"Science has become really opaque, especially when it comes to grant funding", says UNSW climate researcher Ben McNeil. As a result innovation suffers, he says. The offences in question range from junior scientists ghost-writing grant applications for senior colleagues to researchers conspiring with others to influence who might review their work. In one extreme case a cancer scientist discovered his unfunded project idea had been stolen and used by another research group a year later. The two major schemes that fund research in Australia – the National Health and Medical Research Council (NHMRC) and the Australian Research Council (ARC) – hand out about 1.5 billion dollars a year. The impact of these grants is almost impossible to quantify, but some have resulted in big medical discoveries such as the cervical cancer vaccine and new cancer treatments. They also generate new knowledge, jobs and industries. While their $1.5 billion budget seems hefty, together the ARC and NHMRC reject about four out of every five ideas each year. In 2013, only 1883 ideas out 9004 received funding.

The consequence of researchers' attempts to "game" the system is that, if undetected, precious money may be allocated to unworthy research projects, potentially at the expense of the next lifesaving vaccine. The best way to weed out bad behaviour is to overhaul research funding so that reviewers are identified and decisions are more transparent, says McNeil, who founded thinkable.org, a crowdfunding platform that connects research projects with sponsors. To foster breakthrough science, ideas need to be favoured over a researcher's past experience and achievement, he says. "At the moment it's the exact opposite."

While the NHMRC and the ARC say they have no evidence that "gaming" is widespread, a recent survey of 200 health and medical researchers suggests this may not be the case. Before handing out money, both bodies ask panels of anonymous experts to assess project ideas, as well as the calibre of the people who propose the idea. When public health researcher Adrian Barnett and two colleagues surveyed researchers about whether they form alliances with others to boost their chances of a better review, they were shocked to see one in five admitted to the practice. "I knew it was going on, but I didn't think it'd be as high," says Barnett, from the Queensland University of Technology.

"It's a strong symptom of the over-competitiveness that exists." While the NHMRC spends about half of its $800 million funding projects, the number of applications for the same pool of money grows every year. There's a lot at stake. "If you get a bad review that's a whole year down the drain," says Barnett. "People are only doing this because the money is getting so short and small advantages may give you the grant or not," he says.

While strategising isn't strictly against the rules, it has the potential to reduce the quality of the project if it's not detected. "If there's somebody else in Australia who you want to work with, who is good, and you're not engaging in that collaboration for the purposes of helping each other in the system, that's inefficient," says Barnett. A cancer researcher who asked to remain anonymous referred to the practice as "grantsmanship". He remembers being advised as a young scientist to "find someone who does the same research as you, and thinks in the same way as you, and you don't ever write a paper with them or collaborate with them because that excludes them from being a referee on your grants". "It's not like they're doing anything evil, it's just strategy." Both the NHMRC and the ARC say their "rigorous" peer review system required up to 20 reviewers to assess each application. They also have a labyrinth of rules and guidelines that attempts to weed out conflicts of interest or make sure they're declared and to ensure mates can't fund mates.

A spokeswoman for the NHMRC said it was not aware of any instances where such gaming had been successful. "[These activities] would be ineffective and detrimental to the quality of an application given the number of reviewers involved and the competitive nature of NHMRC peer review, which only funds the highest-quality applications." The ARC say there's a limit on the number of grants a person can have, and the mert of any collaboration is assessed. But Barnett says complexsystems have more loopholes for people to try to exploit. His survey calculated that collectively, researchers spent a mind-boggling 614 working years of publicly funded research time writing their NHMRC grant applications last year. "That's what the public should be concerned about," he says.

Grantsmanship is one thing but stealing is another. In the past six months the same cancer researcher has had two project ideas used by other research groups without acknowledgment. He discovered the first theft by coincidence, when asked to review a project proposal of a former collaborator. "There was a whole section of that grant that was virtually verbatim what I had proposed to do in a grant application last year," he says. "I know several other people that could tell you the same story." Both the NHRMC and the ARC say misusing grant information is a clear breach of the Australian Code for the Responsible Conduct of Research. But the cancer scientist is convinced this kind of bad behaviour is being fuelled by the intense competition for research money. "You can't separate the two," he says. "But it seems to be something more-senior people do to more-junior people, taking ideas and making them their own."

Fairfax spoke to several people who said young scientists will sometimes ghost-write ARC grant applications for more-senior colleagues. The chair of the Australian Academy of Sciences Early to Mid-Career Researchers Forum, Sharath Sriram, says because the ARC insists money for research projects be spent on science rather than salaries, any person named on a grant cannot be paid from it. However, grant holders are allowed to employ research or laboratory assistants. Dr Sriram says given many junior scientists are employed only on short-term contracts, some will forgo their own chance to win a grant and write one for a senior scientist with a permanent position, hoping they'll be rewarded with a job if it's successful. "These researchers are desperate for a position so they'll write a grant for someone else," he says. "Senior researchers are taking advantage of this situation."

An ARC spokeswoman says proposals considered to make a false claim about the author, or which don't acknowledge significant contributions, may be disqualified. All applications must also be certified by a scientist's institution, she says.