Thursday, September 27, 2012

Electronic Documentation for Audit and USAID Approvals by E-Mail

Electronic Record Keeping

The ability to keep records in electronic format for the purpose of an audit by DCAA can save money on storage and improve record keeping and speed of audits.  Here is what you need to have in order to be compliant in this area:

1. Policy and Systems to Archive Documents electronically in proper manner, including an established indexing system

2. Ability to keep originals after scanning/imaging for at least 12 months

This is based on the following regulations:

DCAA "Information for Contractors Manual" refers to FAR 4.7 guidance in regard to Electronic Imaging of all Audit Documentation:

FAR 4.703
 (c) Nothing in this section shall be construed to preclude a contractor from duplicating or storing original records in electronic form unless they contain significant information not shown on the record copy. Original records need not be maintained or produced in an audit if the contractor or subcontractor provides photographic or electronic images of the original records and meets the following requirements:
(1) The contractor or subcontractor has established procedures to ensure that the imaging process preserves accurate images of the original records, including signatures and other written or graphic images, and that the imaging process is reliable and secure so as to maintain the integrity of the records.
(2) The contractor or subcontractor maintains an effective indexing system to permit timely and convenient access to the imaged records.
(3) The contractor or subcontractor retains the original records for a minimum of one year after imaging to permit periodic validation of the imaging systems.

This guidance technically only applies to contractors under FAR based contracts.  For USAID grantees, 22CFR226.53 (c) governs and requires written approval of USAID for those grantees who wish to retain copies of original records in lieu of originals.

Grantees should seek permission from USAID based on DCAA’s guidance and FAR 4.703. 

USAID Approvals by Email
Are emails (vs signed letters) sufficient to serve as “written” approval of USAID CO/AO?

FAR Part 2.101 applies for all approvals that are required “in writing”:

See FAR 2.101 In Writing – means any worded or numbered expression that can be read, reproduced, and later communicated, and includes electronically transmitted and stored information.