Fraud management

In accordance with section 10 of the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule), the ARC CEO must take all reasonable measures to prevent, detect and deal with fraud relating to the agency. No instances of fraud were identified in 2019–20.

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 complies with the Australian/New Zealand Standard for Risk Management (AS/NZS ISO 31000: 2009) and the Commonwealth Fraud Control Framework 2017. The plan was reviewed and updated in July 2020 and is due to be reviewed again in 2022. All potential fraud incidents are followed through until a resolution is achieved. The Chief Financial Officer reports all fraud and potential fraud incidents to the ARC Audit Committee meeting.

Senior executive and their responsibilities

In 2019–20 the ARC’s senior executive consisted of: the CEO; Executive General Manager; Branch Manager, Policy and Strategy; Branch Manager, Corporate Services and Branch Manager, Research Excellence. Two Executive Directors were appointed. The Executive Directors are academics drawn from the higher education and research sectors usually for a period of between three and five years. The ARC had three senior staff at 30 June 2020—the Chief Information Officer, Chief Financial Officer and Chief Program Officer.

There were four changes to the ARC’s senior executive over the 2019–20 period. Dr Mary Kelly was engaged as the Executive Director for Biological Sciences and Biotechnology (BSB), Professor Bronwen Neil was engaged as the Executive Director for Humanities and Creative Arts (HCA) and Professor Therese Jefferson and Professor Joanne Tompkins ended their terms as Executive Directors.

Responsibilities

Professor Sue Thomas has statutory responsibilities for managing and leading the agency in accordance with legislated requirements. Under the Australian Research Council Act 2001 (ARC Act), the CEO is required to make recommendations to the Minister on which applications should be approved for funding, administer the financial assistance for research provided through the National Competitive Grants Program (NCGP) and provide advice to the Minister on research matters.

Dr Tony Willis—Executive General Manager

Dr Tony Willis plays a key senior leadership role in the organisation in support of the CEO, by providing advice on public service matters and by supporting a team of senior managers, with a particular focus on the Corporate Services, Research Excellence and Information and Communications Technology (ICT) Services branches. Other duties include being the agency’s Chief Security Officer and Public Interest Disclosure Officer.

Ms Kylie Emery—Branch Manager, Policy and Strategy

Ms Kylie Emery is responsible for the governance and corporate reporting, access, international and integrity policy, and grant policy and data sections. These areas involve responsibility for NCGP policy, non-financial corporate governance, risk management, research integrity, internal audit, ARC guidelines, and data provision and analysis activities. She is also currently the ARC’s Diversity Champion.

Ms Julija Deleva—Branch Manager, Corporate Services

Ms Julija Deleva oversees functions within the ARC relating to finance, legal services, people and services, program evaluation, stakeholder relations and parliamentary engagement. She became the ARC’s Chief Financial Officer in 2009, and in September 2016 commenced in the role of Branch Manager, Corporate Services. She is also currently the ARC’s Indigenous Champion.

Ms Sarah Howard—Branch Manager, Research Excellence

Ms Sarah Howard is responsible for the ongoing implementation of the Excellence in Research for Australia (ERA) program, and the development and implementation of the Engagement and Impact (EI) assessment. Ms Howard oversees the management of the longitudinal datasets for these evaluation programs, as well as the provision

of policy advice on research evaluation and the state of the Australian university research landscape more broadly.

Professor Therese Jefferson—Executive Director, Social, Behavioural and Economic Sciences (SBE)

Professor Therese Jefferson was responsible for SBE issues and NCGP funding schemes. Professor Jefferson joined the ARC in February 2017. Previously, Professor Jefferson was a Research Fellow at 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 a special interest in the economic well-being of people in later life and the use of mixed methodologies in economics. Professor Therese Jefferson ended her term as an Executive Director on 12 February 2020.

Dr Mary Kelly—Executive Director, Biological Sciences and Biotechnology (BSB)

Dr Mary Kelly joined the ARC in February 2020. Prior to this, Dr Kelly has served as an Adjunct Executive Director for the ARC. In 2019 Dr Kelly was inaugural Director of the Centre for Entrepreneurial Agri-Technology, a joint initiative of the Australian National University and the Commonwealth Scientific and Industrial Research Organisation, and from 2015 to 2018 Dr Kelly was Deputy Vice-Chancellor Research, Development and Industry at Charles Sturt University.

