The New Legal Reason for a Records Management Program

By Skupsky, Donald S. | Records Management Quarterly, April 1994 | Go to article overview

The New Legal Reason for a Records Management Program


Skupsky, Donald S., Records Management Quarterly


NOTICE: This article contains information related to sensitive and important legal issues. No section of this article should be construed as providing legal advice. All legal decisions related to records and information management should be reviewed by competent legal counsel.

The reasons for a records management program reflect both business and legal concerns. From a purely business standpoint, a records management program provides the following benefits:

* Cost savings

* Space savings

* Improved access to information

* Improved operational efficiency

These reasons should compel management to provide sufficient resources for the management of company records.

However, some of these benefits may be difficult to quantify. During periods of down-sizing or right-sizing, management may feel that these business issues alone cannot justify the records management program. An awareness of the legal risks associated with a poor records management program might cause them to rethink their commitment.

The legal reasons for a records management and records retention program include the following:

* Legal compliance

* Litigation protection

* Information availability during legal audits

Regulatory agencies can impose significant fines for failure to maintain certain records for the required period of time. During litigation, an organization may be subject to sanctions or loss of rights when the court determines that records were improperly destroyed or the organization cannot find records to support its claims.

The price of a good records management program is minute compared to the legal risks faced by most organizations. For this reason, legal departments often support the implementation of a records management program, especially the records retention component.

LEGAL REQUIREMENTS FOR A RECORDS MANAGEMENT PROGRAM

In spite of all the business and legal reasons for a records management program, many will be surprised to learn that the law does not mandate a records management program per se. The law does mandate that certain records be kept and may also specify certain conditions. Typically, laws will state the following:

* The type of information that must be kept

* The type of information that must be submitted to a regulatory agency

* The form required for the records

* The location for maintaining records

* The availability of records during audits or government requests

While all these requirements might necessitate the implementation of a records management program for compliance, the law still does not specify that you establish a formal program.

Some organizations have focused on the Federal Corrupt Business Practices Act (15 USC 78dd-1) as the legal basis for a records management program. While this law does establish significant penalties for American corporations engaging in corrupt foreign practices (such as bribing foreign officials or businesses), the law merely requires an organization to confirm that it complies with the law.

The law does not require a records management program. However, a records management program would document company expenditures and help show that no money had been diverted to improper reasons.

The Nuclear Regulatory Commission comes close to mandating a records management program for nuclear facilities as a byproduct of its requirements for a quality assurance program. In order to be licensed, a nuclear facility must establish an extensive quality assurance program to ensure that each step of design, construction, implementation and management of the nuclear facility corresponds with appropriate regulations. Quality assurance records must be maintained and made available during agency audits. One component of quality assurance is the records and information management program used to organize and manage the quality assurance program. …

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