Loyola University Chicago

Financial Services

Policy for Financial Records Retention

 

DATE OF ISSUANCE: September 1, 2004
 
MODIFIED: September 2019
 
ACCOUNTABLE DEPARTMENT/UNIT: Financial Services. Questions about policy content should be directed to the Loyola University of Chicago Controller.
 
ABSTRACT: Describes Loyola University Chicago’s policy for the collection, preservation and maintenance of financial records concerning the University's financial operations. Loyola University Chicago record retention requirements in areas other than financial records (i.e., academic records, medical records, police reports) are not addressed in this policy.

POLICY STATEMENT

Loyola University Chicago, recognizing its responsibility to its donors, sponsors, regulatory bodies, the academic community and the public to ensure the preservation of financial 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. Loyola University Chicago conducts business under the rules and regulations of federal, state and local municipalities. Policies, procedures and practices must adhere to government regulatory costing and administrative principles, such as those contained in the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 CFR 200, Federal Acquisition Regulations (FAR) 4.7 and 52.215.2, as well as internal university accounting policies and practices. 

PURPOSE

The purpose of this Policy is to ensure that necessary financial records and documents are adequately protected and maintained and to ensure that financial records that are no longer needed or are of no value to the University are discarded at the proper time.  In addition, the Policy enables the University to comply with Federal Acquisition Regulations, the Internal Revenue Service regulations and other federal, state and local regulations governing auditability.

APPLICABILITY

University financial records are university property and include but are not limited to: annual reports, budget and financial statements, government and other contracts produced or received, gifts and donor agreements, bank deposits, bank statements, canceled checks, wire transfers, check requisitions, credit card settlement reports, journal entries, spreadsheets or other software programs that document calculations, memoranda, correspondence, planning documents and receipts, email 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 but not limited to: paper, CD ROM, computer or network drive, portable hard drive, or an enterprise content management system.
 
This policy applies to all university academic operations of Loyola University Chicago.

RECORDS RETENTION

It is the responsibility of departments to designate a person to be responsible for financial records retention. Many departments designate the appropriate person responsible for the business, finance, and/or operations of the department. 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:
 
Retention Periods
The required retention period for various financial 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 coordinated with the Controller’s Office for preservation. For the required retention periods of various documents, refer to Appendix A at the end of this document.
 
Legal and Audit Requirements
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:
 
  • Direct Charges to Contracts and Grants: Financial records, supporting documents, statistical records and all records pertinent to a contract or grant's activity must be retained for at least seven years, unless a litigation claim or audit is started before the expiration of this period. In these cases, records need to be retained until seven years after all litigation, claims or audit findings are resolved.
  • Business Transaction Records for Centers Included in the Facilities and Administrative Cost Rate: Records must be retained for seven years following the final sign-off for that year by the federal government.
  • All Other Business Transaction Records for Centers Not Included in Contracts, Grants or the Indirect Cost Rate: Records must be retained for seven years following the end of the fiscal year.
  • Individual Employee Human Resources and Payroll Information: Records must be retained for seven years following the end of the calendar year.
  • Taxable Income (cash receipt information and billings, and all documents for activities deemed unrelated business income): Financial records must be retained for seven years following the end of the fiscal year.
In general, the record retention period is seven years except for permanent records. See Appendix A – Financial Records Retention Schedule for a listing of documents, their retention periods and responsible department.
In the event of pending or active litigation, the University General Counsel may request that financial records be maintained longer than stated in this policy.
 
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, after the transaction is complete and the expenditure statement containing the transaction has been reviewed, departments may either dispose of or keep copies of transaction-level documents at their discretion.
 
Media:  
Documents may be stored on the most efficient and effective media available as long as the long-term accessibility 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 Controller’s Office, for information on the various standards and storage requirements.
 
Electronic Transactions:  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 Financial Services for retention on a preapproved schedule. In the latter case, Financial Services will assume the responsibility for proper retention and disposal of the records. Please contact the Controller’s Office to discuss arrangements for this service.
 
