Financial Record Retention Schedule - University Department Requirements (Formerly Appendix 21)

Policy Steward: Office of the Corporate Controller

Table of Contents:

• PURPOSE OF RECORD RETENTION
• RESPONSIBILITY
• GENERAL RETENTION TIMES
• RECORD CATEGORIES
  • Accounts Payable
  • Accounts Receivable, Including Rates and Fees
  • Budget Records
  • Contracts
  • Grant and Contract Records (Sponsored Awards)
  • Merchant Management Cash
  • Operating Cash Funds/Petty Cash/Change Funds
  • Pay and Effort
  • Payroll
  • Property
  • Purchasing Card
  • Purchasing (Non-Pcard)
  • Role Management
  • Student Accounts Receivable
  • Transportation Services
• Travel and Group Meals
• Other

PURPOSE OF RECORD RETENTION

Retaining records serves two purposes; in the short-term, it provides those responsible for the management of accounts with the means to monitor transactions and resolve problems. In the long-term, it enables the University to adhere to Policy AD35, University Archives and Records Management and to comply with Federal Acquisition Regulations, the OMB Uniform Guidance, Internal Revenue Service regulations, and other federal, state and local regulations governing auditability and retention of records. These retention requirements are the University's retention criteria, either derived or based upon federal, state, and/or local statute or regulations, industry standards, and business needs. These retention periods are subject to change.

This schedule provides the basis for determining the length of time various financial documents must be retained by individual University departments, including Finance Offices. Retention schedules related to central financial systems, such as IBIS, ERS and eBuy, will be determined by the Corporate Controller's Office. In addition, the Corporate Controller's Office will maintain separate retention schedules for records maintained by its units.

Retention of non-financial documents can be found in the General Retention Schedule (formerly Appendix 18).

The published retention periods in this appendix are legal or otherwise discretionary requirements. Retention beyond recommended time periods require justifiable reasons and warrant review by the Records Management Officer or designee. All documents must be maintained in such a manner so as to provide ease of access for review, and to provide a suitable audit trail for all transactions. Upon expiration of a stated period of time, the referenced document must be discarded and/or destroyed, unless permission granted by Records Management Officer or designee to retain the records. Archival records created more than 20 years prior to the current date must be reviewed before destruction. The University Archivist should be contacted before discarding any document which may be of permanent or historical value to the University (see definition of archival records in Policy AD35).

PLEASE NOTE: Transactions and records related to sponsored awards generally have longer retention periods, and those rules must be followed over other retention guidelines provided for in this document.

To safeguard the privacy of individuals, documents that contain salary information, personally identifiable information (PII), or student records must also be shredded. See Policy AD53 - Privacy Policy and AD22 - Health Insurance Portability and Accountability Act (HIPAA) for additional information regarding privacy and the protection of an individual's personal information. For documents that must be shredded, departments may arrange for Blue Bag service by contacting the Blue/White Shredding Program of the Office of Physical Plant. Exceptions to this practice are as follows:

• Documents subject to a Legal Hold (see AD35, Legal Hold). A legal hold will remain in effect until it is released, in writing, by the Office of General Counsel.
• If an account to which the transaction/document has posted is under audit or review, either internally or externally, the retention period extends until released by the Corporate Controller's Office. The Financial Officer will be notified regarding any accounts which are under audit; the Financial Office will be responsible for contacting the department.

When requirements for long-term retention of records overlap, the responsible office should retain records for the maximum period needed to meet legal and audit requirements and to comply with Policy AD35. In special cases retention times may be extended by request of the central offices. In such a situation the affected will be notified in writing or it will be noted in the retention schedule under the AUDIT HOLD column (earliest FY for which documents must be held).

When a hold is placed, the hold pertains to the identified fiscal year and includes all subsequent fiscal years until the hold is released.

RESPONSIBILITY

a. Online Transactions (Centrally Maintained)

When the source documentation for a transaction is online, the central administrative office responsible for maintaining the online application is responsible for retaining the online transaction record. This includes transactions in IBIS, ERS, eBuy, and the DocFinity Imaging System.

b. Paper Documents

When the source documentation for a transaction is paper, the office that receives the original document is responsible for retaining it. The submitting department is responsible for retaining the support until the transaction has posted to IBIS or other system. Originating departments have the responsibility to destroy any paper backup once central administration has successfully processed the reimbursement request, has a copy of the scanned supporting documentation and the transaction has been fully processed through the central system.

Department may scan paper documents, such as purchasing card support forms, into approved scanning systems (such as DocFinity) and the paper document destroyed, but the retention period still applies to the scanned document. An approved scanning system is one which has been vetted and approved by AIS Imaging Services as meeting all requirements for scanned documents, including appropriate indexing as well as security and access by central offices as needed for audit purposes. AIS Imaging Services also will manage the purging of images per the retention schedules.

