While many clients now have direct relationships with production houses, many costs still flow through the agency’s creative partner. Media Marketing Compliance takes this into account and, amongst other areas, looks at the following issues in a creative and production audit review:

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• Misallocation or mischarging for staffing resource when compared to the agreed terms

• FTEs not being reconciled or reviewed on a regular basis

• Agency staff are being used across multiple disciplines and are being double counted in FTE reconciliations

• FTEs are not being reconciled to actual hours or true staff time ratios are calculated on industry standards rather than actual staff time ratios

• No competitive bidding process is being consistently employed and job estimates are prepared using unapproved suppliers

• There are no regular reviews of vendors, particularly where the agency are using their own preferred supplier list

• Production rebates and discounts are not being returned to the client

• Contingency costs, that were included within the original estimates, are not tracked or reconciled

• The agency use an in-house studio or related party production supply companies within appropriate disclosure, approval or client oversight

• The agency are passing through costs at unagreed rates and with hidden or unapproved mark-ups

• The agency are shifting client funds across campaigns or projects, circumventing the proper client approval process

• Campaigns are not reconciled and actualized on a timely basis

• The agency are trying to recover unbillable time and costs from some projects by utilizing contingency allowances or external cost savings from other projects

• Deliverables based pricing models are not validated against the key metrics used to derive the eventual price

• There is no process for ensuring competitive pricing or the elements used to derive rate card pricing have not been verified

• Variables used to determine fixed price SOWs are not verified or the agency have offered no support for price calculations

• Cashflow is not being monitored or is being handled in a way which benefits the agency at the client’s expense