Credit Card Data:  Where possible University offices should refrain from storing credit card cardholder data. If required for systems processing or legal purposes storage of cardholder data should be limited to no more than ninety (90) days, with the exception of the MICROS Simphony application which can store data for one hundred twenty (120) days.
 
Paper Documents:  When the source documentation for a transaction is paper, the office that receives the original document is responsible for retaining it. In most cases, a central administrative office (such as Payroll or Accounts Payable) is responsible for retention.
 
Documents Retained Centrally by the University
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 Controller’s Office before disposal.
 
See Appendix A – Financial Records Retention Schedule for a listing of documents, their retention periods and responsible department.
 
Retention of Supporting Documentation by Service Centers
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 and 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. Each service center must, at a minimum, retain the following:
 
  • Documentation on how the charge out rate(s) was calculated, including the algorithms and components of the rate structures used. 
  • The approved rate listing for charges to grants from Research Services Administration. 
  • Supporting documents related to expenses incurred, including transaction forms and salary data for all current employees.
  • Records supporting utilization (level of activity).
  • Records supporting the amount and basis of user billings (revenues).
Service centers under long-term agreements must retain their records until either their annual report is audited or that year is "closed" by Loyola University Chicago, whichever is later. Service centers should contact the Controller’s Office, before disposing of any records.
 
Storage of Documents
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 Controller’s Office.
 
Methods of Disposal
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. The MICROS Simphony application containing electronic credit card records is configured to automatically purge data within the time frame established by this policy.  Please contact the Controller’s Office regarding secure disposal methods.
 
Confidentiality
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 Senior Associate Vice-President & Controller. Once their retention period has expired (if applicable), the documents will be disposed of in a secure manner.
 
Contact
Questions concerning this policy or its intent should be directed to the University’s Controller’s Office at (312)915-7676.

Appendix A - Financial Records Retention Schedule as of September 2019

Document
Required Retention Period
Responsible Department
Accounting transactions
Permanent
Controller
Original Journal or Budget Entries
7 years or until audit is complete, whichever is greater
Controller and Associate Vice President for Strategic Financial Planning
Supporting documentation for transactions
7 years or until audit is complete, whichever is greater
Controller
Travel Expense reports and supporting documentation
7 years or until audit is complete, whichever is greater
Originating department or the Controller by written agreement
Trial Balance reports
Permanent
Controller
Audited university financial statements
Permanent
Controller
Internal annual university financial statements
Permanent
Controller
Annual approved university budgets
7 years
Associate Vice President for Strategic Financial Planning
Accounts Receivable invoices, trial balances and ledgers
7 years or until audit is complete, whichever is greater
Controller
Purchase Orders & supporting information (specifications, bids, quotes, contracts, etc.)
7 years or until audit is complete, whichever is greater
Associate Vice President for Strategic Financial Planning
Accounts Payable invoices, Credit Card Statements, vouchers & supporting information (packing slips, freight records, bills of lading, etc.)
7 years or until audit is complete, whichever is greater
Credit Card users and Controller
Special Service Payment forms and supporting information
7 years or until audit is complete, whichever is greater
Controller
Check registers (Accounts Payable, Payroll, other)
Permanent
Controller
Capital Asset records (including Depreciation)
Life of the asset plus one fiscal year
Controller
Pledges, gifts, planned giving and other donor-related documentation
Permanent
Senior Vice President for Advancement and Controller
Capital project building and renovation records, including contracts
Life of the building plus one fiscal year
Associate Vice President Facilities
Time and attendance records (timecards, rosters, attendance cards, efforts)
7 years or until audit is complete, whichever is greater
Controller and Vice President Human Resources
Payroll distribution reports and supporting information (including reallocation forms)
7 years or until audit is complete, whichever is greater
Controller
Records of employee deductions, contributions and related information
7 years or until audit is complete, whichever is greater
Controller and Vice President Human Resources
Annual W-2, 1099, 1042-S and other individual tax reporting
7 years or until audit is complete, whichever is greater
Controller
Tax-Exempt bond financing records, including bond transcripts, offering documents, records pertaining to use of proceeds, investment earnings on tax-exempt bond proceeds, and arbitrage-related records
Life of the bond issue, plus three years
Chief Investment Officer & Treasurer
Meeting minutes of the Board of Trustees and the Executive Committee
Permanent
President's Office/General Counsel
Meeting minutes of the Board of Trustees Audit & Finance Committees
7 years
Financial Services Division
Meeting minutes of other Board of Trustees Subcommittees
Content will determine the appropriate retention period of minutes
Individual Departments
MICROS Simphony credit card cardholder data
120 Days
Campus Card Office

