Record Retention

Q. Is there a federal requirement that agencies must keep the original records for the life of an asset if the purchase price is $5,000 or greater?

A. The FTA Circular dealing with the management of real property and equipment is FTA C 5010.1D. Chapter III, section 7 deals with records required for “equipment,” which is defined as items costing $5,000 and above. However, agencies must keep certain records for the life of the asset, and those records are described in section 3.c.

The Best Practices Procurement Manual (BPPM), section 10.3, deals with record retention from a project completion perspective. It explains that the FTA Master Agreement requires grantees to maintain records for three years following project completion. Thus you should be sure to comply with both the Master Agreement and the Circular 5010.1D requirements. You should also consult your chief counsel for requirements other than FTA's. For example, the IRS usually has a record retention requirement of 7 years. (Revised: September 2010)



Q. Is the records retention requirement the same for both cost type and fixed price contracts? Cost type contracts usually require yearly indirect rates to be audited. If the rates have not been audited as required by the terms of the 3rd party contract, can the grantee and 3rd party contractor dispose of its records? The FTA Master Agreement, Section 8, "Reporting, Record Retention," requires grantees and their 3rd party contractors to keep records for at least (3) years following project completion.

A. The FTA Master Agreement, Section 8, speaks to record retention by "recipients" and "subrecipients." Those terms are defined in the MA Sections 1m. and 1p. Grantees are recipients, but the term subrecipient does not include third-party contractors. Thus these requirements do not apply to third-party contractors.

Requirements for third-party contractors are defined in the common grant rule, 49 CFR 18.36(i). There you will find a list of contract clauses required to be included by grantees in third-party contracts. These include a clause requiring access to records for the purpose of making audits, etc., and a clause requiring the contractor to retain all records "for three years after the grantee makes final payment and all other pending matters are closed." This record retention requirement of three years begins to run after the final audit and final payment is made and all other issues are resolved. It does not start with completion of the contract work. The requirement in this CFR section does not distinguish between fixed-price contracts and cost-type contracts. Of course there would not be a final audit for fixed-price contracts and thus the three-year retention period would presumably start earlier (at contract completion) than it would for a cost-type contract. (Revised: September 2010)



Q. I was recently hired as a Records Manager for a transit system. I am in the process of cross walking the Municipal Records Retention and Disposition Schedule with all of the Federal Records Retention and Disposition Schedules. I have a copy of the Federal's General Records Retention Schedule 1-25. My request is that you please list other schedules and web addresses so that I may apply the strictest of the standards.

A. The Best Practices Procurement Manual (BPPM) discusses record retention requirements of FTA grantees in Section 10.3 "Record Retention." You will note that the FTA Master Agreement (Section 8 - "Reporting, Record Retention, and Access"), which incorporates the requirements of the common grant rule at 49 CFR 18.36(i), requires grantees to retain project-related documents for three years following completion of the FTA funded project. Grantees are also required to incorporate this three year retention requirement in their third-party contracts. In addition, 49 C.F.R. § 18.42 states as follows: If any litigation claim, negotiation, audit, or other action involving the records has been started before the expiration of the 3 year period, the records must be retained until completion of the action and resolution of all issues which arise from it, or until the end of the regular 3 year period, whichever is later. Beyond these requirements we are not aware of other Federal requirements for record retention.

(Revised: September 2010)



Q. We maintain the records pursuant to our purchases of right of way in an office other than the purchasing department. Is that acceptable or should all purchase documents be maintained in the purchasing department regardless of the type and who handled the actual transaction?

A. FTA does not require the purchasing department to maintain all files in a centralized location, nor that they be kept by the Purchasing department itself. Wherever they are kept, however, the agency must comply with the FTA Master Agreement requirements in Section 8c concerning "Record Retention." These requirements include a provision that the records related to the transaction be retained and accessible to the Government for three years. It would be advisable, though not required by FTA, that the file for any given procurement contain all the documents related to that procurement. (Revised: September 2010)



Q. 
How long do we, as a transit agency, need to keep records on DOT Physicals on our approximately 370 city bus drivers?

A.  The DOT agency that has jurisdiction of this issue is the Federal Motor Carrier Safety Administration.  Their web page address for contact information is: http://www.fmcsa.dot.gov/about/contact/who-to-contact/contactus.htm
(Revised: September 2010)


 
Q. 
FTA requires a grantee to keep records for three years after project completion.  Does the FTA mean an actual project within a grant or the closeout of the grant itself? We had a major construction project completed in June 2004. Can I dispose of that project's files since it has been more than three years since the project itself was completed.  The project used a number of grant sources and an individual grant may not have been closed out until later, say 2006 as an example.
 
A. FTA Circular 5010.1D dated November 1, 2008 details grant closeout requirements and record retention in Chapter III, Sections 5 and 7.  The Circular speaks in terms of closing out grants and record retention requirements for those grants. (Posted: May, 2010)

 
Q. For the purpose of retaining copies of invoices paid, is document imaging an acceptable form of record retention per FTA guidelines?
 
A. Document imaging is an acceptable procedure for retention of documents. (Reviewed: September 2010)



Q.
How long after final project audit is completed do we need to retain federal grant records and reports?  Three years?
 
A. 
The Best Practices Procurement Manual (BPPM) discusses record retention requirements of FTA grantees in Section 10.3 "Record Retention." You should also note that the FTA Master Agreement (Section 8 - "Reporting, Record Retention, and Access"), which incorporates the requirements of the common grant rule at 49 CFR 18.36(i), requires grantees to retain project-related documents for three years following completion of the FTA funded project. Grantees are also required to incorporate this three - year retention requirement in their third-party contracts. In addition, 49 C.F.R. § 18.42 states as follows: If any litigation claim, negotiation, audit, or other action involving the records has been started before the expiration of the 3 year period, the records must be retained until completion of the action and resolution of all issues which arise from it, or until the end of the regular 3 year period, whichever is later. Beyond these requirements we are not aware of other FTA requirements for record retention.  The BPPM is available online: http://www.fta.dot.gov/funding/thirdpartyprocurement/grants_financing_6037.html   (Posted: December, 2010)