Record Retention

Why retain financial records?

  • It provides those responsible for managing cost objects with the means to monitor transactions and resolve problems.
  • It enables the Institute to comply with various requirements—Federal Acquisition Regulation (FAR), A-110, Uniform Guidance, IRS and other federal, state, and local regulations—which govern the auditing and retaining of records. Retention requirements are typically defined by the type of award (grant, contract, cooperative agreement) and the sponsor (federal, nonfederal, foundation).
    1. For federal awards that fall under OMB's Uniform Guidance, see a summary of the revised requirements for paper vs. electronic retention here
    2. For older federal grants and cooperative agreements, A-110 states that financial records, supporting documents, statistical records, and all other records pertinent to an award should be retained for three years from the date of submission of the final expenditure report; for awards that are renewed quarterly or annually, the records should be retained from the date of submission of the quarterly or annual financial report, as authorized by the federal awarding agency.
    3. For federal contracts, FAR dictates that records must be retained for three years after the final payment. This includes books, documents, accounting procedures and practices, and other data—regardless of whether such items are written, computerized, or in any other form—and other supporting evidence to satisfy the contract negotiation, administration, and audit requirements of the contracting agencies and the Comptroller General. For financial and cost account, pay administration and acquisition, and supply records, the required retention requirement is two to four years.

Who is responsible for retaining a financial record?

This depends on the nature of the transaction.

  • Online transactions – When the source documentation for a transaction is online, the central administrative office charged with maintaining the online application is responsible for retaining the online transaction record.
  • Paper documents – When the source documentation for a transaction is paper, the office of record is responsible for its retention. In many cases, a central administrative office, such as Payroll or Accounts Payable, is responsible for retaining the record.
  • Justifications for either online or paper transactions should be maintained by the DLC, as appropriate.

Retention Times

Legal and audit requirements generally dictate how long financial and project records should be retained.

  • 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. A-110 specifies the following:
    1. Direct charges to contracts and grants: Three years following the date VPF Sponsored Accounting considers the project to have been formally closed by the sponsor, unless an audit or litigation is under way.
    2. All cost objects included in the F&A cost rate: Three years following the final sign-off for that year by the federal government. For further information, contact the Office of Cost Analysis in OSP.

Longer retention times apply to certain documents retained by central offices. For information on a specific document or category of documents, consult with the office responsible for processing that type of transaction.

Further Reading

Records Management Program at MIT

Scientific Data/Technical Records Retention

The Principal Investigator is responsible for retaining scientific and technical data as well as for related compliance documentation.