Fraud management
In accordance with section 10 of the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) the ARC Chief Executive Officer (CEO) must take all reasonable measures to prevent, detect and deal with fraud relating to the agency.
The ARC recognises the need for a sound and robust financial framework based on legal and ethical decision making. Management has a key responsibility to ensure that the ARC’s assets are safeguarded against loss by fraud or negligence. ARC staff are required to implement and adhere to fraud control procedures and report all instances of suspected fraud.
The ARC Fraud Control Plan (Plan) complies with Australian/New Zealand Standard for Risk Management (AS/NZS ISO 31000: 2009) and the Commonwealth Fraud Control Framework 2014. The Plan was reviewed and updated in January 2016 and is next due to be reviewed in January 2018. The Chief Financial Officer reports at each Audit Committee meeting on potential fraud incidents or changes to fraud risk.
Corporate governance structures and processes
Senior executive and their responsibilities
During 2016–17, Professor Aidan Byrne was ARC CEO until 30 September 2016. Following his departure, Ms Leanne Harvey was appointed as Acting CEO pending completion of the recruitment process for the new CEO. The new CEO, Professor Sue Thomas, was announced on 26 April 2017 and started with the ARC on 3 July 2017. Prior to her appointment to the ARC, Professor Thomas was Provost and Deputy Vice-Chancellor Research at the University of New England. Professor Thomas’ academic background is in microbial genetics and she has significant experience managing innovation across a comprehensive range of disciplines.
At 30 June 2017 the ARC had eight executive staff: the Acting CEO; Acting Executive General Manager (EGM); Acting Branch Manager Corporate; Acting Branch Manager Research Excellence and four Executive Directors. Executive Directors are academics drawn from the higher education and research sectors usually for a period of between three and five years.
In addition to the executive staff, the ARC had two other senior staff at 30 June 2017—the Chief Information Officer and Acting Chief Financial Officer. The ARC also had a Chief Program Officer who, at 30 June 2017, was on secondment with the Office of Innovation and Science Australia.
Responsibilities
Ms Leanne Harvey—Acting Chief Executive Officer
Responsible for management of the ARC, reporting directly to the Minister for Education and Training
Ms Kylie Emery—Acting Executive General Manager
Responsible for National Competitive Grants Program (NCGP), Policy and Strategy Branch, NCGP pre-award activities and associated policies, non-financial corporate governance, and data provision and analysis activities
Ms Julija Deleva—Acting Branch Manager, Corporate Services
Responsible for management of corporate services including finance, human resources, facilities and NCGP post-award activities
Ms Sarah Howard—Acting Branch Manager, Research Excellence
Responsible for ongoing implementation of the Excellence in Research for Australia (ERA) program, the development of the Engagement and Impact (EI) assessment of university research and ongoing evaluation of NCGP funding schemes
Dr Fiona Cameron—Executive Director, Biological Sciences and Biotechnology (BSB)
Responsible for BSB issues and NCGP funding schemes
Dr Cameron joined the ARC in July 2012. Prior to commencing at the ARC, Dr Cameron led the Innovation and Consulting Unit at Western Sydney University. In this role, she worked closely with the University Executive, academics, active researchers and the University Research Office to identify opportunities to protect, develop and commercialise intellectual property and to build relationships with industry and government.
Professor Stephen Buckman—Executive Director, Physical Sciences, Engineering, Mathematics and Information Sciences (PSEMIS)
Responsible for PSEMIS issues and NCGP funding schemes
Professor Buckman joined the ARC in November 2016. Prior to commencing at the ARC Professor Buckman was Director of the Research School of Physics and Engineering at The Australian National University until July 2015 when he retired. Professor Buckman was awarded an AM in the Order of Australia in 2013 for significant service to science in the field of experimental atomic physics as a leading researcher, academic and author.
Professor Therese Jefferson—Executive Director, Social, Behavioural and Economic (SBE) Sciences
Responsible for SBE issues and NCGP funding schemes
Professor Therese Jefferson joined the ARC in February 2017. Prior to commencing at the ARC, Professor Jefferson was a Research Fellow at the Curtin University of Technology, within the Curtin Business School. Professor Jefferson’s research expertise lies in the gendered aspects of employment, economic security and labour markets, with special interest in the economic well-being of people in later life and the use of mixed methodologies in economics.
Professor Joanne Tompkins—Executive Director, Humanities and Creative Arts (HCA)
Responsible for HCA issues and NCGP funding schemes
Professor Tompkins joined the ARC in April 2017. Prior to commencing at the ARC, Professor Tompkins was Associate Dean (Research) in the Faculty of Humanities and Social Sciences at The University of Queensland. Professor Tompkins’ research expertise lies in the humanities and creative arts, particularly in spatial theories and virtual reality; multicultural theories and drama; intercultural performance and feminist performance. Her research has assisted the development of cultural spaces for theatres, galleries and museums through three dimensional visualisation and modelling of theatre spaces.
ARC committees and their roles
The ARC’s committees support activities across four key areas:
- governance
- administration of the NCGP
- administration of ERA and the EI assessment
- research integrity matters arising from ARC-funded research.
In 2016–17, the ARC reviewed the need for and membership of all governance committees.
Governance
Senior Management Group
Senior Management Group (SMG) supports the CEO in delivering their responsibilities under the Australian Research Council Act 2001 (ARC Act), the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and the Public Service Act 1999 (PS Act). It oversees management of the agency, monitors and reviews the operations of the agency, and ensures effective communication of the agency’s priorities across all business areas.
SMG meets every two weeks and consists of the CEO, EGM, Branch Manager Policy and Strategy, Branch Manager Corporate Services, Branch Manager Research Excellence, Chief Information Officer, Chief Financial Officer, Chief Program Officer and Director, People and Services.
During the year, the following management committees reported through SMG to the CEO:
- the Business Continuity Plan Committee, which ensures that the Business Continuity Plan remains current and practical, and is tested on a scheduled basis to minimise the likelihood and/or consequence of any potential risk exposure to the core business processes of the ARC
- the Delta Project Board, which provides oversight and operational management for a specific information technology (IT) project, including scope, budget, risk management and scheduling
- the Diversity Working Group, which integrates diversity and equity matters into workplace practice
- the Information and Communications Technology (ICT) Change Control Committee, which oversees approval of changes to ICT applications and infrastructure, and coordinates the release of all changes
- the ICT Governance Committee, which reviews the ICT services requirements for the ARC, and provides recommendations on priorities for the ICT Services Branch
- the Information Governance Committee, which ensures that there is a consistent, systematic and whole-of-agency approach to managing information
- the NCGP Change Advisory Committee, which reviews and assesses NCGP change requests and endorses appropriate work packages for submission to the ICT Governance Committee
- the ORCID (Open Researcher and Contributor ID) Implementation Working Group, which supports and progresses the implementation of ORCID within the ARC
- the People Management and Development Committee, which provides a forum for the ARC to consult with employees and their representatives about workplace issues that affect them
- the Planning and Reporting Committee, which provides advice on all elements of the ARC planning and reporting framework
- the Security Committee, which oversees adherence to physical, personal, and IT security measures within the ARC
- the Work Health and Safety Committee, which develops and promotes initiatives to protect the health and safety of employees, contractors and visitors through the implementation and review of the effectiveness of the ARC’s work health and safety policies and practices.
Audit Committee
The ARC Audit Committee provides the CEO with independent assurance by reviewing the ARC’s financial and performance reporting responsibilities; systems for internal control; risk management and corporate governance.
The committee is established by the CEO in compliance with the PGPA Act and PGPA Rule (Section 17). Its functions and responsibilities are detailed in the ARC Audit Committee Charter which is reviewed annually or as required. Members are a mix of internal and external appointments who collectively possess a broad range of skills and experience relevant to the operations of the ARC (Table 3). During 2016–17, the ARC Audit Committee held five meetings.
| Member | Date of appointment | Expiry of appointment |
|---|---|---|
| Mr P Kennedy, External (Chair) | 01/01/2010 | 30/09/2017 |
| Dr E Arthur, External | 01/11/2013 | 31/10/2017 |
| Dr J Baker, ARC | 01/03/2016 | 28/02/2019 |
| Ms S Howard, ARC | 01/10/2014 | 30/09/2017 |
| Mr G Rankin, External | 01/11/2013 | 31/10/2017 |
| Mrs K Toole, External | 15/03/2017 | 31/03/2019 |
Advisory Council
The ARC Advisory Council provides strategic advice to the CEO on issues relating to the purpose of the ARC including: strategic planning; policy matters relating to innovation, research and research training; and matters relating to the evaluation of the quality and outcomes of research and research training in an international context.
The Council is chaired by the CEO and comprises up to nine additional members appointed by the CEO on the basis of their distinguished academic research records and/or achievements in business and/or research (Table 4). Due to the resignation of the ARC’s CEO in September 2016, the Advisory Council did not meet in 2016–17.
| Member, Institution | Date of appointment | Expiry of appointment |
|---|---|---|
| Ms L Harvey, ARC (Chair) | 08/09/2016 | 02/07/2017 |
| Professor A Byrne, ARC (Chair) | 23/07/2012 | 07/09/2016 |
| Professor P Buckskin, University of South Australia | 01/01/2011 | 30/06/2017 |
| Ms K Carnell, Australian Small Business and Family Enterprise Ombudsman | 01/07/2015 | 30/06/2017 |
| Professor E Cornish, formerly Monash University | 01/07/2015 | 30/06/2017 |
| Professor P Johnson, The University of Western Australia | 01/01/2011 | 30/06/2017 |
| Professor T Snell, The University of Western Australia | 01/07/2015 | 30/06/2017 |
| Professor P Wellings, University of Wollongong | 01/01/2011 | 30/06/2017 |
| Mr P Yates, Myer Family Investments, Royal Institute of Australia | 01/07/2015 | 30/06/2017 |
Administration of the National Competitive Grants Program
College of Experts
The ARC College of Experts plays a key role in identifying research excellence, moderating external assessments of research grant proposals, and recommending projects to be funded. The College comprises a wide range of experienced and highly qualified people of international standing, drawn from across academia, industry and public sector research organisations. Members are appointed for up to three years and are announced annually, ensuring a constant source of expertise. At the discretion of the ARC, extensions of up to one year may be offered to ensure the availability of expertise across the range of proposals being submitted.
The ARC College of Experts comprised 196 members in 2017. On 24 November 2016 the ARC announced 58 new members for 2017. In the 2017 nomination round, strong emphasis was placed on interdisciplinary expertise, as well as interest in a wide range of research areas. This year, to assist with the continuous application and assessment process implemented under the Linkage Projects scheme, 29 existing members received 12-month extensions to continue as members of the College. A list of members is provided on the ARC website.
National Competitive Grants Program Appeals Committee
The NCGP Appeals Committee considers appeals submitted to the ARC in relation to the NCGP and makes recommendations to the CEO about whether each appeal should be upheld or dismissed. The committee also provides general advice to the ARC about how administrative processes could be modified or improved. The committee consists of external members appointed by the CEO. The 2016–17 members were Emeritus Professor A Cheetham (Chair), Professor H Bachor, and Professor L Johnson. The Appeals Committee met twice in 2016–17.
National Competitive Grants Program Eligibility Committee
The NCGP Eligibility Committee considers eligibility issues under the funding schemes of the NCGP. The Committee, comprising Executive Directors and the Branch Manager, Policy and Strategy, provides recommendations to the ARC CEO. In 2016–17, the NCGP Eligibilty Committee met 11 times.
National Competitive Grants Program Scrutiny Committee
The NCGP Scrutiny Committee scrutinises the probity of ARC assessment processes in relation to funding proposals involving members of the ARC College of Experts and/or ARC staff. The committee comprises three members appointed by the CEO. In 2016–17, the members were Professor R Fitzgerald (Chair), Ms V Hart and Mr S Sedgley. The NCGP Scrutiny Committee met twice in 2016–17.
Administration of ERA and the Engagement and Impact assessment
Engagement and Impact Steering Committee
The EI Steering Committee, which includes higher education and industry leaders, will help to develop a process that uses clear and transparent measures of non-academic impact, and industry and end-user engagement, to assess Australia’s university research performance and inform future funding structures. Members of the Steering Committee have been appointed for a term of two years.
Technical Working Group
The role of the Technical Working Group is to provide expert advice on the development of indicators that will support a national engagement and impact assessment. This includes providing advice regarding development of an appropriate methodology; assessment requirements for different disciplines and end-users; along with development of appropriate measures/indicators of research engagement and research impact.
Performance and Incentives Working Group
The role of the Performance and Incentives Working Group is to provide advice to the ARC about the potential incentive effects of the preferred model. This includes identifying how the process and measures in the preferred model will influence the decisions of universities about the focus of their research activities.
Research Integrity matters arising from ARC funded research
The ARC and the National Health and Medical Research Council (NHMRC) jointly established the Australian Research Integrity Committee (ARIC) in February 2011.
On request, ARIC reviews whether an institution’s response to an allegation of research misconduct is consistent with the Australian Code for the Responsible Conduct of Research (2007) and the institution’s own policies and procedures.
