Editor's notes:
POLICY TITLE: Carnegie Mellon University Policy for Financial Records
Retention
DATE OF ISSUANCE: This policy was approved by the President's Council on
January 14, 1997.
ACCOUNTABLE DEPARTMENT/UNIT: Finance Division / Office of the
Controller. Questions about policy content should be directed to the Office of
the Controller.
ABSTRACT: Describes Carnegie Mellon's policy for the collection,
preservation and maintenance of records concerning the university's financial
operations.
Policy for
Financial Records Retention
Note: Due to recent changes within the Defense Contract
Audit Agency, all incurred cost audits (F&A rates) have been placed on
hold. Carnegie Mellon's audits are
only complete through fiscal year 2006, therefore 2006 should be the year used
where references are made to the "final sign off".
Policy Statement
Carnegie Mellon University, recognizing its responsibility to its donors,
sponsors, regulatory bodies, the academic community and the public to ensure
the preservation of records documenting the activities of the university,
adheres to the following policy for the collection, preservation and
maintenance of records concerning the financial operation of the university.
Financial records retention policies and practices have been established to
provide consistent operational practices among the various units and to ensure
compliance with government regulations. Carnegie Mellon University conducts
business under the rules and regulations of federal, state and local
municipalities. Policies and practices must adhere to government regulatory
costing principles, such as those contained in the Office of Management and
Budget (OMB)
Circular No. A-21, "Cost Principles for Educational
Institutions," as well as internal university
accounting policies and practices. As of September 1995, Carnegie Mellon
has incorporated federal Cost Accounting Standards (CAS). Consequently all
records and documentation of the university's compliance with CAS are required
to be maintained in the same manner as other financial records described. Federal Acquisition Regulations (FAR) 4.7 and 52.2-5 and OMB
Circular No. A-133
specifically require
documented policies and procedures regarding the retention of records.
In addition,
anyone generating records while working in an official university capacity
should contact the university archivist, x8-7268, regarding their preservation.
(See the Policy on Historic Records.)
Retaining records serves two purposes. In the short
term, it provides those responsible for management with the means to monitor
transactions and resolve problems. In the long term, it enables the university
to comply with Federal Acquisition Regulations, the Internal Revenue Service
regulations and other federal, state and local regulations governing auditability.
University financial records are university property
and include: annual reports, budget and financial statements, government
contracts produced or received, gifts and donor agreements, spreadsheets or
other software programs that document calculations, memoranda, correspondence,
planning documents and receipts, e-mail messages to the extent they authorize
or provide substantiating information, or other documentation of individual
entries made in the transaction of its business. This policy applies to all
original documentation supporting the accuracy, applicability and method of calculation
for all financial entries.
This policy applies to all original or archival forms
of storage media, including: paper, microfilm, microfiche and/or jackets,
aperture cards, optical disks, CD ROM, 8mm or other magnetic tape, computer
drive, any size diskette or other magnetic, film or optical media.
This policy applies to all units at Carnegie Mellon
University.
It is the responsibility of departments to designate
a person to be responsible for records retention. Many departments designate
the business manager. The designated person should have appropriate knowledge
of and access to departmental financial data.
Designated personnel and all university staff and
faculty are required to comply with the following:
The required retention period for various documents
associated with an activity is dependent upon the source of funds used to
support that activity. At the end of the required retention period, documents should
be destroyed in an acceptable manner (see Methods of Disposal, below). Documents of
permanent historic significance should be sent to the University Archives for
preservation (see the Policy on Historic Records). For the
required retention periods of various documents, refer to Appendix A at the end of this document.
When requirements for long-term retention of records
overlap, the responsible office should retain records for the maximum period
needed to meet both legal and audit requirements. General rules are:
Longer retention times apply to certain documents.
See Appendix A - Financial Records
Retention Schedule for a listing of documents, their
retention periods and responsible department.
