Minutes of the Quarterly Meeting
September 9, 1999
Department for Libraries and Archives
Department Financial Institutions
The State Archives and Records Commission met September 9, 1999,
in the Board Room, Kentucky Department for Libraries and Archives (KDLA).
Members present: Dr. Thomas D. Clark, representing the University of Kentucky; Paul F. Coates, representing Citizens-at-Large; Ed Hatchett, Auditor of Public Accounts; Dr. Linda E. Johnson, representing Citizens-at-Large; Shelia E. Heflin, representing the Kentucky Library Association; Carolyn Nichols (formerly Carolyn N. Murphy), representing local governments; Dr. Jack D. Ellis, representing Citizens-at-Large; and Lynne Hollingsworth, representing the Kentucky Historical Society.
Representatives present: Leslie Smith, representing Robert Sherman, Director, Legislative Research Commission; Victor Fox, representing A. B. Chandler, III, Attorney General; and Ron Jones, representing Stephen N. Dooley, Commissioner, Department of Information Systems.
Members not present or represented: Dr. Marlene M. Helm, Secretary, Education, Arts and Humanities Cabinet; Dr. William J. Morison, representing regional colleges and universities; Cheryl Jones, representing Citizens-at-Large; Crit Luallen, State Budget Director, Governor’s Office of Policy and Management; and Judge Joseph E. Lambert, Chief Justice, Kentucky Supreme Court.
Public Records Division staff present: Richard N. Belding, Director, Public Records Division; Diana Moses, Manager, State Records Branch; Darrell Gabhart, Manager, Local Records Branch; Charles Robb, Manager, Technology Analysis and Support Branch; Jerry Carlton, Regional Administrator; Jim Terry, Administrative Specialist; Michele Staton, Administrative Specialist; Mark Stone, Supervisor, State Archives Center; Rob Hill, Computer Operations Analyst; and B. J. Webster, Administrative Secretary.
Guests present: No guests were present.
Richard Belding conducted the meeting, in Chairman Nelson's absence.
For the record, Belding called for introductions of Commission members.
Minutes of the previous Commission meeting were approved on a motion made by Mr. Coates, seconded by Mr. Hatchett. The motion carried.
Belding asked that the schedule for the Department of Financial Institutions
be considered first, to maintain a proper sequence for the local schedules
that follow.
NEW OR REVISED RECORDS RETENTION SCHEDULES
Department Financial Institutions
Diana Moses was the records analyst working on this revised schedule. The series being scheduled are: 00847 to 00857; 03384 to 03387; 04884 to 04885; 00858 to 00859; 00864 to 00866; 00868 to 00869; and 04876 to 04881, for a total of thirty-two series. The series being deleted are 00863, 00867, 00870 and 00871.
The General Assembly enacted legislation in 1912 that created the Department of Banking and directed the Governor to appoint a Commissioner. In 1936, it became two divisions in the Department of Business Regulation. In 1946, it became the Department of Banking and Securities, and its name was changed to the Department of Financial Institutions, in 1984.
KRS 287.011 establishes the Department and describes its functions. Its duties include regulating and licensing financial institutions and the regulation of securities. A Commissioner heads the Department. Executive Order 93-528 organized the Department into three divisions and abolished the Division of Securities. The Commissioner assumed the duties formerly assigned to the Director of the Division of Securities. However, Executive Order 97-723, issued June 12, 1997, abolished the three divisions and created the Office of General Counsel and three divisions: Financial Institutions, Securities, and Administrative Services.
The Division of Financial Institutions, formerly the Division of Supervision, regulates banks and trust companies, credit unions, and savings and loan associations. It also regulates consumer loan companies, industrial loan companies, mortgage loan companies, mortgage loan brokers, sale of checks licensees, and check-cashing licensees. The division conducts examinations, provides remedial supervision and disciplinary enforcement, and handles the chartering and licensing of these depository and non-depository entities.
The Division of Securities, formerly the Division of Law and Regulatory
Compliance, regulates those corporate entities that issue securities to
investors residing in the Commonwealth. It also regulates all persons and
entities that engage in transactions involving Kentucky investors. Its
functions include corporate finance, licensing, compliance and enforcement.
The Division of Administrative Services, formerly the Division of Planning and Management, provides fiscal, human resources, and technological support to all department personnel.
