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New OfS regulatory advice on monitoring and reportable events

New OfS regulatory advice on monitoring and reportable events

The OfS expects its interactions to be with the provider’s accountable officer. Providers should note that where there is a prolonged absence or sudden departure an alternate accountable officer must be nominated, who will be vetted for suitability by the OfS. We have seen the OfS expect an alternate to be appointed even where the accountable officer is off sick for a few weeks.

The Advice reminds providers of the power of the OfS to seek information under registration condition F3, either generally or where a particular issue has been notified. What it has to say about deadlines for providing this information typifies its approach overall. It will not agree to extend deadlines, but will take into account the reasons for the delay in deciding whether to take action over the late response.

Information provided to the OfS can be shared with a wide range of other bodies and regulators, such as the ESFA, OIA, Ofsted and the Advertising Standards Authority, where necessary to perform its functions. The OfS cannot sign confidentiality agreements restricting disclosure.

The Advice reiterates that the OfS will decide whether to take action against a provider based on an assessment of the risk of breaches of regulatory conditions by looking at:

  • Lead indicators from data about the provider
  • Reportable events;
  • Notifications of concerns by staff, students and others including through complaints and whistleblowing;
  • Evidence from other conditions (e.g. where the breach of a quality and standards condition also reveals a potential breach of, say, the management and governance condition); and
  • Random sampling.

To mitigate the risk of a breach of condition, the OfS can issue a formal communication for the governing body to consider if action should be taken, or put the provider under enhanced monitoring or impose a specific condition of registration.

The Advice also contains a summary of the OfS’s powers to sanction providers if it considers that there has been or is a breach of condition.

Reportable events

Regulatory Advice 16 deals with reportable events. It makes clear that the test of whether or not to report is whether it materially affects or could materially affect either the provider’s:

  • Legal form or business model; or
  • Willingness or ability to comply with the conditions of registration.

It is for the provider to judge “materiality”, but it must act reasonably and it is not a question of financial value alone. Reportable events cover a very wide range of issues from strategic decisions, to the findings of governance effectiveness reviews through to “allegations of improper behaviour” by the accountable officer or members of the governing body.

There are also specific requirements to report under individual conditions, for example in relation to the triggering of the student protection plan.

It is the responsibility of providers to decide whether something is a reportable event. The OfS will not give guidance and may penalise both over- and under-reporting.

The Advice sets out examples of reportable events, including some that were not set out in the Regulatory Framework, for example significant changes in the governing body or turnover in the senior management team, or allegations of improper behaviour against members of the governing body or the accountable officer. Partnerships between registered providers present a particular challenge, as all or only one/some of the partners may have to report events.

Reportable events must be reported within five days or, exceptionally, as soon as is reasonably practicable thereafter and without undue delay.

Considerations for institutions

The OfS’s approach to monitoring and reportable events raises a number of issues for institutions:

  • It is quite clear that the OfS is not in the business of providing any advice and guidance on how to comply with these requirements, which seems unfortunate given that the sector will inevitably need time to adjust to and become comfortable with implementing these requirements. The explicit threats that over-reporting will be treated as a breach seem unnecessarily draconian, and it would have been better for the OfS to look at over-reporting as, initially at least, a good thing.
  • Institutions need to have clear arrangements in place about making decisions in relation to reportable events and monitoring engagements, especially where key individuals such as members of the board and the accountable officer are involved. This might be the University Secretary/Registrar and/or a Senior Independent Governor, but their authority to make these decisions needs to be confirmed in advance to avoid institutional “paralysis” if a crisis situation arises.
  • Some of the examples given by the OfS will create practical challenges for institutions. At what point, for example, should allegations of improper behaviour on the part of senior officers be reported: as soon as they are made or only at the point at which there is some evidence to support them? Being required to act on the basis of the allegations alone would be a mischief-maker’s charter, but delaying notification pending a preliminary investigation could also put the provider in breach of the obligation to report promptly.
  • The OfS’s approach may also result in highly defensive practices which could divert time and energy that could otherwise be spent on focussing on delivering a better experience and outcomes to students. For example, if every allegation, however poorly articulated or evidenced, has to be investigated in order to decide if it should be reported, then that could be a lot of resource spent on investigations. However, reading these Regulatory Advices, governing bodies and accountable officers could be forgiven for thinking that they need to carry out investigations into every allegation, however unsubstantiated. Let’s say an anonymous allegation comes in that the chair of the board is being bullied by the accountable officer. Is the rest of the governing body entitled to draw on their observations and knowledge of the relationship, performance appraisals and an informal discussion with the protagonists to decide that there is nothing in the allegations? If so, does it need to report its decision? The risk is that there will be a tendency to commission an investigation, probably externally given the seniority of the individuals involved, and thus a period of time when two of the most senior posts in the institution cannot fulfil their normal obligations because their relationship is under investigation. This is likely to threaten the institution’s ability to function which seems an undesirable outcome for the regulator.