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Re: From "This Just In..."



On Fri, 11 Jan 2002 20:08:12 GMT, John Fowler <johnhowardfowler@JUNO.COM>
wrote:

>This is a hard one to judge on.  The question is whether there was a policy
that allowed or required the destruction of records.  Quite often, retention
schedules read, "Keep for 5 years or until audit."  Every time I see that
statement, I cringe, since it implies that that once an audit is done,
records can/must be destroyed and so make checking up on the auditing
agency's competence or honesty next to impossible.  Still, it appears to be
pretty standard practice.
>
This of course has been a lively topic over on the recmgmt-l list yesterday
and today. AA does have RM program in place that provided for the
destruction of records at the end of their retention period if that was what
was called for.

The phrase "Keep for 5 years or until audit" sounds ominous but is not. What
it means is that if the records are subject to audit (procedural or
financial) you may destroy them after 5 years. The hard part is the "until
audit". This phrase (and I despise it personally) means that you can't
destroy the records until an audit is done. This is difficult to do because
some organizations may, if the series is in multiple locations, only audit
one of the locations rather than all of them, and fail to notify the other
locations that the audit has been completed.

I prefer to write records series such that the retention period is stated in
this manner "Retain for 5 years, then destroy." In the series description on
e would clearly state that the records are subject to audit. If an audit is
performed, then the retention clock is put on hold until the audit is
completed. Generally this requires that the RM be notified as to what
records series are currently being audited. Most organizations with good  RM
programs have in place a destruction authorization process. this process
reviews the records that are  eligible for destruction. This process is
designed to catch records that are needed for an audit, litigation or an
investigation. This process usually involves tax, legal and maybe internal
audit.

>The ones who should be looked at closely are not Enron,
per se, but Arthur Anderson, the auditing firm.  AA is responsible for the
plurality if not the majority of all Fortune 500 reports that go to the SEC.
 If they cannot be audited themselves, there could be real trouble awaiting
everyone....  Quis custodiet ipsos custodies?
>
AAndersen is only the 5th largest auditing firm. But you are correct. who
audits them. And they also I fear have the greater exposure.

>Yet, as archivists and records managers, we are responsible not only for
preservation, but for the orderly and timely destruction of records, once
their legal or organizational mandate requires it.  Under these
circumstances, is it possible to retain documentary evidence that would
allow "second-guessing" of auditing agencies, either through the
identification of key documents or through a sampling scheme.
>

This is why it is so critical in today's business environment to understand
the business processes and functions of an organization. The information
that is created, retained and maintained within an organization is utilized
by a variety of processes. If the business process and the associated
procedures is thoroughly documented it is not really necessary to retain a
sample. IMHO


Peter Kurilecz CRM, CA
pakurilecz@aol.com

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