Record Retention and Document Destruction Policy

Record Retention and Document Destruction Policy

Section 1. Purpose:

The Sarbanes-Oxley Act of 2002 forbids purging of documents when any organization – nonprofit or for-profit – is under federal investigation. It is a federal crime to alter, cover up, falsify, or destry any document to prevent its use in an official proceeding. The purpose of this Policy is to:

  1. balance the need of the Corporation to maintain accurate and appropriate files with the challenge of limited physical and electronic space for archives;
  2. preserve the institutional history for strategic planning, regulatory compliance, and legal purposes;
  3. provide guidelines for proper disposal of records
  4. prevent destruction of relevant documentation if the organization is involved in litigation.

Section 2. Violation of Policy:

The Corporation takes seriously its obligations to preserve information relating to litigation, audits, and investigations. Failure on the part of employees to follow this policy can result in possible civil and criminal sanctions against the Corporation and its employees, trustees and officers and possble disciplinary action against responsible individuals up to and including termination of employment.

Section 3. Policy Statement:

The Corporation, including its staff, trustees, violunteers, committee members and outsiders (independent contractors via agreement with the Corporation), are responsible for and will retain documents in accordance with Generally Accepted Accounting Practices and applicable laws. From time to time the Executive Director or the Chair of the Board of Trustees may issue a “legal hold,” suspending the destruction of any records due to pending, threatened, or otherwise reasonably foreseeable litigation, audits, government investigations, or similar proceedings. No records specified in any legal hold may be destryed, even if the scheduled destruction date has passed, until the legal hold is withdrawn in writing by the person placing the hold.

Section 4. Document Destruction:

The Corporation’s staff, trustees, violunteers, committee members and outsiders (independent contractors via agreement with the Corporation) are required to honor the following rules:

  1. Paper or electronic documents indicated under the terms for retention in the following Section 5. are retained for the minimum required period as provided by law. All paper and electronic documents are stored in a manner and location in which they are reasonably secure. The Corporation backsup and archives all electronic documents and conducts a regular review of back up and archiving procedures and systems. The Corporation conducts regular checkups for reliability of back up and archiving systems.
  2. All other paper documents may be detroyed after three years;
  3. All other electronic documents may be deleted from all individual computers, databases, networks and back-up storage after one year;
  4. No paper or electronic documents will be destroyed or deleted if an official investigation or private litigation against the Corporation is underway or expected; and
  5. No paper or electronic documents will be destroyed or deleted as required to comply with government auditing standards (Single Audit Act).

Section 5. Record Retention:

The following table indicates the minimum retention requirements for all documents, written and electronic, and is provided as guidance.

Type of Document

Minimum Requirement

Accounts payable ledgers and schedules

7 years

Audit reports

Permanently

Bank reconciliations

2 years

Bank statements

3 years

Checks (for important payments and purchases)

Permanently

Contracts, mortgages, notes, and leases (expired)

7 years

Contracts (still in effect)

Contract period

Correspondence (general)

2 years

Correspondence (legal and important matters)

Permanently

Correspondence (with customers and vendors)

2 years

Deeds, mortgages, and bills of sale

Permanently

Depreciation schedules

Permanently

Duplicate deposit slips

2 years

Employment applications

3 years

Expense analyses/expense distribution schedules

7 years

Year-end financial statements

Permanently

Insurance records, current accident reports, claims, policies, and so on (active and expired)

Permanently

Internal audit reports

3 years

Inventory records for products, materials, and supplies

3 years

Invoices (to customers, from vendors)

7 years

Minute books, bylaws, and charter

Permanently

Patents and related papers

Permanently

Payroll records and summaries

7 years

Personnel files (terminated employees)

7 years

Retirement and pension records

Permanently

Tax returns and worksheets

Permanently

Timesheets

7 years

Trademark registrations and copyrights

Permanently

Withholding tax statements

7 years

Section 6. Annual Review:

To ensure the Corporation operates in a manner consistent with this Policy, annual review of the record retention requirements and procedures are conducted. Annual review is conducted by the Corporation’s Operations Manager, who reports to the Board of Trustees to confirm compliance or noncompliance with record retention requirements and whether procedures should be updated or amended.