July 2008: Volume 7

The Sarbanes-Oxley Act enacted in 2002 established new requirements relating to financial reporting and record-keeping. Generally, the provisions of the Sarbanes-Oxley Act (“Act”) only apply to publicly traded companies that are subject to regulation by the Securities and Exchange Commission (SEC). However, the Act’s whistle-blower and document destruction provisions apply to nonprofit groups.The document destruction provisions of Sarbanes-Oxley apply to nonprofit organizations. The Act imposes criminal penalties for knowingly altering, destroying, concealing or falsifying any record or document that is under investigation, or is being contemplated for investigation, by a federal agency.

Record retention schedules should be developed based on several factors, including:

   - the types of records your organization keeps; and

   - the length of time under state and federal law
     different types of claims can be brought.