Appendix B - Departments Responsible for Retention of Electronic Records as of September 2019

Responsible Department
Record Type
Human Resources/Payroll
Original entries and records supporting all employment, employee benefits and payroll deductions.
Purchasing
Original entries and supporting documentation for:
  • postage meter
  • stamp requisitions
  • postage trust
  • international mail
  • regular package shipments
Provost’s Office
Original entries and supporting documentation for:
  • purchases charged to departmental accounts in any retail location
Purchasing
Original entries and supporting documentation for:
  • purchases charged to departmental accounts in any dining location
  • purchases charged to departmental accounts via Loyola University Chicago catering services
Accounts Payable
Original entries and supporting documentation for:
  • allocation of Credit Card purchases to the appropriate general ledger centers and accounts
Parking Services and Human Resources
Original entries and supporting documentation for:
  • individual parking deductions
  • parking fees charged to departmental accounts
  • bank deposits
Facilities
Original entries and supporting documentation for:
  • billings for Facilities work order services
  • billings for project management services
Telecommunications
Original entries and supporting documentation for:
  • telephone installation, repair or removal
  • regular line and equipment charges, including cellular phones
  • message unit, long distance and other per call charges
Computing Services
Original entries and supporting documentation for:
  • usage and/or printing from Computing Services hardware charged to departmental accounts
  • services provided for the repair or installation of computing equipment charged to departmental accounts
  • services provided for the activation of campus network outlets charged to departmental accounts
Recharge Centers
Original entries and supporting documentation for:
  • services and equipment charged to departmental accounts
 
 
 
Controller
Original entries and supporting documentation for:
  • distribution of all employee payments, taxes and benefits (HRIS)
  • Accounts Payable invoice transactions
  • Accounts Receivable invoice, payment and reconciling transactions
  • Miscellaneous journal entries, both keyed at external locations and keyed internally
  • Cash deposits (non-student receivables)
Enrollment Services and Office of the Bursar
Original entries and supporting documentation for:
  • distribution of all student-related transactions, including tuition, financial aid, housing, dining and any other items processed via the PeopleSoft system
Advancement
Original entries and supporting documentation for:
  • gifts to the university
Purchasing
Original entries and supporting documentation for:
  • copying services and/or copy machine rentals charged to departmental accounts
  • design, publication, mailing and/or postage services charged to departmental accounts
  • invoices supporting third party billings passed on to departmental accounts
Budgeting & Financial Analysis
Original entries and supporting documentation for:
  • distribution of endowment income
  • all non-research budgets
  • all revenue projections
  • minutes of all pertinent budget meetings
 
 
Sponsored Program Accounting & Office of Research Services 
Original entries and supporting documentation for:
  • cost transfers
  • miscellaneous correcting entries
  • research budgets
  • Sponsored Research Overhead distribution
  • final, signed contracts, grants and other sponsor agreements or amendments
  • financial and administrative reports required by research sponsors or regulatory agencies
Campus Card Office
Temporary credit card cardholder data in MICROS Simphony Application