With an uncertainty as to how the apprenticeship landscape will settle in the coming months and years, it can be difficult to know how best to plan for the future. However, one thing is clear, we will all need to adapt to a ‘new normal’ and, from a business perspective, that naturally includes retaining your funding and being efficient with your processes.
With this in mind, now is a good time for providers to reflect on apprenticeship compliance. Firstly, you want to be confident that the apprenticeship funding you have already claimed is safe from clawback and, secondly that you are implementing the right systems to safeguard your apprenticeship funding in future.
In this post, SDN’s compliance expert, David Lockhart-Hawkins, tackles three compliance challenges that providers struggle with, to help you understand common funding errors and adjust where necessary.
But first… why is apprenticeship compliance so important now?
Apprenticeship compliance has changed fundamentally since May 2017 when the funding methodology of levy and negotiable training price was implemented.
Staying compliant now requires a greater degree of technical knowledge of the apprenticeship product, the funding rules and an ability to evidence the funding you are claiming is justifiable.
Over the last two years, SDN has supported dozens of apprenticeship training providers with their compliance assurance activity and it is rare to find providers that do not, in the first instance, have errors in their data. This is usually linked to misunderstandings of apprenticeship funding methodology and the ability to interpret and make evidence-based decisions on the grey areas of the funding rules.
Below are the three main areas where errors occur…
“The training price / assessment price conundrum”
Many training providers sell their apprenticeship programmes to employers on a single value (usually the maximum funding band) and assume the end-point assessment (EPA) cost is fixed, when in fact it only becomes fixed when the employer agrees that price with their chosen End Point Assessment Organisation (EPAO).
You need to clearly agree your training price (cost of delivery and your margin) at start, and then the assessment price when known (actual cost agreed by employer with EPAO). We’ve seen too many instances of estimated assessment prices or values that are not accurate, leaving an overclaim and an employer potentially overcharged.
For example, if you quote a single price at the maximum funding band for a particular standard at £5,000 and assume EPA will cost 20% (£1,000), you are effectively saying that your training costs £4,000 to deliver. You have to put that on your Individualised Learner Record (ILR) as your training price. This means, if the employer chooses a different EPAO who delivers EPA at a lower cost than you had planned for (say £600 instead of £1,000), you have an EPA overclaim of £400.
Providers commonly think that this is an overclaim only at completion, but it isn’t. You get 80% of your training and assessment monies on the ILR split between start and planned end date. You’re claiming EPA monies on the day you input an assessment price on the ILR. If that value is wrong, you have an overclaim.
Dual approach to initial assessment
It’s important that you have strong and effective compliance systems that work hand-in-hand with your quality systems – initial assessment is a good example of where compliance and quality should work in tandem, now more than ever.
Initial assessment is really the most important part of the apprenticeship journey. An apprentice must need at least 20% off-the-job training, across a minimum duration of a year, to be suitably funded as an apprentice. If you cannot evidence the suitability of your apprentice, then all funding is going to be at risk irrespective of where they are now in their journey.
You need to be sure that when you’re designing an initial assessment you are teasing out the level of knowledge, skills and behaviours an apprentice has already obtained prior to starting the apprenticeship, before amending the training programme to reflect this prior learning.
Modulising your programme is one good method to getting this right. This gives an apprentice a more tailored apprenticeship programme but will also mean adjusting the price when particular modules of learning are not needed or advising the applicant of other training routes if there isn’t enough learning activity to make them eligible for an apprenticeship.
Auditors rightly never accept the reasoning that, if an apprenticeship is the only funding route available to a provider, then the absence of their own delivered alternatives is why the applicant was put on the programme!
David Lockhart Hawkins has developed a series of subject-based initial assessment and skills gap analysis templates to ensure apprentice suitability. Contact us for details.
Planning off-the-job hours as part of curriculum development
Many apprenticeship providers do not yet have a sufficient understanding of the development hours (the off-the-job hours) an apprentice will receive within their curriculum, which makes it impossible to accurately identify what they need following initial assessment. This often creates ineffective planning and tracking mechanisms for off-the-job hours.
Tracking hours itself can be problematic if parties don’t understand what needs to be tracked. You might be asking apprentices to spend a large amount of time recording hours that could be obtained in a more streamlined way. Where apprentices don’t track their hours adequately or aren’t sure what to track, could give the impression they are not meeting the training requirements and potentially result in a funding clawback, though this is usually at the point of completion when it can’t be proven an apprentice has met the 20% requirement.
In summary
90% of the compliance challenge is now about effectively designing an apprenticeship programme where you understand your curriculum, how the curriculum aligns to the apprenticeship standard, and the apprentice, employer and trainer all have clarity on what is required of them to progress through the programme.
Whilst being in lockdown has presented many challenges for apprenticeship providers, it does also provide an opportunity to address key compliance challenges and better safeguard your funding before business resumes in the months ahead.
5-part webinar recorded series: Understanding ESFA compliance and its audit process for apprenticeships
If you’d like a more thorough understanding of ESFA compliance from David, register for SDN’s webinar series..
The 5-part webinar series, will give you a clear overview of ESFA compliance and auditing process for apprenticeships, how you can self-assess your compliance ahead of any ESFA monitoring, meet the funding rules and safeguard your funding.
The series even includes a session on the updated funding rules later this year.