>>
They do contract with the federal government and law enforcement as well
as private individuals.
<<

Deb,

If they have contracts to provide services or supplies to the Federal
Government, they may fall under the Federal Acquisition Register(FAR).
Here is the text of the FAR's section on records retention:

"Subpart 4.7-Contractor Records Retention 
4.700  Scope of subpart. 
This subpart provides policies and procedures for retention of records
by contractors to meet the records review requirements of the
Government. In this subpart, the terms "contracts" and "contractors"
include "subcontracts" and "subcontractors." 
4.701  Purpose. 
The purpose of this subpart is to generally describe records retention
requirements and to allow reductions in the retention period for
specific classes of records under prescribed circumstances. 
4.702  Applicability. 
(a) This subpart applies to records generated under contracts that
contain one of the following clauses: 
(1) Audit and Records-Sealed Bidding (52.214-26). 
(2) Audit and Records-Negotiation (52.215-2). 
(b) This subpart is not mandatory on Department of Energy contracts for
which the Comptroller General allows alternative records retention
periods. Apart from this exception, this subpart applies to record
retention periods under contracts that are subject to Chapter 137, Title
10,U.S.C., or 40 U.S.C. 101, et seq. 
4.703  Policy. 
(a) Except as stated in 4.703(b), contractors shall make available
records, which includes books, documents, accounting procedures and
practices, and other data, regardless of type and regardless of whether
such items are in written form, in the form of computer data, or in any
other form, and other supporting evidence to satisfy contract
negotiation, administration, and audit requirements of the contracting
agencies and the Comptroller General for- 
(1) 3 years after final payment or, for certain records; 
(2) The period specified in 4.705 through 4.705-3, whichever of these
periods expires first. 
(b) Contractors shall make available the foregoing records and
supporting evidence for a longer period of time than is required in
4.703(a) if- 
(1) A retention period longer than that cited in 4.703(a) is specified
in any contract clause; or 
(2) The contractor, for its own purposes, retains the foregoing records
and supporting evidence for a longer period. Under this circumstance,
the retention period shall be the period of the contractor's retention
or 3 years after final payment, whichever period expires first. 
(3) The contractor does not meet the original due date for submission of
final indirect cost rate proposals specified in paragraph (d)(2) of the
clause at 52.216-7, Allowable Cost and Payment. Under these
circumstances, the retention periods in 4.705 shall be automatically
extended one day for each day the proposal is not submitted after the
original due date. 
(c) Nothing in this section shall be construed to preclude a contractor
from duplicating or storing original records in electronic form unless
they contain significant information not shown on the record copy.
Original records need not be maintained or produced in an audit if the
contractor or subcontractor provides photographic or electronic images
of the original records and meets the following requirements: 
(1) The contractor or subcontractor has established procedures to ensure
that the imaging process preserves accurate images of the original
records, including signatures and other written or graphic images, and
that the imaging process is reliable and secure so as to maintain the
integrity of the records. 
(2) The contractor or subcontractor maintains an effective indexing
system to permit timely and convenient access to the imaged records. 
(3) The contractor or subcontractor retains the original records for a
minimum of one year after imaging to permit periodic validation of the
imaging systems. 
(d) If the information described in paragraph (a) of this section is
maintained on a computer, contractors shall retain the computer data on
a reliable medium for the time periods prescribed. Contractors may
transfer computer data in machine readable form from one reliable
computer medium to another. Contractors' computer data retention and
transfer procedures shall maintain the integrity, reliability, and
security of the original computer data. Contractors shall also retain an
audit trail describing the data transfer. For the record retention time
periods prescribed, contractors shall not destroy, discard, delete, or
write over such computer data. 
4.704  Calculation of retention periods. 
(a) The retention periods in 4.705 are calculated from the end of the
contractor's fiscal year in which an entry is made charging or
allocating a cost to a Government contract or subcontract. If a specific
record contains a series of entries, the retention period is calculated
from the end of the contractor's fiscal year in which the final entry is
made. The contractor should cut off the records in annual blocks and
retain them for block disposal under the prescribed retention periods. 