Dr Robert Mun—Executive Director, Engineering and Information Sciences (EIS)

Dr Robert Mun is responsible for EIS issues and NCGP funding schemes.

Dr Mun joined the ARC in May 2018. Previously, Dr Mun was Branch Head at the Defence Science and Technology Group with the Australian Department of Defence, and Scientific Advisor to the Navy and also to the Defence Material Organisation.

Dr Mun’s research expertise relates to chemical engineering. He managed the Department of Defence’s Capability and Technology Demonstrator Program, a grant funding scheme promoting innovative defence technologies.

Professor Bronwen Neil—Executive Director, Humanities and Creative Arts (HCA)

Professor Bronwen Neil joined the ARC in June 2020 as Executive Director of HCA. She is seconded from Macquarie University where she is Professor of Byzantine History in the Department of Ancient History. She joined Macquarie in 2017 while an ARC Future Fellow and in 2019 became the inaugural director of the university- funded research Centre for Ancient Cultural Heritage & Environment (CACHE).

Professor Joanne Tompkins—Executive Director, Humanities and Creative Arts (HCA)

Professor Joanne Tompkins was responsible for HCA issues and NCGP funding schemes. Professor Tompkins joined the ARC in April 2017. Previously, she 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. Professor Joanne Tompkins's ended her term as an Executive Director on 30 June 2020.

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.

Senior Management Group

The Senior Management Group (SMG) supports the CEO to deliver her responsibilities under the 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 ARC, monitors and reviews the agency’s operations and ensures effective communication of the ARC’s priorities to all business areas.

The SMG generally meets every two weeks and consists of: the CEO; Executive General Manager; 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.

To assist the SMG and the CEO to discharge their duties the ARC has a number of management committees and boards. They include:

• Business Continuity Committee, which ensures that the Business Continuity Plan (BCP) 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 ARC’s core business processes
• Diversity Working Group, which integrates diversity and equity matters into workplace practice
• Information Technology (IT) Governance Committee, which reviews the ARC’s ICT service requirements, and provides recommendations on priorities for the ICT Services Branch
• People Management and Development Committee, which provides a forum for the ARC to consult with employees and their representatives about workplace issues
• Planning and Reporting Committee, which provides advice on all elements of the ARC’s planning and reporting framework
• Program, Strategy and Executive Committee, which provides advice and recommendations on policy and programs as they relate to the NCGP
• Security Governance Committee, which oversees adherence to physical, personal and IT security measures
• 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 ARC’s work health and safety policies and practices.

Audit Committee

The Audit Committee provides the CEO with assurance by independently reviewing the ARC’s financial and performance reporting responsibilities, systems for internal control, risk management and corporate governance.

The Audit 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. The charter is available on the ARC web site, www.arc.gov.au > About ARC > ARC Profile > ARC Committees > ARC Audit Committee. 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 2). During 2019–20 the ARC Audit Committee held five meetings.

Table 2: Membership of the ARC Audit Committee, 2019–20

ARC Advisory Council

The ARC Advisory Council provides strategic advice to the CEO on issues relating to the purpose of the ARC. This includes feedback on strategic planning; policy matters relating to innovation, research and research training; and the evaluation of the quality and outcomes of research and research training in an international context.

The Advisory 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 or achievements in business research and development (Table 3). Seven members of the Advisory Council continued their appointment in 2019–20. The Advisory Council met twice in 2019–2020, on 4 September 2019 and 17 March 2020.

Table 3: Membership of the ARC Advisory Council, 2019–20

ARC College of Experts

The ARC College of Experts (College) are experts of international standing, drawn from the Australian research community and across all disciplines from higher education, industry and public sector research organisations—and other eminent members of the wider academic community and/or key industry groups. College members play a key role in the peer review processes of grant applications submitted under the NCGP.

