As of 1 July 2023, there will be changes in identifying persons with management or control (PMC) of a service in the Australian childcare industry. This blog post serves as a guide for prospective approved providers, helping them understand the new definitions and responsibilities surrounding PMC. If you’re an existing approved provider.
When do the changes start?
The definition of a person with management or control (PMC) of a service will change from 1 July 2023. This information sheet aims to assist prospective approved providers in identifying individuals who fall under the PMC category for their service(s). Existing approved providers can find further information on identifying persons with management or control here.
Who is defined as a PMC from 1 July 2023?
The approved provider refers to the legal entity approved to operate an education and care service, and holds the legal responsibility for managing the service. Persons with management or control of a service (PMCs) are individuals within or outside the approved provider responsible for managing the delivery of the provider’s service(s) or have significant influence over the service’s activities or delivery.
Each PMC must be a fit and proper person to be involved in children’s education and care, and carries the same legal responsibility for the safety, health, and wellbeing of the children at their service as the approved provider. A PMC typically holds an executive or management role within the approved provider entity, which includes:
- An officer of a body corporate
- Each member of the management committee of an association
- Each partner of a partnership
- A person in a management position within the business, with authority or responsibility for, or significant influence over, decisions affecting the delivery of children’s education and care (e.g., a state/territory or area manager)
Apart from individuals in executive or management roles within the approved provider entity, a PMC can also be a person outside the entity, such as an employee of a third-party management company or a volunteer. Additionally, a PMC may be someone without a formal or contractual role who, through their actions, exerts significant influence on the planning, direction, or control of the service’s activities or delivery.
However, it’s important to note that holding operational management roles within a service, such as a nominated supervisor, person in day-to-day charge, or centre manager, does not automatically meet the PMC definition. Individuals in these roles will only meet the PMC definition if they also participate in executive or financial decision-making or have authority, responsibility, or significant influence over the planning, direction, or control of the activities or delivery of the education and care service. For instance, if they are a partner in a partnership or an executive committee member of the approved provider entity.
Why is the definition changing?
The definition is expanding to ensure regulatory authorities can assess the suitability of all individuals who have significant influence, responsibility, or authority over the delivery of the provider’s service(s). The expanded definition, effective from 1 July 2023, will encompass persons within or associated with the approved provider entity who have authority or responsibility for, or significant influence over, planning, directing, or controlling the activities or delivery of the service.
How should prospective and approved providers prepare for this change?
When completing an application for provider approval, prospective providers must identify any individuals within or associated with their organisation who meet the expanded PMC definition. Each person identified as a PMC must be notified to the regulatory authority. This notification process involves each identified person providing essential information to enable the regulatory authority to assess their fitness and propriety. This information is known as ‘prescribed information’.’
To prepare for this change, prospective and approved providers should:
- Assess which individuals within or associated with the prospective or approved provider meet the expanded PMC definition.
- Ask these individuals to complete and submit a declaration of fitness and propriety form through the NQA IT System, including all prescribed information (e.g., applying for a working with children check if that person not already holds it).
If an application for provider approval is made in Western Australia (WA)
If you’re making an application for provider approval in Western Australia (WA), you should identify any PMCs based on the definition provided in the Education and Care Services National Law (WA) Act 2012. This definition will not change on 1 July 2023, and will continue to apply until further notice. The defined PMCs in WA are:
- An officer of a body corporate
- Each member of the management committee of an association
- Each partner of a business partnership
- In any other case, a person who has the responsibility, alone or with others, for managing the delivery of the service.
If you’re applying for provider approval in another state or territory, but intend to operate one or more services in WA, the expanded definition will apply from 1 July 2023 concerning the PMCs of services operated in WA. Prospective providers planning to operate in WA should contact the WA regulatory authority for further information.
What are the obligations of prospective and approved providers under the National Law?
When applying for provider approval under Section 12 of the National Law, prospective providers must provide the regulatory authority with the details of each person who will be a PMC for their service(s) and submit the prescribed information.
If an application for provider approval is made before 1 July 2023, the prospective provider should assess which persons meet the current PMC definition in the National Law, and notify only those individuals to the regulatory authority in the application for provider approval. However, if the application for provider approval is granted, the approved provider must notify the regulatory authority of any other persons who meet the expanded definition once it comes into effect on 1 July 2023. Further information on how and when to notify the regulatory authority of new persons meeting the expanded definition can be found below.
At all times, approved providers must ensure their PMC information is accurate and up to date. Any changes regarding PMCs must be notified to the regulatory authority within the specified timeframes under section 173 of the National Law and section 174 of the National Regulations.
Why do approved providers need to notify of these changes?
Approved providers and PMCs have a legal responsibility to continuously demonstrate their fitness and propriety to be involved in managing or controlling a service.
How and when does an approved provider notify the regulatory authority?
The approved provider must notify the regulatory authority of any appointment or removal of a PMC within 14 days of the event (or within 14 days of becoming aware of it), according to section 173 of the National Law and section 174 of the National Regulations.
If a person becomes a PMC under the expanded definition when it comes into effect, the person is considered appointed as a PMC on 1 July 2023, as per the transitional provision. The approved provider must notify the regulatory authority of the appointment of that PMC by 15 July 2023.
Notification is not required for persons already notified to the regulatory authority as PMCs before the change to the definition on 1 July 2023.
To notify the regulatory authority of any appointment or removal of a PMC, the provider must submit the PA08 – Notification of change to information about approved provider form through the NQA IT System. Each identified PMC must then complete a PA02 – Declaration of fitness and propriety form. This process includes any individuals who meet the new definition from 1 July 2023. As part of the notification process, each PMC must submit the relevant supporting documentation outlined in the PA02 form.
If an existing PMC is no longer fit and proper for any reason, the regulatory authority must be notified within seven days.
For more information about submitting information online through the NQA IT System, please refer to the user guides available on the Australian Children’s Education & Care Quality Authority (ACECQA) website.
How will the regulatory authority assess the suitability of PMCs?
All PMCs identified by a prospective provider as meeting the expanded definition must be, and must remain, fit and proper individuals to be involved in the provision of education and care. The regulatory authority will assess a person’s fitness and propriety, including their knowledge of the National Quality Framework (NQF), using a risk-based approach. In addition to the prescribed information, the regulatory authority may obtain relevant additional information through interviews, written assessments, or both.
The regulatory authority retains the right to reassess a person’s fitness and propriety at any time under section 21 of the National Law.
Is there a difference between a PMC under the National Law and for Child Care Subsidy (CCS) payments?
The expanded definition of a PMC under the National Law will be similar to the definition used by the Australian Government for a PMC of a provider entity for administering the CCS, under the Commonwealth Family Assistance Law.
In some cases, a provider’s PMCs will be the same individuals for the National Law and CCS purposes. However, certain circumstances may lead to a person being a PMC in relation to the CCS, but not a PMC under the National Law. This can happen when a person is involved in managing the funds received by the provider for CCS payments, but has no role in executive decision-making related to the delivery of the approved provider’s service, or authority/responsibility for, or significant influence over, the planning, direction, or control of the service. Similarly, a person who is a PMC under the National Law may not be involved in managing the funds received for CCS payments.
It’s important to note that not all operational management roles, such as a nominated supervisor, person in day-to-day charge, or centre manager, automatically meet the expanded PMC definition under the National Quality Framework (NQF). However, these roles may meet the PMC definition in relation to CCS.
For more information about PMCs in relation to the CCS and the Family Assistance Law, please visit the Australian Government website.
Resources:
- NSW Department of Education – Your Responsibilities as a Person with Management Control
- The Guide to the NQF – Section 1.1 Application for provider approval
- Contact your regulatory authority
- Fact sheet – Suspending or cancelling a provider approval under National Law from 1 July 2023
Acknowledgement: The information in this publication is accurate pending the Australian, state, and territory Education Ministers’ agreement to amended regulations.