When a central office has retention responsibility,
the department initiating a transaction may discard copies of documentation
supporting the transaction when it is no longer needed for management purposes.
For example, after the transaction is complete and the expenditure statement
containing the transaction has been reviewed, departments may either dispose of
or keep copies of documents at their discretion.
Documents may be stored on the most efficient and
effective media available as long as the long-term archivability
and usefulness of the records are maintained, and the viability and accuracy of
the transfer to the archival media are ensured. This may entail, for example,
ensuring that the software and hardware necessary to read any magnetic media
are available in working order for the duration of the required retention
period. Responsible departments should work in partnership with their computing
systems provider to ensure usability of archived data.
All forms of media must conform to the established
standards for use and storage related to that medium. Consult the university
archivist, x8-7268, for information on the various standards and storage
requirements.
When the source documentation for a transaction is
electronic, the department responsible for maintaining the application is
responsible for retaining the transaction record. This retention may employ the
most efficient and effective media available, as discussed above. (See Appendix B for a list of current
responsible departments.)
Departments that create and transmit journal entries
electronically must retain all source and supporting documentation for the
entries as cited in the Retention Period section. If this is impractical, the
source documentation may be given to the Office of the Controller for retention
on a pre-approved schedule. In the latter case, the Office of the Controller will
assume the responsibility for proper retention and disposal of the records.
Contact the Office of the Controller to discuss arrangements for this service.
When the source documentation for a transaction is
paper, the office that receives the original document is responsible for
retaining it. In some cases, a central administrative office (such as Payroll
or Accounts Payable) is responsible for retention.
Certain documents, either original or archival media,
are maintained by the central administrative offices of the university. These
records do not need to be duplicated in other offices. If you are unsure
whether a particular document is retained centrally, contact the Office of the
Controller before disposal.
See Appendix A - Financial Records
Retention Schedule for a listing of documents, their
retention periods and responsible department.
Service center charges are subject to audit as long
as the grants or contracts they charge (either directly or indirectly) remain
subject to audit requirements. Service centers are also subject to periodic
review by the university's Internal Audit Department and by external auditors,
to evaluate compliance with established university policies and accounting
practices. Therefore, service center activities must be adequately documented
and records must be maintained to support expenditures, billings and cost transfers.
(For a definition of what constitutes a service center, see the Policy on Service Centers [in draft].)
Each service
center must, at a minimum, retain the following:
Service
centers under long-term agreements must retain their records until either their
annual report is audited or that year is "closed" by Carnegie
Mellon's cognizant government agency, the Office of Naval Research (ONR), whichever
is later. Service centers should contact the Cost Analysis Office before
disposing of any records.
In order to safeguard the assets of the university in
the case of extreme physical disaster, records of permanent or long-term value
should be stored in secure off-site locations. The university has negotiated
agreements with a number of preferred vendors for off-site storage. The
responsible department should arrange for the appropriate off-site storage of
their financial records. For more information on off-site storage vendors
contact Procurement Services. All
records, regardless of media, should be stored in containers capable of
surviving the storage period while maintaining the physical integrity of the
records. Records should be clearly labeled with a description of the contents,
the responsible department, the origination date and the disposal date. For
advice on the proper storage of records, contact the university archivist.
At the end of the required retention period,
financial records may be disposed of unless they support current audit or
litigation. Records may be disposed of via recycling in accordance with the
university's recycling policy. The only exception to
this is documents containing information, such as name or social security number, that could identify any individual member of the
campus community. Documents containing this type of information must be
disposed of via incineration or pulverization. Please contact the university
archivist, x8-7268, regarding secure disposal methods.
In order to safeguard the privacy of individuals,
documents that contain salary information are treated in a highly confidential
manner. Access to these documents is only allowed on a need-to-know basis with
the written approval of the assistant vice president, Payroll and Benefits
Accounting. Once their retention period has expired (if
applicable), the documents will be disposed of in a secure manner.
Questions concerning this policy or its intent should be directed
to: Office of the Controller.
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