Records Audit Readiness Checklist: Is Your Records Management Program Prepared?

Table of Contents

• What Is a Records Management Audit?
• Records Audit Readiness Checklist
• Records Retention Policy
• Document Classification System
• Records Storage Practices
• Physical Records Storage
• Digital Records Storage
• Records Retrieval and Accessibility
• Chain of Custody Documentation
• Records Destruction Policies
• Compliance and Regulatory Requirements
• Employee Training and Governance
• Technology and Digital Records Systems
• Signs Your Organization Is Not Audit Ready
• How to Improve Records Audit Readiness
• How Corodata Helps Organizations Prepare for Records Audits

Most organizations have a list of priorities, and records management is not always at the top – until audit time comes around, that is. The truth is, when a regulatory agency or internal compliance team announces an audit, it often sends departments into a tailspin.

To avoid the chaos of locating documents from multiple departments before the auditors come knocking, a records audit checklist can help your team assess whether your organization’s records are truly audit-ready at any time.

What Is a Records Management Audit?

A records management audit evaluates whether an organization is creating, storing, retaining, and destroying records in accordance with policy and regulatory requirements. An audit isn’t just a document treasure hunt.

It’s how auditors:

• Look into a system
• Examine how an organization manages documents and files
• How records are classified
• How long records are kept
• Who has access
• Destruction methods and schedule

There are two types of audits that organizations face. The first is a proactive, self-initiated internal audit that helps organizations identify gaps in their records management program before they become records retention compliance risks.

The other is a third-party audit conducted by a regulatory agency, which can arrive with little warning and carry significant consequences if deficiencies are found. In both cases, the audit is a window into how well your records management program is actually working.

Records Audit Readiness Checklist

A records audit checklist is used as a self-assessment tool, so you assess where you would stand in the case of a real audit. The checklist walks through each area of your records management program and identifies where compliance gaps exist. Answering “no” to any question on this checklist indicates an action item.

Records Retention Policy

A records retention policy is the foundation of audit-readiness. Without a policy, there’s no basis for any decisions made about records management. Auditors will ask to see it, and if it doesn’t exist or hasn’t been updated, that’s an immediate red flag.

• Do you have a documented retention schedule?
• Are retention timelines based on current regulatory requirements?
• Do employees know how to apply retention rules to their records?
• Has the retention policy been reviewed or updated in the past year?

Records retention policies should align with specific industry regulations, not general assumptions. For help writing a policy, review Corodata’s Records Retention Policy Template.

Document Classification System

Where your records retention policy is the foundation, the document classification system is the framework for records management. It provides a consistent way to categorize records, and without it, nothing else that comes after works the way it should.

• Do you have a defined classification system for all record types?
• Is the classification system applied consistently across departments?
• Are employees trained on how to classify records correctly?
• Does your classification system align with your retention schedule?

Rather than leaving classification to individual interpretation, this system must be documented and standardized to ensure that every record is handled the same way, regardless of who created it or where it resides within the organization.

Records Storage Practices

In the modern digital age, records live in two places: physical and digital. Although both types must meet audit standards, hybrid records management best practices can differ for each, and a records audit checklist must take both into account.

Physical Records Storage

Physical records storage is one of the most vulnerable areas in an audit. Records that have been misfiled, are inaccessible, or are stored in conditions that compromise their integrity can create problems during an audit.

• Are physical records stored in a secure, organized, and accessible location?
• Are storage conditions appropriate for the record types being stored (temperature, humidity, and fire protection, for example)?
• Is there a system for tracking the location of physical records?
• Are offsite records stored with a certified, secure vendor?

Physical records in unsecured or uncontrolled environments create both compliance and liability risks. Secure offsite storage provided by a certified vendor offers audit-ready security, organization, and chain of custody documentation.

Digital Records Storage

Digital records come with their own set of vulnerabilities that can impact document management and audit readiness. From version control issues to unsanctioned storage locations and access permissions, there is significant room for error, inconsistency, and compliance gaps.

• Are digital records stored in a single, approved location?
• Are access permissions regularly reviewed and updated?
• Are records backed up and recoverable in the event of a system failure?
• Is there version control in place to ensure the integrity of digital documents?

Records Retrieval and Accessibility

Records retrieval and accessibility are a critical part of a records audit checklist, because being able to produce a record quickly is just as important as having it. This makes retrieval one of the most common areas to expose disorganized record management programs.

• Can records be located and retrieved within a reasonable time frame?
• Is there a documented process for requesting and retrieving records?
• Are retrieval logs maintained to track who accessed what and when?
• Can you retrieve records from offsite storage quickly when needed?

