Monday, February 9, 2015

Records retention and legal consideration

What is the records retention program?
The records retention program provides a timetable and consistent procedures for maintaining the organization’s records, moving the records to inactive storage when appropriate and destroying records when they are no longer valuable to the organization.

Goals
  • First task in developing a records retention program is to determine the goals and objectives of the organization’s retention program
  • Major goals of records retention program
    • Meet organizational needs, accomplished by
      • Cost reduction
        • Destroy unneeded records and transfer semiactive and inactive records to low-cost storage areas (improves use of office space)
        • Equipment required for storage of semiactive and inactive records (e.g. Metal shelving, transfer boxes), less costly than filing cabinets and shelves
        • Only one copy, the record copy, needs to be retained during semiactive and inactive periods
      • Retrieval efficiency and consistency
        • Destroying unneeded records increases efficiency
        • Retention procedures that are consistent throughout the organization provide control over employees who keep everything (pack rats) or employees who dispose of records too quickly (nonsavers)
    • Meet legal requirements
      • Adhering to government regulations
      • Providing litigation protection and support
Government regulations
  • Federal, provincial and municipal governments have many statues that have an impact on the retention periods for business records
  • Statutes fall into three major categories:
    • Tax records
    • Employment and personnel records
    • Regulations for specific industries
Legal requirements
  • Tax records help government establish appropriate amount of tax due
  • Employment and personnel records
    • Canada Pension Plan Act
    • Employment Insurance Act
    • Provincial Workers’ Compensation Act
    • Provincial occupational health and safety legislation (The Workplace Safety and Health Act in Manitoba)
    • Federal and provincial human rights acts
  • Statutes applying to specific industries, e.g.
    • Agriculture
    • Banking and financial institutions
    • Communications
    • Transportation
    • Professional groups, e.g. doctors, lawyers, engineers, etc.
    • Also: fair business practices, consumer affairs, right to privacy, access to information
Government regulations
  • Retention procedures must meet the statute requirements of federal, provincial and municipal governments, and make sure that records are destroyed after the retention periods have been met
  • The records manager must be familiar with the statutes of the government
  • Ignorance of a statute does not absolve the organization of its responsibility to keep records for the specified time
Litigation protection and support
  • A records retention program helps us to identify the records necessary for litigation and locate the records needed as evidence in the courtroom
  • Ensure records are destroyed according to an established records retention program, records properly destroyed prior to litigation cannot be used against the organization during litigation
Records appraisal
  • Records appraisal is an examination of the data gathered through the records inventory to determine the value of each records series to the organization
  • Result of records appraisal should be a records retention schedule
Steps to establish a records retention schedule
  • Establish series value
    • Administrative value: a records series that defines operating procedures, e.g. organization chart, policy statements, directives, procedures manuals
    • Fiscal value: records that documents use of funds, e.g. financial statements, summaries of financial transactions
    • Legal value: records series that documents business transactions, e.g. contracts, financial agreements, titles, records proving compliance with regulatory requirements
    • Historical value: records series that documents the organization’s accomplishments, e.g. minutes of board meetings
  • Establish retention periods
    • Originating department must determine the retention period to support the business activity
    • Legal counsel must determine retention period to meet the legal requirements of the records series
    • The fiscal officer must establish the retention period for the organization to maintain its fiscal responsibly
  • Determine requirements
    • Length of time records are retained based on:
      • Support for business activity (organizational requirements)
      • Legal requirements
  • Negotiate and finalize retention periods

Sample inventory and retention forms
Records Management Plan. McMaster University Health Sciences http://www.fhs.mcmaster.ca/recman/invform2.html
Records Inventory and Retention Control Card http://web.archive.org/web/20050101000000*/http://www.bankersbox.com/us/handbook/retention.xls (click on December 16 to download)

Organizational requirements
  • Requirements of originating office
  • Vital records (4-10% of records)
Requirements of the administrative policies of the organization
http://www.smbsd.org/UserFiles/Servers/Server_3140011/File/migration/Records_Retention_Form.pdf

Legal requirements
  • Business records must be maintained in compliance with federal, provincial, and municipal statutes and rules and regulations established by government regulatory agencies
  • The statute of limitations must be considered when records retention periods are established
    • The period during which a person or organization can bring action in a lawsuit or be sued

Government regulations
  • Varying federal and provincial jurisdictions based on Constitution Act of 1867
    • Provinces look after property, civil rights as such regulate most business activities
    • Federal government regulates international and interprovincial trade, commerce, transportation, communication, navigation, shipping, banking
  • Two major legal systems
    • Civil code in Quebec
    • Common law other provinces
  • Language regulations
    • Some records must be kept in both official languages
    • Quebec, records must be in French
  • Most comply with statutes of each province organization does business in
  • Records managers must establish retention periods for the records covered by the federal, provincial and municipal states
    • Requires researching applicable legislation
  • The records analyst is a specialist in systems and procedures used in creating, processing, and disposing of records
  • No single source for Canada lists all government statues and regulations

Statues of limitations
  • Records managers must establish a records retention program that will support the organization in case the organization is involved in litigation
  • Statues of limitations designate time period during which an organization can sue or be sued they do not state records retention requirements
    • general rule for breach of contract within six years of cause of action

Archival requirements
  • Archival retention may be based on legal, fiscal, or historical reasons
  • Usually applies to c. 5% of records
  • Archives are used to preserve corporate memory; provide production information, policy direction, personnel information and financial information; maintain public relations activities; provide legal advantage and research service; and prepare commemorative histories

Finalize retention periods
  • When records manager receives the records inventory and retention sheets with all the required signatures, a records retention schedule can be finalized
  • Retention periods include 
    • length of time to remain in originating office
    • length of time in records storage area
    • final disposition (archives/destruction)
    • date scheduled for destruction
  • Final retention periods may include the amount of time the record will remain on its original medium, the medium to which it should be transferred for further retention, and the time on the new medium

Program implementation
Steps include

Legally sufficient records retention program
To make program legally sufficient, i.e. adheres to government regulations and provides litigation protection and support, following factors must be included:

  1. The records retention program must be developed in a systematic manner.
  2. All records must be covered in the records retention program.
  3. Records maintained on media other than paper must be included in the records retention program.
  4. Records retention schedules must have written approval by key personnel of the organization.
  5. Records must be systematically destroyed according to the records retention program.
  6. The records retention program must be managed.
  7. Procedures must be in place to suspend destruction of records involved with litigation and government investigations.
  8. Documentation relating to the destruction of records must be maintained indefinitely.

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