The document management buzz continues to grow in the funeral industry. But, do you really know what document management is? Document management systems allow you to scan paper documents or print electronic documents directly into an online file cabinet and add index values (tags) to the documents so that you can easily retrieve them by searching for a person’s name, date of service or other customized index values. Document management can make a difference in your funeral home by offering time and money savings as well as increased compliance.
While all business are required to keep certain records on file, funeral homes (especially those with cemeteries) have detailed and lengthy record retention guidelines. In Kentucky and Alabama, for example, the record retention guidelines look like this:
Record Retention Period
License Renewal Cards – Active Permanently 15 years
Complaints and Investigation Reports Permanently 15 years
License Applications 50 years
Apprenticeship Training Report 3 years 3 years
Examination Papers 2 years 3 years
Board Meeting Minutes Permanently Permanently
Quarterly Licensing Newsletters Permanently Permanently
And that is just the beginning. All businesses are required to keep certain human resource and financial documents on file for a certain number of years, depending on the state. The following list provides general guidance about the length of time various types of records should be retained:
· Shareholder agreements, bylaws, minutes and other corporate governance documents: These documents should be retained permanently. Ideally, copies should also be in the hands of your attorney.
· Key contracts, leases and other agreements, including insurance policies: These records should be retained for at least 10 years after they have expired. Funeral home owners should also retain insurance policies permanently since claims can occasionally arise from acts that occurred many years in the past. (This is particularly true of environmental claims.) Keep a copy of the policy to establish the potential for coverage.
· Tax returns, financial statements and related documents: These documents should be retained permanently.
· Payroll records: Also keep these documents permanently.
· Financial and accounting records, including journals, ledgers and depreciation schedules: These should generally be kept for 10 years after their creation. However, in the case of assets that may be long-lived or sold at a much later date, invoices or other documents establishing their cost will be required to establish a tax basis. Such documents should be retained indefinitely.
· Personnel records: Employee records, including applications, I-9 forms and performance reviews, should be retained for at least seven years following termination of the individual’s employment. In the event of a charge of discrimination, any documents should be kept for four years after resolution of the charge, if that is longer than the seven years after termination of employment. With respect to job applicants who have not been employed, applications, resumes and replies should be retained for one year after completion.
· Bank statements and cancelled checks: These generally may be discarded after seven years. However, if cancelled checks might be required to establish a tax basis or to evidence other significant transactions, copies should be kept indefinitely, preferably with the other documents related to the transaction in question.
Rules and regulations for funeral homes (and other businesses)
In addition to record retention regulations, there are other laws and acts that can affect your funeral home and the way you store your documents.
Gramm-Leach Bliley Act
If your funeral home routinely enters into retail installment contracts with your families, you are subject to the Gramm-Leach Bliley (GLB) Act as a financial institution. (If most consumers pay you by check, credit card, insurance assignment, or payment from estates, your funeral home will not be regarded as a financial institution simply by occasionally allowing consumers to pay over time.) To be compliant with the GLB Act, you need to:
• Hire or designate a records retention manager to supervise the disposal of records containing non-public personal information
• Store confidential records in such a way that only authorized employees can access them
• Shred or recycle customer information recorded on paper
• Erase all data when disposing of computers, diskettes, magnetic tapes, hard drives or any other electronic media that contain customer information
• Effectively destroy the hardware
• Promptly dispose of outdated customer information
FTC Red Flags
The Red Flags Rule is an anti-fraud regulation, requiring “creditors” and “financial institutions” with covered accounts to implement programs to identify, detect, and respond to the warning signs, or “red flags,” that could indicate identity theft.
In order to further prevent the likelihood of identity theft occurring at your funeral home, you should take the following steps to protect customer identifying information:
• Undertake complete and secure destruction of paper documents and computer files containing customer information
• Make office computers password protected and provide that computer screens lock after a set period of time
• Keep offices clear of papers containing customer identifying information
• Require and keep only the kinds of customer information that are necessary for funeral home purposes.
Occupational Safety and Health Administration: Right To Know Law
Officially know as the Occupational Safety and Health Administration’s (OSHA) Hazard Communication Standard 29 CFR 1910.1200, the Right To Know Law was designed to ensure that chemical hazards in the workplace are identified and evaluated, and that the information concerning these hazards is communicated to both employers and employees. This transfer of information is to be accomplished by means of a comprehensive hazard communication program that includes container labeling and other forms of warning including Material Safety Data Sheets (MSDSs) and employee training. According to OSHA, MSDS’s must be readily accessible to employees when they are in their work areas during their work shifts.
How document management can help
The Uniform Electronic Transactions Act (UETA), which was adopted by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in 1999, guarantees that electronic transactions are just as enforceable as their paper counterparts. UETA provides that: “a contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.” The act states that any law that requires a physical record will be satisfied by an electronic record and that any signature requirement can be met by an electronic signature.
Translation: in the United States, an electronic document is considered the same as the original document. This allows business owners to shred the corresponding paper files after they have been scanned into an electronic format or document management system. And, it leads business owners to document management systems.
Permanent record retention.
Using a document management system, your funeral home records can be stored permanently online. Once a document is scanned into the system, it can only be deleted by the file cabinet owner. This will assist you in complying with state record retention guidelines. To comply with OSHA regulations, your staff can scan your MSDS into a document management system for immediate retrieval from any computer with an Internet connection. And, by scanning in all of the paper that comes into your office, you are keeping desks clear of personal information, which is a major deterrent to identity theft.
A document management system is much more secure than your standard file cabinet. Your employees will need user IDs and passwords to access the system and authorities can be set up so that users can only see documents that are relevant to their jobs. This feature of most document management systems will help you comply with the GLB Act and the Red Flags Rule.
Once a user is in the document management system, audit trails track which documents they have scanned, viewed, edited and even deleted. This gives you the ability to see what your employees are looking at as well as where and when. This adds another level of security to your documents and again, assists with compliance.
An unintended benefit: in the event of an audit – planned or unplanned – document management system users can provide auditors secure access to all of the documents stored on the system, which eliminates the need for auditors to be on-site and greatly speeds up the audit process.
By getting rid of the paper in your funeral home, you’ll also be able to improve compliance, eliminate files and file cabinets and create a central repository for all of your records. In the process, you’ll save time and money and create a better experience for your employees and customers. The only question left is, when can you start scanning?