New members are announced annually for terms of up to three years, ensuring a consistent source of expertise. At the discretion of the ARC, extensions of up to one year may be offered to ensure that available expertise reflects the range of applications being submitted.

As at 30 June 2020, the College comprised 195 members, including 58 new members appointed for 2020. In the 2020 nomination round, strong emphasis was placed on multi-disciplinary and cross- disciplinary expertise, with high regard also placed on applicants with a strong assessor history. In addition, nominations from women, people of Aboriginal or Torres Strait Islander origin, and end-users across the private, public and not-for-profit sectors were particularly encouraged. This year, to ensure that the available expertise reflects the range of applications received by the ARC, three existing members received extensions to continue as members of the College. Continuing to support the ARC Reconciliation Action Plan, ten Aboriginal and Torres Strait Islander College members were retained. A list of members is on the ARC website, www.arc.gov.au > About > ARC Profile > ARC Committees > ARC College of Experts.

Selection Advisory Committees

Selection Advisory Committees (SACs) recommend which applications should be funded, and how much funding successful applications should receive, to the CEO. The nature of the grant opportunity and the volume of applications influence the size and structure of each SAC. SACs may comprise of College members and/or other distinguished academic researchers and members from end-user communities. The membership of each SAC remains confidential until funding outcomes are announced.

For most schemes, the SAC will be divided into three, four or five broad disciplinary panels. For specialist and highly prestigious schemes such as the Australian Laureate Fellowships, Linkage Infrastructure, Equipment and Facilities, Linkage Projects, Industrial Transformation Training Centres, Industrial Transformation Research Hubs (ITRH), Special Research Initiatives and ARC Centres of Excellence (CoE) schemes, the SAC consists of a single interdisciplinary panel.

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 appeals should be allowed or dismissed. This committee also provides general advice to the ARC about modifications and improvements to the ARC’s administrative processes. It consists of external members appointed by the CEO. The 2019 members were Emeritus Professor H Bachor, Dr K Anderson, Ms E Carroll and Emeritus Professor B Lohmann. In 2020 members were Dr K Anderson, Ms E Carroll, Emeritus Professor B Lohmann and Professor M Harding. The NCGP Appeals Committee met three times in 2019–20.

National Competitive Grants Program Eligibility Committee

The NCGP Eligibility Committee considers all eligibility issues identified for applications submitted under the NCGP. The committee—comprising ARC Executive Directors and the Branch Manager, Policy and Strategy—provides eligibility recommendations to the CEO based on the eligibility criteria set out in the relevant Grant Guidelines.

National Competitive Grants Program Scrutiny Committee

The NCGP Scrutiny Committee examines the probity of ARC assessment processes for applications submitted by SAC members and/or ARC staff. This committee comprises members appointed by the CEO. In 2019 and 2020 the members were Professor D Sharma, Professor D Siddle, Mr J Withers and Professor J Fitness. The NCGP Scrutiny Committee met twice in 2019–20.

Medical Research Advisory Group

The ARC’s Medical Research Advisory Group (MRAG) is responsible for providing additional technical advice regarding medical eligibility for selected applications under consideration by the NCGP Eligibility Committee. Where the NCGP Eligibility Committee considers that additional expertise is required to determine eligibility, the application is referred to at least two MRAG members for written advice. Once this technical advice has been received, the NCGP Eligibility Committee determines medical research eligibility recommendations.

MRAG members may be individuals from current or past ARC College of Experts or candidates with sufficient seniority to have broad overview of the research sector, with expertise in relevant Fields of Research codes, notably (but not exclusively) biological sciences (06), medical and health sciences (11) and psychology and cognitive sciences (17).

ERA EI Review Advisory Committee

The ARC established an Advisory Committee for the review of ERA and EI in 2019–20. The Committee, comprising experts from government, universities and research end-users, as well as experts in research evaluation, provides advice to the ARC CEO based on their expertise and in response to feedback received through the review consultation process.

Australian Research Integrity Committee

The Australian Research Integrity Committee (ARIC) currently comprises seven expert members (Table 4) and reports to both the ARC and the National Health and Medical Research Council.

