Loyola University Chicago

Financial Services

Policy for Financial Records Retention

 

DATE OF ISSUANCE: September 1, 2004
 
MODIFIED: September 2023
 
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. 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.

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 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, budgets, financial statements, government and other sponsored program contract or agreement produced or received, gifts and donor agreements, bank deposits, bank statements, canceled checks, wire transfers, payment requisitions, credit card settlement reports, journal entries, spreadsheets or other electronic files  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, auxiliary, and administrative 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 Grants or Sponsored Program Contract or Agreement: 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 after the submission of any final financial or programmatic reports to a sponsor or funding agency, 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 Departments 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 Not Included in Contracts, Grants or the Indirect Cost Rate categories above: Records must be retained for seven years following the end of the fiscal year in which the transaction originated.

  • Individual Employee Human Resources and Payroll Information: Records must be retained for seven years following the end of the calendar year in which the transaction originated.

  • 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 which the transaction originates.
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. As discussed above, this retention may employ the most efficient and effective media available.  (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.

Server Security Standard
: This standard applies to servers procured through, operated or contracted by Loyola University Chicago that house or interact with Loyola Protected data per the Data Classification Policy. See Appendix B for policy information.

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. Effort should be made to minimize paper documentation in favor of scanned files.

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

Per the National Institutes of Health definition, Service Centers or Core Facilities are centralized shared research resources that provide access to instruments, technologies, services, as well as expert consultation and other services to scientific and clinical investigators. The typical service center is a discrete unit within an institution and may have dedicated personnel, equipment, and space for operations. 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.
     
  • 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 Sponsored Program Accounting or 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. Paper records may be disposed of via environmentally sustainable practices in accordance with the University's sustainable practices. The only exception to this are documents containing information, such as a name or social security number, or any other personally identifiable information (PII) that could identify any individual member of the campus community. Documents containing this type of information must be disposed of via secure document destruction or pulverization. Please contact the Controller’s Office regarding secure disposal methods. Electronic documents that are beyond the required retention period can be discarded if it is impractical to keep those documents stored on the appropriate document retention system or the University shared drives.

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 controller@luc.edu, or (312)915-7676.

Appendix A - Financial Records Retention Schedule as of September 2023

Document
Required Retention Period
Responsible Department
Accounting transactions
Permanent
Controller
Original Journal Entries
7 years or until audit is complete, whichever is greater
Controller
Budget Entries including forecast adjustments
7 years or until audit is complete, whichever is greater
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 fiscal year end 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.) to document receipt on purchase orders
7 years or until audit is complete, whichever is greater
Associate Vice President for Strategic Financial Planning/Purchasing Department
Accounts Payable invoices
7 years or until audit is complete, whichever is greater
Accounts Payable Department and Controller
Purchasing Card (Pro Card) Statements, vouchers & supporting information
7 years or until audit is complete, whichever is greater
Purchasing Card (Pro Card) users, Pro Card Administration and 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
Vice President for Advancement, Sponsored Programs and Controller
Capital project building and renovation records, including contracts
Life of the building plus one fiscal year
Senior Associate Vice President Facilities
Time and attendance records (timecards, rosters, attendance cards, efforts)
7 years or until audit is complete, whichever is greater
Assistant VP Financial Systems & Payroll, 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
Assistant VP Financial Systems & Payroll, Controller, and Vice President Human Resources
Records of employee deductions, contributions and related information
7 years or until audit is complete, whichever is greater
Assistant VP Financial Systems & Payroll, 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
Assistant VP Financial Systems & Payroll and 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
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
Student Accounts Receivable and related student notes receivable, including accounts in collection
7 years from date paid in full
Controller – Office of the Bursar

Appendix B - Departments Responsible for Retention of Electronic Records as of September 2023

 

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 for all departments under the Provost
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
Pro Card Administration
Original entries and supporting documentation for:
 
  • allocation of Purchasing Card (Pro 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 Management/Financial Aid 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
Office of the Bursar - Cashiers
Cash, check, and credit card deposits (non-student receivables)
Advancement
Original entries and supporting documentation for:
 
  • financial and non-financial gifts to the university
Purchasing
Original entries and supporting documentation for:
 
  • copying services and/or copy machine rentals 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
Information Security Team
Servers procured through, operated or contracted by Loyola University Chicago that house or interact with Loyola Protected data per the Data Classification policy:
Reference the Server Security Standard policy here