Per FAR 4.703(c)(3) a copy of the original document must be retained for one year past the date it was scanned to allow time for validation of the imaging systems. This applies to all local imaging systems used for financial documents, such as Purchasing Card support forms. Therefore, documentation which originated in paper format, if scanned, must be maintained for one year before the paper document can be destroyed. This does not apply to ERS or eBuy documentation.

GENERAL RETENTION TIMES

a. Minimum Paper and Electronic Record Retention Times

Specific rules: There are specific retention times required for certain documents which are maintained by the Department. These are detailed in the schedules below. In some cases, there will be notations which indicate a fiscal year back to which records must be maintained - these years are set based on audit requirements for indirect and fringe cost calculations, using general fund financial records, by the Defense Contract Audit Agency (DCAA). Until these audits are complete, general fund records must be maintained.

General rules:

Tax-Exempt Debt Related Records: Life of the bond issue, plus the life of any issue that refunds the issue, plus six years. Records related to tax-exempt debt include but are not limited to documentation of the use of the debt proceeds (project costs), how debt financed property is used, relevant sponsored research contracts and grants in facilities financed with tax-exempt debt, relevant third party leases of space, etc.

Direct Charges and Revenues to Contracts and Grants: Per OMB Uniform Guidance 2CFR Part 200 - three years following the contract end date (date of submission of final expenditure report). This may be extended if the contract/agreement is under audit or if circumstances related to tax-exempt financing require it (see Tax-Exempt Debt Related Records above).

Cost Sharing: Any cost sharing records, including those on general funds, must be maintained for the same length of time as the direct charges to the award. This supersedes any general fund retention limits listed in the schedules below.

NOTE: Retention is based on the end date of the award, not a particular fund established under an agreement. Units who are managing part of an agreement must be aware of the agreement dates and must maintain records based on the agreement end date, not on the end date of their particular fund. In IBIS, the agreement end date will be the close-out date for the agreement.

Business Transaction Records (not contract or grant-related): Current Year + 2 years - although general fund transactions may need to be held longer for audit purposes. Endowment and gift accounts follow the same retention as general funds.

Taxable Income (Cash receipt information and billings, and all documents for activities considered unrelated business income). Four years following the end of the fiscal year. Longer retention times apply to certain documents retained by central offices.

b. Management Information

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, when the transaction is complete and the transaction has posted as an actual in IBIS. Departments should not maintain documentation held by central offices more than one month after the transaction, unless for some reason the transaction has not yet posted.

RECORD CATEGORIES:

ACCOUNTS PAYABLE

NOTE: Documents maintained in DocFinity by Accounting Operations can be viewed by Finance Office personnel.

ACCOUNTS RECEIVABLE, INCLUDING RATES AND FEES

BUDGET RECORDS *

* No paper copies should be maintained.

CONTRACTS

The statute of limitations for breach of contract in the Commonwealth of Pennsylvania is 4 years; therefore Penn State has set this as the minimum retention period for all contracts, including leases.

NOTE: Risk Management and the Assistant Treasurer do not maintain copies of executed agreements. The contracting department is responsible for maintaining the contracts in their files as noted below. Scanned copies may be kept, but should be accessible by others in the department if needed (on department network).

Research Awards through the Office of Sponsored Programs are maintained centrally through OSP. See Grant and Contract Records section above.

Agreements and contracts processed as part of a Purchase Order or signed by Purchasing are maintained centrally through Purchasing. See Purchasing section below.

GRANT AND CONTRACT RECORDS (SPONSORED AWARDS)

In accordance with the OMB Uniform Guidance 2CFR Part 200, financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report or, for awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial reports, as authorized by the Federal awarding agency; except if any litigation, claim, or audit is started before the expiration of the three year period, the records shall be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken (units must check with Research Accounting for this determination).

In IBIS, the end date of the agreement is the CONTRACT END DATE, which can be found for a particular account by using ICNA - Contract Information Inquiry or IACT - Inquiry on Account. Do not use the Account End Date, as this is the date the account number closes, not the agreement itself.

It is highly recommended that separate contract and grant files be maintained for all sponsored awards to support all transactions and actions on a contract or grant which is not maintained in a centrally maintained system (IBIS, eBuy, ERS, SIMS, DocFinity, etc).

SIMS, which is maintained by the Office of Sponsored Programs, is the official record of contractual documents for the University. If a document is in SIMS, it does not need to be maintained by the department. SIMS retention is managed through OSP.

MERCHANT MANAGEMENT / CASH

All supporting documents for cash deposits - register slips, deposit tickets, etc should be held for current + 2 years.

OPERATING CASH FUNDS/PETTY CASH/CHANGE FUNDS

PAY AND EFFORT

These are retention for those transactions which are NOT direct charges to grants and contract. See Grant and Contract Records for those retention periods.

PAYROLL

PROPERTY

PURCHASING CARD

PURCHASING (NON-PCARD)

ROLE MANAGEMENT

STUDENTS ACCOUNTS RECEIVABLE

See "Student Records" Section of the General Retention Schedule

TRANSPORTATION SERVICES

TRAVEL AND GROUP MEALS

OTHER

(2-26-18)