What Did We Find?

Weaknesses in the current arrangements have led to low levels of transparency and accountability

The independence of the ICRC could be improved

The membership of the ICRC is made up of two senior officers of DPC and the Director of Government Media (DGM) who is a term of government employee in the Office of the Premier. We noted that the DGM’s responsibilities have included involvement in the initiation and design of some campaigns. Having the DGM also approving campaigns as a member of the ICRC represents a conflict of interest that diminishes the independence and credibility of the committee.

The ICRC has an important role in overseeing the management and approval of campaigns. Between 2011 and June 2013 the ICRC approved 509 campaigns with a budget of over $83 million. To effectively undertake these functions the membership of the committee needs to be free from any perceived conflict of interest or bias.

In the Australian Commonwealth jurisdiction, and in Victoria, independent committees are responsible for approving campaigns with a budget threshold of over $125 000. These committees are made up of at least two members that are independent of the lead agency and of the campaigns.

DPC acknowledges that there may be some benefit in broadening the membership of the ICRC and has advised that it will include this as part of its review of the Policy

DPC does not evaluate campaign outcomes

DPC has a stated role of reviewing post campaign performance to enable them to assess whether campaigns have met their intended objectives. However, we found that DPC does not use campaign evaluations to assess campaign performance to inform their Policy and processes.

Three of the five agencies we reviewed had completed their campaigns and evaluated their campaign outcomes. However none had lodged their evaluation with DPC because it was not a requirement of their campaign approvals.

Up until 2013, campaigns with a budget of over $150 000 were required to spend at least five per cent on evaluation. However, what was specifically required in the evaluation was not defined and there was no requirement for agencies to submit evidence to DPC of how the campaigns met their objectives.

We noted that DPC has recently changed the application forms that agencies must complete to obtain approval for new campaigns and that the requirement to spend at least five per cent on evaluation has been dropped.

For DPC to effectively assess the performance of government communications and inform its Policy and processes, we expected DPC would require agencies with campaigns of significant material value to submit at least:

  • a summary of the lessons learnt with insights that could be used to inform future campaigns
  • total expenditure on the campaign against the approved budget with a breakdown on all advertising related activities
  • evidence of how the campaign met its objectives.

We noted that in one Australian jurisdiction, some campaigns were required to submit evidence to the central agency of how campaign objectives were met.

The actual cost of government advertising is not known to DPC

DPC does not know the actual cost of campaigns. Campaign budgets are approved as part of DPC’s campaign approval processes. However, agencies are not required to report back to DPC on the actual cost of their campaigns. DPC cannot therefore review the true cost of campaigns.

The only reliable cost information available to DPC is the amount agencies spend on purchasing media through the CUA. This information is limited and does not reflect the full advertising cost. For the five campaigns in our sample, the actual media cost only accounted for about 70 per cent of the total amount spent on the campaigns. The other 30 per cent was spent on other campaign costs such as:

  • creative design and production of advertising material
  • market research
  • public relations
  • printed materials and direct mail.

A breakdown of campaign costs for the campaigns reviewed is shown in Figure 3:

Figure 3: Breakdown of campaign costs

The reporting of government advertising costs is not transparent

We found only limited public transparency about the total cost of government campaign advertising. Between 2009 and 2013, DPC publicly reported only once on campaign expenditure. This was in response to a Parliamentary Question in August 2012. The reporting was limited to the cost of purchasing media and did not include other campaign costs.

All the agencies we reviewed complied with the Electoral Act 1907 section 175ZE requirements to publish total expenditure incurred on communications and advertising in their annual report. However, this form of reporting is limited as it only shows the total cost of communications and advertising and not how much was spent on each campaign. Below is an example from one of the agencies we reviewed of how the expenditure is reported in annual reports. It is representative of the way most agencies show this information in their annual reports.

Figure 4: Disclosure of campaign expenditure under section 175ZE of the Electoral Act 1907In some Australian jurisdictions, the lead agency reports at least once a year on how much agencies spend on advertising campaigns. This varied from reporting all associated costs to only that spent on media buying.

A requirement in WA for DPC to publicly report annually all costs would improve the transparency of government advertising campaigns.

Media buying increased prior to the 2005 and 2013 State elections

We found that media buying increased in the year prior to both the 2005 and 2013 State elections. Specifically, it increased by approximately 43 per cent ($6 million) prior to the 2005 election, and by approximately 10 per cent ($1.8 million) prior to the 2013 election. Different political parties held government prior to each of these elections.