In 2019–20 Ms Patricia Kelly replaced Mr Ron Brent as Chair of ARIC. The appointments of Dr Kerry Breen and Emeritus Professor Shelia Shaver expired in December 2019 and Emeritus Professor John Finlay- Jones joined ARIC as a member in April 2020.

During 2019–20 the ARIC ARC secretariat received three requests for review. It also continued consideration of one case related to a request for review that was received in 2018–19. In relation to the four ARIC-ARC matters active in 2019–20:

• one review that commenced prior to 1 July 2019 was finalised and the outcome communicated to the relevant parties by the ARC
• three requests for review were determined to be within the scope of ARIC. One of these reviews was finalised and the outcome communicated to the relevant parties by the ARC
• the other two reviews remained ongoing as at 30 June 2020.

Table 4: Membership of the Australian Research Integrity Committee, 2019–20

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 performance measurement framework ensures there is a clear line of sight between the performance criteria published in the ARC’s PBS and Corporate Plan, and the performance outcomes documented in the Annual Performance Statement. Together, these documents provide the ARC’s complete performance story.

In addition to published performance information, the ARC’s performance measurement framework is supported by internal operational planning, monitoring and reporting processes.

Figure 9: External planning and reporting framework

During 2019–20 the ARC:

• published the ARC Annual Report 2018–19
• published the ARC Corporate Plan 2019–20.

Internal audit

An integral part of the ARC’s corporate governance framework is the ARC’s 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, who is the Branch Manager, Policy and Strategy. The internal auditor role is outsourced to an independent service provider and reports to the Audit Committee through the Head, Internal Audit. In 2019–20 the ARC’s internal auditor was McGrathNicol Advisory Partnership.

McGrathNicol assisted in the development of an annual internal audit work plan and undertook the following audits during 2019–20:

• Review of NCGP Assurance Framework
• Business Continuity Planning
• Declarations/Conflict of Interest.

A fourth audit on fraud control was commenced but due to COVID-19 was unable to be finalised. It is anticipated this audit will be completed in 2020–21.

Framework

The ARC has implemented risk management with the guidance of the Commonwealth Risk Management Policy (RM Policy) that ensures the ARC manages risk in accordance with Section 16 of the PGPA Act. Under the RM Policy, the ARC, as a non-corporate Commonwealth entity, must comply with the nine elements that contribute to effective risk management.

In line with the RM Policy, the ARC’s Risk Management Framework (the risk framework) is a comprehensively designed package underpinned by six key components—a Risk Management Policy, a Risk Management Plan and Toolkit, an operational risk register, a strategic risk register, a fraud risk register and a network of risk champions. The risk 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 entity within a good corporate governance framework.

The annual review of the risk framework by SMG, included the ARC adopting principles of risk management to communicate the value, intention and purpose of the risk framework and its associated processes. The principles of risk management at the ARC are:

• integrated—embedded in all organisational activities
• structured and comprehensive—contributing to consistent and comparable results
• customised—to be proportionate to the ARC’s context
• inclusive—of the ARC’s internal and external stakeholders capturing their knowledge, and improving awareness
• dynamic—anticipating and responding to change in the ARC’s context in an appropriate and timely manner
• utilising the best information available—taking into account historical and current information as well as future expectations and any limitations associated with the information
• human and cultural factors— these are considered as significant influences in all aspects of risk management
• continual improvement—through education and increasing experience.

Contribution of risk management to achieving objectives

The ARC Strategic Risks for 2019–20 were reviewed by SMG and established in May 2019. The ARC identified four strategic risks aligned to the three key activities outlined in the ARC Corporate Plan. In March 2020 SMG conducted a mid-year review of the ARC’s strategic risks for 2019–20 to ensure that they remained relevant for any emerging risks that could impact on the ARC achieving its outcomes, priorities and objectives. Controls, causes and consequences for each risk were updated to ensure the strategic risks remained relevant, effective and appropriate.

The ARC reviewed its operational risks in September 2019 and May 2020. This biannual activity is designed to ensure that business areas have a risk approach embedded into processes and planning aimed to deliver against the activities outlined in the Corporate and Operational Plans.