The Office of the General Counsel is an extension of the Commissioner's Office and provides legal support to the entire agency. The Public Affairs Officer, who coordinates all communications with media and acts as the agency's ombudsman, is a member of the General Counsel's staff.
Moses explained to the Committee members that the revised schedule excludes the records of the General Counsel and the Division of Administrative Services. The General Schedule for State Agencies covers the records of the Division of Administrative Services. The records of the Office of the General Counsel, which is under re-organization, will be scheduled at a later date. Moses directed the members to the Agency Function and Records Summary, which is attached to the schedule, for detailed information regarding the changes and additions to the schedule.
Due to restrictions on access imposed by KRS 287.470 (1), records that document bank examinations, including closed bank examinations, have been reduced in retention from permanent to fifteen years. Examinations of financial institutions contain financial information about private individuals that cannot be disclosed, under the terms of KRS 61.878 (1) (a). In addition, the language in KRS 287.470 (1) is very explicit about the circumstances under which access to the records can be granted. For this reason, Moses said, the records are not being recommended for permanent retention.
There being no discussion, Mr. Hatchett made a motion to adopt this new schedule, seconded by Dr. Clark. The motion carried.
Before proceeding to the local schedules, Belding said that there had been a concerted effort by staff in the Local Records Branch to examine the several model schedules previously approved for local officials to identify and eliminate redundancy, and to consolidate records that are alike into single series entries. The undertaking was very productive and should result in schedules that are much easier for local officials to use.
Gabhart explained that there are several "model" schedules, many of which have similar or like series in them. Previously, when a "common" or general record series needed to be changed, it affected several different local schedules. Making the changes to so many schedules was very labor intensive, according to Gabhart. Also, many local agencies are beginning to consolidate services across government boundaries. For instance, police departments may have jurisdiction in several counties or cities, not to mention the number of special districts that have been created and which have jurisdiction in multiple locations. Given these evolving governmental structures, it is more feasible to have one schedule that is applicable to several different agencies, than to have separate schedules for each administrative unit. Separate schedules will continue to be developed to cover records that are unique to specific offices. The offices would be instructed to use both the general records schedule and their agency specific schedule, when making disposition of records.
Gabhart complimented Jerry Carlton on his work on this project. Carlton's
work to eliminate redundancy and to consolidate records resulted in a 45%
reduction in the number of series previously approved for use by local
officials.
City Model (Municipal Records Retention Schedule)
By way of introduction, Belding said that the action being proposed is a new title for the schedule, from City Model to Municipal Records Retention Schedule.
Carlton was the regional administrator working on this schedule. The schedule contains the remainder of the records series not transferred to the new Local Government General Records Retention Schedule, which will be considered later in the meeting. The State Archives and Records Commission approved the series listed below, which would comprise the newly re-titled schedule, in December 1998.
The series included in the schedule are: L0894, Special Study Reports; L2313, Contract Book; L4740, Parking Citations - Unpaid; L4741, Parking Citations - Paid; L4742, Exonerated Parking Ticket File; L2917, Monthly Return of Utility Gross Receipts License Tax for Schools; L0970, Unpaid Property Tax Bills; L0971, Paid Property Tax Bills; L0966, Master Property Tax Listing; L0967, Tax Assessment Book; L4793, Personal Property Tax Assessment Books; L0969, Delinquent Tax List; L2949, Certification of Public Service Company Property Assessment; L2950, Certification of Public Service Company Assessment for Railroad Car; L4749, Application for Business/Occupational License File; L4750, Beer and/or Liquor License Renewal File; L0978, Occupational/Business License Register; and L2945, Unemployment Compensation Quarterly Contribution Report.
Carlton explained that the Commission had approved a revised City Model Schedule in December 1998. Many of the series contained in the revised City Model have since been removed and placed on the new Local Government General Records Retention Schedule, as they are applicable to a number of offices. Carlton explained that the series listed above are all that remain in the City Model, after the common records were removed.
Belding said that, as with the Public School District Model schedule, the local schedules under consideration would be accessible in the near future on the Department's web site. The local schedules affect in excess of 2,800 units of local government. The Public School District Model schedule, which was approved by the Commission at its December 1998 meeting, affects schools at all levels and district offices, more than 1,300 units. By disseminating the schedules electronically there is the potential for more efficiency and reduced operating costs for the Department, in terms of the production and distribution of schedules.
Dr. Clark raised the issue of the number of local officials and the frequency with which officeholders change and the challenge this presents to staff in keeping them abreast of changes in schedules. Belding said that Local Records staff works with the Department for Local Government when introductory workshops for newly elected local officials are held. Staff also participate in the twice-annual meetings of the county clerks and attend the Kentucky League of Cities meetings to re-enforce implementation and use of schedules. In addition, there have also been several workshops conducted by Local Records staff across the state in the past year. Education efforts directed to local officials continue to comprise a good portion of the work of staff.
Mr. Coates made a motion to adopt this schedule, seconded by Mr. Fox. The motion carried.
Lexington/Fayette Urban County Government - Police Department
Carlton was the regional administrator working on this new schedule. The series being scheduled are L4831 to L4914, a total of 84 records.
Carlton said this schedule continues the efforts of the staff to develop retention schedules for the Lexington/Fayette Urban County Government (LFUCG). Work to revise the retention schedule for the Police Department, which was initially approved by the Commission in 1978, has been underway since September 1998. The revised schedule is part of the LFUCG Police Department's certification process.
Mr. Fox made a motion to adopt this new schedule, seconded by Dr. Johnson. The motion carried.
Local Government General Records Retention Schedule
Carlton was the regional administrator working on this new schedule. The schedule contains 239 series. This schedule is being issued to address those record series that may be created or maintained by all local governments throughout the Commonwealth. A local government may be a county, city, or special district, with their subordinate departments, offices and agencies. This schedule is applicable to all local agencies, except the City of Louisville and the Lexington/Fayette Urban County Government.
Carlton said that records series contained in the schedule were extracted from local agency retention schedules previously approved by the Commission. Eight such schedules were screened to identify the appropriate series. The description and analysis (D&A) forms were edited to ensure the accuracy of the information and to reflect the change in the name of the local government. After making the appropriate changes and additions, the records series from the approved schedules were incorporated into the Local Government General schedule. The schedule has the following sections: Common Records, Cemetery Records, Parks and Recreation, Planning and Zoning, Public Works, Utilities, and Public Safety. The Public Safety section includes emergency medical services, fire departments/districts, and law enforcement. Records of dispatch/911 centers will be added at a later date. With approval of the schedule, local governments will use both the Local Government General schedule and their agency specific schedule, as applicable.
Retention schedules for the following offices were reviewed during this process: County Attorney; Coroner; Sheriff; County Judge/Executive; Treasurer; City Model, including the addendum for municipal utilities; and the recently approved Local Government Model. The schedules not affected by the change are those for public schools, health departments, and area development districts. Carlton said that the County Clerk Model Schedule would basically remain as is, due to the specificity of the records to that office.
On a question by Dr. Johnson, Carlton addressed the challenge of educating local government offices in the use of the schedule. It is intended that the schedule will be disseminated electronically. Ms. Heflin said that the public libraries would be a resource to educate local agencies about the schedules, as the libraries frequently refer requesters to the Department's web site.
Dr. Clark made a motion to adopt this new schedule, seconded by Dr.
Ellis. The motion carried.
County Model - County Clerk - Probate Records
Carlton was the regional administrator working on this schedule change. The series being changed are: L5046, Inventory, Appraisement and Sale Bill File - Unbound (Pre-1870); L5047, Inventory, Appraisement and Sale Bill File - Unbound (Post-1869); L5048, Estate Settlements File - Unbound (Pre-1870); L5049, Estate Settlements File - Unbound (Post-1869); L2629, Appointments for Executors - Unbound; and L1547, Executor's Bond File - Unbound.
County Clerks in the state continue to be the custodians of the estate settlement records, maintaining both the bound instruments and the unbound file, even though the probate function was transferred from the County Court's jurisdiction to the District Court, in January 1978. Until 1978, all probate actions were initiated in the County Court, with all estate settlement records being recorded in the County Clerk's Office. Currently, the only portion of the probate process now being completed by the County Clerk is the recording of wills. Wills are recorded in bound volumes and, as required in KRS 394.300, the original will must be maintained permanently in the County Clerk's office, as well.
Prior to 1978, the recording of estate settlements took the form of: 1) Inventory, Appraisement and Sale Bill Books and Unbound Files; 2) Estate Settlement Books and Unbound File, which included Administrator, Executor, Guardian, Committee, Trustee, and Assignee Settlements; 3) Will Books and Unbound Wills; and 4) Bond Books and Unbound Bonds.
After researching a number of county estate settlement records, Local Records staff found that some county clerks have both bound and unbound estate settlements dated as early as 1815, but the majority only have unbound records for the period up to 1850. The estate settlements are also found in Will Books for this period. In the unbound papers, inventories, appraisements, sale bills and settlements can be found, as well as maps, deeds, private correspondence and family information.
There was no uniform way of maintaining the estate settlements for the period up to the Civil War, until after the unbound settlements began to be recorded in bound volumes.
The unbound papers, after the Civil War, only contain inventories, appraisements,
sale bills, vouchers, claims, settlements, the value of the estates, dates
of claims, administrator's qualifications, summaries of costs, total receipts
and disbursements, sworn
statements of administration, attestations of county clerks, and signatures
of executors and county clerks. This same information was recorded in the
bound volumes. The uniformity in recording appears to have commenced around
1866, according to Local Records staff.
Carlton said staff is recommending that the unbound estate settlement papers, created after 1870, be destroyed, if they have been duly recorded in the appropriate Estate Settlement Book or County Court Order Books. Any papers dated before 1870 would be retained permanently, whether loose or bound. The revised disposition instruction states that before any of the unbound papers can be destroyed, the information in the unbound file must be compared with the information recorded in the bound volumes, word for word, verified and certified. In addition, State Archives staff must give their permission, prior to destruction.
Carlton said there are several hundred cubic feet of loose papers in the Archives that could be destroyed, as they have been duly recorded in the appropriate volumes. The papers from Fayette County alone, which are stored in the Archives Center, comprise three to four hundred cubic feet, with the records dating from 1948 to 1978. All have been checked and verified as to recording in Settlement Books and Order Books.
Coates voiced concern that records of research value could be destroyed. Belding reiterated that if the loose documents did not match what was recorded in the Clerk's Office, they would be retained.
Dr. Johnson questioned the cost and labor involved in looking at individual documents and comparing them to the recorded information. Mr. Fox said that the review and possible destruction of the loose documents would be up to the clerks. Belding said that it was likely that the review would be done in increments, rather than the clerks attempting to tackle a substantial amount of material at one time. According to Carlton, reformatting the material is not an option, as the cost would be enormous. Carlton said that by approving the proposed change, the Commission would be giving the clerks the opportunity to eliminate records, if the conditions specified in the disposition instructions are met. The clerks have the option of retaining the materials, if they so desire.
After additional discussion, Dr. Clark made a motion to adopt this schedule change, seconded by Mr. Fox. The motion carried.
County Model - Office of the Sheriff
Carlton was the regional administrator working on this schedule change. The series being added to the schedule are L4915, Application for Property Tax Refund; L4916, Refund Authorization Statement; L4917, Pay-In Voucher; and L4918, Election Complaint Form. Series L4915 and L4916 relate to refund of ad valorem taxes to taxing districts or individuals, for either overpayment or erroneous assessment. Series L4917 is the instrument used to deposit ad valorem taxes and fees with the Kentucky State Treasurer, and L4918 is an administrative record that documents a request from a precinct election officer regarding violations of election laws.
The need to schedule the series was brought to the attention of Local Records staff by the Jefferson County Sheriff's Department. The series are applicable to all Sheriff's Offices throughout the state.
Dr. Ellis made a motion to adopt this schedule change, seconded by Dr.
Johnson. The motion carried.
Department of Insurance - Division of Insurance Fraud Investigation
Moses was the records analyst working on this schedule change. The series being added to the schedule are 04872, Case Referral File; 04873, Investigative Case File; 04874, Evidence File; and 04875, Special Investigative Unit Plan File.
The Bureau of Insurance was established in the Office of Auditor of Public Accounts in 1870. The Auditor appointed the Insurance Commissioner. The Department of Insurance became a separate administrative department of state government in 1934 and the Governor appointed the Commissioner. In 1936, the Department became a division of the Department of Business Regulation. It became a department again when the Division of Insurance was removed from the Department of Business Regulation, in 1950.
KRS 304.2-010 establishes the Department of Insurance, and the powers of the Commissioner are set out in KRS 304.2-100. The duties of the Department include:
A director heads the Division. House Bill 1, enacted at the 1996 First Extraordinary Session of the General Assembly, created a workers' compensation branch in the Division, staffed by at least three special investigators, one attorney, and one administrative assistant.
After a brief explanation by Moses, Dr. Johnson made a motion to adopt this schedule change, seconded by Mr. Hatchett. The motion carried.
Department of State Police - Legal Office
Moses was the records analyst working on this schedule change. The series being changed are 00011, Litigation File, from destroy when case is closed to ten years; and 04598, Auto Accident Case Files, which is being transferred from the Office of the Secretary, Justice Cabinet, to the Department of State Police.
The Department of State Police was formed on July 1, 1948, when legislation was signed giving its officers full police powers, both traffic and criminal. All offices, facilities, equipment, duties, powers and funds of the State Highway Patrol were transferred to the Department. In 1956, the Department was abolished and it became the Division of Kentucky State Police in the Department of Public Safety. Since 1973, it has been a part of the Justice Cabinet and is headed by a Commissioner (KRS 15A. 020). Its duties and powers are contained in KRS Chapter 16. KRS 16.060 details the duties and powers of the Commissioner and officers of the Kentucky State Police. It is the duty of the Commissioner and each officer of the Department to detect and prevent crime, apprehend criminals, maintain law and order throughout the state, collect, classify and maintain information useful for the detection of crime and the identification, apprehension and conviction of criminals, and enforce the criminal as well as the motor vehicle and traffic laws of the Commonwealth. The KSP must also provide security of state facilities located in Frankfort, highway enforcement, and water safety enforcement, as provided in KRS Chapter 235.
After a brief explanation by Moses, Mr. Hatchett made a motion to adopt
this schedule change, seconded by Dr. Ellis. The motion carried.
The following schedules were reviewed as a group.
State University Model - Administrative Services - Buildings/Grounds/Physical Plant
Moses was the records analyst working on this schedule change. The series being changed is U0705, Inventory Forms/Lists, from three years and destroy, to destroy when superseded.
Please refer to motion below.
State University Model - General Records - Personnel Records
Moses was the records analyst working on this schedule change. The series being changed are: U0305, Notification of Personnel Action File, from indefinite to three years; U0312, Vacancy Reporting Form (Duplicate), from two years to three; and U0629, Vacancy Report Form (Original), from two years to three.
Moses explained that the changes were to increase the retention of the series, to meet federal reporting requirements.
Please refer to motion below.
State University Model - Medical Facilities
Moses was the records analyst working on this schedule change. The series being added to the schedule are U1701, Dental Records (Adults), and U1702, Dental Records (Children).
Moses explained that these series represent records of dental clinics operated by universities. The retention periods of the records are in keeping with best business practice.
Please refer to motion below.
State University Model - Student/Course Records
Moses was the records analyst working on this schedule change. The series being added to the schedule is U0477, Dental Records (Students). The retention period for student medical records is ten years, as recommended by the American Association of Collegiate Registrars and Admissions Officers.
Dr. Johnson made a motion to adopt the four State University Model schedule changes, seconded by Dr. Ellis. The motion carried.
OTHER BUSINESS
Belding informed the Commission members that the Kentucky Information Resources Management (KIRM) Commission, which Nelson has chaired for the past three years, had its final meeting September 7, 1999. The Office of the Chief Information Officer is currently engaged in a series of transition activities to move into a new governing structure involving information technology. Although KIRM will be abolished, a governance group, representing chief information officers of the various cabinets, will advise Dr. Aldona Valicenti, the Chief Information Officer, from the executive branch side of government. The Information Technology Advisory Council, a newly created unit, comprised of representatives from the private sector, the media, the legislative and judicial branches, also will provide advice. Ron Jones, representing Stephen N. Dooley, currently the Commissioner of the Department of Information Systems, said that September 16, 1999, is the target date for finalizing creation of the Governor's Office for Technology. Legislative approval of this action will be required during the regular session of the General Assembly in 2000.