Between 1 July 2008 and 30 June 2010 media buying decreased by 45 per cent. DPC attributed the reduction to government policy and agencies reducing their campaign spend on the more expensive production and broadcasting of television commercials.

We were not able to obtain monthly CUA expenditure data for the period between 2003 and 2013. As a result we could not assess if there was any spike in advertising in the months immediately prior to the ban on advertising under the caretaker convention prior to the 2005 and 2013 elections.

Figure 5: CUA campaign expenditure at 30 June 2013

Agency monitoring of charges for creative work could be improved

Invoices submitted by the creative advertising companies to two agencies did not detail time spent on their activities and charge rates. This was despite contracts with the companies having been agreed on an hourly remuneration model. These agencies could not ensure that payments to creative advertising companies satisfied the requirements of TI 304. One of the requirements of TI 304 is that the incurring officer must be satisfied that rates of charges are correct.

For example, one agency was issued with invoices of $88 000, $46 000 and $22 000 for the pre-production and production of campaign material, and project management for its campaign. The invoices lacked detailed information on what activities were undertaken or the hourly rates charged as per the contracts. The invoice only provided one line descriptions such as ‘pre-production for the campaign TVCs’ and a lump sum figure. This level of detail was similar in samples of invoices we looked at for another agency.

Campaigns generally complied with the Policy but risks and breaches occurred

The timing of government advertising campaigns is a sensitive matter

All the campaigns we looked at complied with the Policy requirement not to advertise during the caretaker period before an election. Specifically, it required that government advertising be deferred during this period except for:

  • advertisements relating to public inquiries
  • advertising of services provided by agencies
  • community services announcements.

Nevertheless, the sensitivity about government advertising is evident, particularly when it is prior to an election. For instance, it was brought to our attention that a government television campaign prior to the 2013 election that informed the public about a government program was regularly followed by a political party’s advertisements with a message about the benefits of the same government program.

We investigated this concern and found that on two occasions in November 2012, the government commercial and the political party commercial aired in the same time slot. Importantly, the government commercials were aired prior to the commencement of the caretaker convention and had been approved by the ICRC. Still, the concern was understandable and showed the need for transparency and confidence in the independence of the ICRC.

DPC is aware of the sensitivity associated with high profile government advertising campaigns. On one occasion DPC belatedly realised that two high profile campaigns would go to air at around the same time. To prevent this, DPC instructed the government agency running one of the campaigns to put on hold the Perth metropolitan component of its campaign a week from the scheduled launch date. Cancelling the scheduled media slots incurred a $133 000 (23 per cent of the approved budget) cancellation fee.

Below is a timeline of when the two campaigns were initiated, approved and launched:

Figure 6: Timeline for two campaign initiation and approvals

DPC was aware of Policy breaches but did not manage these well

The campaigns we reviewed generally complied with the Policy. However, we identified six breaches of the Policy. Two of the breaches were by agencies that engage in frequent campaigns. One of these was not identified by DPC and the other was well known to DPC but no action had been taken to ensure the agency complied. The other four breaches were of a minor nature. The failure to effectively identify or manage these breaches increases the risk that public funds could be misused.

Specifically, whilst reviewing application and approval processes at DPC we identified that the Policy requires the same level of detailed documentation for agencies that have frequent advertising needs with those that only advertise occasionally. As a result, we were advised by two agencies that run frequent or multiple campaigns that they find the process onerous.

One such agency initiated and developed campaigns without DPC approval. This meant that its campaigns were not subject to the same scrutiny as other government agencies. The agency spent about $8 million on buying media in 2012-2013. Although DPC was aware of the agency’s non-compliance with the Policy they did not ensure the agency complied or sought a formal exemption.

Another agency that frequently advertises had a campaign application approved by DPC despite it lacking a detailed description of the activities to be developed. In the absence of the detailed information the agency booked an additional campaign worth $249 000 under the same booking number without informing DPC.

The four minor breaches we found that DPC had not identified during or after the campaigns were launched were:

  • one campaign application was approved by the agency’s Director for Media Communications and not the CEO as required by the approval process for all campaigns with a budget of over $40 000
  • the same campaign commenced creative work and media planning before an approval was issued by DPC. This was a breach of the Policy which requires that campaign material should not be produced before ICRC approval is granted
  •  one agency did not advise DPC that its campaign did not proceed to advertising stage despite being granted approval and completing its pre-campaign research. This was a breach of the ICRC approval which required the agency to advise DPC of changes to the campaign
  • another agency did not submit its final advertising and promotional material to DPC for approval, as was required by its ICRC approval conditions.

 

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