The approach to risk management in the ARC forms a comprehensive clear-line-of-sight across the governance and business processes. All staff contribute and are responsible for risk management as underpinned by the framework.

Business continuity and disaster recovery

The ARC’s BCP sets out 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 (DRP), which is designed to safeguard and recover critical ICT systems.

In 2019–20 the ARC:

• conducted disaster recovery testing in accordance with the DRP
• enhanced data protection capabilities
• held seven meetings of the BCP Committee
• tested the capability of ARC staff to work from home
• enacted the BCP in relation to ARC critical functions and redeployed internal staff to assist in these functions.

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 ARC values into performance agreements
• an Ethics, Integrity and Fraud page on the ARC intranet site, as well as the Australian Public Service Commission (APSC) Ethics Advisory Service, www.apsc.gov.au > Working in the APS > Integrity > Ethics Advisory Service
• an ARC Ethics Contact Officer.

The ARC includes an overview and discussion of the Australian Public Service values and Code of Conduct as part of induction training for new appointees. Regular 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 2019, showed that 80 per cent of ARC staff believed that ARC senior executives act in accordance with the APS values, compared to 73 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, which is available on the ARC website, www.arc.gov.au > Policies & Strategies > Policy > ARC Conflict of Interest and Confidentiality Policy.

ARC Research Integrity Policy and Research Misconduct Policy

To safeguard the integrity of the ARC’s processes, the ARC Research Integrity Policy requires organisations, and in some circumstances individuals, engaged in ARC business to report to the ARC on research integrity matters. This policy outlines actions the ARC may take in response to breaches of the Australian Code for the Responsible Conduct of Research (the Code). It also describes how potential breaches of the Code can be referred to institutions for investigation. The ARC Research Integrity Policy is available on the ARC website, www.arc.gov.au > Policies and Strategies > Policy.

The ARC was notified of, or identified, 40 new matters relating to actual or potential breaches of the Code or research misconduct in 2019–20. This included matters reported by institutions, as well as concerns identified through ARC business or by members of the public. In addition, 20 matters reported or identified prior to 1 July 2019 were still active or re-opened in 2019–20.

Of the 60 matters that were active in 2019–20, 40 were finalised as at 30 June 2020. This included:

• 17 matters where institutions reported breaches of the Code and the ARC took action in response
• one matter where an institution reported a breach of the Code and the ARC determined that no ARC action was required as the breach was minor and the action taken by the institution was considered sufficient to address the matter
• 10 matters that were dismissed following institutional preliminary assessments or investigations
• 12 matters where preliminary assessments by the relevant institutions were not required as the matters were not within the scope of the policy, or insufficient information was available to provide grounds for proceeding to preliminary assessments.

As at 30 June 2020, 20 active matters were being assessed or investigated by institutions, and/or considered by the ARC.

National codes and statements on research ethics

All ARC-funded research projects must adhere to the Code. In June 2018 the ARC, the NHMRC and Universities Australia (UA) released a revised version of the Code and the Investigation Guide. In 2019–20 the ARC has continued to work closely with the NHMRC and UA to promote the new Code and the Investigation Guide. Further supplementary guidance documents have been developed to support implementation of the principles and responsibilities in the Code.

From 1 July 2019 all institutions have been required to comply with the expectations of the 2018 Code. Where applicable, ARC-funded research projects must also comply with:

• The National Statement on Ethical Conduct in Human Research (2007, updated in 2018)
• Ethical Conduct in Research with Aboriginal and Torres Strait Islander Peoples and Communities (2018)
• Australian Council for Arts, Indigenous Cultural Protocols for Producing Indigenous Australian Music, Writing, Visual Arts, Media Arts and Performing Arts (2007)
• 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).

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.

The ARC Complaints Handling and Appeals Policy assists clients to make a general complaint about the ARC or submit an appeal about the administrative processes of the NCGP. In 2019–20 the ARC received:

• one general complaint about the ability to add and link into the ARC’s Research Management System publications to applications
• one complaint about an assessor’s comments on a research application
• thirty-seven appeals relating to applications submitted for funding under the NCGP, two of which were upheld.

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.