ARIC comprises eight expert members (Table 5) and reports to both the ARC and the NHMRC. During 2016–17, the ARIC-ARC secretariat received two requests for review, both of which were under consideration as at 30 June 2017. One ARIC-ARC review that commenced in 2015–16 was finalised in 2016–17 and the outcomes were communicated to the relevant parties by the ARC.
| Member | Year of current appointment | Expiry of current appointment |
|---|---|---|
| Mr R Brent (Chair) | January 2017 | December 2019 |
| Dr K Breen | January 2017 | December 2019 |
| Ms J Hamblin | January 2017 | December 2019 |
| Emeritus Professor S Shaver | January 2017 | December 2019 |
| Mr M Chilcott | May 2017 | December 2019 |
| Emeritus Professor A Lawson | May 2017 | December 2019 |
| Professor M Otlowski | May 2017 | December 2019 |
| Professor J Reid | May 2017 | December 2019 |
Planning and reporting arrangements
The ARC’s performance measurement framework is consistent with the requirements of the PGPA Act and the enhanced Commonwealth Performance Framework.
The ARC’s framework ensures there is a clear line of sight between the performance criteria published in the ARC’s Portfolio Budget Statements (PBS) and Corporate Plan, and the performance information published in the Annual Performance Statement in the annual report. Together, these three documents aim to provide the ARC’s complete performance story (Figure 12).
In addition to published performance information, the ARC’s performance measurement framework is supported by internal operational planning, monitoring and reporting processes.
During 2016–17, the ARC:
- prepared the ARC Annual Report 2015–16, which was tabled in both Houses of Parliament on 25 October 2016
- prepared the ARC Corporate Plan 2015–16 to 2018–19, the second plan prepared under the requirements of the PGPA Act
- following publication of the ARC corporate plan, developed the ARC operational plan for 2016–17. This process allowed branches to map their planned activities to the corporate plan. Biannual reporting against the plan allowed the ARC to track progress against its responsibilities
- established an internal Planning and Reporting Committee to enhance the ARC’s performance planning and reporting capabilities
- prepared the 2017–18 PBS in accordance with Department of Finance guidance. The 2017–18 PBS was tabled in Parliament on 9 May 2017 as part of the Education and Training PBS
- continued to review its performance measurement framework in preparation for drafting of the corporate plan 2017–18
- participated in Community of Practice meetings organised by the Department of Finance to share experiences and information about the new planning and reporting requirements.
Internal audit arrangements including risk
Internal audit
An integral part of the ARC’s corporate governance framework is the internal audit function. Internal audit provides an independent and objective review and advisory service, giving the CEO assurance that the ARC’s financial and operational controls, designed to manage the entity’s risk and achieve the ARC’s objectives, are operating in an efficient, effective, economical and ethical manner. Internal audit also assists management in improving the ARC’s business performance.
The ARC’s internal audit function is managed by the Head, Internal Audit. The Branch Manager, Policy and Strategy assumes the role of Head, Internal Audit. The internal auditor role is outsourced to an independent service provider and reports to the Audit Committee through the Head, Internal Audit. In 2016–17, the ARC’s internal auditor was KPMG.
KPMG assisted in the development of an annual internal audit work plan and undertook the following audits during 2016–17:
- Data integrity: NCGP data warehouse
- Eligibility processes health check
- Fraud scenario based workshops
- Recruitment processes.
Risk
Framework
The ARC manages risk in accordance with the PGPA Act, the Commonwealth Risk Management Policy and the Australian/New Zealand Standard for Risk Management (AS/NZS ISO 31000: 2009). The ARC’s risk management framework is underpinned by five key components: a policy; a plan and toolkit; an operational risk register; a strategic risk register; and a network of risk champions. The framework is reviewed annually by the SMG to facilitate continual improvement.
Results from the 2017 Comcover Risk Management Benchmarking Program found that the ARC continued to achieve an overall risk maturity level of ‘Advanced’. The benchmarking program concluded that the ARC had a well-established risk management framework and policy, and risk management was well embedded into business processes.
Contribution of risk management to achieving objectives
The ARC risk management framework is designed to minimise the possibility of loss or damage to operations, staff, property, reputation and assets, while recognising opportunities to meet the stated objectives of the organisation within a good corporate framework.
In July 2016, SMG briefed the ARC Audit Committee on how the ARC identifies and manages its strategic risks. In January 2017, the SMG reviewed the ARC’s strategic risks for 2016–17 to ensure that they remained relevant, and that the controls for each risk were still effective and appropriate. Following consultation with senior staff across the agency, and in parallel with strategic and corporate planning activities, the SMG finalised its strategic risks for 2017–18 in June 2017.
The ARC reviewed its operational risks in July 2016 and March 2017. This biannual activity helped ensure that business areas were able to properly plan and deliver against the key activities outlined in the ARC’s operational plan.
