The Office of the Vice President for Finance (VPF) has published a new policy to provide guidance to DLCs with respect to the retention of financial documentation. The new policy, which can be found in Buying and Paying Policies, Section 8.00, includes guidance on storing records electronically, even when the original is paper, and standardizes retention guidelines across all financial document types.
The policy applies to all financial records, including those related to salary and payroll, purchase orders, ProCard purchases, requests for payment, reimbursements, travel expense reports, and all other financial transactions. For a complete list of documentation types (e.g., receipts, packing slips, timesheets) by transaction category, see the FRC Quick Guide.
Previously, MIT’s financial record retention rules varied based on document types. The new policy provides a standard framework across all financial document types for determining how long records should be retained. The flow chart below can help DLCs determine how long to retain financial records in accordance with the new policy. Download a PDF of the chart for easy reference.
VPF encourages the use of electronic formats whenever possible. When an original financial record is electronic, it must be retained for the current fiscal year (FY) plus four additional FYs, and there is no need to create and retain a paper copy.
For paper originals, electronic copies (e.g., PDF scans) may be retained, so long as they are readable and reasonably safeguarded against being altered. In this case, the paper original must be retained for the current FY plus one additional FY. The electronic copy must be retained for the current FY plus four additional FYs. If electronic record retention is not used, paper records must be retained for the current FY plus four additional FYs.
When electronic records are uploaded to or held in a centrally owned online application (e.g., B2P or Concur), the DLC does not need to keep an electronic copy.
The new policy reiterates that regardless of paper or electronic format, all backup for sponsored awards must be kept for at least three years after the close of the award (or for the current FY plus four additional FYs, if this timeframe is longer).
Record retention examples
The following examples illustrate how the new policy could apply in two different scenarios.
Example 1: A paper credit card receipt from December 2016 is used to verify a ProCard charge on a HQ cost center/general account.
- DLC scans and saves electronic copy of receipt, retaining paper original
- After the current FY (FY2017) plus one additional FY (FY2018), the DLC may shred/destroy the original paper receipt
- After the current FY (FY2017) plus 4 additional FYs (FY2018 – FY2021), the DLC may delete the electronic copy of the receipt
Example 2: A Q3FY15 (Jan-March 2015) quarterly DACCA with handwritten notes by a PI is used by a DLC administrator to certify the eDACCA via proxy for salary charges on an NSF award that will end 8/31/2018.
- DLC retains paper original for three years after the close of the award (through 8/31/2021), since this timeframe is longer than the current FY plus four additional FYs (through FY2019)
- After 8/31/2021, the DLC may shred/destroy the paper original of the DACCA
Note that no paper backup is required for eDACCAs that are electronically certified by the primary certifier.
If you have questions about a particular document, or if you would like to discuss your current record retention process, please contact the relevant VPF Business Unit for assistance: