Decoding Note (b)

Financial and programmatic records can include accounting, banking, and purchasing records for purchases made with grant funds, payroll records for grant-funded staff, and administrative records for grant-funded projects. For example, if a grant funds a cleanup project, you might be looking at receipts for supplies and equipment, payroll records for project staff, internal reports and milestones, or correspondence about project operations.

How long do you keep these financial and programmatic records? The short answer: it depends on the grant. The page-long retention period in Schedule GR, Part 2 might look overwhelming at first, but let’s break it down.

Question 1: Is this a subgrant of federal funds?

If not, proceed to the next question.

If so: Records of projects funded by federal subgrants must be retained by local government subgrantees for FE + 5 years. Local governments should consult with subgrantors to identify potential additional requirements for a particular grant.

Note: This overrides the 3-year retention period for most local governments in GR1025-08(a) and (b).

Question 2: How frequently is the grant renewed?

But the question is… 3 years from when?

• Multi-Year Funding Cycles: Submission of the final expenditure report for the last year of the funding cycle.
• Quarterly Renewals: Submission of the Q4 expenditure report, using the fiscal year of the grantor.
• Other Periodic Renewals (Annual, Semi-Annual, etc.): Submission of the final expenditure report for the funding cycle.
• Non-Renewing: Submission of the final expenditure report.

Customization to the Rescue

Still overwhelmed? That’s where a custom internal retention schedule comes in handy. Custom series are all about what works for you, so we’ll look at two model governments who went in opposite directions.

Simplifying (“Bucketing”)

In this example, the City of Townville has created just two series to capture all their grant records. This is called bucketing. These series meet the requirements of both the FE + 5 retention period for federal subgrants and the various 3-year retention periods for grants from other sources. This helps the city keep its retention schedule short and flexible.

City of Townville Records Retention Schedule (example use only)
FINANCE-001a Retention period derived from Schedule GR, Part 2, Note (b).	GRANT-FUNDED PROJECT RECORDS (NOT QUARTERLY)	Financial and programmatic records of grant-funded projects, if funding is not renewed quarterly.	FE of submission of final expenditure report + 5 years	Retention Note:  Final expenditure report is the last report of the funding cycle.   For grants renewing quarterly, see FINANCE-001b.
FINANCE-001b Retention period derived from Schedule GR, Part 2, Note (b)(1)(ii)(c).	GRANT-FUNDED PROJECT RECORDS (QUARTERLY)	Financial and programmatic records of grant-funded projects, if funding is renewed quarterly.	FE of submission of Q4 expenditure report + 5 years	Retention Note:  Use fiscal year of the granting entity/agency.   For grants that do not renew quarterly, see FINANCE-001a.

Specifying

Here, Texas County has created series for individual grant-funded projects and programs throughout their schedule. The county aims to reduce human error and resistance by insulating staff from records management decisions.

Texas County Records Retention Schedule (example use only)
ROAD-BRIDGE- 001 TSLAC citation: Schedule GR, Part 2, Note (b)(2).	TRANSPORTATION IMPROVEMENT PROGRAM RECORDS	Administrative and operational records of the Transportation Improvement Program.	FE+5	Retention Note: Federal funds administered by State Agency ABC.
EMERGENCY-001 TSLAC citation: Schedule GR, Part 2, Note (b)(3).	LIBRARY PROTECTION PROJECT RECORDS	Administrative and operational records of the Library Protection Project.	Submission of final expenditure report + 3 years	Retention Note: One-time grant from Big Nonprofit Entity.
SHERIFF-001 TSLAC citation: Schedule GR, Part 2, Note (b)(1)(ii)(c).	NEIGHBORHOOD WATCH RECORDS	Administrative and operational records of county-funded neighborhood watch programs.	End of state fiscal year + 3 years	Retention Note: Direct funding from State Agency XYZ, renews quarterly.

Closing Thoughts from TSLAC

This article is just the starting point on your adventure! When determining the retention period for local government records, always refer to the local schedules. Caveats and additional information are located in note (b).

Contact your county’s analyst or your legal counsel if you have questions about retaining your grant records.