including whether the public would have confidence in the person.
Is a past bankruptcy disqualifying under the TEQSA Act?
Not automatically. TEQSA weighs the matter in context, including how long ago it occurred, the circumstances and the person's subsequent record. Failing to disclose it is far more damaging than the bankruptcy itself.
Do overseas matters need to be disclosed to TEQSA?
Yes. The Determination covers convictions, proceedings and other matters in Australia or overseas, and the declaration requires completeness across all jurisdictions.
Dr Brendan Moloney is CEO of Darlo Higher Education, Australia's largest specialist TEQSA consultancy. He holds a PhD from the University of Melbourne, is a Cambridge University Press author on governance in higher education, and has advised private providers on registration and course accreditation for more than fifteen years.