Experiential or event marketing agreements are typically geared towards the creative strategy, design and production with the lead agency potentially managing an extensive portfolio of third-party vendors.

 

Our compliance audit reviews the client-agency agreement plus the respective Statement of Work ("SOW") that should include any rate-cards for resource, studio, expenses and third-party costs for the audit period or events under review.

 

The compliance audit analyses the lead agency costs, primarily resource costing with the third-party costs typically being pass through costs to client.  The experiential/event marketing compliance audit usually uncovers:

 

• Mark-ups and/or rebates retained for the hire of venues and equipment.

• Physical assets paid for by clients within the event budget, yet asset value retained or sold by the agency.

• Poor reporting systems relating to reconciliation of time and third-party costs, especially with use of freelance producers who leave the project before final cost reconciliation.

• Event budgets / WIP projects never reconciled to actual costs with cost contingencies remain unused.

• Unclaimed aging credit notes.

• Lack of control over staff expenses, with items such as subsistence, travel and hotels often not being in line with client’s T&E policy.

• Overspends in “expenses” often offset against underspends in actual supplier costs.

• Resources billed at incorrect rates resulting in overcharges.

• Freelancers charged as agency FTE rather than at net cost as per the agreement.

• Poor or no formal time tracking system to validate resources and time utilized as per the SOW.

• Duplication of resource across in-house studio & core team.

• Mark-ups incorrectly applied to in-house studio services.

• Charges passed onto client outside of SOW scope and with no client approval.

• Inadequate insurance and lack of signed employee confidentiality agreements.