Innovation, Industry, Science and Research

Audit strategy overview

The Innovation, Industry, Science and Research portfolio was established in December 2007. It aims to promote a coordinated approach to innovation, science and research and to foster industry competitiveness. Portfolio agencies include:

• Commonwealth Scientific and Industrial Research Organisation (CSIRO);
• IP Australia;
• Australian Research Council (ARC);
• Australian Nuclear Science and Technology Organisation;
• Australian Institute of Marine Science; and
• Australian Institute of Aboriginal and Torres Strait Islander Studies.

Combined funding for the portfolio in 2009–10 was approximately $5.6 billion. Recent ANAO audits have covered various industry assistance schemes, including the two largest—the Automotive Competitiveness and Investment Scheme and the Textile, Clothing and Footwear Scheme; and the portfolio agencies, the Australian Institute of Marine Science and the Australian Research Council.

The ANAO’s audit program for the coming years proposes to focus on the programs administered by the Department of Innovation, Industry, Science and Research (DIISR), and portfolio agencies, to assist science, research and innovation in industry. These functions underpin economic growth and generate knowledge to address some of the environmental and social challenges facing Australia.

Potential audits

Green Car Fund

The Green Car Innovation Fund is a competitive, merit-based grants program developed to enhance research, development and commercialisation of Australian technologies that significantly reduce fuel consumption or greenhouse gas emissions of passenger motor vehicles. The Fund will provide $1.3 billion over 10 years from 2009. The Fund aims to help the Australian automotive industry deliver the improved environmental performance required by the Automotive Transformation Scheme, which also forms part of A New Car Plan for a Green Future. The program aims to contribute one dollar for every three dollars contributed by grantees.

An audit would examine the administration of the Green Car Fund by DIISR.

Research Block Grants

The Department of Innovation, Industry, Science and Research manages seven programs valued at $1.4 billion to support research and research training in Australian Higher Education Providers. Research Block Grants are allocated according to a performance-based formula and are independent of funding for specific research projects, programs, or fellowships. Institutions have considerable autonomy in deciding what research projects, personnel, equipment and infrastructure this funding should support.

An audit would examine DIISR’s administration of the Research Block Grants.

Cooperative Research Centres Programs

Cooperative Research Centres (CRCs) are partnerships between publicly funded researchers and end-users (either from the private, public or community sector) to address clearly articulated, major challenges that require medium to long-term collaborative efforts. The first CRCs were established in 1991. There are currently 48 CRCs operating in six broad CRC sectors: manufacturing technology; information and communication technology; mining and energy; agriculture and rural-based manufacturing; environment and medical science; and technology.

The Commonwealth has contributed more than $3 billion over the life of the program with approximately $9 billion contributed in cash and in-kind by CRC participants. The twelfth funding round was announced in December 2009, providing $130 million to seven CRCs.

An audit would examine the administration of the CRC program by DIISR.

Commercialisation Grants

Commercialisation Australia (within DIISR) is a new Australian Government initiative to build the capacity of Australia's talented researchers, entrepreneurs and innovative companies to convert ideas into successful commercial realities and create high-skill, high-wage jobs. Commercialisation Australia will receive $196.1 million over four years to 2013, with ongoing funding of $82 million a year thereafter. Commercialisation Australia offers: skills and knowledge grants; proof of concept grants; and early stage commercialisation repayable grants. Commercialisation Australia also provides technical advice to AusIndustry, the program delivery division within DIISR that manages the grants.

An audit would examine the administration of commercialisation grants by DIISR.

Commonwealth Scientific and Industrial Research Organisation—Administration and Coordination of Selected National Research Flagships

The Commonwealth Scientific and Industrial Research Organisation (CSIRO) is Australia’s largest national research and development organisation covering a variety of scientific and industrial fields. In 2010–11, CSIRO has a proposed budget of $1.18 billion. This budget is directed at four programs which are focussed on delivering scientific solutions to Australian industry and communities, while simultaneously helping to build Australia’s science base. Of the four CSIRO programs National Research Flagships and Core Research and Services are the key mechanisms for strategic and applied research. National Research Flagships are distinct from Core Research and Services in that they are generally larger, multi-disciplinary responses with longer timeframes that are targeted to major challenges and opportunities of national or global significance. There are 10 National Research Flagships encompassing a diverse range of research themes which have a combined budget of approximately $550 million for 2010–11.

An audit would examine whether CSIRO is effectively administering and coordinating selected National Research Flagships.

Australia Research Council—Follow on

The ARC is a statutory authority that advises the Government on research matters, manages the National Competitive Grants Program (NCGP), a significant component of Australia's investment in research and development, and has responsibility for the Excellence in Research for Australia (ERA) initiative. In 2009–10 total net resourcing for the ARC was $684.1 million, which includes funding for ERA and the NCGP.

An audit would examine the ARC’s administration of grants and the progress made in implementing the recommendations from ANAO Audit Report No. 38 2005–06 The Australian Research Council's Management of Research Grants.

Establishment and Management of the Nation Building Funds: the Education Investment Fund

The ANAO’s Planned Work Program for 2008–09 outlined a series of audits that would be undertaken to examine the establishment and management of the Nation Building Funds. An audit of the Education Investment Fund (EIF) would be the first audit in a series of proposed audits.

The EIF was established to:

• make payments towards creating or developing education infrastructure in areas such as higher education, research and vocational education and training; and
• make transitional payments relating to the former Higher Education Endowment Fund, the balance of which was transferred into the EIF.

The Department of Education, Employment and Workplace Relations and the Department of Innovation, Industry, Science and Research are responsible for project identification and evaluation criteria, with the Department of Finance and Deregulation being involved in the payment process once decisions are made about which projects to fund.

An audit would examine how candidate projects are identified, how evaluation criteria for the Fund are developed and applied, and how efficiently and effectively the funding for approved projects is administered and accounted for. The audit would also examine the investment by the Future Fund Board of Guardians and Future Fund Management Agency of the assets of the EIF (which stood at $5.99 billion as at 31 December 2009).

 

Previous: Infrastructure, Transport, Regional Development and Local Government

Next: Parliamentary Services