Document retention requirements for community organisations

1. What documents does my organisation need to keep?

If your organisation is an incorporated association

The Associations Incorporation Act 1981 (Vic) requires an organisation to keep:

• the financial statement submitted to members at the annual general meeting for at least 7 years after it was submitted;
• the certificate signed by a management committee member about the financial statement submitted to members at the annual general meeting for at least 7 years after the date it was signed;
• if you are a 'prescribed association', all accounting records for 7 years after the completion of the transaction to which they relate.  A 'prescribed association' is an incorporated association that:
  • has assets in excess of $500,000; or
  • had over $200,000 gross receipts in the previous financial year;
  • or a regulation makes it a prescribed association.
• the original of any document the organisation has lodged with CAV for at least 7 years after the date it was lodged.

If your organisation is a company limited by guarantee

The Corporations Act 2001 states that a company must keep written financial records that:

• correctly record and explain its transactions and financial position and performance; and
• would enable true and fair financial statements to be prepared and audited.
  

Financial records are defined as including:

• invoices, receipts orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and
• documents of prime entry; and
• working papers and other documents needed to explain:
  • the methods by which financial statements are made up; and
  • adjustments to be made in preparing financial statements.

The Corporations Act requires financial records to be kept for 7 years.

Financial records may be kept electronically. The Corporations Act states that if financial records are kept in electronic form, they must be convertible into hard copy. Hard copy must be made available within a reasonable time to a person who is entitled to inspect the records. If financial records are kept on a computer which is owned and operated by a third party (eg. your company's accountant) you still have the responsibility to provide a hard copy.

2. What taxation records do we need to keep?

Generally, records, receipts and other documentation you have used to prepare your organisation's tax return, including written evidence to verify claims for deductions claimed, must be kept for 5 years from when the record is prepared or the transaction is completed, whichever occurs later.

You should also keep any Australian Tax Office (ATO) correspondence regarding your organisation's tax endorsements, if any, while your hold those endorsements and, we suggest, for 5 years from revocation or relinquishment. For example, endorsement as a Tax Concession Charity (TCC) or Deductible Gift Recipient (DGR).

The ATO's website has further information about record keeping.

3. What employee and volunteer records do we need to keep?

Under the Fair Work Act 2009, an employer must make, and keep for 7 years, employee records in relation to each of its employees, containing the information specified in the Fair Work Regulations 2009, including:

• the employer's name;
• the employee's name;
• whether the employee's employment is full-time or part-time;
• whether the employee's employment is permanent, temporary or casual;
• the date on which the employee's employment began;
• the Australian Business Number (if any) of the employer;
• pay details;
• leave details;
• superannuation contributions;
• any individual flexibility arrangement;
• any guarantee of annual earnings; and
•  termination of employment details.

Under the Occupational Health and Safety Act 2004, employers ‘must, so far as is reasonably practicable, keep information and records relating to the health and safety of employees of the employer'.

In general, an organisation has a responsibility as an employer to maintain records of incidents which impact on its employees, including details of grievances and how they were resolved.  They must be kept for a reasonable period.  In particular, under the Occupational Health and Safety Act 2004 (Vic), employers must keep a copy of written record of a ‘notifiable incident' for at least 5 years. A ‘notifiable incident' is an incident that must be notified to WorkSafe, including a death or employees or persons who require either medical treatment by a doctor or immediate treatment as an in-patient in a hospital.

4. What records do I need to keep if I am registered to raise funds from the Victorian public?

The Fundraising Act 1998 (Vic) requires records and accounts relating to a fundraising appeal to be stored in Victoria at the association’s registered office or principal place of business, for 3 years after the date the appeal ends. The records that need to be kept include details of all income/proceeds and expenditure, and the names and addresses of the beneficiaries and the people who managed the appeal.

Note that different laws apply in each state or territory in which you raise funds from the public.

5. Do you know of any actual or threatened legal proceedings against the organisation or any of its clients?

Criminal litigation

The Crimes Act 1958 (Vic) requires an organization to retain documents if an office bearer or staff member is aware of any actual or threatened litigation being bought against the organisation or any of its clients: see very broad provision in section 254 of the Crimes Act (Destruction of evidence).  Note that to be liable under section 254(1) a person must know that document is, or is reasonably likely to be, required in evidence in a legal proceeding.

Other Litigation

Typically an action can be brought against a person or entity within 6 years of the cause of action, for example a breach of contract or an act of negligence. Any legal documents that may be relevant if legal action was to be taken (but is not actual or threatened), for example contracts, should be kept for 6 years.

6. Can I keep records in electronic form?

Information can be recorded in electronic form if the conditions in the Electronic Transactions Act 2000 (Vic) are satisfied.  For example, information must be useable, accessible, complete and unaltered, able to be reproduced in hard copy.

Companies limited by guarantee may keep financial records electronically, see question 1. 

7. Are we required to have a document retention policy?

If your organisation has no policies currently in place regarding the retention and amendment of employment records and other documents you should develop such policies as a matter of good governance, and have regard to:

• the type of information to be retained by the organisation;
• the purpose for which that information is retained;
• the means of accessing, and if necessary altering, the retained information; and
• the timeframes for retention and what happens to files once this timeframe has expired.

Also note that if your organisation receives funding from State or Commonwealth Government it may be bound by the relevant Privacy Act.  As a best practice model your organisation should implement its record management policies in line with relevant Information Privacy Principles, which are set out in the respective Acts.

8. Are there any examples available of document retention policies?

Below are some examples of document retention policies.