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Document Retention Policy

 Leffler Foundation Inc

 Document Retention and Destruction Policy

PURPOSE OF THIS TOOL: Certain federal laws prohibit the destruction of certain documents. Not-for-profit organizations should have a written, mandatory document retention and periodic destruction policy. Policies such as this will eliminate accidental or innocent destruction. In addition, it is important for administrative personnel to know the length of time records should be retained to be in compliance. 

Document Destruction

The Document Retention and Destruction Policy identifies the record retention responsibilities of staff, volunteers, members of the board of directors, and outsiders for maintaining and documenting the storage and destruction of the organization’s documents and records. 

The organization’s staff, volunteers, members of the board of directors, committee members and outsiders (independent contractors via agreements with them) are required to honor the following rules: 

a. Paper or electronic documents indicated under the terms for retention in the following section will be transferred and maintained by (fill in the blank based on the organization’s practices);  

b. All other paper documents will be destroyed after three years;  

c. All other electronic documents will be deleted from all individual computers, data bases, networks, and back-up storage after one year;  

d. No paper or electronic documents will be destroyed or deleted if pertinent to any ongoing or anticipated government investigation or proceeding or private litigation (check with legal counsel or the human resources department for any current or foreseen litigation if employees have not been notified); and  

e. No paper or electronic documents will be destroyed or deleted as required to comply with government auditing standards (Single Audit Act).  

Record Retention

The following table* indicates the minimum requirements and is provided as guidance to customize in determining your organization’s document retention policy. Because statutes of limitations and state and government agency requirements vary from state to state, each organization should carefully consider its requirements and consult with legal counsel before adopting a Document Retention and Destruction Policy. In addition, federal awards and other government grants may provide for a longer period than is required by other statutory requirements.

 

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

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

 

Resources 

  National Council of Nonprofits www.councilofnonprofits.org 

  BoardSource Record Retention and Document Destruction Policy—Download 4 Samples (E-Policy Sampler) www.boardsource.org/Bookstore.asp?Type=epolicy&Item=1071 

  Independent Sector www.independentsector.org/issues/sarbanesoxley.html 

  AICPA Management of an Accounting Handbook—2003 and IRS Appendix Document www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/PracticeManagement/PracticeAdministration/ PRDOVR~PC-090407/PC-090407.jsp 

  Guide to Record Retention Requirements in the Code of Federal Regulations: Contact the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402-9325 or from CCH, Inc. at www.onlinestore.cch.com 

 

Enacted by the board 2-28-2020