What a records retention schedule is--and why you need one.

• Author: Montana, John C.
• Position: INFORMATION MANAGEMENT BONUS CONTENT

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This bonus content, which is excerpted and adapted from the ARMA International book How to Develop a Retention Schedule, is provided only in this electronic issue of Information Management magazine for ARMA International members

If you are new to the records management business, you may not be very familiar with records retention schedules, what they consist of, or what they are used for. So, before we begin discussing the details of retention schedules, let's spend a bit of time thinking about what they are and why we might need one.

The Fundamental Concept

All organizations have record. In modern society, even the simplest organization cannot function without them. If the organization lasts long enough, it has too many records. The file cabinets are full, the computer files have overflowed onto disks and tapes, and the basement is full of boxes. At this point, the organization must, as a matter of necessity, get rid of some records.

Destroying records is not as easy as simply tossing them out when you run out of space. The most obvious reason is that someone in the organization might still need some of the records you were tempted to toss. Before you do anything about the records, you must therefore at least make some sort of mental calculation that goes something like, "Well, we could still get audited for 2009, so we'd better not throw anything away that's newer than that, or we'll get hit with a penalty."

You just created a records retention schedule. Not a very good or comprehensive one, but a records retention schedule, nonetheless. Additionally, you considered three key factors that all retention schedules must account for:

1. We can't destroy records newer than some date, because we may still need them.

2. Some sort of law may affect this date.

3. We may have some sort of legal trouble if we don't account for that law.

The retention schedule you created in your mind also contains the fundamental pieces of all retention schedules: a list of records, a retention period for them, and a rationale for that retention period.

Elements of a Records Retention Schedule

Retention schedules are usually paper or electronic documents rather than mental impressions, and the schedule is usually quite a bit more complicated than our hypothetical schedule. One reason is that your organization probably has more than one kind of record.

List of Record Types

In addition to accounting records, even a small and simple organization probably has a few personnel-related records. Therefore, the organization has at least two kinds of records and at least two potential retention periods to go along them. Scale that up to a very large and complex organization, and it means thousands of record types with potentially thousands of retention periods. The number and kind of rationales for those retention periods increases with size and complexity as well.

Rationale

Organizations keep records to meet many needs, so beyond the hypothetical tax audit, you might have to consider customer service issues, the possibility of lawsuits, and the need to track financial performance, just to name a few.

Retention Periods

With few exceptions, organizations of all types are subject to laws that affect what records they create, how long they keep them, and what they can do with them. For a small and simple organization, those laws may consist of a handful of tax and personnel requirements that affect some simple accounting records and personnel files.

Increase the size and complexity of the organization, and both the kinds of records and the number of laws that regulate them increase. At the other end of the spectrum, a very large organization producing complicated products, such as drugs or airplanes, may have many thousands of record types governed by many thousands of laws, and it is affected by very complex business needs and risk management considerations.

A records retention schedule is developed in an attempt to accommodate all an organization's needs and possibly other things as well. However, the schedule has a single, straightforward purpose: it is a document that lists what records are in the organization and how long the organization intends to keep each type of record. At least implicitly, some justification is developed for each retention period chosen.

Other Elements

A good retention schedule may contain a good deal more information than merely records and their retention periods. (See example on page B-6.). Rather than being a mere listing, a records retention schedule may:

* Be quite elaborately structured and formatted

* Organize record types into groups or a hierarchy

* List additional information about record types such as location or media

* Have...