The financial position of the technical and further education (TAFE) sector has improved at 31 December 2015 compared to prior years. This has been driven by reduced spending in the sector and $159.3 million in additional grant funding provided by the state government to TAFE entities during 2015. The sector recorded a collective net surplus of $37.2 million at 31 December 2015 (2014: $83.1 million net deficit).

As a result, our financial sustainability risk analysis of the sector has improved with the indicators showing positive short-term results. The challenge for the sector is to translate this into a longer-term financially sustainable business model.

There has also been positive change in performance reporting in the sector. The Department of Education & Training have developed a performance reporting framework which is being implemented and is on track to be in place for the 2016 reporting cycle.

Our review of the fraud control frameworks in place at the TAFEs identified that TAFEs are adopting too narrow a definition for fraud. This means that the risk of all types of fraud occurring are not being adequately mitigated.