Document Retention and Destruction Policy

The corporate records of the Kindness Initiative (KI) are important assets and are solely the property of KI. Corporate records include essentially all records you produce as an employee and/or director of KI, whether paper or electronic. A record may be as obvious as a memorandum, an e-mail, a contract, or something not as obvious, such as a computerized desk calendar, an appointment book, or an expense record.

By law KI is required to preserve certain types of corporate records, usually for a specified period of time. Failure to retain those records for those minimum periods could subject you and KI to penalties and fines, cause the loss of rights, obstruct justice, spoil potential evidence in a lawsuit, place KI in contempt of court, or seriously disadvantage KI in litigation. All scanned files are to be kept permanently.

KI expects all employees and directors to fully comply with any published records retention or destruction policies and schedules. Destruction of all documents listed below shall be done by shredder and properly disposed of after shredding. Several categories of documents that bear special consideration are identified below to include but not limited to:

  1. Tax Records. Tax records include, but may not be limited to, documents concerning payroll, expenses, proof of deductions, business costs, accounting procedures, and other documents concerning KI’s revenues.
    1. The following tax records must be retained permanently:
      1. Internal Revenue Service or state adjustments;
      2. Tax returns and worksheets, revenue agents’ reports, other documents relating to determination of income tax liability, and canceled checks for tax payments.
    2. Payroll tax returns must be retained for at least 7 years from the date of filing the applicable return.
  2. Employment Records/Personnel Records. State and federal statutes require KI to keep certain recruitment, employment, and personnel information.
    1. Safety records such as chemical and toxic exposure must be retained for thirty (30) years.
    2. The following employment records must be retained for 7 years:
      1. Garnishments;
      2. Personnel files (from date of termination of employment); and
      3. Withholding statements.
    3. Records of job injuries causing loss of work must be retained for 5 years.
    4. The following employment records must be retained for 3 years from date of termination of employment:
      1. Employment applications;
      2. Employment eligibility verification (I-9 forms); and
      3. Individual employee contracts.
    5. Help wanted ads and job opening notices must be retained for 2 years.
  3. Legal Documents.
    1. The following legal documents must be retained permanently:
      1. Articles of incorporation and bylaws;
      2. Contracts and leases (still in effect);
      3. Legal correspondence;
      4. Minutes of all meetings of members, directors, executive committees, and other officials.
    2. The following legal documents should be retained for 7 years:
      1. Contracts and leases (expired); and
      2. Employment agreements.
  4. Insurance Records.
    1. Insurance policies still in effect should be retained permanently;
    2. Insurance policies that have expired should be retained for 7 years;
    3. Accident reports and settled claims should be retained for 7 years after settlement; and
  5. Client Files. All client files and documents must be at KI’s principal office. If KI maintains computer-stored documents, it must ensure that the documents are actual reproductions of original documents.
    1. The following client files must be retained for 2 years after notification to applicant of incomplete KI Membership application, withdrawal, or decline, and they will be scanned and then shredded and destroyed after two (2) years:
      1. Inquiries;
      2. Partial applications;
      3. Withdrawn applications; and
      4. Applications turned down by KI.
    2. General correspondence must be retained for 1 year, and client-specific correspondence must be housed in the client file.
    3. Client files, including the original application file, servicing file, and closing file, must be retained for 7 years after the client’s membership is relinquished. After 7 years, the original paperwork is to be shredded
    4. Current client files shall be kept in original form and locked in fireproof file cabinet. Scanned copies will be made immediately and stored on the computer.
  6. Accounting Records.
    1. The following accounting records must be retained permanently:
      1. Annual financial statements;
      2. Canceled checks for fixed assets and income taxes;
      3. Cash disbursements journal;
      4. Cash receipts journal;
      5. Books of accounts;
      6. Fixed asset records, including invoices, canceled checks, and depreciation schedules;
      7. General journal;
      8. General ledger;
      9. Notes payable ledgers and schedules;
      10. Purchase journal;
      11. Training manuals; and
      12. Trial balance (year-end)..
    2. The following accounting records must be retained for 7 years:
      1. Bank statements and deposit slips;
      2. Cancelled checks for general, payroll, and payroll related taxes;
      3. Electronic payment records;
      4. Employee expense reports;
      5. Payroll journal;
      6. Petty cash vouchers;
      7. Production and sales reports;
      8. Purchases;
      9. Purchase orders;
      10. Sales or work orders;
      11. Subsidiary ledgers, such as accounts receivable, accounts payable, and equipment;
      12. Timecards and daily time reports;
      13. Voucher register and schedules; and
      14. Vouchers for payments to vendors and employees, including allowances and reimbursement of employees, officers, and directors for travel and entertainment expenses).
    3. The following accounting records must be retained for 3 years:
      1. Internal reports.
    4. The following accounting records must be retained for 2 years:
      1. Correspondence (general); and
      2. Correspondence (routine) with customers and/or vendors.
  7. Donor Files and Correspondence. All donor files and correspondence must be at the KI’s principal office.
    1. Contribution acknowledgement letters must be retained for 7 years.
    2. All other general correspondence must be retained for 2 years.
    3. After 2 or 7 years, the files should be scanned, if it not already in the computer, and stored on the computer. The original paperwork is to be shredded.
    4. Current donor files and correspondence must be locked in fireproof file cabinet.
  8. Electronic Mail. E-mails are considered general correspondence and must be retained for two years, unless subject to a Litigation Hold.

Failure to comply with this Document Retention and Destruction Policy may result in punitive action against the employee or director, including suspension or termination. Questions about this policy should be referred to the current executive director, who is in charge of administering, enforcing, and updating this policy.