Because response time matters during an audit, being ready means you need a documented, tested retrieval process, not one improvised under pressure.

Chain of Custody Documentation

Chain of custody tracks the life of a record. From who created it and handled it to where it’s been or how it was disposed of, chain-of-custody documentation is required to verify that records haven’t been altered, mishandled, or gone missing. Without this verification, even a well-organized records program can’t prove its own integrity.

• Is there a documented process for tracking records, from creation to destruction?
• Are transfer logs maintained when records move between departments or to offsite storage?
• Can you demonstrate that records have not been altered or tampered with?
• Are the chain of custody records themselves retained and accessible?

Records Destruction Policies

Destruction is the final stage in records lifecycle management, and it’s just as regulated as all the steps before it. Although it may seem like holding onto records permanently is the safest option, it creates its own set of liability and compliance risks.

• Does your organization have a documented records destruction policy?
• Are destruction timelines tied to your retention schedule?
• Is destruction documented with certificates of destruction or destruction logs?
• Are records destroyed using a secure, certified method?

Secure shredding services are offered by certified vendors and provide a defensible paper trail that tells auditors you handled record destruction responsibly.

Compliance and Regulatory Requirements

Whether it’s HIPAA, SEC, FINRA, SOX, or state-level requirements, different industries face a variety of regulatory frameworks – and the stakes are high. Just in the global financial services industry, firms spend almost $206 billion per year on maintaining financial crime compliance.

Records management requirements vary significantly across all of them, and not knowing which regulations apply to your organization is an indefensible position in an audit.

• Have you identified all regulatory requirements that apply to your organization’s records?
• Are retention schedules and policies mapped to specific regulations?
• Do you have documentation showing how your records management program addresses each applicable requirement?
• Are you monitoring for regulatory changes that could affect your records management obligations?

Employee Training and Governance

A records management program is only as strong as the people following it. Auditors will not only ask whether policies exist, but they’ll also inquire whether employees know about them and follow them.

That’s why the accountability layer in records management is so essential:

• Who owns records management
• Who enforces it
• Who is responsible for when something goes wrong?

Include the following questions in your records audit checklist:

• Are employees trained on records management policies and procedures?
• Is training documented and conducted regularly?
• Is there a designated records manager or governance lead responsible for the program?
• Are there consequences in place for records management policy violations?

Technology and Digital Records Systems

When it comes to digital records, there is another set of compliance issues to consider regarding the systems that manage them. Technology is the infrastructure behind a modern records management program, and auditors will look to see whether it’s being used to support the process or create additional risk.

• Does your organization use a records management system or document management platform?
• Does the system support retention scheduling, access controls, and audit trails?
• Are system logs maintained and accessible for audit purposes?
• Is the technology regularly updated and supported by the vendor?

Whether it’s through inconsistencies or a lack of controls, technology can create compliance risks.

Signs Your Organization Is Not Audit Ready

If you went through the records audit readiness checklist and feel prepared, but still want additional checks and balances, these warning signs can help confirm whether your program is solid:

• Does your organization have a documented retention schedule that has been updated within the past year?
• Are records stored in a centralized, trackable location rather than scattered across departments?
• Can employees consistently explain how to classify and retrieve records?
• Is destruction documented with certificates of destruction logs every time?
• Is there a designated person who owns records management accountability?
• Have applicable regulatory requirements been reviewed recently?
• Can retrieval requests be fulfilled in hours rather than days?

If you answered “no” to any of these questions, your records management program may have gaps that warrant attention.

How to Improve Records Audit Readiness

This thorough assessment indicates the need for improvement while also showing where those gaps are. To fill these compliance gaps, go back through the checklist and turn every item that you answered “no” to into an action item for your to-do list.

1. Start with the retention schedule, the foundation on which everything is built.
2. Conduct a records inventory, because you can’t manage what you don’t know you have.
3. Standardize your classification system across departments.
4. Document everything from policies and destruction to retrieval and training.
5. Assign ownership. Someone needs to be accountable for the records management of your organization.
6. Schedule internal audits so gaps are caught before regulators find them.
7. Partner with a certified vendor for storage, shredding, and chain-of-custody services.

How Corodata Helps Organizations Prepare for Records Audits

Audit-readiness isn’t a one-time project. This checklist is best used as part of an ongoing program to help organizations prepare for records audits. If an information governance audit checklist reveals gaps in how your organization’s records are stored, tracked, and destroyed, Corodata can help you close them.