Record Retention by Contractors
By David
A. Greaves, Aronson
& Company
Federal
Acquisition Regulations require that government contractors retain certain
documents for a determined amount of time after the contract is complete.
Per FAR 4.703, contractors are required to keep pertinent documents
related to the contract with the government for three years after final
payment. However, there are some specific documents that have a different
retention requirement. The specific requirement periods below and to
the right apply from the end of the fiscal year of the contractor.
| Financial
and Cost Accounting Records (FAR 4.705-1) |
Document
|
Retention
Period |
| 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 |
4
Years |
| 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 |
| Cash
advance recapitulations, prepared as posting entries to accounts
receivable ledgers for amounts of expense vouchers prepared for
employees' travel and related expenses |
Paid,
canceled, and voided checks, other than those issued for the
payment of salary and wages |
Accounts payable
records to support disbursements of funds for materials, equipment,
supplied, 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 |
| Labor cost
distribution cards or equivalent documents |
2
Years |
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 |
These are the recommended
guidelines per the FAR. However, the retention period can be extended
specifically as part of a contract clause. Be sure to read your contract
to verify that the periods have not been extended.
Pay
Administration Records (FAR 4.705-2) |
Document
|
Retention
Period |
| Payroll
sheets, registers, or their equivalent, of salaries and wages paid
to individual employees for each payroll period, change slips, and
tax withholding statements |
4
Years
after completion of
contract, unless
contract performance
is the subject of
enforcement action |
| Clock cards
or other time and attendance cards |
2
Years |
Paid checks,
receipts for wages paid in cash, or other evidence of
payments for services rendered by employees |
| Acquisition
and Supply Records (FAR 4.705-3) |
Document
|
Retention
Period |
Work
orders for maintenance and other services
|
4
Years |
| Equipment records,
consisting of equipment usage and status reports and equipment repair
orders |
| Expendable
property records, reflecting accountability for the receipt and
use of material in the performance of a contract |
| Receiving and
inspection report records, consisting of reports reflecting receipt
and inspection of supplies, equipment, and materials |
| Purchase order
files for supplies, equipment, material, or services used in the
performance of a contract, supporting documentation and backup files
including, but limited to, invoices, and memoranda: e.g., memoranda
of negotiation showing the principal elements of subcontract price
negotiations |
| Production
records of quality control, reliability, and inspection |
| Store requisitions
for materials, supplies, equipment, and services |
2
Years |
David A. Greaves, CPA is a Senior Manager providing real estate and
construction industry audit and tax services at Aronson & Company.
David is an active member of MACPA and NAHB.
|
The
Government Contractors Council Report is a monthly newsletter distributed
by the Northern Virginia Government Contractors Council, an initiative
of the Fairfax County Chamber of Commerce for Washington, DC metropolitan
area government contractors.
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