Business continuity and disaster recovery
The ARC’s Business Continuity Plan sets out the controls and contingencies to minimise the likelihood and/or consequence of any potential risk exposure to the core business processes of the ARC. It includes the ARC’s ICT Disaster Recovery Plan, which is designed to safeguard and recover critical ICT systems.
In 2016–17, the ARC:
- reviewed and updated the Business Continuity Plan
- held two meetings of the Business Continuity Plan Committee.
Ethical standards
As a public service agency
The ARC is committed to high ethical standards. This commitment is promoted through:
- the ARC’s guiding principles which include ‘accountability through transparent, efficient and effective processes and adherence to ethical standards’
- the incorporation of ethical standards into ARC governance policies and guidelines
- the incorporation of the ARC values into performance agreements
- a page on the ARC intranet site and the Australian Public Service Commission (APSC) Ethics Advisory Service
- an ARC Ethics Contact Officer.
The ARC includes an overview and discussion of the Australian Public Service (APS) Values and Code of Conduct as part of induction training for new appointees. Biannual individual performance reviews provide ongoing opportunities for staff and supervisors to address ethical issues.
Data collected for the State of the Service Report Census, conducted by the APSC in 2016, showed that 79 per cent of ARC staff believed that ARC senior executives act in accordance with the APS values, compared to 68 per cent APS wide.
The ARC is committed to preserving public confidence in the integrity, legitimacy, impartiality and fairness of its business. ARC committee members and assessors, as well as any other people undertaking ARC business, must comply with the ARC Conflict of Interest and Confidentiality Policy. In 2016–17, the ARC reviewed its Conflict of Interest and Confidentiality Policy. It also introduced the use of probity officers for the NCGP assessment meetings.
As a research funding agency
ARC Research Integrity and Research Misconduct Policy
To safeguard the integrity of the ARC’s processes, the ARC Research Integrity and Research Misconduct Policy requires institutions, and in some circumstances individuals engaged in ARC business, to report to the ARC the details of research integrity matters which require a formal inquiry to be undertaken by the institution. It also describes pathways via the ARC through which allegations of integrity breaches can be referred to institutions for investigation.
In 2016–17, the ARC was notified of, or identified, 23 new matters relating to actual or potential research integrity breaches or research misconduct. This included matters reported by institutions as well as concerns identified through ARC business or members of the public. In addition, 13 matters reported in 2015–16 were still active in 2016–17.
Institutional investigations found research integrity breaches and/or research misconduct in 12 of the 36 matters that were active in 2016–17. The other 24 matters include six allegations that have been dismissed, nine investigations that are still underway at the end of 2016–17 and nine matters where either no investigation or reporting to the ARC was required.
National codes and statements on research ethics
All ARC-funded research projects must conform to the principles outlined in the Australian Code for the Responsible Conduct of Research (2007) and where applicable:
- the National Statement on Ethical Conduct in Human Research (2007)
- Values and Ethics: Guidelines for Ethical Conduct in Aboriginal and Torres Strait Islander Health Research (2003)
- Australian Institute of Aboriginal and Torres Strait Islander Studies Guidelines for Ethical Research in Australian Indigenous Studies (2012)
- Australian Code for the Care and Use of Animals for Scientific Purposes (2013).
Australian Research Integrity Committee
The ARIC is an independent body, jointly established by the ARC and the NHMRC, to provide a system to review institutional process to investigate allegations of research misconduct. Further information about the ARIC is provided on page 84.
Service delivery and complaints handling
The ARC sets out the standards of service clients should expect from the ARC in the ARC Client Service Charter. In 2016–17, the ARC reviewed and updated the Charter.
The ARC Complaints Handling and Appeals Policy helps clients who want to make a general complaint about the ARC or submit an appeal about the administrative processes of the NCGP. In 2016–17, the ARC:
- received no general complaints
- received five appeals relating to proposals submitted for funding under the NCGP. Of the five considered, one appeal was upheld by the NCGP Appeals Committee. Further information on the NCGP Appeals Committee is provided on page 84.
Senior Executive Service remuneration
Terms and conditions for ARC Senior Executive Service (SES) staff are set out by Common Law Contracts. As at 30 June 2017, there were four Common Law Contracts in place for ARC SES staff.
Remuneration is reviewed annually taking into account the individual’s personal skills, knowledge, experience and capabilities as well as achievements against goals set in the preceding performance cycle.
At 30 June 2017, the notional salary range for SES Band 1 and Band 2 officers was between $160,000 and $285,000. Further information about executive remuneration is available on the ARC website.
Non-compliance with Finance law
The ARC did not report any significant issues to the Minister under paragraph 19(1)(e) of the PGPA Act that relates to non-compliance with Finance law.