Records Retention

A resource of the Evangelical Council for Financial Accountability
This article provided by the Engstrom Institute

An organization's record policies should ensure that necessary records and documents of are adequately protected and maintained and ensure that records that are no longer needed or are of no value are discarded at the proper time. In addition, it can aid employees in understanding their obligations in retaining electronic documents— including e-mail, Web files, text files, sound and movie files, PDF documents, and all Microsoft Office or other formatted files.

RECORD RETENTION AND DESTRUCTION POLICY

1) Policy

This Policy represents the {Name of Organization}'s policy regarding the retention and disposal of records and the retention and disposal of electronic documents.

2) Administration

Attached as Appendix A is a Record Retention Schedule that is approved as the initial maintenance, retention and disposal schedule for physical records of {Name of Organization} and the retention and disposal of electronic documents. The {insert title of policy administrator} (the "Administrator") is the officer in charge of the administration of this Policy and the implementation of processes and procedures to ensure that the Record Retention Schedule is followed. The Administrator is also authorized to: make modifications to the Record Retention Schedule from time to time to ensure that it is in compliance with local, state and federal laws and includes the appropriate document and record categories for {Name of Organization}; monitor local, state and federal laws affecting record retention; annually review the record retention and disposal program; and monitor compliance with this Policy.

3) Suspension of Record Disposal In Event of Litigation or Claims

In the event {Name of Organization} is served with any subpoena or request for documents or any employee becomes aware of a governmental investigation or audit concerning {Name of Organization} or the commencement of any litigation against or concerning {Name of Organization}, such employee shall inform the Administrator and any further disposal of documents shall be suspended until shall time as the Administrator, with the advice of counsel, determines otherwise. The Administrator shall take such steps as is necessary to promptly inform all staff of any suspension in the further disposal of documents.

4) Applicability

This Policy applies to all physical records generated in the course of {Name of Organization}'s operation, including both original documents and reproductions. It also applies to the electronic documents described above.

This Policy was approved by the Board of Directors of {Name of Organization} on_____________.

Appendix A—Record Retention Schedule

The Record Retention Schedule is organized as follows:

SECTION TOPIC

A. Accounting and Finance

B. Contracts

C. Corporate Records

D. Electronic Documents

E. Payroll Documents

F. Personnel Records

G. Property Records

H. Tax Records

I. Contribution Records

Comment: The list of possible records suggests the potential breadth of items for which policies should be established. Every organization may not need all of these categories, but every organization should for itself determine which ones are relevant.

The following are some common retention periods. These apply to both physical and electronic documents. If no physical copy of an electronic document is retained, the means to 'read' the electronic document must also be retained.

A. ACCOUNTING AND FINANCE

B. CONTRACTS

Comment: Some states may require longer retention period generally, or for specific types of contracts. A local attorney should be consulted.

C. CORPORATE RECORDS

D. ELECTRONIC DOCUMENTS

1. Electronic Mail: Not all email needs to be retained, depending on the subject matter.

• All e-mail—from internal or external sources—is to be deleted after 12 months.

• Staff will strive to keep all but an insignificant minority of their e-mail related to business issues.

• {Name of Organization} will archive e-mail for six months after the staff has deleted it, after which time the e-mail will be permanently deleted.

• All {Name of Organization} business-related email should be downloaded to a service center or user directory on the server.

• Staff will not store or transfer {Name of Organization}-related e-mail on non-work-related computers except as necessary or appropriate for {Name of Organization} purposes.

• Staff will take care not to send confidential/proprietary {Name of Organization} information to outside sources.

• Any e-mail staff deems vital to the performance of their job should be copied to the staff's H: drive folder, and printed and stored in the employee's workspace.

2. Electronic Documents: including Microsoft Office Suite and PDF files. Retention also depends on the subject matter.

3. Web Page Files: Internet Cookies

• All workstations: Internet Explorer should be scheduled to delete Internet cookies once per month.

In certain cases a document will be maintained in both paper and electronic form. In such cases the official document will be the electronic document.

Comment: This section may be the appropriate place to include other policies regarding email retention, usage or subject matter. Whether the paper or electronic document is the "official document" would be determined by each organization.

E. PAYROLL DOCUMENTS

F. PERSONNEL RECORDS

Comment: Many employment and employment tax related laws have both state and Federal law requirements. A local attorney should be consulted.

G. PROPERTY RECORDS

H. TAX RECORDS

Comment: Retention period for sales taxes and property taxes are determined by state law. A local accountant or attorney should be consulted.

I. CONTRIBUTION RECORDS

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This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.