Belding informed the members that Dr. Marlene M. Helm, Secretary, Education, Arts and Humanities Cabinet, had testified before the Capital Planning Advisory Board. Dr. Helm appeared before the Board in support of the cabinet's capital construction and equipment requests. The Department's request to construct a major archival addition to its Coffee Tree Road facility includes an electronic archives facility. Belding said that it was not known at this time where the Department's request stands, in relation to the other requests submitted to the Board. Neither the Board nor the Governor's Office has come forward with any prioritization of the requests, as yet. Belding said that the Department requested $14.9 million for the addition, which is expected to be both a digital archives and an expanded addition to manage archival holdings in all media.
The Department also submitted an additional request for a little over $1 million for a records format conversion facility, to expand its imaging capacity. Additional planning money also was included in the request. If the request for the building addition is not approved, Belding is hopeful that planning money would be made available, so that the Department can take the steps necessary to determine how a digital archives would function in cooperation with the other players in state government who have a related interest. Belding said that by the December meeting of the Commission, there should be a better sense of the status of the Department's requests. Dr. Clark believes that planning money, possibly as much as $200,000, will be made available to the Department.
The last item of business was a discussion regarding the implementation of the Management Administrative Reporting System (MARS), effective July 1, 1999. MARS, an electronic financial reporting system, replaces the Statewide Tracking and Reporting System (STARS), which was formerly used to manage the financial transactions of state government. Belding said that MARS is one of several initiatives that have developed under the Empower Kentucky Program, an effort of the current administration to do more state business electronically. The Program attempts to use technology to best advantage, in terms of delivering services and making efficient use of personnel and other resources.
Related to the implementation of MARS, Belding informed the members that early in the summer, agencies were provided with a document called Procedures for Delegation of Pre-Audit and Document Retention, which was issued by the State Comptroller's Office.
According to Belding, there were several items in the document that have an impact in the area of records management. There were some administrative conclusions expressed in the document about records retention, which Division staff believed to be rightfully the domain of the Commission. As a result, Belding, Diana Moses, manager of the State Records Branch, and Charles Robb, manager of the Technology Analysis and Support Branch, met with Ed Ross, State Comptroller, to discuss the issues raised in the document. Belding, Moses and Robb also met with representatives from the State Auditor's Office, because of the potential impact on financial records in the conduct of future audits. Both meetings were productive, according to Belding. It was agreed that there are some important records management considerations involved in the implementation of MARS which need to be further pursued. Belding said that staff is considering the issuance of a follow up memorandum to the document to help state agencies better understand their records management responsibilities under the new system.
Moses explained the three areas that raise concerns, from a records management perspective. The first is the transference of the responsibility to maintain the record copy of source documentation from the Finance and Administration Cabinet to individual agencies. The procedure document referenced above requires that individual agencies maintain the record copy of source documentation for a period of eight years, which was the retention period approved for the Finance and Administration Cabinet for records subject to audit. Previously, duplicate copies of source documentation were retained by individual agencies for a period of three years, under the terms of the General Schedule for State Agencies. Under statute, the Commission has the sole authority to determine the retention requirements for records. In this instance, the Commission was not consulted prior to imposition of the retention requirement, thus bypassing its statutory role.
The second area involves audits and how they will be carried out. Source documentation will no longer be centrally located but will be disbursed throughout the various state agencies, which may complicate the audit process. Lastly, the lack of a central location for source documentation also can impact the investigations into possible wrongdoing in government that have occurred in the past and which will occur in the future.
Dr. Johnson asked what position the Department was going to take in regard to these issues. Belding said that MARS is in a period of transition, which is always a difficult time. One area in which a larger investment could have been made, according to Belding, was in communication, both among interested parties and with bodies that have a statutory authority that relates to the implementation. Also, agencies received the procedure document with no advance warning, which has caused some measure of confusion for them. Robb said he believed that from their perspective, the MARS implementation team had taken into consideration the secondary uses for the information contained in the system but did not realize they were preempting the role of the Commission by imposing the eight-year retention period. What is of concern, according to Robb, is the lack of a central location where the hard copy documentation will reside. What is of even greater importance is that MARS is year 2000 compliant, which the previous system was not. Belding said staff is eager to work with the responsible parties to resolve any related records management issues.
Belding adjourned the meeting at 11:30 a.m.
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