(b) When records generated during a prior contract are relied upon by a
contractor for cost or pricing data in negotiating a succeeding
contract, the prescribed periods shall run from the date of the
succeeding contract. 
(c) If two or more of the record categories described in 4.705 are
interfiled and screening for disposal is not practical, the contractor
shall retain the entire record series for the longest period prescribed
for any category of records. 
4.705  Specific retention periods. 
The contractor shall retain the records identified in 4.705-1 through
4.705-3 for the periods designated, provided retention is required under
4.702. Records are identified in this subpart in terms of their purpose
or use and not by specific name or form number. Although the descriptive
identifications may not conform to normal contractor usage or filing
practices, these identifications apply to all contractor records that
come within the description. 
4.705-1  Financial and cost accounting records. 
(a) Accounts receivable invoices, adjustments to the accounts, invoice
registers, carrier freight bills, shipping orders, and other documents
which detail the material or services billed on the related invoices:
Retain 4 years. 
(b) Material, work order, or service order files, consisting of purchase
requisitions or purchase orders for material or services, or orders for
transfer of material or supplies: Retain 4 years. 
(c) Cash advance recapitulations, prepared as posting entries to
accounts receivable ledgers for amounts of expense vouchers prepared for
employees' travel and related expenses: Retain 4 years. 
(d) Paid, canceled, and voided checks, other than those issued for the
payment of salary and wages: Retain 4 years. 
(e) Accounts payable records to support disbursements of funds for
materials, equipment, supplies, and services, containing originals or
copies of the following and related documents: remittance advices and
statements, vendors' invoices, invoice audits and distribution slips,
receiving and inspection reports or comparable certifications of receipt
and inspection of material or services, and debit and credit memoranda:
Retain 4 years. 
(f) Labor cost distribution cards or equivalent documents: Retain 2
years. 
(g) Petty cash records showing description of expenditures, to whom
paid, name of person authorizing payment, and date, including copies of
vouchers and other supporting documents: Retain 2 years. 
4.705-2  Pay administration records. 
(a) Payroll sheets, registers, or their equivalent, of salaries and
wages paid to individual employees for each payroll period; change
slips; and tax withholding statements: Retain 4 years. 
(b) Clock cards or other time and attendance cards: Retain 2 years. 
(c) Paid checks, receipts for wages paid in cash, or other evidence of
payments for services rendered by employees: Retain 2 years. 
4.705-3  Acquisition and supply records. 
(a) Store requisitions for materials, supplies, equipment, and services:
Retain 2 years. 
(b) Work orders for maintenance and other services: Retain 4 years. 
(c) Equipment records, consisting of equipment usage and status reports
and equipment repair orders: Retain 4 years. 
(d) Expendable property records, reflecting accountability for the
receipt and use of material in the performance of a contract: Retain 4
years. 
(e) Receiving and inspection report records, consisting of reports
reflecting receipt and inspection of supplies, equipment, and materials:
Retain 4 years. 
(f) Purchase order files for supplies, equipment, material, or services
used in the performance of a contract; supporting documentation and
backup files including, but not limited to, invoices, and memoranda;
e.g., memoranda of negotiations showing the principal elements of
subcontract price negotiations (see 52.244-2): Retain 4 years. 
(g) Production records of quality control, reliability, and inspection:
Retain 4 years.

Electronic Records

a. Electronic records apply:

FAR Subpart 4.7 applies to all records "regardless of whether such items
are in written form, in the form of computer data, or in any other
form." (4.703(a))

b.  Paper records may be imaged to digital format:

"Original records need not be maintained or produced in an audit if the
contractor or subcontractor provides photographic or electronic images
of the original records and meets the following requirements: 
(1) The contractor or subcontractor has established procedures to ensure
that the imaging process preserves accurate images of the original
records, including signatures and other written or graphic images, and
that the imaging process is reliable and secure so as to maintain the
integrity of the records. 
(2) The contractor or subcontractor maintains an effective indexing
system to permit timely and convenient access to the imaged records. 
(3) The contractor or subcontractor retains the original records for a
minimum of one year after imaging to permit periodic validation of the
imaging systems."  (4.703(c))"

End of quote.

Good luck,
Gary Link, CRM
Pittsburgh, PA

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